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For-Profit Colleges — Hello Predatory Education

January 10, 2013

For-profit institutions of higher learning appear to embody a radically different mission of education than that promoted by traditional educational institutions; however, upon closer examination, for-profit education appears as a caricature of rather than a diversion from the public and private nonprofit institutions that make up the American education system. Many who have pursued education at for-profit colleges have been misled by recruiters (who are often paid commission on the number of students they sign) and highly disappointed with their results. Schools like University of Phoenix and Kaplan College have run into severe scrutiny and financial crisis as more Americans, already increasingly wary of expensive educational programs, become aware of the massive transfer of wealth from taxpayers to these institutions.

Considering the un- and underemployment rates and our middling place in the international educational community, the outrage directed at the for-profit education can in part be explained by Americans’ general feeling of disappointment and anxiety about our education system. With its slick advertising and eight-figure CEO salaries, the for-profit college sector is an invitingly devilish target for ridicule and blame not only because of the damning numbers behind the sector but also because of its impudence.

Meager or nonexistent as their economic benefits to students may be, and deplorable as their marketing practices are, for-profit colleges and universities are a symptom of the larger problem of unaffordability and unavailability of quality education in the United States. Without some kind of financial aid, it is nearly impossible for anyone but the wealthiest Americans to attend most colleges in the United States. The cost of obtaining a college degree has increased by 1,000% in the last thirty years, and the majority of college graduates finish school with tens of thousands of dollars in debt. According to the Center for American Progress, student debt in the United States today exceeds $1 trillion, with $864 billion in federal loans and $150 billion in private loans.

The method of student (and therefore tuition) acquisition employed by for-profit schools may differ from that of more traditional educational institutions, but the basic results are often comparable: graduates leave with crippling debt that will eat away at the financial benefits offered by the very careers that required the college degree in the first place.

Over the last few decades, for-profit colleges such as the University of Phoenix and Kaplan College, have claimed that they are just responding to market demand by adopting a policy of open-enrollment, offering more vocational degree and certificate programs, and providing relatively flexible courses (especially for adults aged 24 or older). However, the promise of economic mobility and career advancement that inspires students to enroll — and pay tuition either out of pocket or with government loans or grants — is usually nothing more than a marketing tactic. Their outreach focuses on those who have delayed obtaining degrees or certificates past high school and are either unemployed and looking for work or are hoping to level-up in their careers.

For instance this 2012 University of Phoenix commercial trumpets the 3.7 million American jobs that are currently unfilled due to a discrepancy between the skills required for the open positions and the background of Americans who are looking for work. While the entire narrative of the “skills mismatch” is itself dubious, this ad does not even pretend that the institution plays a proactive role in providing its students with specific skills that are guaranteed to land them jobs. The commercial is a dreamy image of ambitious workers set to “Amazing Grace” and the echo of that large number of unfilled positions. It mentions nothing of UOPX’s (University of Phoenix’s) job placement rates or career counseling offered by the school, and in fact UOPX has no career placement resources for its 425,000 students; the ad just vaguely inserts the university’s name as the bridge named “skills” between you and your “new career”.

Of course, this incoherent jumble of ample hope and zero data is perfectly common in advertising. Still, it is difficult to morally equate a company selling a $40 bottle of weight loss pills to a consumer hoping to drop 20 pounds in “just three weeks!” with a for-profit institution of higher-learning selling tens of thousands of dollars in education courses under the pretense that their career prospects will skyrocket and their earning potential will increase tenfold, especially when taxpayers are footing the majority of the bill. As Senator Tom Harkin of Iowa told NPR after the Senate Committee on Health, Education, Labor and Pensions conducted an investigation into the industry, while for-profit universities take only 10-12 percent of students who are enrolled in higher-education, they account for 50 percent of all defaults on loans. More astounding, however, is that 86 percent of all for-profit college revenue comes from taxpayers via government loans.

It is not that such institutions should not be allowed to exist, but rather that the demand for their services evinces a fundamental problem with the American education system, to say nothing of the severe under-regulation of the for-profit college sector. Institutions — public, private nonprofit, and for-profit — that award college and/or advanced degrees rely increasingly on tuition to run, resulting in outrageous tuition rates unmatched by other wealthy, developed countries. For instance in the United Kingdom, where international students pay a much higher tuition rate than EU citizens do, the cost of attending even the most prestigious universities is much cheaper than it would be at nearly all comparable and many inferior schools at home for an American student. More troubling, of course, is the lack of options for those who do not necessarily want to attend the most expensive schools but simply want a good education that will prepare them for the workforce. Both congress and the general public are beginning to realize that we simply cannot afford to keep sending money to institutions that do not deliver commensurate results.

According to the Government Accountability Office’s investigation, government officials posing as applicants reported that they were encouraged to lie on their financial aid forms (not claiming certain assets, for example) so they could qualify for more government loans; they were also misled about tuition costs and their potential earnings upon graduation. Westwood College, another for-profit institution, reportedly failed to warn applicants that, should a student want to transfer to a more traditional, regionally-accredited university, their credits would likely not be accepted there because Westwood is only nationally-accredited.

The enormous burden of tuition creates disparate educational experiences for the wealthy and lower- and middle-classes in the United States, both economically and psychologically. Moreover, because even our public K-12 systems are underfunded, the quality of public education corresponds heavily with the socio-economic status of a given community, and this in turn inevitably determines the higher education prospects for American students. It seems that while Americans do value education as a tool for economic mobility in a very general sense, we refuse to fully embrace the concept of free or nominal, high-quality public education; such a system seems to spook people with its connotations of socialism, but in reality many public education systems in Europe tend to do a better job of explicitly rewarding students based on merit, as opposed to our system where students’ quality of and later opportunities for education are determined much more heavily by their socio-economic status.

Weighing the decision of whether to raise children in the U.S. or the Netherlands, M.S., writing at the The Economist, acknowledges that Americans may not favor the methods of tracking students in some European countries because they appear limiting to students’ prospects from an early age. In the Netherlands, for example, children must take the Citotoets in 8th grade, a standardized test that determines where students will attend high school, with the high school they attend playing a considerable role in a student’s future employment and educational prospects. In the United States, however, the quality of public high school one’s children will attend is heavily determined by the socio-economic status of the school district. M.S. writes: “The [American] system incentivises me to earn and spend money to safeguard my children’s educational future. The [Dutch] system incentivises me to get my children to study hard to safeguard their own educational future.” And even without an education system that is based on students’ merit, there is no reason not to prioritize some kind of equality in merit among all government-funded schools if we are to maintain a public education system.

While increased regulation of the for-profit higher-education industry is necessary to protect prospective students from predatory recruiting practices, we also need to take an additional step back to appreciate why this industry has been able to flourish despite the lack of promise for those who enroll in these institutions. To be clear, not all for-profit schools are created equal. Deep Springs college in Colorado, which is surely an exception, is a highly competitive, all-male (though will start admitting female students this year) two-year program that successfully places its students into top-tier universities, two-thirds of whom go on to earn graduate degrees and half go on to earn doctorates. The school was founded on the three pillars of academics, labor, and self-governance; it’s not about enrolling as many students as possible (they only have about 26 students at a time), it’s about promoting their educational philosophy and fostering independence and success in their students. Of course, Deep Springs is certainly an exception among for-profit companies because it almost resembles a quaint American dream of education; it surely does not fit in an industry where a commercial portraying college as an assembly line designed to feed laborers into the workforce is considered effective.

Aside from the general problem of how unaffordable education is in America, the very idea that for-profit schools with questionable track records are eligible for public funds is offensive. Noam Chomsky has argued that educational institutions are and should be parasitic: “they don’t produce commodities for profit, thankfully”, because the education should have a value in itself. So when an institution like UPOX or Westwood or Kaplan College leeches off taxpayers, paying their CEOs exorbitant salaries, without creating value for their students and society at large, they essentially cease to be educational institutions; they become businesses that sell products called certificates and degrees whose appeal stems from an exploited version of the idea that education is both the great equalizer and the bastion of opportunity.


Jackie Colvin is a staff writer for The Leftist Review. She is also a freelance writer and lives in Chicago


2 Responses to For-Profit Colleges — Hello Predatory Education

  1. SteveH on March 1, 2013 at 10:15 pm

    Scam education. A cheap product that costs far more than it should and far more than it is worth, so that some people can make more money off of the excess money they already have.

  2. ddloo on January 12, 2013 at 8:35 am

    An excellent piece that covers key elements in this squalid picture of the Phoenixs et al. I especially appreciated your showing how the for-profits are caricatures of the rest, rather than some kind of exception. The situation in education where neoliberals are in the driver’s seat is a microcosm of the way that they are spoiling the entire planet in every arena they touch.

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