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A Broken Sector

As national higher ed debates focus on issues of cost and racial equity, one sector’s failures loom large.

For-profit colleges, a new report concludes, are broken. And the Biden administration needs to make fixing the problem a top priority. Here are two big issues that Brookings article lays out:

For-profit colleges are more expensive and less effective.

  • The average tuition at a for-profit college is more than $10,000 higher than at a public community college, the report says, and they play an out-sized role in the nation’s student debt load.
  • For-profit colleges enroll 10 percent of students but account for half of all student-loan defaults.

For-profit colleges target Black and Latino students — and the poor outcomes for the sector’s students overall are often worse for them.

  • Black and Latino students make up less than one-third of all college students, the report says, yet they represent nearly half of students at for-profit colleges.
  • An example of disparate outcomes: Almost 60 percent of Black students who took on debt to attend a for-profit college in 2004 defaulted on their loans by 2016, compared with 36 percent of their white peers.

The Brookings authors want the new president to do more to hold for-profit colleges accountable for the outcomes of their students, close loopholes in rules that seek to prevent colleges from depending completely on federal subsidies, and provide consumers more information about graduates’ earnings and loan repayment rates.

Alternatively, the report’s authors say, they see enough evidence of poor performance to justify removing for-profit colleges from eligibility for federal funds entirely — an idea that some Democrats have proposed.

A New Tone

Within days of the inauguration, signs of a new era appeared. The Education Department recommended that a controversial accreditor of for-profit colleges, the Accrediting Council for Independent Colleges and Schools, be stripped of its federal recognition.

Chris Quintana, a higher education reporter for USA Today, says that action set a tone for what could be to come. Chris, who we used to work with at The Chronicle, has spent a number of years investigating for-profit colleges. I talked with him this week about what he’s watching as the ground shifts in Washington.

Growing enrollments. We’ve seen (and written) a lot of headlines about falling student enrollments in the pandemic. They’re down 2.5 percent overall — and by more than 10 percent at community colleges. Where they’re not falling? At for-profits. There, the numbers are up by 5 percent.

Chris wants to know why. Are for-profit colleges’ marketing campaigns getting more aggressive, or more targeted? Why are students seeing them as a better option than their community colleges? Most importantly, what does this mean for the students choosing to enroll there?

For-profit college students, Chris says, often have trouble transferring credits to other colleges. That’s an issue high on his radar. And they take on more debt than their peers elsewhere. More than 80 percent of graduates of for-profit colleges took out student loans, and their average debt is nearly $40,000. That, Chris says, “seems really significant.”

How do we help people assess if a college is good? It can be hard to tell, Chris says, especially when there’s not a lot of local coverage of colleges outside of the state flagships.

There’s a lot of ink spilled at the national level about federal policy debates over things like “gainful employment” and “borrower defense” rules — and those are important. But those terms have little meaning to students making college decisions, and they often don’t know very much about how they should be vetting colleges.

Chris remembers writing about the sudden closure of Argosy University a couple of years ago, which displaced thousands of students. When he talked with students who had attended the for-profit college, they sometimes didn’t even know it was for-profit or why that distinction might matter. “How much do they know about the college process and what they have been told by the recruiters is something I’m always interested in,” Chris says.

A pitch for more coverage. Here’s why Chris believes we should be writing more about for-profit colleges: Many of us, he says, probably have a cousin or sister or some other family member who sought to improve their life, went to a for-profit college, and it didn’t work out. Sure, there are good outcomes for some people. But, in general, there’s a lot of frustration with debt, especially debt that’s hard to pay back without a degree or credential that translates to a higher salary.

“It matters,“ Chris says, “because it affects what people can do with their life.”

— Sara Hebel

+ Read Chris’s investigation of a for-profit university that won accreditation even though it appeared to have no students, faculty, or classrooms.

And his follow-up about the accreditor’s stumbles as it scrambled to crack down.

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