For-Profit Educational Institutions Under Fire

Supporters say they provide unprecedented access to minorities; others caution buyers to beware

“Unfortunately, there are a lot of students of color from poor backgrounds who might not be getting the proper guidance from families or other resources to let them know what their options are,” said Kimberly Jones, associate vice president for public policy at the Council for Opportunity and Education. “For-profits are not the only option, especially when you consider that a lot of the learning students are looking for can very easily be gained at a far lesser cost at a local not-for-profit institution, particularly community colleges. We don’t believe that the regulation would close the door of opportunity for African American students.”

Jose Cruz, a vice president for education policy and practice at The Education Trust, said that it is not unreasonable to expect a market-based, for-profit enterprise to provide consumers with the information that they need to make informed choices. “This is an industry that has grown by 236% in the last ten years and has spawned players that have profit levels on the order of a Procter & Gamble,” he said. “Yet as a whole, they fail to graduate four out of every five of their first-time, full-time bachelor degree seeking students.”

According to Cruz, prospective students should ask schools about their overall graduation and job placement rates. “If you’re a student of color or a low income student, it’s important to ask about the graduation rate because some of these institutions do significantly worse with them than their white or more affluent counterparts.” He also suggested that students ask where graduates are being placed because most schools cater to local populations that expect to be able to find jobs in or near their communities.

Find out if the program you’re considering is accredited and whether there is a licensing exam associated with the occupation as well as how the school prepares students for the exam. Cruz recommends that students seek information about exam pass rates. Otherwise, “you might take a $50,000, two-year degree and find out you’re not prepared for the exam or if the program’s not accredited, that you’re not even eligible to take the exam.”   

Students are sometimes surprised to learn that more often than not the credits they earned at a for-profit institution cannot be transferred to traditional, nonprofit schools. Cruz, who previously worked as a vice president of student affairs for a large state university system, said that this is a problem in higher education in general, but for-profit credits are “almost impossible” to transfer.

“Ask how long a typical student similar to you takes to complete the degree or certificate program and how much debt you’ll be expected to incur,” advises Cruz. Because for-profits tend to be much more expensive, most students have to take the maximum amount they can get in federal aid and also take out private loans.

Asking these questions will give prospective students a far greater sense of the actual risk associated with a particular school or program so they can make the right decision, said Cruz, who also recommends shopping around. “If they’re recruiting you, the least you can do is find out if your community college has a similar program or if there’s a nonprofit that’s more affordable.”

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