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In the past decade, for-profit colleges have risen from relative obscurity to front-page news.
For-profit college shakeup
The College Board estimates that 10 percent of all college students are now enrolled at for-profit institutions, a dramatic shift that has attracted the attention of both politicians and the media.
Here are highlights of recent coverage:
- ProPublica has been reporting on for-profits since late 2009, kicking off its coverage with a piece on “high-pressure, deceptive tactics” used by recruiters at the University of Phoenix. The story includes claims by a former recruiter that he was told to pressure students who were “on the fence,” including telling them there was only one seat left in the class. Students also claimed that they were told their credits from the for-profit would be easily transferred to other colleges – which wasn’t always the case.
- The New York Times did a piece on for-profits in March 2010, focusing mainly on two oft-mentioned criticisms – their price and the “dubious benefits” of their degrees. The Times describes for-profit schools luring in students with promises of job placement and increased salaries. The students rack up tens of thousands of dollars in debt (sometimes at high interest rates), only to find that no jobs await them. Making things worse, much of the student debt is nearly impossible to escape, even through declarations of bankruptcy.
- Bloomberg also painted a bleak picture in a December 2009 piece, focusing on for-profits that were targeting students from the U.S. military, luring them with quick degrees and free laptops.
- Frontline spent an hour giving an overall look at the for-profit issue, including a profile of investor Michael Clifford, who specializes in taking small, failing colleges and turning them around. He does it by turning the schools for-profit, starting up online programs and infusing them with cash.
- The Washington Post, in collaboration with The Hechinger Report, looked at how for-profit colleges are capitalizing on – and cooperating with – overstretched California community colleges.
- In an extensive March 2010 piece, Bloomberg Business Week delved into the business aspects of for-profits, explaining how they’ve expanded by buying up small, at-risk schools – largely to secure their accreditation. Those schools have “regional accreditation,” which is the gold standard in higher education and makes them more attractive to students. Perhaps more importantly, regional accreditation allows for-profits to skirt rules that require new schools to wait at least two years before receiving federal money. That is key for an industry that makes a lot of its $26 billion in revenue from government grants and loans.
- The potential impact of all those student loans has also made news, with Mother Jones quoting one well-known investor as saying the schools are a crisis-in-the-making, akin to the sub-prime mortgage collapse. That claim drew fire from some who argued that investors are trying to stir up controversy over for-profits in order to make money when stock prices drop.
- In a July 2010 piece, ProPublica reported that one investment firm has paid an investigator who helped gather signatures on a letter that was critical of for-profit recruiters for targeting the homeless.