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Do for-profits impoverish their students?

The New York Times suggests in an article published over the weekend that for-profit colleges drive students into debt, luring them in with promises of future wealth and then feasting on their aid dollars.

"Critics say many schools exaggerate the value of their degree programs, selling young people on dreams of middle-class wages while setting them up for default on untenable debts, low-wage work and a struggle to avoid poverty," the article says, in a summing-up passage we in the business call a "nut graf."

The gist of the piece is that for-profit schools overstate the market value of their degrees, charge as much as they dare, then leave students more indebted and less marketable than promised.

For-profits have a reputation within the industry for operating much like any other for-profit company: smart, efficient and effective, but ultimately driven by profit rather than the creation of knowledge.

The for-profits have come out swinging.

Harris Miller, CEO of the Career College Association, writes in a statement of the sector's "critically important role in educating almost 10% of college students, many of whom would otherwise be shut out of higher education."

Tuition at for-profits averages $14,174, a figure roughly midway between the sticker price of state schools and private non-profits. Two-year career colleges graduate students at twice the rate of community colleges.

"Career colleges are a key to restoring this country's global educational and economic standing," he writes. "Our schools play an essential role in helping the United States lower unemployment, fill jobs in key industries, and increase the number of college graduates dramatically by 2020."

The industry's 2.8 million students would be "insulted," he writes, at being branded "The New Poor," the title of the newspaper's ongoing series.

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By Daniel de Vise  |  March 15, 2010; 3:14 PM ET
 | Tags: Career College Association, New York Times, for-profits  
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Aside from the savage and unsupported bias in the story, what was also interesting about it was what was left unsaid. The article cites industry lobbying to fight new "gainful employment" rules. But the author fails to note that not-for-profit schools agree the rules are excessive and potentially harmful as well. The article also fails to note the connection between two of its sources: Lauren Asher the president of Institute for College Access and Success and Robert Shireman, its founder and Ms. Asher's former boss, who happens to be the architect of the new rules. Finally the article fails to note its own suspicious presence in the middle of the lobbying process. Was the timing of the piece a mere coincidence? It hardly seems likely. Shabby journalism from the Shades-of-gray Lady.

Posted by: turdan | March 15, 2010 5:38 PM | Report abuse

Goodman's shameless bias in this article is exemplified best by what can only be intentional omissions of facts and context that would change an impartial person's interpretations.

He builds a damning case around for-profit tuition at $14K but neglects to mention that average private tuition is $26K. He laments undocumented and largely chimerical taxpayer losses, neglecting to report that the taxpayer shells out $8-10K for the average not-for-profit student in the US but gets a check of $500 or so for every for-profit student. Goodman's reporting aligns with the DoEd's academic elitism and distaste for the for-profits.

For-profits would not have grown from 1% to 10% market share had traditional higher education not become the unaware, self-serving, inefficient, indolent behemoth it is today.

The constructive solution would be to fix the not-for-profits. The Department's solution is to pull the rug of success from under the for-profits so the traditionals can continue along their path of declining efficiency and quality.

Posted by: roberttucker | March 16, 2010 10:53 AM | Report abuse

Interesting question, but I think we could be missing the point – students can learn real skills through online for profit education, and those skills can surely help them compete for more jobs. Sure, an online degree may not carry the same cache as a degree from a prestigious 4-year institution, but it could provide students with greater career opportunities that they would have been ineligible for in the past.

I find it strange that the motives of “for-profit” schools are coming under such scrutiny. Does anyone criticize Apple for seeking profits? No! Why? Because they make great products that people love. If for-profit universities can offer students a good education at a lower price, I think we should applaud them for it.
Let me pose a question that likely strikes fear in the hearts of many 4-year college administrators – what if their students start to take online courses with increased frequency as a way of saving money? Seems like the best of both worlds – they get their degree, but take non-essential GE courses in the most cost-efficient way. It’s coming, but it will be interesting to see how the universities deal with it.

Austin, TX

Posted by: CheriB | March 16, 2010 6:38 PM | Report abuse

For-profit schools have preyed upon the unprepared potential students for decades. Most don't know that the quality and reputation of these programs are questionable, at best. These schools promise jobs and careers that the best students at Ivy League schools can't get. There's more than deceptive advertising here; there's outright fraud. The for-profits charge outrageous costs for degrees that are not comparable to state universities. Fast, better and definitely not inexpensive, is the message these schools send. Why go to these schools and waste money when a community college, state college or university can provide skills and in-depth knowledge that the for-profits only skim the surface in providing? The reputable state schools now employ the internet along with classroom training so that should not be the only reason to attend a for-profit. The old adage still applies: if it sounds too good to be true, it probably is. With the for-profits, everyone's admitted, regardless of background and everyone passes. So much for quality of the programs.

Posted by: cricket35 | March 16, 2010 7:31 PM | Report abuse

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