Criticism of for-profit colleges

Many for-profits serve heavily adult markets where many of the closest peer public and PNP schools you could name are also open admissions or less selective. For a for-profit serving a more traditional market, how about Five Towns College? College Navigator, Wikipedia. Five Towns admitted 52% of its applicants last year. About 15 miles east, private non-profit Long Island University C. W. Post Campus admitted 79% of its applicants. About 20 miles west Stony Brook University (SUNY) admitted 40% of its.

Five Towns students' SAT scores are significantly lower, but consider that Five Towns offers undergraduate degrees only in music, music education, theatre, film/video, childhood education, mass communication, business management, and (this only at the associate's level) liberal arts. Applicants for the music and theatre programs audition.

 

What do you think about making potential students have to prove themselves somehow before being giving a federally backed loan? Maybe have them pay for their first X number of credit hours? Maybe require a certain GPA? Have them first take some CLEP, DSST or other tests?

 

Well, there are Satisfactory Academic Progress requirements to stay eligible for federal student aid. Of course, a mercenary tuition-driven school, for-profit or not, could inflate grades to avoid letting students fall below SAP requirements. It's been suggested that some schools probably inflate grades when employer tuition reimbursement requires minimum grades too. (Also, should a lender really give a requirement placed on its borrowers the name "SAP?" This is up there for the most unfortunately named debt-related thing since NEPAD.)

There's a 'skin in the game' expectation built into federal financial aid in the Expected Family Contribution, though some will borrow to cover this.

 

Perhaps this is an exception that proves the rule, but for-profit Grand Canyon has some reasonable admissions requirements. They require a high school GPA of 3.0 (or submission of ACT/SAT scores if under 3.0) for admission to their on-campus undergrad programs. Their online program requires only a 2.75 GPA. So, while hardly rigorous, here's a for-profit school making an attempt at admission standards beyond open admissions. I don't know if the requirements are new, or if they've been in place for some time. I get the sense, from reading everything I have about GCU's operations and plans for the future, that they are one of the better actors in the sector.

Undergraduate Admission Requirements |Main Campus | Grand Canyon University

Undergraduate Online Programs | Grand Canyon University

 

Sorry, 54%.

 

Admissions standards can be waived.

As for defaults, there are two ways to look at them. First, as a measure of quality--are students getting the outcomes they seek (and the schools promise)? It is very difficult to measure this for any individual student, plus it changes over time. It is impossible to aggregate such individualized information, so we turn instead to indicators like loan defaults. But this measure is predicated on the idea that defaulting on a loan means you didn't get more money and, thus, you can't pay back your loan. But this is very flawed thinking. Some students will have gotten exactly what they bargained for--or more--yet still cannot pay their loans. Others did not, yet still pay their loans. Is there a correlation between defaulting on loans and students getting what they came for? Perhaps that study has been done?

The other way to look at it is the impact on our society. The people, through their government, subsidize these loans and guarantee them. If the borrower fails to pay back the loan, the taxpayers are on the hook. But hold on. "Default" doesn't mean "doesn't pay back." Being in default on a student loan means that payments on the loan are due and are beyond the grace period. It is nearly impossible to discharge a student loan debt in bankruptcy--you practically have to die to get rid of the obligation. I wonder how many loans actually don't get paid back? Certainly, this distinction means the problem of default--however big it really is--is overstated.

I'm much more interested in the faulty supply/demand market schools--for-profit and not--operate within. They have very little pressure to keep tuition low since financial aid--federal or otherwise--is often predicated on these costs. Students can't possibly make judgments about the value of their investments and the likely ROI. It's like houses--you pay what people are paying. And your perception of the value of a house is in comparison to other houses (and their asking prices). People don't intrinsically know the value of a house--or an education. That's why we're reading about the parallels between the housing bubble and the (potential) education bubble. Non-market (but very real) forces have been interfering with people's ability to really measure the value vs. the cost of higher education. Finally, the money--often paid years or decades in the future--doesn't seem "real" in the present. It's easy to accumulate--hardly any qualifying! It's easy to spend--the schools just tell you what it costs! And payback is a bummer.

My main complaints with the for-profits revolve around their voracious need for growth, which sometimes leads to their enrolling just about anyone breathing who can get some funding (a consumer protection issue), and their general disregard for membership in the academic community. Let's face it, the for-profits--as a group and accounting for the potential for exceptions--care very little about advancing the academic disciplines from which they award degrees. This goes, even, for the ones awarding doctorates. Maybe even more so. They're degree-awarding trade schools in many cases. That said, has someone with an BBA from UoP earned the degree? Certainly. But how many other students enrolled--students that really didn't have a chance to succeed--did it take to pay for that?

 

BTW, a strong qualifications framework--where the government got behind building education and career ladders in occupations/professions needed to move the country forward--would go a long way to resolve this. We then could put a pricetag on each level of the career ladder and require participating schools to meet or beat it. And if a student wants to go off the farm and take a subject not included in the framework, fine. But do so at your own risk.

 

You are trying to make this very complicated.
But the reality is pretty simple.

Schools with high default rates are going to lose their eligibility to participate in government aid programs.
This has already happened with respect to state aid in California.
It will inevitably happen at the federal level too, perhaps in conjunction with the new college grading system that the Obama administration has announced.
The handwriting is on the wall, even if some people are unwilling or unable to see it.

This change will affect both non-profits and for-profits.
But it will affect the for-profits more, because they have more of the defaults.

 

If you don't like the facts presented in my previous post, then you will have to be more specific about the facts that you want to see.
Note that "blah, and blah blah" is unspecific.

If you want factual comparisons that use numbers, instead of words, then you are probably out of luck.
The vast majority of for-profits are classified as "open admissions" schools.
Nobody tracks numerical things like GPAs, SATs, ACTs, or admissions rate for "open admissions" schools.
The numbers are meaningless for a school that admits everyone, regardless of numbers.

 

In 2009, the for-profit education sector enrolled about 3,200,000 students.
This was 11.8 % of the total US student population.

I challenged you to find a school within that sector that required the SAT/ACT.
I have to admit that you did find one: a school with a total enrollment of 753.

But let's face it: Five Towns is not a big player, even in the Long Island higher education market.
In fact, it is smaller than the average middle school in New York state.
The comparison with CW Post (enrollment = 11,012) or Stony Brook (enrollment = 23,946) is even more revealing.
And as you acknowledge, both of those other schools maintain significantly higher scores, despite their far higher enrollments.

If we expand the comparison to include the entire for-profit sector, then Five Towns represents approximately 0.02 % of the total enrollment.
So I will concede the point: it is not true that the for-profit sector is 100 % unselective.
Based on the Five Towns example, it is only 99.98 % unselective.

But this doesn't seem like a big difference to me.

 

I've already acknowledged that some publics and some private non-profits have open admissions.
I've also observed that many other publics and private non-profits do not; on the contrary, their admissions may be extremely selective.

In the for-profit sector, on the other hand, approximately 99.98 % of the schools have open admissions.
And the number of extremely selective schools closely approximates zero.

My conclusion is that something about the for-profit model favors open admissions -- to a much greater extent than the public or non-profit model.

I don't see how any other reasonable conclusion can be drawn from these facts. But I'm prepared to consider suggestions.

 

Isn't the percentage of community colleges with open admissions, to the institution and to its least selective programs – I think we'd agree that a generally OA for-profit with nursing and allied health programs, for instance, that are selective should be considered OA institutionally; likewise a community college – very similar to the percentage of for-profits with open admissions?

If so, you could say that something about the community college model favors open admissions, to a much greater extent than other public and non-profit models.

And what's wrong with that?

 

There are already tests of general aptitude that students routinely take for college admissions.
They are called the SAT and the ACT.

 

There is nothing inherently wrong with open admissions, in either the for-profit or non-profit model -- unless open admissions are associated with high default rates.
And this association seems to be a lot more common in the for-profit sector than in the non-profit sector.

Community colleges, in general, are less expensive than for-profit schools, which presumably helps to lower their default rates.
Now, it's true that CCs are less expensive because they are subsidized by local taxpayers.
But in return, those taxpayers get some degree of oversight and control over CCs.
Here in California, for example, CCs are run by board members who run in local elections (not sure how it works in other states).

If a for-profit school can convince local voters to subsidize their operations, in spite of the lack of public control, then I have no objection to that.
It strikes me as a somewhat unlikely scenario though.

 

As Rich notes, "Admissions standards can be waived."

To build on this point a little: I suspect that many public and PNP colleges that we're counting as selective based on SAT/ACT requirements and College Navigator data, largely drawn from traditional-college-age entering classes, will often make exceptions to the standards they maintain for traditional students to let in students given a mature student status, transfer students, or students in online, evening, and (degree- and degree-credit-granting) continuing education divisions.

For example, the College Navigator listing for "Harvard University" uses student input data that seems to reflect Harvard College but omit Harvard Extension School, which is also part of Harvard University. "Harvard University" is the only College Navigator listing including the string "Havard." I have a feeling we'd find similar exclusions of online, evening, and continuing education divisions, and possibly of individual students admitted as mature and transfer students, in the data from numerous other public and PNP schools. Meanwhile we could describe many for-profits, functionally, as freestanding online, evening, and continuing education divisions. Are we comparing like with like?

 

The College Navigator input data for Harvard omit the Extension School -- just as they omit the Law School, the Business School, the Divinity School, etc.

However, the College Navigator output data -- under the "Programs/Majors" tab -- clearly include everything at Harvard University. For example, the Extension School degrees are shown under "Liberal Arts and Sciences, General Studies and Humanities", with the "d" notation, which signifies DL programs.

Note that the final College Navigator tab -- for "Cohort Default Rates" -- is standardized by government definition. CDRs are like with like. This makes it easy to determine (for example) that 27 students who left Harvard in 2009 have since defaulted on their loans, compared to (for example) 5 defaulting students from MIT, 23 defaulting students from Yale, and 49,592 defaulting students from the University of Phoenix system.

 

There is a difference between open admissions at community colleges and non-traditional colleges. Community colleges usually require placement tests. If you score low in an area, you're required to take remedial classes. At non-traditional colleges, students are usually just dumped right into college-level courses they aren't ready for.

 

Gawd this pony has been flogged to death. I'd jump in here but Dr. Pina made my points more diplomatically than I am inclined to do. So let me provide a "students" perspective.

I've attended the following for profits:
Ashworth College
Kaplan University
Ashford University

And the following non-profits:
LSU
Southwestern College
Stanford
Bellevue University
St. Joseph's College

From a student perspective, the quality of education is a wash. LSU Independent study is very much like Ashworth College, except at Ashworth it's actually possible to get your books. (LSU used way outdated materials back then).

Bellevue is almost an equal tradeoff to Ashford with the exception that Bellevue has only just now matched Ashford's student support in customer service.

I could go on.

Price wise, Ashford and Bellevue are/were very similar. Actually cost to credentials, Stanford is probably the most expensive of the lot.

As for the burden on tax payers...let's not focus simply upon financial aid and tuition costs, let's also discuss the tax money that keeps the doors open at non-profits which dwarf financial aid revenue in the long run and are compulsory to everyone, whether they attend the school or not. There's just something basically wrong with that, but I digress. If we want to have a conversation about how colleges cost tax payers, let's take into account all of the money and all of the tax payers.

Really this is a debate about "who gets the money", school staff or investors/owners. There is no greater good here, just money, it's always about money.

 

Yeaa, what he said to a tee.