The Chronicle of Higher Education:
For-profit colleges can play an important role in educating nontraditional students, but the colleges often operate as aggressive recruiting machines focused on generating shareholder profits at the expense of a quality education for their students.
That's the unflattering portrait of the for-profit higher-education industry detailed in a voluminous report officially released on Monday by the Senate Health, Education, Labor, and Pensions Committee. The report, which also criticizes the accrediting agencies that evaluate the colleges, concludes a two-year investigation into the operations of 30 for-profit higher-education companies from 2006 to 2010.
The Senate report concludes that most for-profit institutions in higher education--most, not all--place their emphasis on profits over education and graduation of students. Of course, they are in the education business to make profit. But that profit comes from a target population of nontraditional students without financial means. The revenue comes from student loans from the government, most of which goes into marketing, too often high-pressure, "boiler room"-type "marketing"--more, in fact, than goes into educating students!---"Senate Report paints a Damning Portrait of For-Profit Higher Education," by Michael Stratford, The Chronicle of Higher Education (7.31.2012)
The Chronicle article appended these revealing summary data:
By the Numbers
- More than half of the 1.1 million students who in 2008-9 were enrolled in colleges owned by the examined companies had withdrawn by mid-2010.
- In 2010 the for-profit colleges examined employed 35,202 recruiters, compared with 3,512 career-services staff and 12,452 support-services staff, which amounts to more than two recruiters for every student-service employee and 10 recruiters for every career-services staff member.
- Colleges owned by a company that is traded on a major stock exchange had 2008-9 withdrawal rates nine percentage points higher than the privately held companies examined. Among the 15 publicly traded companies, 55 percent of students departed without a degree, compared with 46 percent of students at the 15 privately held companies.
- In the 2009 fiscal year, the colleges examined spent: $4.2-billion (22.7 percent of all revenue) on marketing, advertising, recruiting, and admissions staffing. $3.6-billion (19.4 percent of all revenue) on profit. $3.2-billion (17.2 percent of all revenue) on instruction.
- 96 percent of students at for-profit colleges take out student loans, compared with 13 percent of community-college students, 48 percent of students at four-year public colleges, and 57 percent of students at four-year private nonprofit colleges.
But to be fair, the report analyzes a sample of only 30 for-profit colleges--by no means all or most--but includes some very recognizable names. They were chosen and their data analyzed to provide a fair representation of the group. And to be fair, the study identifes several for-profit colleges it deems to be doing a good job, and several others that have shown notable improvement. But the fact remains that on the whole, and as a sigificant segment of higher educational institutions, they appear to be well short of national standards for higher education performance.
And then there is the Chronicle story about a regional accreditor, the Western Association of Schools and Colleges (WASC), and it's rejecting response to the for-profit Ashford College. From the article:
WASC oversees higher education in California, Hawaii, and the Pacific islands. In early July it rejected an application from the high-flying publicly traded company Bridgepoint Education. Although Bridgepoint's corporate headquarters are in a downtown San Diego office tower, the anchor of its fast-growing online operation, Ashford University, is in Clinton, Iowa, at the former home of Franciscan University of the Prairies.
In 2005 Bridgepoint bought Franciscan, which at the time was declining but still accredited. Franciscan was promptly renamed Ashford.
Seven years, more than 200,000 students, vast sums of taxpayer-supported financial aid, and several Congressional hearings later, Bridgepoint had apparently worn out its welcome with Franciscan's former accreditor, and decided to look for approval closer to its corporate home. But WASC turned it down, for reasons that included a paucity of faculty at Ashford and the fact that 128,000 out of 240,000 students had dropped out over the last five years. "That level of attrition," said WASC's president, Ralph A. Wolff, "is, on its face, not acceptable."
---"Why One Accreditor Deserves Some Credit. Really." by Kevin Carey, The Chronicle of Higher Education (8.3.2012)This article also describes how the WASC posted it's rejection letter on the Internet for all to see. But before you think they are just biased against for-profit schools, consider that the WASC is now challenging public and private nonprofits as well, including "asking four-year colleges and universities to provide some evidence of how much their students are learning, and to compare that success to similar institutions." Now that's even got the elite universities like Stanford and Cal-Berkeley upset. I say, good, it's about time for some top-down accountability that addresses how much learning really takes place--and no schools should be exempt. (More on this in another post.)
But if I appear eager to share this story, let me also hasten to add that I'm both sympathetic and optimistic about the role of for-profit higher education in formulating or re-shaping better higher education options--outcome-effective, cost-effective options--and especially for middle and lower income students and families. I addressed this in a 2011 post, "Disruptive Innovation: Re-Shaping American Higher Education?" But identifying the best and worst among the for-profits and offering interim report cards on the industry as a whole is also an important part of the process.
If for-profits would ultimately provide the needed educational "life raft" for nontraditional and lower-income students and their families, they must come down the learning curve and the cost curve a lot faster than they have. Right now, many or most community colleges offer the same or better educational outcomes for these students at a much lower price.
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