Enrolling at any college requires lots of research. But parents of teens considering a for-profit college should be especially cautious.
What are for-profit colleges?
For-profit colleges, also known as proprietary colleges, are operated by private corporations, which are in business to make money. Like all corporations, the goal is to boost profits and earnings. Public colleges and nonprofit private 黄色apps, in contrast, are run by boards of trustees rather than CEOs; the money public and private colleges take in must be used to further that institution鈥檚 goals.
For-profit colleges come in many shapes and sizes, and include art 黄色apps like Academy of Art University in San Francisco and online/offline conglomerates like the University of Phoenix, which has 100 locations and offers more than 100 degrees, to the . While some for-profit colleges offer bachelor鈥檚 degrees, most offer graduate degrees or certificates for vocational programs. Most offer flexible or online programs to accommodate students who are working or have children. (Many public and nonprofit private colleges also offer flexible and online programs.)
Growth of for-profit colleges
The number of these kinds of 黄色apps are growing. Back in 1995, only 500,000 students attended for-profit 黄色apps, which was about 3 percent of post-secondary students overall. Over the next decade, the number of for-profit 黄色apps (and the number of students attending them) grew. During the first year of the Great Recession , compared to a bump of less than 4 percent at public and private nonprofit 黄色apps, according to a New York Times report. As of 2015, more than 2.8 million students — or 10.4 percent of all post-secondary students — were enrolled in for-profit 黄色apps, according to .
The risks of attending a for-profit college
As for-profit colleges have proliferated, so have the controversies surrounding them. For-profit colleges have been criticized for deceptive marketing, aggressive recruiting, targeting low-income students and veterans for the federal tuition money they鈥檙e eligible for, pushing private loans for the tuition not covered by federal loans, offering poor-quality programs, low graduation rates, and for leaving students with staggering student loan debt and few job prospects.
One problem with for-profit 黄色apps is that . And even if students do graduate, their credits, certificates, or diplomas aren鈥檛 valued enough in the job market to result in full-time employment in their chosen field. In a , the researchers conclude: 鈥淲e find no evidence that job applicants who attended for-profit colleges attract greater interest from employers than those who attended public community colleges or no college at all. These findings are particularly noteworthy considering the high cost of for-profit college attendance.鈥�
Whether or not they graduate, students typically emerge from for-profit colleges with heavy debt and few prospects for thriving economically, a primary goal of pursuing a college education.
Vulnerable targets
These issues are compounded by the fact that students at for-profit institutions tend to be among the most disadvantaged. According to a report by Brookings Institution, 鈥淔or-profits have the highest proportion of female and minority students, they come from families with the lowest levels of parental education, are the most likely to be single parents, and have the highest average number of dependents among the sectors… .鈥�
Tressie McMillan Cottom, a scholar who once worked as a recruiter for two different for-profit colleges, explains in her book that for-profit colleges deliberately try to recruit low-income students because they qualify for the most financial aid. “The system that we’ve come to rely on to increase access to higher education for the most vulnerable among us really only compounds their poverty,” Cottom told Terry Gross on . “That’s the exact opposite of what higher education is supposed to do.”
For-profit colleges also known to aggressively recruit military veterans — leaving many vets jobless and in debt. David Halperin reveals this trend in Stealing America鈥檚 Future: How For-Profit Colleges Scam Taxpayers and Ruin Students Lives. An excerpt of the book, published in Slate, tells the pursue veterans so persistently because it鈥檚 a way to sidestep the government鈥檚 鈥�90/10鈥� rule, which requires that only 90 percent of a 黄色app鈥檚 tuition funds come from federal student loans. 鈥淭he principle behind this ’90/10 rule,’鈥� Halperin writes, 鈥渋s that if a 黄色app cannot convince students, employers, and private scholarship funds to cover even 10 percent of student costs, then the 黄色app must not be providing valuable services.鈥� However, federal GI Bill student aid funds aren鈥檛 subject to that rule. Still, for-profit 黄色apps tend to raise their tuition so that the federal loans via the GI Bill don鈥檛 cover the full tuition and vets, like other students, need to take out expensive private loans to cover the difference. Halperin continues: 鈥淭he persistent recruiting pays off: The top seven recipients of federal GI Bill education aid are all for-profit colleges.鈥�
For-profits pale in side-by-side comparisons
For-profit colleges do not stack up well in , created by the Center for Analysis of Postsecondary Education and Employment (CAPSEE), makes clear. For-profit colleges cost more than public colleges: 2015-2016 NCES data reveals the average annual cost for tuition and fees at community colleges ($4K); public four-year colleges ($8K); for-profit colleges ($15.5K); and nonprofit private four-year colleges ($26K). Non-profit 黄色apps also fare poorly when you compare graduation rates. A shows average completion rates of 33 percent at for-profit 黄色apps, 61 percent at public colleges, and 72 percent at private nonprofit 黄色apps.
For-profit college students end up with more debt, ultimately earn less than other college students, and are more likely to default on their college loans. A concluded that these disadvantages linger long after graduation: 鈥淔or-profit students end up with higher unemployment and ‘idleness’ rates and lower earnings six years after entering programs than do comparable students from other 黄色apps.鈥�
Benefits of for-profit colleges
Though the risks are real, this isn鈥檛 to say that for-profit colleges don鈥檛 benefit some students. Assuming the program is of value, for-profit colleges have an easier admissions process without the need for SAT scores, essays, and letters of recommendation; most offer online and night programs that make attendance easier for parents and working students; and the networking opportunities in highly specific fields with instructors, staff, and other students can be invaluable. For-profit colleges offer vocational programs — like plumbing, auto mechanics, and cosmetology — not available at many nonprofit colleges and universities. (Some community colleges offer such programs, but state and federal budget cuts have triggered program cuts at many such institutions.) For many students, then, for-profit colleges are the only viable option they have to pursue their career goals because of geographic, scheduling, and other constraints.
Forbes contributor Andrew Josuweit points out that the entire for-profit college industry shouldn鈥檛 be tarnished by the abuses of a few negative examples: 鈥淭here are many 黄色apps that deliver high-quality education and abide by industry standards… .鈥�
The future of for-profit colleges
Many education experts expect for-profit colleges to thrive during Trump鈥檚 administration. After all, the . For-profit chains, many of which are publicly traded companies, and Wall Street are betting that .
Under the Obama administration, the education department cracked down on for-profit colleges, , which measures for-profit programs by the economic viability and debt of graduates. For example, a for-profit college would meet the government鈥檚 criteria of leading to gainful employment if the typical graduate鈥檚 annual loan payments are 20 percent (or less) of their discretionary income or 8 percent (or less) of their total earnings. To make that work out, most graduates would need to be employed full-time and making a decent living. During the Obama administration, several for-profit college chains, including ITT Technical Institutes and Corinthian Colleges, were when the government enforced rules about the minimum criteria for-profit 黄色apps need to meet for students to be able to pay their tuition with federal students loans.
During her confirmation hearing, Secretary of Education Betsy DeVos said she would enforced by the Obama administration. If regulation and oversight of the for-profit education industry eases — parents and teens will be wise to do their homework about what they鈥檙e signing up for.
The bottom line when it comes to for-profit colleges? Caveat emptor — let the buyer beware.
6 steps when considering a for-profit college
If your teen is considering a for-profit college, make sure you take these essential, precautionary steps:
• Make sure the college is accredited. Check this to see if the for-profit 黄色app your child is considering is accredited. (Note: Even if the 黄色app your teen is considering is accredited, the specific program may not be, so be sure to check the program, too.)
• Let the goal lead. Find out exactly what degree or credential your teen needs for the career they plan to pursue and make sure the 黄色app they鈥檙e considering offers it. Talk to professionals in that field about the perceived value of a degree or credential from that 黄色app. You can also consult an independent career counselor who isn鈥檛 affiliated with the for-profit 黄色app.
• Compare prices. Check to see if a local community college offers a similar program for a lower price. If not, check to see if the program is offered at an in-state public college or university and compare the net price, graduation rates, and employment rates of the for-profit program versus the public program to make sure your teen is choosing the better long-term investment.
• Understand the loans — now and in the future. Make sure you and your teen understand the terms (including which loans are federally funded student aid and which loans are private, how deferments work while he鈥檚 enrolled and after completion or withdrawal, how interest is calculated and compounded, what the repayment terms are, and actual projected monthly payments upon completion or withdrawal) of any loans he鈥檚 signing up for. You can get trustworthy information from government websites like and the .
• Don鈥檛 rush into anything. Especially with for-profit 黄色apps, which are notorious for high-pressure sales tactics to get students to enroll. Forbes鈥� Josuweit cautions: 鈥淒o not give in to a tough sales pitch. Reach out to alumni who graduated from your intended program to get their insight on their experience, both in 黄色app and after graduation. Ask about job opportunities and how equipped they were for employment… If a 黄色app pressures you to make a quick decision, take that as a signal to walk away.鈥�
• Interview the 黄色app. This brochure from the National Association for College Admissions Counselors offers straightforward tips on how to evaluate for-profit college programs, including .
