New data from the Education Department confirms what most educators have long known, that for-profit schools rarely deliver on their promises to prepare students for successful careers. An analysis of more than 5,000 career programs offered by for-profit schools found 72% of them produced graduates who earn less than high school dropouts.
Why do students enroll in these programs? Many–perhaps most–cannot gain admittance to a public or private institution of higher education, because they are unprepared for college-level work. That makes them prime targets for the ethically dubious tactics of such schools.
For-profit “colleges” may be a bad deal for students, but they are great for the pocketbooks of their proprietors and investors, and they are proliferating.
Huffington Post recently reported that the new federal consumer protection agency has sued one such institution.
Director Richard Cordray charged that ITT “misled students by overstating their salaries and job prospects upon graduation” and then pushed them into predatory high-interest private student loans.
Cordray called the abuse of students by the overall for-profit college industry “truly an American tragedy.” He was joined at the event by the attorneys general of Kentucky, Illinois, Iowa, and New Mexico, all of whom are conducting investigations of major for-profit colleges.
These practices would come to a quick stop if taxpayers stopped subsidizing these problematic schools by allowing their students to participate in federal loan programs. For-profit students account for about 31 percent of all student loans and nearly half of all loan defaults.
It isn’t like these “schools” are any bargain. Atlantic reports that
[f]or-profits charge tuition like private not-for-profits, while offering less institutional financial aid. Low-income students who might pay nothing out-of-pocket at a public institution, thanks to grant aid, pay about $8,000 in tuition at a for-profit school, according to a 2011 report from The College Board. Students take out loans to make up the difference.
These student loans aren’t doing the students any favors. They’re just lining the pockets of predators.