Education or Exploitation? For-profit schools and working-class students

If you read yesterday’s New York Times, you may have noticed the full-page ad, paid for by Corinthian Colleges, Inc., one of the largest for-profit education providers in the US.  The ad urged readers to contact our Congressional representatives to “put the brakes on” proposed regulations that link educational programs’ eligibility for federal financial aid with the post-graduation income and debt repayment of students.  The ad suggests that proposed new rules would lead to the loss of thousands of jobs and limit college access for low-income and minority students.

Responding to the proposed rules, Harry C. Alford, CEO of the National Black Chamber of Commerce, argues that the Department of Education was “singling out one vitally important segment of the post-secondary landscape and putting up ‘no trespassing’ signs, keeping out the students who would benefit the most.”  While this rhetoric is appealing, the question of whether for-profit schools – which Alford describes as “career colleges” – serve the best interests of working-class students is not simple.

For-profit schools have thrived for several reasons.  First, they offer an alternative to traditional college programs.  States have cut funding to higher education, and in some cases – California   most dramatically – have limited enrollment.  Meanwhile, the most common advice given to those who are out of work is “get a college education.” So it’s no surprise that enrollments are up across the country.  For-profit programs provide alternatives to students who can’t get in to crowded colleges or programs with limited enrollments.

For-profit programs also provide flexible, often on-line programs that focus on job preparation.  They offer short-term certificates as well as degrees.  That flexibility helps working adults, and some traditional-age working-class students may well find alternative settings more comfortable and accommodating than traditional community colleges or four-year public universities.  The focus on training for specific jobs may appeal to the practical attitudes of many working-class students, as well.

Such schools often target lower-income students, and they both enroll and graduate higher percentages of minority students than do traditional colleges.  A study commissioned by Corinthian found (perhaps not surprisingly) that they offer a good value for working-class students: such schools “increase access and student success among first-generation, low-income, and non-traditional students better than two-year public colleges.”  In a report prepared for the Imagining America Foundation, an organization that provides scholarships for students attending for-profit “career colleges,” Watson Scott Swail claimed that career colleges achieved higher graduation rates than public or private institutions.  The National Center for Education Statistics disagrees.  Its 2008 report shows for-profit 6-year graduation rates at just 24.5%, compared with 55% of students at public institutions.

Faculty at some for-profit schools work hard to provide high-quality education.  But some of these schools encourage or even require faculty to use questionable methods or pitch course expectations low.  Several of my former graduate students have taught at a for-profit near Youngstown State.  They describe the “college prep English” courses there as centered on grammar drills and worksheets, while “college writing” focuses on the “five-paragraph essay,” a model widely discredited by experts in composition.  The curriculum is tightly prescribed and very different from what we teach in first-year writing courses offered to very similar students at our open-enrollment university.  The education at the for-profit is significantly less challenging and substantive than what students would get at the university.  Asking less may help raise graduation rates, but it cheats students.  One of my colleagues said that her students at the for-profit school believe they are getting the same quality education, in both substance and cultural value, as they would get at the university.

The Corinthian study claims that for-profits “do a better job in helping advance students, leading to higher wage gains upon employment and more manageable debt burden.”  Specifically, the report finds that students generally see a wage gain of about 54%, comparable to what they’d get with a community college degree.  Most for-profit schools promote their programs as good preparation for high-demand careers.  While defining college entirely in terms of job preparation is problematic, as Tim Francisco pointed out last week, it’s equally true that for many young adults, job training programs are a good fit. For some students, learning a skilled trade would be a better choice than a more academic program.  Despite the popular belief that “everyone” should go to college, some students who might struggle at four-year universities would thrive in practical training programs.  Further, according to the Bureau of Labor Statistics, the employment categories that will see the most growth over the next few decades require either specialized training or none at all.  For those jobs that require some training – manicurists, for example, or licensed practical nurses — some for-profit training programs may be a fine option.

Yet, as we’ve discussed here before, many of those jobs pay very poorly.  The New York Times reported earlier this year that students often enroll in for-profit schools expecting to land high quality jobs, only to discover that being a line cook or a manicurist doesn’t pay very well.  Worse, tuition at most for-profit schools is significantly higher than at public institutions.  A Government Accounting Office report provided a case in point: “A student interested in a massage therapy certificate costing $14,000 at a for-profit college was told that the program was a good value. However the same certificate from a local community college cost $520.”  Students who either pay out of pocket or take out loans for $30,000 dollar degrees that lead to $22,000 a year jobs are right to feel resentful.

Meanwhile, for-profit schools claim that they do not receive taxpayer support, while both public and private non-profits rely on state and federal funds for operations and research.  Of course, students attending for-profits do receive support from taxpayers, in the form of loans and Pell grants, and their loan repayment rates are considerably worse than those of students attending non-profit schools.  According to an Education Department report, 43% of those who default on student loans attended for-profit schools, even though only 26% of borrowers attended such schools.  For-profits may not receive direct funding, but without government loan programs, many of their students could not attend college.  And many of those who attend such schools don’t earn enough to pay back their loans.

That imbalance lies at the heart of the “gainful employment” concept of the new regulations.  It asks schools to demonstrate that the cost of a program does not exceed a reasonable percentage of typical earnings for graduates and to show that graduates are paying off their student loans.  A program would be deemed ineligible for federal loans for students if less that 35% of graduates were successfully repaying loans.  That’s why for-profits and their allies are fuming, though as Inside Higher Ed points out, the new regulations are likely to make just 5% of for-profit programs ineligible for government loan programs.  About 55% would be restricted in some way.

Even worse, the GAO study found clear patterns of deception and pressure in recruiting, and admissions counselors at several schools encouraged applicants to lie on their government financial aid forms.  Undercover investigators applied to 15 for-profit schools around the country.  Every single program “made deceptive or otherwise questionable” claims.  At most schools, applicants were given inaccurate information about job placement rates, job openings, and potential earnings.  Some applicants were pressured to sign contracts without having a clear statement of program costs.  If for-profit education is so good, why do so many programs rely on high-pressure tactics and misrepresentation to recruit students?

No doubt, many working-class students benefit from alternatives to traditional 2- and 4-year college programs.  They may offer greater flexibility, programs focused on preparation for jobs that don’t require a traditional degree, or a focus on working-class and minority students. Some for-profit schools offer high-quality and affordable programs, provide students with accurate and smart advice about how to balance college debt with employment potential, and assist students in finding good job placements.  They provide a viable alternative for working-class or any other students.  If others can’t make a profit without misrepresentation and exploitation, they should be shut down.   I guess it’s pretty simple after all.

Sherry Linkon, Center for Working-Class Studies