For-Profit Colleges Use Taxpayer Dollars to Rip Off Students

A report shows for-profit colleges are doing their job: educating students.

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Supporters of the Common Core State Standards say the initiative will align high school learning with college and work expectations.
Supporters of the Common Core State Standards say the initiative will align high school learning with college and work expectations.

Sen. Tom Harkin, Democrat of Iowa, released a report recently on for-profit colleges that should make your hair stand on end. So many bad apples, so little time to remove them.

This report should, at the very least, send many of these "educators" into the proverbial classroom corner with their dunce caps on. Actually, it should put a whole host of them out of business and cause the others to instigate serious and immediate reforms.

I have written a number of blog posts on the for-profits, and each new revelation makes me angrier. No one disputes that efforts at nontraditional learning, online courses, helping those who are older and are raising families succeed, are laudable and should be pursued with all due speed. But the current crop of for-profits are, by and large, failing to serve these students and ripping off taxpayers.

[Students at For-Profit Colleges Earn Less, Study Says]

The Washington Post's Dylan Matthews summarized it as follows: Most students don't graduate, the schools are really expensive, and you're paying for it. He should have added that many in this "business" are getting fabulously wealthy soaking in taxpayer dollars. The average CEO of the publicly traded for-profits made $7.3 million in 2009…$7.3 million! If they were delivering a serious and worthwhile product and their compensation was tied to student success, that would be one thing, but far from it.

The report showed that 63 percent of students who enrolled in an associate degree program left and the median student lasted only four months. Of those seeking a bachelor's degree, 54 percent left, and 38.5 percent left certificate programs.

And how are they paying for it? Loans, grants, Department of Defense dollars—86 percent of all the money these for-profits take in comes from taxpayer dollars. The cost to all of us last year was $32 billion and rising.

And how do these for-profits spend their money—on education? An educational institution, one would think, should be investing in education, right? Sorry, 23 percent goes for marketing and recruitment, 20 percent is considered profit, and actual instruction for students comes to a paltry 17 percent. Don't forget the lobbying expenses that have increased rapidly as these for-profits have come under legitimate criticism.

[How to Pay for College]

The lead lobbyist for the for-profits, former Rep. Steve Gunderson, a Wisconsin Republican, called the report "ideology overriding reality." Actually, there is nothing ideological about these criticisms. They are grounded in a pragmatic approach to solve our country's serious educational problems. 

When state and community colleges are getting their funding cut, the economy has put the squeeze on working families, and college loans are increasingly hard to pay back, how can we justify being ripped off by the for-profit colleges? How can they escape scrutiny and regulation when they are taking in $32 billion a year, much of it not to educate kids, while other colleges are struggling, students are struggling, families are struggling? With millions of students being saddled with debt, no job after school, promises unfulfilled, how can we justify continuing to use taxpayer's money? We are paying the bill—where is the oversight, where is the outrage?

My advice to Gunderson is that it is time to clean house, to bring together a serious board of advisers with real experience in education to work on serious reform of the for-profits. If he doesn't act quickly, he will find that the bad apples in his barrel will cause all of them to be rotten. 

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