A recent Inside Higher Ed story indicates a drastic rise in the money for-profit higher education corporations are spending on lobbying. So I was interested to see that Newsweek now reports the first good news in a long time for the would-be students of for-profit higher education corporations: Two of the largest are instituting reforms. Gee, I wonder why?
Possibly it’s because
on Nov. 1 the Department of Education will announce a set of new rules that for-profit schools must follow, including an industrywide prohibition against incentives to admissions officers for recruiting more students and a revision to policies that have allowed schools to tweak the way they count credit hours in order to let students borrow more federal cash.
It’s been a tough year for for-profit education corporations, hasn’t it? Ever since those reports about the massive debt and poor completion rates or job placement of for-profit students, such as the nice summary in “For-Profit Higher Education by the Numbers,” came out in January (link launches a pdf).
It could make a feminist philosopher wonder about the possibility of exploitation to read that “For-profit colleges top the list of postsecondary institutions that received the most money in 2008–2009 from federal Pell Grants, which are awarded to needy students.” That’s “24% of all Pell Grant funding, about double the proportion from ten years ago.”
Of course, they are serving needy students, which sounds great, except when one reads the section on “The Costs for Students.”
Students at for-profits are more likely to borrow and borrow more than students at any other type of college. Yet, they are also among the least likely to complete school. College completion rates are low in all sectors. Only about half of all freshman entering baccalaureate programs earn degrees within 6 years. Given the cost, low completion rates are particularly burdensome for students at for-profit schools. For example, only 8.9% of University of Phoenix students without prior college experience complete a degree in six years, including 5% of those who attend classes online compared to a national graduation rate of about 56.1% for four year schools and 30.9% for two year schools.
I’ve voiced concerns before about the UK moving toward anything like the model we have here in the USA, which left me with over $50k in debt, but it could be worse — I could’ve been a for-profit student! 96% of for-profit students end up in debt. You read that right, 96%. Yep, they’re serving the needy, all right.
Percent of Graduating Class with Student Loans and Average Debt for Those with Loans: 2008
Sector Average Debt Percent with Debt
Public four-year $20,200 62%
Private nonprofit four-year $27,650 72%
Private for-profit four-year $33,050 96%
Source: The Project on Student Debt, “Student Debt and the Class of 2008″ (Dec. 2009). Based on calculations by the Project on Student Debt using data from the National Postsecondary Student Aid Survey 2008.
Now, not all debt is “bad debt,” right? I want to be reasonable about this. For instance, my consolidated federal student loans are not generally held against me in credit checks, I have lots of methods of repayment with a helpful Dept. of Education, and I write off some of the interest on my taxes every year. I’ve been told by every financial consultant that it’s the private lending that’ll kill you.
Sadly, that’s where for-profit edu-corporations’ students often turn.
In 2007-08, students attending for-profit schools composed about 9% of all undergraduates, but 27% of those with private loans. 42% of all proprietary school students had private loans in 2007-08, up from 12% in 2003-04.
I’m pretty sure it’s the next part that makes me queasiest:
Many schools have also begun offering their own credit products. For example, in 2009, Corinthian Colleges planned to make about $100 million in loans, ITT Technical Institutes about $75 million and Career Education Corporation (CEC) about $50 million.
Man, you know you’ve got a bit of a problem when homeless shelters are complaining about the targeting of homeless people for recruitment to for-profit education and debt!
If it makes the students with the largest share of student-loan debt feel better, though, you are helping the for-profits with those mighty high lobbying expenses.