For-profit colleges should be more focused on educating students than making money
For-profit colleges, as their name implies, are private ventures that provide an alternative to the standard postsecondary options of community colleges and universities. They cater to non-traditional students — working adults who are seeking an education to further their career opportunities. For-profit colleges have experienced massive growth in the last decade, tripling their enrollment from 1998 to 2008 to about 2.4 million students. Certainly they are no longer the niche vocational schools of the 1990s, as they have expanded their offerings to include courses in general fields such as criminal justice and business management.
In theory, for-profit colleges are a great idea. They serve students who might never have the chance to acquire an education beyond high school because they are working. Because of features such as online classes and flexible course registration, non-traditional students can fit education in their busy schedules. In practice, however, for-profit colleges are doing more harm to their students than improving their stations in life. Remember that these institutions are for profit: Besides their goal of providing a quality education and job training for their students, they are also beholden to return the investment of their shareholders. The actions of these institutions show which goal is primary.
Surprisingly, these institutions are more expensive than community colleges and universities, a fact incongruous with their stated mission of providing education for non-traditional students, A study conducted by Sen. Tom Harkin found that on average bachelor degrees conferred at for-profits cost 20 percent more than those conferred at state universities. For-profit associates degrees cost four times more than those conferred at community colleges; compare spending an average of $35,000 for an associates at a for-profit with spending an average of $8,300 for an associates at a community college. University of Phoenix, a for-profit college, responds to this by pointing out that “for-profit institutions… cost taxpayers substantially less than public and non-profit institutions.” While it is true that for-profits do not directly receive money from the government, this argument is misleading. Students at for-profit colleges may not be able to afford tuition — partly because they are usually working adults and do not have parents to pay for tuition like traditional students, and partly because of the exorbitant tuition prices — and instead they may take out student loans and receive federal grants. Thus, much of the revenue of for-profit colleges comes from the government. For example, University of Phoenix, contrary to its statement above, receives 86 percent of its revenue from student loans.
The business model of for-profit colleges is simple: the more students enroll, the more money the colleges make. Notice the distinction between enrolling and graduating: these institutions don’t particularly care whether their students even graduate. Once they receive the student loans, there really is no financial incentive for the institution to help students stay the course. The Harkin report found that over half of enrolled students drop out before earning a degree, with the typical student dropping out within four months. Of course, after they drop out, the students are still responsible for paying their loans. So not only are the majority of the students lacking in the proper training and credentials they sought in the first place, they also incur a massive burden of debt for what amounts to a useless endeavor.
It is indeed amazing to see how brazen the for-profit colleges are in their focus on acquiring money, not on educating their students properly. The Harkin report found that they have in total 32,496 recruiters on staff in 2012, ten times the amount of their career services staff members. Thus, it is apparent that for-profit colleges are aggressively funneling students into their systems and leaving those same students in the dust after all of the loan money has been sucked dry from them. Naturally, the people at the helm of these institutions are the beneficiaries of this preoccupation with profit. Education Management Corporation (EDMC), the company that runs the Art Institutes, paid its CEO over $13.1 million in 2011; meanwhile, the University of California, with more than twice the number of students as EDMC, paid its president a little more than $500,000 in the same year.
What then should be done about a system that is almost universally broken? Save from shutting down these predatory for-profit colleges altogether — which will hurt non-traditional students, as they are then deprived access to an education — the only sensible path is stricter government regulations, as these institutions will certainly not change out of their own will. Force for-profit colleges to change their business model instead of relying on enrollment en masse to generate revenue. Make them accountable for graduation rates and employment rates after graduation; withhold loans and grants from them if they fail to achieve standards.
Rolph Recto is a Viewpoint writer for The Cavalier Daily.