Tag Archives: for-profit colleges

Stuck In The Swamp

Can you stand one more diatribe about Betsy DeVos?

According to Gail Collins at the New York Times, DeVos isn’t just devoting herself to the destruction of public elementary and high schools. She’s after public universities too.

DeVos is the superrich Republican donor who once led a crusade to reform troubled Michigan public schools by turning them into truly terrible private ones. Now she’s in the Trump cabinet, and she seems to be dedicating a lot of her time to, um, lowering higher education.

When no one was watching she hired a lot of people that come from the for-profit colleges,” complained Senator Patty Murray of Washington, who feels the additions are far more interested in protecting their old associates than in overseeing them. Murray is the top Democrat on the Health, Education, Labor and Pensions Committee, otherwise known as HELP. These days it’s hard to tell whether that’s a promise of assistance or a cry of distress.

To oversee the critical issue of fraud in higher education, DeVos picked Julian Schmoke Jr., whose former job was a dean of — yes! — a for-profit university. Specifically a school named DeVry. Last year, under fire from state prosecutors and the Federal Trade Commission, DeVry agreed to pay $100 million to students who complained that they had been misled by its recruitment pitch.

Over the past several years, we have learned that students attending these for-profit institutions pay far more, and get far less, than they would at a public college. They have huge dropout rates, and even larger rates of default on the government grants that almost all of them take out. (On the other hand, they have very low rates of employment, despite the rosy promises made by these institutions.)

Although there are some legitimate private colleges, the statistics are pretty devastating.

“The outcomes for people who take out loans at for-profits are abysmal,” said Ben Miller of the Center for American Progress. He added that almost all the students borrow, for courses they could sometimes get for one sixth the price at a community college. And about half the people who borrow default.

As the stories about deceitful for-profits mounted, the Obama administration came up with regulations making it easier for students to refuse to pay their loans if a school had misrepresented their chances of graduating and getting a lucrative career. The rules were supposed to go into effect in July, but DeVos has delayed their implementation.

Not only has DeVos “delayed” implementation of the new regulations, under her management the Department of Education has stopped approving new fraud claims against for-profits, leaving a backlog of more than 87,000.

Give her credit for one educational advance, though: Betsy DeVos is giving us all a lesson on what happens when big political contributions buy a cabinet position for a theocratic ignoramus.

When “Private” Really Isn’t

Remember when Ross Perot built his third-party campaign on his image as a hard-headed private-sector businessman? And it turned out that his company did most of its “private-sector” business with government?

The revelations about Trump University are highlighting a similar reality: most supposedly “private sector” universities are financed with tax dollars.

Investigations by government officials and reporters over the past few years have uncovered numerous abuses by these schools, which recruit heavily among populations unprepared for higher education, encourage students to take on government-insured loans, and fail to provide them with the education and skills they need to succeed in the job market. According to the U.S. Department of Education, for-profit schools are responsible for 44% of all student loan defaults.

Like Trump “University,” most of these institutions aren’t universities–they’re scams. And  Trump isn’t the only public office-seeker with ties to these lucrative enterprises.

Pennsylvania Senator Pat Toomey, in a tight race for re-election, is being criticized for his ties to Yorktown University:

The Pennsylvania Senator is expected to get the Trump U treatment over his dealings with Yorktown University, a for-profit college that has been criticized for its lack of accreditation, questionable academic offerings and marketing to veterans who can receive government tuition aid. Toomey is an investor in the online program, served on its boards and agreed to appear in its marketing materials.


Former presidential candidate Marco Rubio was hit in the Republican primary for his support of the now-closed Corinthian Colleges; former Arkansas Gov. Mike Huckabee took some heat for his support of Victory University, a for-profit based in Memphis, before its untimely demise; and former President Bill Clinton has faced censure for his lucrative work with for-profit colleges, even as his wife has criticized them.

To its credit, the Obama Administration has consistently attacked schools trading false hopes for the tuition dollars being provided courtesy of taxpayers. The Education Department’s long-debated “gainful employment” rule, which requires colleges to track their graduates’ performance in the workforce and eventually will cut off funding for career training programs that fall short, was recently upheld by the courts. The Justice Department recently announced that Education Affiliates would pay $13 million to settle allegations it had falsified federal financial aid claims and issued fake diplomas, the latest in a string of similar actions.

It is past time to shut down these phony “schools” that exist only to prey on the vulnerable while defrauding taxpayers.

Why do I think that wouldn’t happen in a Trump-Pence Administration?

File Under “I Told You So”

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.

Fraud and Waste

Candidates for office are notorious for promising to cut taxes and claiming that they will pay for them by reducing “fraud and waste.” Usually, this is bullshit; especially at the local level. Americans love to believe bloat exists in service delivery, but usually, the only way to pay for tax cuts is by eliminating services.

That said, a recent Congressional report has identified one way to save the federal government money by curtailing an activity that is actively harmful: funding tuition at for-profit schools of “higher education.” (Note quotes here.)

The Committee that issued the report was headed by Senator Tom Harkin. It hasn’t gotten the attention it deserves. The report documents aggressive recruiting, exorbitant tuition, abysmal student outcomes, regulatory evasion, and taxpayer dollars pocketed as profit.

According to the summary of findings published by the New York Times, students at for-profit colleges are charged, on average, four times as much tuition as students at public universities, and eighty percent of that comes from American taxpayers. Furthermore, according to the blog Political Animal, “these colleges do an exceptionally crappy job of educating students.”

Retention rates are horrendous: the majority of enrollees, according to the Times, leave without a degree, but even those who earn a credential usually discover it isn’t worth the paper it’s printed on. And–perhaps the most telling statistic from a taxpayer’s point of view– students at for-profit colleges make up 13% of the country’s college students, but account for 47% of defaults on student loans.

Think about that next time you see one of those gauzy–and expensive–commercials for a college you never heard of.

The Obama Administration has tried to change the student loan system so that tax dollars cannot be used at most of these schools, but the effort–like so many others–has been met with fierce lobbying and obstruction. You might think that all of those politicians running for office on a platform of reducing fraud and waste would applaud this recommendation. After all, refusing to fund con artists would actually protect those who are currently getting ripped off, as well as saving tax dollars.

You’d think this would be a no-brainer, one of those rare “win-win” situations. But you’d be wrong.

And we wonder why Congress has a 17% approval rating. (Maybe the 17% attended for-profit colleges.)


Threshold Questions

In this Sunday’s New York Times Magazine, Joe Nocera has the sort of superficially thoughtful opinion piece that increasingly characterizes America’s “chattering classes.”

The essay is a defense of for-profit colleges. Nocera acknowledges the obvious: such colleges enroll only 12% of the nation’s college students, but gobble up 25% of all federal student aid; fewer than half of their students graduate; and some 47% of those who were paying back their student loans in 2009 had defaulted by 2010. Despite these statistics, and numerous lawsuits over unethical recruitment practices, Nocera asserts that “The country really can’t afford to put [for-profit colleges] out of business.”

Why? Nocera says that education is increasingly critical to the ability to get a decent job, and that for-profit schools educate poor, working class students who might otherwise not be able to attend any college.

Think about the assumptions built into that argument.

The first (and in my mind, the most pernicious) is the conflation of education and certification. One of the thorniest issues in higher education today revolves around that tension. Parents understandably want their children to emerge from college with a marketable skill, but if that is all they emerge with—if students do not graduate with a deeper appreciation of the importance of history, culture, literature, science and philosophy—then they have attended a trade school, not an educational institution.

The second assumption Nocera makes is that kids from poor and working-class families are prevented from attending state-supported and nonprofit colleges and universities. He is only half right; poor students with poor academic credentials do have trouble accessing institutions of higher education, but not simply because they are poor. Colleges and universities that are genuinely engaged in education must have standards; allowing students to enroll who clearly do not have the wherewithal to succeed not only diminishes the classroom experience for more prepared students, it is manifestly unfair to those who are admitted despite being doomed to fail.

At IUPUI, we talk about these issues a lot. We recognize that poor students often have poor records because they attended substandard schools, and we try to fashion admission standards that allow us to separate academic potential from past performance. We schedule courses so that students with full-time jobs can attend, and we offer a wide variety of support mechanisms for students facing fiscal, emotional and physical challenges. But at the end of the day, we are in the “business” of providing education. We are not a trade school, and we aren’t going to rip off both students and taxpayers by admitting anyone who can qualify for a government loan.

A few weeks ago, my husband and I were driving to Costco, and I noticed the number of billboards advertising “colleges” I’d never heard of. They all trumpeted the same message: come to XYZ and get a credential that will get you a good job in less time.

Nocera says we need for-profit colleges, and just need to tweak government regulations to reduce incentives for them to cheat.

I say beware of easy answers to the wrong questions.

The question isn’t: do we need for-profit colleges? The questions (plural) are: how do we define “college education”? How do we provide job skills training to those who cannot benefit from—or don’t want—an academic program?  How do we improve K-12 education so that being poor does not doom children to a second or third rate elementary education that makes it difficult to get into college?

And along the way, can we encourage a decent respect for academic excellence and the life of the mind?