For-Profit Colleges

This is as an issue I’ve been trying to keep an eye on.   There’s a Senate hearing scheduled for today on the for-profit college industry. I haven’t been able to sit down and really put together a coherent study on the subject, and unfortunately I don’t have much time to put together a thorough analysis of it right now, but I wanted to at least drop in and point to a few resources since this is coming up today.

PBS recently aired a Frontline documentary on the subject College, Inc.  (You can view the full program online)  It is definitely worth a look.

A few quick things worth mentioning here:

This sentence jumps out from today’s Inside Higher Ed Article :  “Between 2000 and 2009, the amount of Title IV federal aid — Pell grants, Stafford loans and all other aid administered by the Department of Education — going to for-profit institutions grew $4.6 billion to $26.5 billion.”  So, like other corporations, the for-profit schools rely on federal money to bolster their profits while simultaneously crowing about their superior financial efficiency.

As the College, Inc. documentary pointed out,  when students (read: “customers”) do not qualify for federal money, the for-profit schools are also offering commercial loans.  Keep in mind many of these schools will accept nearly anyone who wants to apply (and the documentary presents evidence that some schools have even taken up high pressure sales practices to get students to enroll).  What this means is you have the makings of another major debt crisis, a crisis in addition to the one already brewing for students at traditional colleges and universities drowning in loan debt.  (Guilty as charged!)   This stands out from today’s New York Times article about the hearing:

“One source of contention was the planned appearance at the hearings of Steven Eisman, a hedge fund manager known for having predicted the housing market crash. He has recently compared the for-profit college sector to the subprime mortgage banking industry — arguing that both grew rapidly based on lending to low-income people with little ability to repay the loans…His prepared testimony for the hearings repeats that theme, calling the for-profit colleges “marketing machines masquerading as universities.””

I think its important  to make a distinction between criticism of the for-profit schools themselves, and the students who choose to attend.  After all, most of them are only doing what we’ve all been told people should do:  Try to get an education to improve their lot in life.  The for-profit schools often appeal to students who are unable to attend  traditional colleges for academic or financial reasons.  (And I’m only using the term “traditional” because I don’t think “non-profit” quite applies either, and that’s a whole other angle to examine.)  There is a very real elitism built into  the way traditional colleges function, which is something the for-profits use  in their sales pitches to low-income students, and something they also use when they are called upon to defend the economic practices of their industry.

I’ll try to catch up with what goes on in the hearings and hopefully post some more thoughts in the next few days.

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