The Business of Education and For Profit Universities
When President Barack Obama was elected, he vowed to make education a top priority and claimed that in order for America to be successful every high school graduate needed to go on to achieve some type of higher learning. The case was made by FRONTLINE in an episode titled College, Inc. that for-profit colleges and universities are taking advantage of this type of thinking and creating a new generation of college graduates with enormous student loan debts and minimal actual educations to match. Our children are being told they can’t succeed without college (that argument is for another time), and they are being increasingly pressured to attend higher education schools, no matter what the cost.
Not all students have equal academic backgrounds and capabilities, however, and not all colleges are created equally.
- Traditional non-profit colleges tend to have higher tuition expenses than state run colleges.
- Traditional non-profit colleges are often funded by wealthy alumni and private donations.
- State run college systems offer less expensive 4-year degree programs.
- Community colleges are popular for specific and focused degrees.
- For-profit colleges are owned by investors and run as businesses.
- All types of these colleges are experimenting with online offerings for classes and degrees.
A report by FRONTLINE explored the growing business of owning colleges and how these moves affect the direction of higher education, as well as the debt-load for college students and graduates. You’ve probably seen the popular University of Phoenix advertised online, on billboards, or perhaps in your community. These advertisements might catch your eye because the business owners of Phoenix spend approximately 25% of the school’s budget on marketing (but only 10% – 20% on teachers’ salaries).
The Dangers of For Profit Colleges
In some instances, such as charter schools, when centers for education are run as businesses it seems to benefit the students and therefor the communities. However, when it comes to higher learning centers, business is getting a bad name.
High Pressure Recruiting
There is concern that these for-profit schools are using high pressure tactics for recruiting, and bringing in students who are simply not prepared academically, financially, or even emotionally for the stress on resources and life that college can cause. Congress has even launched investigations into allegations that these for-profit schools are using incentive programs for recruiters who bring in the highest numbers of new students. It appears that student loans are handed out like candy, enticing students to sign up and take the risk – after all, they wouldn’t offer them a loan if they weren’t fairly certain they could pay it back – right?
High Debt Levels
College is not cheap, no matter where you attend. For-profit colleges that operate with convenient schedules for non-traditional students are also surprisingly expensive. These schools are 5 to 6 times more expensive than community colleges, and twice as expensive as most state run universities. Students are eager to attend them, however, for two basic reasons:
- Convenience – The classes and degrees are geared toward individuals who are employed and trying to improve their careers by becoming college graduates. The classes are at night, online, anytime.
- Accessibility – For-profit colleges tend to cater to students who might not otherwise attend college for academic and financial reasons. They are more likely to be able to gain admission to these universities.
The students who attend these for-profit colleges also seem to be more likely to require student loans, and less likely to be able to repay them. In America the student debt situation is getting so dire that the total amount Americans owe on student loans, more than $750,000,000, rivals the national credit card debt.
The claims made by Frontline are that the for-profit schools pressure students into taking classes without preparing them for the financial responsibilities that go along with student loans and financial planning. Places like Phoenix dispute those claims, stating that they strive for “financial literacy” when it comes to working with their students to manage their college funds well.
Low Academic Preparations
You would think that after all of that money has been spent that you would be as well prepared as possible for the job-world. Frontline claims, however, that students who graduate from for-profit schools have less preparation for the job market. There seems to be a real question about whether or not students can be gainfully employed when they achieve a degree without ever stepping into a tangible classroom.
Even nursing students from some for-profit schools are claiming they never had worthwhile classroom and practical experiences working in hospitals, so their degrees are meaningless to potential employers. An overwhelming number, 90%, of students from Grand Canyon University are enrolled in online classes. While there is evidence that online education offers effective learning modules, there are just some things for which real-time and –world interactions are necessary for students.
Which College is Right for My Child?
We are in the midst of searching for those answers right now as our daughter prepares to graduate in 2013. However, when she does graduate high school she will also be completing her sophomore year through dual enrollment at a private college, thanks to our state offering a Post-Secondary Enrollment Options program at no cost to her (or us). The search is on for scholarships and programs that will give her the best education, prepare her for application to veterinary medicine school, and leave her with little or no debt. It just doesn’t look like for-profit colleges fit any of those criteria.