The Scams That Are “For-Profit” Colleges

June 27, 2011 1:00 pm     Posted in College, News  Kim- Syracuse University g+ page

We’ve all seen those cheesy commercials promising students who enroll in hassle-free online classes at for-profit institutions a job within the lucrative careers of their choice. What these commercials forget to mention, though, are the incredibly steep tuition costs, the even steeper debt that students should plan to graduate with and the statistics of high dropout and low success rates of graduates from these institutions. The government is pouring millions of federal tax dollars and much of its student aid into these for profits, which results in only 3 things: rich CEOs, grads deep in debt and the rest of us college students (at non-profit schools) losing out on more federal student aid each year.


By Kim

So what’s the real deal with these for-profit colleges?

Well, here’s how the system works. Recruiters are paid upwards of about $750 to practically harass students to enroll in these institutions, which typically offer online courses. Tuition costs an average of $31,000, which is about double that of non-profit public universities who are also federally funded. Ironically, the for-profits spend on their students only 1/3 of the amount that public universities spend on their students. The reasoning for this may be that the for-profits offer most of their classes online. Bridgepoint Education for example, has a 99% of its enrollment online. Campus Progress provided a statistical breakdown of the scams non-profit professionals are running, and the injustices their students face during enrollment and post graduation from these schools. Here’s a rundown of the stats:

- Non-profits are the fastest growing sector of higher learning. Enrollment has increased drastically by 225% in 10 years, yet students of these colleges still make up only 10% of college students nationally.

- For profits get 25% of federally subsidized student aid, 42% of Pell grant funds, and 36% of GI Bill funds.

- These colleges can earn up to 90% of its profits from federal loans and Pell grants.

- An education at a for-profit costs, on average, $500/ credit hour, compared with $75/hour at a public college, whose schools usually face the harshest budget cuts yearly.

-Students enrolled at these for-profits, a majority of which are poor and/or students of color, face a 71% chance of dropping out, and are 8 times more likely to go into debt upon graduation

-Here’s the biggest scam: the CEOs of these institutions are bringing in yearly salaries of up to $20 million!

- 1 in 5 students graduate from for-profits. At non-profits, over half graduate, on average.

So how is this even legal? The government has finally responded to complaints from opponents and students of these institutions by issuing a set of regulations that aim to protect students from the empty promises & blatant lack of commitment to the students’ success. After the Department of Education published their “Condition of Education” report, which this year focused on the different sectors of higher education, the Obama administration responded with a list of rules that crackdown on the scams that are for-profits. The goal is to weed out these institutions that are consistently leaving their students in unmanageable amounts of debt while its CEOs pocket the federal aid these students are receiving to afford the pricey tuition costs.

 

Although these rules seem to be rather stringent, they are far less strict than the original set of rules, for which infractions would’ve resulted in immediate reprimand. With the rules implemented, schools have to fail to comply 3 out of 4 years before they become completely ineligible to receive federal student aid. And even without aid, the schools will be able to remain open (if they so choose). As of right now, schools won’t begin to lose aid until 2015. This is still a step forward in the right direction.

Until then, CEOs of for-profits will continue to spend millions lobbying in Washington to maintain their influence and to keep the government off their backs. This is the point at which lawmakers need to decide which is more important, political backing from those are are practically corrupt, or justice within the educational system.  The educations for non profit college students are negatively affected each year with more budget cuts and less financial aid for its students needed to balance out the steep direct deposit of federal funds into for profit CEO pockets.

For-profits are clearly affecting the quality of education students are receiving nationwide, and these recent changes are recognition of these injustices. Change, however slow, is coming.

Have you had an experience with a for-profit college? Do you think for-profit schools are a scam? Sound off below!

14 Comments on "The Scams That Are “For-Profit” Colleges"

  1. leah says:
    Mon, 27th Jun 20112:35 pm 

    I got scammed into going to a for-profit, the art institute to be exact. While the classes were fun, they didn’t teach anything that I didn’t know already, and now my credit and future are ruined. Also, they will blatantly lie on paperwork to get more money from you and you can’t fight it. I left as soon as i could, but the damage was done. Just go to a normal school, seriously.

  2. Jer says:
    Mon, 27th Jun 20112:45 pm 

    She sounds like a jaded bitch.

  3. Sydney Mae Bickford says:
    Mon, 27th Jun 20115:07 pm 

    you sound like an asshole

  4. arizonapenguin says:
    Mon, 27th Jun 20115:31 pm 

    I know people who have been to schools like this or worked for them and the only way to get much out of them is to work for them and then take classes since they are free. A lot of these schools are terrible because when you try to transfer to a non-profit/ 4 yr university, the credits aren't accepted anywhere.

  5. Terry says:
    Mon, 27th Jun 20116:09 pm 

    I agree that these colleges shouldn't be getting so much federal aid, but seriously no one is forcing people to go to them. Don't blame the CEO's for making money, blame people for being stupid and giving it to them. If no one went to them, they wouldn't exist. Problem solved.

  6. Jen says:
    Tue, 28th Jun 201111:16 pm 

    I think people need to remember that there are some for-profit schools that do educate people properly which which paves the way for good paying jobs. Granted those successful for-profits may owe that success to having physical locations as well as online options. All in all, this article is way too one sided and has an unbalanced tone to it which takes away from the article's credibility .

  7. Frank says:
    Sat, 5th Nov 20118:38 pm 

    If I pulled my sited stats from a Doonesburyish infographic cartoon, I would expect to receive an "F"!

  8. Richard says:
    Sat, 17th Dec 20115:53 am 

    From another perspective, I have been an employee of a for-profit college and have witnessed some of the less tasteful methods of recruitment but also seen the opportunities these schools have afforded many students. While judging a school that has to proactively draw in prospective students to sustain itself and grow, we must understand that even at non-profit schools the heads are compensated very well. For people likely to be reading these articles they are usually college grads and these schools help to educate a certain population that aren't being offered these same opportunities at traditional schools. I know run a site http://www.futurebrighter.com that connects prospective students to schools that are saying " hey, we want you" this is not a statement coming from other schools. Another perspective

  9. Andrew says:
    Mon, 6th Feb 20129:56 pm 

    the people who are running this country into the ground with student loan debt aren't the kind of people who would be excepted to successful for profit schools. Its very clear that they cater to the poor selling them pipe dreams on daytime TV and then stealing federal funding for it(I have no idea how it could possibly be aloud). Hope they all burn to the ground

  10. John says:
    Mon, 6th Feb 20129:59 pm 

    For profit schools are scams! whatever you do don't go! You will be wildly in debt before you know it with an online degree worth nothing. I wouldn't hire someone with an online degree to walk my dog, trust me whatever you do stay away or your life will be ruined!

  11. stacy says:
    Mon, 6th Feb 201210:05 pm 

    A lot of times the only reason people are going to these schools is becuase its free to them, they are poor and get grants and subsidized loans. CEO's taking money from the federal goverment basicly from our checks every week to give a worthless person 3 months of cooking school for $10,000. The same person could never ever ever ever get a real loan for $10,000 because sometimes they haven't even graduated highschool!

  12. Bill Davis says:
    Tue, 21st Feb 201212:08 am 

    Central Florida Institute in Palm Harbor Florida is a SCAM, (Bait and Switch). They advertise 95% job placement, but they can't even find clinical sites for there students (for training). There is NO job placement! After they get your $, they won't even respond to your complaints. Maybe 10% of my classmates found jobs in their field and they already worked for medical facilities. They stuck me in a clinical site where I only changed bed lined between patients instead of BEING TRAINED like I was promised. Now I pay $250 a month for the next 10 yrs to these crooks without even being employed in the medical field. These 2 yrs of credits aren't even transferable!!!!!!!!!!!!!!!!! ALL FOR NOTHING! Don't be a fool like me. Go to a state college where your credits are transferable. DO YOUR HOMEWORK BEFOREHAND!!!!!!!!!!!!!!!!!!!!! I wish i had.

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