For-Profit Colleges: The Unfulfilled Promise

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December 13, 2010; Source: Atlanta Journal-Constitution | The fastest growing colleges in the U.S. now are for-profit entities, not public universities or the nonprofits typically associated with private colleges and universities. These for-profit institutions, says Maureen Downey in her recent Atlanta Journal-Constitution editorial, are particularly attractive to students “without a college-going culture in their families to inform their higher-education decisions.”

Who are these for-profit colleges? According to Amy Wilkins, vice president of the Education Trust, they are “shysters.”  The Education Trust’s new report, Subprime Opportunity: The Unfulfilled Promise of For-Profit Colleges and Universities, is a devastating critique that has the for-profit college industry howling.

According to the report, “For-profit colleges provide high-cost degree programs that have little chance of leading to high-paying careers, and saddle the most vulnerable students with heavy debt. Instead of providing a solid pathway to the middle class, they pave a path into the subbasement of the American economy.”

For-profit colleges graduate 22 percent of their first-time, full-time bachelors students, compared to 55 percent for public colleges and 65 percent for nonprofit colleges. The largest of the for-profits, the University of Phoenix, has a six-year graduation rate of 9 percent.

The AJC notes that “the median debt of graduates of for-profits was $31,190, nearly twice that of the private nonprofit graduates, $17,040, and more than three-and-a-half times that of public college graduates, $7,960.” Explaining their low graduation rates, the for-profits say that they take a disproportionate share of students “who are not traditionally regarded as college material.”

They also take a disproportionate share of public subsidies: Though enrolling only 12 percent of post-secondary students in 2008-2009, for-profit colleges got 23 percent of federal college student grants and loans. In the case of higher education, according to the Education Trust’s report, for-profit apparently means a lower quality product.—Rick Cohen