The Scams That Are "For-Profit" Colleges

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.
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!

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