A Denver Post article about for-profit colleges examined graduation rates, loans, default rates and other federal Department of Education data and reported that "for-profit schools as a group underperform their public and nonprofit counterparts."
Here is a summary of their findings:
• For-profit students are defaulting on their loans at much higher rates than students enrolled in public or private nonprofit schools. Twenty-three percent of students who attended Colorado for-profit schools were in default in the first three years they are required to make payments, according to a Denver Post analysis of 2009 federal Department of Education data.
Adams State College in Alamosa had the state's highest default rate among four-year public schools at 15 percent.
• Tuition rates are high. Associate's degrees usually run $30,000 to $40,000, and bachelor's degrees usually cost between
$60,000 and $75,000 at for-profit colleges.
That compares with Metropolitan State College of Denver, where a three-year bachelor's degree runs about $12,900, and the University of Colorado at Boulder, where the cost is $29,000 for in-state students. At the private, nonprofit University of Denver, a three-year bachelor's degree costs $148,704.
• Taxpayers are paying for it. Last year, Colorado students received $1.6 billion in federal loans and Pell grants. Of that, $690 million went to for-profit schools, according to an analysis of federal loan data.
• Twenty-five percent of students seeking bachelor's degrees at for-profits receive their degrees within six years, compared with 55 percent at public colleges
and 64 percent at private nonprofit colleges, according to the National Center for Education Statistics.
For-profit schools say they serve a needier student population than most other colleges, which pulls down their graduation rates. Indeed, public schools that serve higher-risk populations, such as Metro State, do not perform any better. Its six-year graduation rate is 22 percent.
• Since 2006, the Colorado Department of Education has received 164 complaints against for-profit colleges — or one for every 214 students attending for-profit schools allowed to collect federal loan dollars. That compares with 178 complaints filed against public colleges — or one for every 1,224 students.
While the complaints themselves are not public, state officials told The Post the complaints against public schools are mostly academic in nature — disputes about grades or professors, for example. Complaints from students attending for-profit schools are consumer in nature, ranging from recruiting practices to lack of transparency about tuition costs and financial aid, according to John Karakoulakis at the state Department of Higher Education.
Now the Post article focused on Denver, but there is plenty of evidence nation-wide that for-profit schools do more harm than good.
94% of students who attend for-profit colleges take out federal student loans. The Wall Street Journal found that students who attend for-profit colleges have higher default rates on their student loans than students who attend public and nonprofit colleges and universities. Many students at for-profit schools are left with an overwhelming level of debt and scarce opportunities for gainful employment in their specific fields. The link between gainful employment and debt levels has led the Department of Education to review financial aid policies to all schools, but especially for-profits, though like much in Washington these days, it looks like any new proposals in the area are gridlocked and ultimately nothing will get done.
But something needs to be done about these schools.
I know that we live in a society these days that privileges "going to college" but it is very important that high school students be provided with good counseling about the process, especially with college costs so high.
A college degree only helps kids when it actually aids them in finding gainful long-term employment.
A college degree harms kids when it leaves them with tens of thousands of dollars of student loan debt and useless or less-than-useful credentials.
The NY Times reports this morning that 60% of Americans now see colleges "as businesses, concerned more with their bottom line than with the educational experience of students."
Nonprofit institutions with tuition prices as high as $50,000, $60,000 or $70,000 a year are part of the problem here, but for-profits are the most worrisome to me because as a University of Phoenix enrollment director told recruiters in 2003, "It's all about the numbers. It will always be about the numbers."
When you run a school as a business, the bottom line is always the most important thing.
And the bottom line for these for-profit schools is not educating their students.
The bottom line is money.
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