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For-Profit Colleges Section
For-profit colleges are among the nation’s fastest growing businesses. While only 9% of the nation’s colleges, they account for almost a quarter of all federal financial aid.
Recently the for-profits like Corinthian Colleges Inc., the University of Phoenix and Sanford Brown have been criticized for their exhorbitant fees and extrodinarily high student loan default rates. Critics have labeled their operations a subprime student loan racket and the United States Congress is investigating them. Yet, in the last year, Milwaukee real estate developers have been anchoring publically subsidized projects with notorious diploma mills such as Corinthian College ’s Everest affiliate and the Goldman Sachs owned Art Institute of Wisconsin.
For- profit college faculty and students have contacted Local 212 about the predatory nature of these diploma mills and we have worked with student and community organizations to deny them public subsidies and to regulate them.
In an effort to keep you informed about these institutions and on-going efforts to regulate them, the local 212 web site has added a section on for-profit colleges. To read get the latest information on these bottom feeding institutions check here. It will be updated frequently.
Links
Is There a For-Profit Education Bubble?
NPR, All Things Considered, August 17, 2010
'Frontline' Highlights Dangers of For-Profit Colleges
Barbara McKenna
Reprinted from AFT Leadernet
PBS's documentary news program, "Frontline," broadcast a recent expose
called "College Inc.: Investigating How Wall Street and a New Breed of
For-Profit Universities Are Transforming the Way We Think About College
in America."
Now posted on the public television station's website, it is worth a
look for anyone who wonders about the barrage of TV and print ads from
places like Kaplan University, the University of Phoenix, and Corinthian
and Everest colleges.
You've probably seen the ads, because, as "College Inc." explains, they
are everywhere. For-profit colleges spend a lot to get the attention of
their market—lower-income and working adults. The portion of their
budgets going into advertising rivals that going into instruction. They
keep instructional costs down by relying on a teaching force of
untenured part-time and temporary faculty.
To cite one example, the University of Phoenix spent $130 million on
advertising in 2008. That was more than Tide, Revlon or Federal Express put into selling soap, cosmetics or business services, the program
noted.
For-profits also find students through other channels. In October, Daniel Golden of Bloomberg.com interviewed a man at a homeless shelter about the efforts of Drake University and other institutions to recruit
him. The day after "College Inc." aired, Drake announced it would
discontinue the practice.
Well, this is America, you might say. Who would begrudge a business for
marketing its product and making a buck?
Plenty of people, apparently. There are the students, heavily recruited
and coaxed through the process of applying for federal loans. Many are
ending up saddled with life-altering debt, no degrees and inadequate
skills to get the jobs they thought they were training for.
"Frontline" spoke to Ann Cobb, whose $30,000 loan, 10 years later, has
turned into a $60,000 debt she is unable to carve down.
When a for-profit business like the University of Phoenix gets 84
percent of its revenue from the federal student aid system, as"Frontline" documents, it raises eyebrows. Ten percent of college
students attend for-profit institutions, yet they account for 25 percent
of student loan volume and close to half (44 percent) of loans in
default. Eventually, taxpayers must foot the bill on unpaid loans.
Outstanding student loan debt amounts to a whopping $750 billion (not so
far from the $865 billion total of Americans' credit card debt). Some members of Congress worry that a debt crisis reminiscent of the subprime
mortgage debacle is imminent. Last fall, the House Education and Labor
Committee held hearings to consider whether tighter oversight is
necessary for an industry that taps into the federal financial aid stream to the tune of $20 billion. The U.S. Department of Education is
also looking at better regulation through the negotiated rule-making
process.
For-profit colleges have identified a niche, and through online courses
and programs offered at times and in places that are convenient to the
students they serve, they are addressing needs that the public and
nonprofit institutions are struggling to meet. As U.S. Secretary of Education Arne Duncan says in "College Inc.," there is nothing
inherently wrong with for-profits providing good education. "But where
there are high-pressure tactics, deceptive tactics and dishonesty, we
have to challenge that in a very serious way."
The AFT has a long history of lobbying for protections in federal law
for students who may fall prey to the questionable tactics of some
for-profit ventures. Recently, Local 212, the faculty union at Milwaukee
Area Technical College, pressed hard to prevent the establishment of a
branch of Everest College just blocks away from MATC and next door to a public housing development. Although the city has signed off on zoning
waivers and tax-free bond issues to allow the college in, local
president Michael Rosen says the unionkeeping the pressure on state legislators to ensure that Milwaukee
students are protected against fraud and abuse.
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