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For-profits, Frontline and College Inc.

The esteemed PBS program Frontline borrowed our name this week for a broadcast about the for-profit sector of higher education.

Like recent investigative pieces in the New York Times and Bloomberg BusinessWeek, the Frontline program questioned whether operating a college for profit is a good idea. I think I'm safe in saying that all three concluded it was not.

I have published both positive and negative appraisals of the for-profit sector on this blog, always with the important disclaimer that the Washington Post Company owns Kaplan University, a player in the for-profit industry.

(Incidentally, I shook hands with an actual employee of Kaplan University at a speaking engagement last week, so I can no longer say that I have never met one.)

In a nutshell:

For-profit colleges are a fast-growing and profitable sector, offering serious competition to both four-year and (especially) two-year public and private, not-for-profit colleges. They set up shop near freeway exits, offer classes at all hours and market themselves as a convenient, efficient route to a certificate or degree for a student who doesn't have a lot of free time. They are an overflow to over-taxed community colleges, which offer many of the same classes at much lower cost but also lower availability.

For-profits charge more than state universities but less than private universities, at least in terms of sticker price. For-profit students tend to carry more debt after completion than their counterparts in other sectors. That's partly because for-profit students are more likely self-supporting and, well, poor.

Perhaps the most unflattering material in the Frontline piece came from former for-profit employees who spoke of high-pressure sales techniques, call-center tactics more commonly associated with peddlers of time-share vacations and magazine subscriptions.

There was also the familiar procession of dissatisfied students, many of whom claimed they finished their studies with a degree that was not worth the money they had paid, because they had not been given sufficient training.

I spoke to Harris Miller, president of the Career Colleges Association. He lobbies for the for-profits, just as several of his counterparts on the non-profit side lobby for Harvard and U-Md.

Why all the bad press?

"For whatever reason, we haven't been able to communicate effectively," he said.

The criticism, he said, comes from "people who think that for-profit and higher education don't belong in the same sentence."

Miller calls it "attack by anecdote." He says he tries to remind reporters "that for profit is a tax status, not a financial status. Harvard has to run a profit every year. Otherwise, they'd shut down." He reminds his critics in not-for-profit education that "I don't think it's in our collective best interest to be shouting at each other."

But he faults his own sector for a certain lack of transparency, particularly in the past.

"I think there's been a historic tendency to kind of hide from the news media and from the research sector," he said. "We can't hide. We're too big. We're 10 percent of higher education."

He said the industry has to "be honest about the fact that there are some rogue employees in our schools," although not necessarily entire rogue schools. "The dark days were in the late 80s and early 90s. They had some bad actors. And Congress reacted. They probably over-reacted." More than 1,000 for-profit colleges closed, he said, in a wave of regulation and reform.

Lost in the blitz of negative coverage, he said, is the important role that the for-profit sector can play in raising the numbers of low-income and minority students who finish college. The sector serves a group of students more at-risk, by the government's definition, than any other. Three-quarters of students are working adults.

"And, yes, if they're going to go to school, a Pell grant, if it exists, is not enough, and they're going to have to borrow some money," he said.

For-profits, he said, are "serving a group of students who have been abandoned by the higher education system."

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By Daniel de Vise  |  May 7, 2010; 11:17 AM ET
Categories:  Access , Administration , Aid , Community Colleges , For-profit colleges , Research  | Tags: career colleges, college inc, for-profit higher education, for-profits, frontline  
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I was just looking at graduation rates yesterday, and I think the data says it all: graduation rates at for profit schools are half what they are at other schools. Only 24.5% of for profit students graduate in six years with a degree! This could be for many reasons, including the high prevalence of at-risk students who attend these schools, but the bottom line is that these schools are not doing enough to make sure they bring in people who will succeed and/or support students so they can successfully graduate. If you're going to serve these "forgotten" populations, make sure you do it in a responsible way so you're helping more than hurting!

PS: does any of this sound like the rationale offered by sub-prime lenders? "We're helping underserved populations afford homes..." No, you're making money by selling people a dream that you're pretty sure they can't achieve.

Posted by: dawn-wise | May 7, 2010 1:43 PM | Report abuse

I would hardly characterize "Frontline" as esteemed. In any case, in this instance it is perversely attacking the solution rather than the problem.

Higher education is increasingly out of reach due to the conventional system's out of control inflation and miserable productivity. The so-called non-profit system is merely a scam to funnel the life savings of middle class families into the already stuffed pockets of wildly overpaid slobs who can't be fired and whose only contribution to society is a few hours a week spouting far-left idiocies. That is to say nothing of the vast fortunes wasted on administration and the gamut of non-academic boondoggles.

I'll esteem "Frontline" when it starts campaigning to abolish tenure and to hold so-called non-profit institutions financially accountable.

Posted by: thebump | May 8, 2010 9:19 AM | Report abuse

Nearly 30 years ago I attended a specialized computer programming school at night. Though I was highly successful as a result of my studies there, only 13 students of the 87 who started with me even graduated. Of the 13 only a few of us obtained employment in the field. They operate much like the for profit colleges & universities described in the Frontline episode. They enticed lots of people to apply, showing employment ads from the WP with the high salaries, arranged student loans and Veteran's benefits for those who signed up, packed the intro classes to the gills, mostly with students who had little in the way of interest, qualifications & aptitude for the coursework at hand, and probably made most of their money by keeping those students "enrolled" for a few weeks, where the refund policy was very much in favor of the school.
Since then, I've received a Masters degree and have nearly 30 years' IT experience. I contacted one of the major on-line universities about joining their faculty, went thru their training and turned down their offer to join. I felt the standards were far from what I felt was acceptable for the degree to be meaningful. The students would be awarded 3 credits towards their BS degree in return for 5 weeks of on-line coursework, but the university would not back me up with my requirement that the work be done & submitted during that 5 week period. During my training, we were given a writing sample and a rubric to use for grading. The sample was so bad, I couldn't imagine it was a "real" example, but in fact it was; I don't know how someone could have been awarded a high school diploma, seemingly unable to assemble many complete sentences. It really seemed that the faculty trainers wanted us to "push the students thru" and that the standards were really lacking, compared to a traditional university. It's not difficult to see why the default rate on their loans is so high, as many of their students probably don't qualify for the sort of employment needed to repay them.
I think the industry needs more oversight.

Posted by: Evan.Rosenberg@Gmail.Com | May 8, 2010 11:48 AM | Report abuse

Face it. These "universities" used to be called business schools or trade schools (Strayer Business School is now Strayer University). They do not offer a "well rounded" education but a "targeted" one.
By labeling their graduates as having earned BS, BA and MBA degrees, they have cheapened the meaning of those degrees. I personally know several folks who have completed courses at these schools and gained employment and promotions, but many employers look not at the "degree" but the source. Misleading ads that create undue expectations are pretty low.

Posted by: pjohn2 | May 8, 2010 12:17 PM | Report abuse

Let's start with the idea that for-profits are "serving a group of students who have been abandoned by the higher education system." For-profits are making money--off the poor, off the government who subsidizes this sub-standard education, from the commercial hype that appeals to the less sophisticated. The system of higher education does not "abandon" students. Rather, students who have not shown academic promise, which doesn't mean they can't be a respected worker in a non-academic pursuit, are not admitted to reputable colleges.

In the wake of the attempted car bomb attack on NYC, we should open our eyes to the proliferation of sub-standard schools offering "degrees" and "accredidations" (put between quotes because they are often so meaningless) to students who have not demonstrated the ability to earn those degrees in traditional settings. This sector cares little for providing students with the skills they need to be successful.

Posted by: Jennifer88 | May 8, 2010 1:20 PM | Report abuse

I don't know if Frontline mentions accreditation problems with for-profit colleges, and I don't see it in your article. One of the major issues with the for-profits - apart from that in most cases an equivalent but much less expensive vocational education can be had at a community college - is that the colleges' accreditating body is different and so the credits students earn in the for-profits are not usually accepted by mainstream colleges and universities. That means a student who earns an AA and then wants to transfer to a nonprofit 4-year college almost always has to start all over from scratch, but with the prohibitive debt they accrued while at the for-profit. Many of the students who end up at for-profits never realized (or were never advised by high school counselors) that there are other affordable options than the for-profits on the TV commercials. In other words, the students never get sufficient information to make a sound decision about how to pursue a college education, and once they are educated enough to know that the for-profit accreditation locks them into for-profit bachelor's and advanced degrees rather than giving them more options, it's too late. These students aren't abandoned by the higher education system, but exploited by the capitalist system.

Posted by: paperball | May 8, 2010 4:08 PM | Report abuse

I have issues with our tax dollars being used to pay dividends for the for-profit shareholders...87% of Kaplan's profits are derived from Federal tuition grants!!!!

The incentive is to recruit students, get their financial aid set up and then keep them in school until their financial aid expires....instruction and training are not the priorities....

This is 'wall street' meets higher education and they are gouging the public just the way they did with subprime mortgages....

Posted by: 4theKids1 | May 10, 2010 10:35 AM | Report abuse

Unfortunately, many of the commenters here are misinformed about the quality of education provided by most for-profit colleges. One commenter above states that because Strayer University used to be called Strayer Business College, it somehow has cheapened the degrees that it awards to its students. I fail to see any relationship between these two assertions.

Strayer's degree programs are built in exactly the same way as those at any other accredited institution. They offer introductory courses that form the foundation of the major and that lead to more advanced and specialized courses in the subject matter, all supported and complemented by a core of general education courses that provide a well-rounded education. When laid alongside similar programs from any Ivy League, state university, private college, or historically black college or university, its programs would be indistinguishable.

Regarding accreditation, no one ever seems to ask why traditional nonprofits, including state universities and community colleges, so often refuse to accept credits and degrees earned at for-profit institutions. These nonprofits often sniff that because some for-profits are nationally rather than regionally accredited, their courses and degrees are unworthy, but no one ever seems to challenge them on such a baseless assertion.

National accrediting agencies have promulgated accreditation standards regarding faculty credentialing requirements, curriculum content, and instructional resources that are virtually identical to the requirements of regional accreditors, and they typically enforce these standards more aggressively than do the regionals. Courses at for-profits often are taught by the same faculty who teach the same course in the local nonprofit using the same syllabus and same textbook. And, many for-profits provide much better instructional resources, equipment, and support than nonprofits, particularly some state-supported institutions that constantly are subject to subsidy cuts, so the quality of the education is often better at for-profits than at their competitors. If we want to lament the waste of taxpayer dollars, perhaps we should force nonprofit institutions, particularly those that are dependent on taxpayer subsidies, to justify with facts why they so often refuse to accept transfer credits from nationally accredited for-profit institutions.

Posted by: rlswartz | May 10, 2010 11:10 AM | Report abuse

Anyone who has paid a tuition bill realized that all of these institutions-- from Harvard to Strayer-- are making a healthy profit.

Posted by: hakafos44 | May 10, 2010 2:28 PM | Report abuse

Strayer and many others like it, are rife with fraud and should have been included in Frontline's report. These schools are deceptive as well as fraudulent, preying on those who are looking for a quick and easy way to get a credential. These for-profit programs are weak at best and although they tout accreditation, students would be hard pressed to compete academically in non-profit, traditional programs. The for-profits are driving down the value of college degrees and with more traditional colleges offering their programs online, no one should feel they need to attend a for-profit to gain an education. For-profits work for Wall Street, not their students.

Posted by: cricket35 | May 12, 2010 9:39 PM | Report abuse

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