For-Profit College Investigation

The statistics about for-profit colleges reveal a depressing pattern of debt and failure for many students who see the schools as a way to improve their lives.

A report on the findings of a two year investigation by the Senate Health, Education, Labor and Pensions Committee led by Iowa Senator Tom Harkin found widespread problems in this industry.

For starters, tuition at for-profit colleges is six times higher than at community colleges and twice as high as you might find at a four-year public school. That might be okay if students benefited. But the senate study of 30 for-profit schools found many students attracted by web marketing, TV and other heavy advertising don’t achieve academic success.

Fifty-four percent of the students enrolled in the 2008-2009 school year withdrew by the summer of 2010.  Most of the students borrowed money to pay their tuition, and close to one in four defaulted on their federal student loans within three years of leaving school.

Why should you care if you are not a student?

According to the report taxpayers invest more than $30 billion in these schools.  Most of the money comes from federal funds. 25% comes from Department of Education, 37% Post 9/11 G.I. Bill benefits, and 50% Department of Defense Tuition Assistance Funds.

Senator Harkin said, “In this report, you will find overwhelming documentation of overpriced tuition, predatory recruiting practices, sky-high dropout rates, billions of taxpayer dollars spent on aggressive marketing and advertising, and companies gaming regulations to maximize profits.  These practices are not the exception — they are the norm; they are systemic throughout the industry, with very few exceptions,”

In a news release on its website the Association for Private Sector Colleges and Universities says the senate report, “…continues in the tradition of ideology overriding reality. The report twists the facts to fit a narrative…”

Believe what you will and beware.

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Barbara Nevins Taylor

As the winner of 22 Emmy Awards and a slew of journalism honors and awards, I created ConsumerMojo.com to give you the straight story about complicated stuff. Tell us what you want to know and we'll get you the answers.