For-Profit Higher Education

Remember my earlier comments about wanting to be sure that if I went back to school, it be at a non-profit university, because I was nervous about the reputational stigma that may be attached to for-profit universities?

Well, according to a study published by the Health, Education, Labor and Pensions Committee of the United States Senate, I was right to worry.

The study is based on a two year investigation of the industry, and is fairly scathing in its criticisms. (As noted in the article I read, it only reviewed “30 large companies that own for-profit colleges” and didn’t compare results to those of public non-profit institutions, so on this report only it’s difficult to say how much “worse” these for-profit schools are than the general higher education environment.)

Still, the findings are grim indeed. These companies running major for-profit universities are a wonder to behold when you look at the size and focus on recruiting and marketing, but they are frighteningly less concerned with student support and career services. Tuition is steeply higher, more than four times the cost at comparable community colleges for certificate programs and associate’s degrees, and bachelor’s degrees were more than 20% more expensive than those at “flagship public universities” as well.

And most damning of all, most of these students aren’t even finishing the programs. A study of a cohort of enrollees in 2008/2009 found that 54% had left without a certificate or degree by mid-2010. And the problem is much worse for online students, who are more likely to leave the program than their on-campus peers. (It’s easier to walk away when you have less social investment and thus less conflict, as my three failed semesters of online community college years ago can attest.)

This should be shocking, but when you stop and think about the fact that these are for-profit institutions often owned by publicly traded parent companies, the bottom line must always be profit. So by aggressively recruiting enrollees, and then spending a fraction of the time and money to actually retain them and ensure that they are successful, you have a neverending flow of income without much residual effort required.

Profits go up, shareholders are happy, and the only people who get hurt are the poor saps who signed up for a ton of government-backed student loan debt that they cannot possibly escape.

So yes, I’m selfishly glad that I made the decision to focus on non-profit universities. Yes, Bellevue University (where I’ll be enrolling in the Spring) is a non-profit institution of higher learning, and I’m breathing a sigh of relief that I made the decision that I did.

(Note: If you’ve got time to burn and are interested in this topic, I really encourage you to take a look at the actual report from the Senate committee. You can find it online and skim over the Executive Summary, and if you’re really intrigued there’s a lot more detail about the two-year investigation in there.)

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