The War on For-Profit Colleges

And, as we have discussed elsewhere, there are still people who go out and get jobs with their Almeda University "degrees."

Almeda has zero accreditation. But it doesn't have nearly the reputation of a school like Everest. Even though Everest has national accreditation, Almeda gets to enjoy the benefit of its obscurity.

ITT Tech has been beating its degree programs into the minds of the public for a very, very long time. The commercials also end with an incredibly confidence instilling disclaimer that "Credits earned are unlikely to transfer."

As with any business venture, some of these schools have effective marketing techniques. Some have good commercials. Others have sketchy bus stop ads. And no one really touches upon the throngs of small and regional for-profit schools that just don't warrant any attention. They are all over. I just received a mailer from one the other day trying to entice readers into their programs in "cosmetology, medical assistant or finance."

Right, because those three go together. At least with cosmetology the programs ends with you getting a license and a skill that will be needed as long as people have hair. I'm not sure what a person could hope to achieve with a diploma in finance from an ACICS accredited career school operating out of a strip mall. Then again, I'm sure that at least one person completed the program and parlayed it into a decent career.

At the end of the day, for all of the people who say they would never hire a UoP graduate, UofP graduates get hired. One of the reasons is that many UofP graduates already had jobs and went back for an MBA or MS to give their career a little boost. If you're a CPA with years of experience (bonus if you have specialized experience) you're going to find work. No one is going to spite-not-hire-you because you picked up an MBA (and a pair of socks) from the University of Phoenix.

Everest College, however, is in a different playing field. Like the local "career colleges" they took unskilled people, didn't train them in any useful skills, and then released them onto the job market with a degree. Traditional universities do it all the time. But Everest wasn't preying on high school students, like most universities do, they went after low income adults and made their situations much worse.

Honestly, I think that's why so many universities are in the MBA game these days. Most of your students are likely to be working professionals. After a graduating class or two you can boast a successful alumni base regardless of the quality of your actual program.

 

I remember many years ago looking at UoP back when they were just starting to push their online programs hard. What shocked me at the time was how expensive their courses were. There were several local small private liberal arts colleges that were a lot less expensive(and probably still are).

To say that there is not a huge public distaste for for-profit colleges would really be ignoring the large elephant in the room. If anyone thinks otherwise, do a simple Google search for for-profit colleges and you will find no more than one or two down items down a series of articles about for-profit colleges and they are not boasting about what good they are doing. There are some that are bad apples, but not all are. This is a "one rotten apple spoils the barrel" mentality. Some are better than others and the generalization is bad for everyone. One real concern of mine is that graduates of for-profit schools could find themselves discriminated against, as why hire the guy with a for-profit degree? The bad need to be punished but there could be repercussions that are not being considered (like alumni and the people going to for-profits colleges).

 

Personally, I have nothing against the for profit institutions. Back in the day I recall schools like UoP starting the whole DL trend. However, like other folks have commented on in these forums there are more inexpensive options out there that bring more credibility and value your degree program.

 

I took one UoP graduate class towards a masters degree back in 2001 and that one class was about 3k. The entire degree program would have been over 30k, which was simply too expensive. I immediately transferred the class (for credit) to a local state university and got a masters degree for 7k. My employer paid 75%, so my out-of-pocket cost was about $1700.

 

This isn't exactly true. They just became better known for DL because of all their advertising.

 

OP, the article I read stated that it was actually easier and quicker to get programs approved for nonprofit schools, so that's one of the reasons Grand Canyon cites for wanting to switch, in addition to the regulatory issues directed at for-profits. Kind of ironic in a way is there's less red tape for nonprofits. It seems things would be better off with a uniform set of regulations (not accounting for tax/SEC issues, etc.) for all types of colleges. Otherwise the schools that can afford to make the switch over to nonprofit likely will do so.

 

I would consider a for-profit school if:

• The name sounded normal. Most for-profit schools are easily identifiable by the name. If it has "American" or "International" in the name, I will assume they are trying to attract foreign students.
• The front page did not say "on-line" and list 1-800 numbers. Recruiters are going to check the Web site too, not just students, so this page should look like a professional university page, not a pop-up ad.
• Complete program details are available on-line. I don't want to fill out forms, get phone calls, and get the usual less-then-detailed information. I want to see catalogs, complete tuition and fees, faculty name, etc. so I quickly see if the school belongs on my list of schools to consider.
• A quick Web search did not reveal hundreds of pages of student complaints.

 

Those are actually some of the other reasons I went with CTU instead of its "cousin" American InterContinental University. AIU keeps getting flagged by hiring managers and my colleagues when it comes up on resumes.

"This sounds like a fake school" is a frequent sticky note message when the applicant mentions AIU.

Ironically enough, not a single one of these people flagged the person with the B.S., M.S. and Ph.D. from Atlantic International University (diploma mill).

On a side, but related, note I was reading a few of the "Grr! For-profit schools bad!" articles and I found a really interesting trend; most of the articles seem to be based on a few weird (and incorrect) assumptions. In this PBS article, for example, the article begins with a huge picture of the facade of the University of Phoenix but then later in the article it says:

(Emphasis is mine)

Thing is, of that list, UofP only offers nursing programs. I know they used to offer on-site RN programs at some locations but I can only imagine that (if they still have these at all) their bread and butter in the nursing industry are the graduate programs for current nurses.

And, of course, all of these articles only really deal with schools that make their money off of federal funds. PennFoster, Ashworth, New Charter University are just three examples of NA schools that get by without touching the federal money. Patten (same parent as New Charter) is the most obvious (and might be the only, but someone please correct me if there is another player in this space) example of an RA school which doesn't rely on financial aid. Capella is branching into this space as well and I predict that a number of other schools are going to be going this route (or turning non-profit).

Makes sense, the federal government only really has a reason to complain when federal money is going into it.

I will be curious post July 1 how the numbers start to look for for-profit providers. I'm wondering if we're going to see some pretty significant players fall to the ground. These new regulations have the potential to strangle a school. It may bring about the demise of a big player (UoP, Kaplan, any of the CEC schools) but it may also lead to the rise of some of the smaller players like Patten.

Naturally, I hope my own alma mater emerges unscathed. But, as with any business, I also recognize that changing market conditions will force some of them to close. I hope CTU isn't in that number, but if it is, there are far worse fates to befall one's former school than closure, IMHO.

 

I'm also interested in watching how things shake out for the for-profits, since I'd like to work in post-secondary ed. Another way this might go is increasing developmental/remedial offerings and academic support as well as career services throughout programs, to ensure that students are successful, make it through programs and have the best chances to land a job. There is a lot of talk about how for-profits are more student-centered, to me providing more comprehensive services like these is how they can prove it versus making courses easier and doing everything to keep students happy. I'd think successful graduates are more likely to be happy with their choice of schools.

 

Programs offered to certain professions also enjoy a built-in funding model. Teachers typically have access to tuition assistance to aid in the career advancement.

Every company I've worked for post-Navy offered tuition assistance (heavily pushing MBAs).

So you don't really need Title IV if employers are willing to cut a check. If you can stay on the good side of those employers, life is good.

Title IV also doesn't include GI Bill funding.

And if your tuition is low enough people are more likely to just self-fund.

All good revenue models that avoid running afoul of the fed.

 

I have wondered How American Military/American Public University fit in. They are a for profit but their tuition is fairly low. I have to imagine they have quite the different business model(I also do not see ads for them every other day). As for giving up federal money to do what you want, I am not sure how that will pan out for some of the big guys as they would have to drastically lower tuition to get people to attend. Which bears the question, if you reduce tuition and reduce costs is the business model still viable as recruiting seems to be a big portion of what these schools do. I find it interesting that SNHU a non profit school has been acting very for profit in many ways with their advertising and their admissions model(from what I have seen of it).

 

When I was on active duty they advertised pretty heavily in military circles. Full page ads in Navy Times were not uncommon (the ad that stuck in my mind was the one where they showed a closeup up two feet in combat boots with the caption "Our provost wears combat boots. ...so does our President, and..." or something to that effect).

AMU/APU has a target demographic. They also set themselves apart by offering the sort of programs you typically don't see at a for-profit school. You can earn a B.A. in Philosophy, Religion, English, History etc. The graduate programs are also somewhat uncommon in the distance learning (either for or non-profit) space. MA in Humanities, History etc.

I think the public bias is also largely based on the assumption that "for-profit" college ALL offer purely vocational programs (see the article above). So a school offering numerous programs in the humanities is going to really throw everyone for a loop. They can fly under the radar because they are going after a target demographic that is rich in GI Bill (and military TA) money (and their spouses). They also have a pretty solid reputation in military circles and other majors which apply directly to people still serving (or serving the federal government) like Intelligence Analysis.

Meanwhile, I was positive SNHU was for-profit until about six months ago when I actually checked.

I think the RA factor has caused a number of lines to blurr. Before regional accreditors were even willing to evaluate for-profit operators there was no real competition. Now, the playing field is pretty level. The President (and some Senators) are trying to tip the scales. It will shake a few of the weaker apples from the tree, possibly. But I don't see this being the death toll for for-profit universities.

Disclosure: I am a fan of AMU. I signed up and registered for my first class without ever talking to a person which seems rather uncommon for a for-profit (and many non-profit) school. I took a few grad courses with them in History but never earned a certificate/degree.

 

I agree Steve, my comment was meant more for the publicly traded schools. How Does a Devry, UoP, etc. change to a pay as you go model forsaking all Title IV monies, cut tuition,continue recruiting (as you need more butts in seats to turn the same profit) and stay solvent? As it was suggested, that this may be the new model that schools go to(doing like Capella). I think there would have to be some divestiture and lots of pain to move in that direction at this point.

 

It could also mean the death of the large schools like UoP. UoP reminds me of Gateway computers. For a while they had a really impressive run. But they tried to scale too quickly and wasting money on trying to put a location in every town. In a sense, they tried to be ITT Tech on steroids. It might bring about their end. Or, maybe they will all scale down, switch to subscription based competency models and hope to survive on a combination of employer funding, GI Bill and self-funded learners.

I am also seeing more schools going to a portfolio assessment model. This might be a push to ensure higher completion rates. If I show up to Capella with zero credits and start from scratch I am going to be there longer and spend more money. But the longer I'm there, the more likely I won't finish my program. If Capella can knock four months off my program based on some certifications it might be the difference between completing and withdrawing.

 

SNHU has said that it is modeled after for-profits such as UoP. It was also originally founded as a for-profit school.

 

I'm enjoying this discussion, so I hope people don't mind if I throw out another interesting case study.

Full Sail University.

For a nationally accredited school, they seem pretty good at what they do.

I think certain areas are harder to criticize than others and entertainment is one of those areas. The area, where the for-profit schools are heavily criticized and it doesn't seem to matter as much, would be culinary schools.

I was reading an article the other day where someone called culinary schools the "worst offenders" and said that upon graduating people were making $8/hr to "scoop whipped cream onto desserts." (That guy might want to start going to fancier restaurants)

I'm not a chef (but we do know someone here who is). I can see both sides of this argument. There are certainly successful chefs who bypassed culinary school and went straight into the kitchen (thus, also bypassing student loans). But there are also many who did not.

All I know is the "I didn't even go to culinary school" person is usually the first one eliminated during Top Chef (sometimes second if the "quirky caterer" can't hold it together).

Business programs prepare students for everything from working the counter at a rental car place to investment banking, and pretty much everything in-between. Criminal Justice programs seem to be popular among active duty military and police officers (and a lot of people aspiring thereto). But there is still a pretty broad range in the CJ world wherein "success" can be rightfully declared.

But entertainment, the arts, culinary arts are pretty competitive. For every celebrity chef we see on TV there are probably thousands of people toiling in unknown kitchens for slave wages.

My question to all, is success in these fields properly measured by job placement rates or average salaries?

Maybe I'm so passionate about cooking that I'd rather make $12/hr than $45,000/yr doing something non-cooking related. Or maybe I'd rather be a broke production assistant, but still get to say I work in the film industry, than try to get a job as an accountant.

If those rates aren't useful, is there another measure? Or should schools not have so many measures like this in the first place?