10 Reasons to Avoid For-Profit Schools
As the days begin to shorten and the humidity drops, we approach the end of another summer. Young people across the country are getting ready to return to college for another semester of buying overpriced textbooks while attending lectures taught by underpaid adjuncts. As millions of former High School students make their transition from classrooms to lecture halls, there are many who are enrolling in for-profit schools like the Art Institutes, Kaplan, or ITT Tech. While these institutions may seem like a good choice on the surface, their overall mission is to turn a profit for shareholders, rather than investing in their students. These schools have destroyed the lives of thousands of students who were simply looking for an opportunity to better their lives.
Why precisely are these schools so bad? Here are ten reasons:
1. False Job Placement Numbers.
One of the biggest issues with these schools is that their counselors, under the pressure of quotas and performance-based assessments, frequently misrepresent the school’s job placement numbers, misleading students into investing their future into schools which might not actually help them succeed in the long-run.
In 2014, the city of San Francisco won a $4.4 million settlement from The Art Institutes of California after many students filed complaints accusing the school of inflating job placement rates while understating the cost of their programs.
Another lawsuit from the New York Attorney General led to a $10.25 million settlement with Career Education Corp which advertised job placement rates of 55-80%, rather than the actual statistic: 24-64%.
2. Not Properly Accredited
When researching the brochures and websites of these schools, you might have noticed that they are accredited by organizations such as the Accrediting Commission for Career Schools and Colleges (ACCSC) or the Accrediting Council for Independent Colleges and Schools (ACICS). While these might seem legitimate, a majority of the board members at these organizations consist of former executives from prominent for-profit schools, and neither of these groups have stripped any accreditation, even from institutions which face high-profile lawsuits and complaints from state and federal governments.
Why? Well, if either the ACCSC or ACICS strips an accreditation from a school, they will lose revenue. As a former senior policy adviser for the Department of Education says: “It’s not like there’s active policing going on. You get under incredible amounts of pressure whenever you try to take someone’s accreditation away.”
Many prospective students are told that these for-profit schools are properly accredited and without further research, won’t realize that most, or all of their credits won’t transfer if they later decide to switch schools. For instance, Amy Robin, a former Art Institute of New York student, transferred to the City University of New York (CUNY) system and lost all of her credits, despite being told that they would transfer. She owes $80,000 in loans for essentially zero credits.
3. Performance of Recruiters Based on Admissions.
You may have noticed that the recruiters at your school are very persistent, constantly pressuring you to get your application completed as soon as possible. You might have thought to yourself: Why are these admission counselors so impatient? The truth is, if your advisers seem more like salespeople then employees of an academic institution, you might be making a bad decision.
In 2011, The U.S. Department of Justice filed a complaint under the False Claims Act against the Art Institutes, for giving incentives to counselors based on the number of students they enrolled. Other notorious for-profit schools such as Devry and The University of Phoenix have also faced similar lawsuits.
For more evidence of the quota-based culture for these educational “advisers”, check out these documents from the Art Institutes, obtained by the Huffington Post:
A comprehensive investigation by the Senate Committee on Health, Education, Labor, and Pensions have also revealed similar findings:
“Recruiting materials indicate that at some for-profit colleges, admission representatives were trained to locate and push on the pain in students’ lives. They were also trained to ‘overcome objections’ of prospective students in order to secure enrollments. Additionally, companies trained recruiters to create a false sense of urgency to enroll and inflate the prestige of the college.”
4. Students Receive Insufficient Information
Many students who are interested in these for-profit schools legitimately want to improve their lives but lack sufficient information about their desired field of study. One unfortunate result of the quota-driven dynamics of these recruitment departments, is that advisers are pressured to mislead students with incomplete information.
For instance, the Justice Department opened an investigation into DeVry, for offering an associate degree program in Health Information Technology without providing adequate information about degree requirements or the job market. Unsurprisingly, Corinthian, ITT Tech, and Apollo Group have all been accused of similar practices.
5. Veterans are Targeted
Many Americans join the military because of the GI Bill, which provides free, or deeply discounted higher education to veterans upon completion of their service. Since the passage of the Post-9/11 GI Bill, for-profit schools have aggressively targeted veterans to receive federal aid from these programs. The Apollo Education Group and Corinthian Colleges have both faced federal lawsuits for incorrectly using Military seals in their advertising, tricking service members into thinking that these U.S. Military has a direct relationship with these schools.
The University of Phoenix even has a military division and their advertisements are heavily featured on military programming. Many of these schools also have dedicated military enrollment advisers, which visit injured Marines to pressure them into signing up for programs.
As one Army vet and former University of Phoenix student from St. Petersburg, FL wrote on the GI Bill’s Facebook page:
“I researched the accreditation and it seemed legit. I had no idea…none of my schooling would transfer. A lot of places see the guaranteed GI Bill as cash in hand and it’s a shame they take advantage of us.”
6. Very High Cost of Education
This chart, based on data from ProPublica says it all:
Despite what admission counselors may tell you, for-profit schools like Corinthian and Art Institutes are definitely not a bargain, especially for Certificate and Associates Degree Programs. Attending a public institution, such as a community college would be a far better option, as these programs are certainly not worth the $20-35,000 pricetag.
7. Very little investment in actual instruction
According to the study from the Senate Committee on Health, Education, Labor, and Pensions, for-profit schools spend more on marketing, recruiting, and pre-tax profit, than instruction:
- $4.2 billion (22.7%) - Marketing, Advertising, Recruiting, and Admissions staffing.
- $3.6 billion (19.4%) - Pre-tax profit.
- $3.2 billion (17.2%) - Instruction.
This disparity is reflected in the amount spent on instruction per student, in comparison to Non-Profit and Public Colleges:
We can also see the implications in the staffing levels of these schools, where recruiters comprise a significant majority of the employees:
Another Fact: The CEOs of the publicly traded companies that own these schools are paid 26 times as much as heads of traditional universities.
While this should go without saying, you should aim to attend a school which actually invests in classroom instruction, rather than focusing on marketing, recruitment, the salaries of high level administrators, and turning a profit
8. Exorbitant default rates
If you attend a for-profit school, you have a much higher change of defaulting on your loans than if you went to a public or private non-profit institution. New America did a 3-year study which illustrates how tough it is for students of proprietary schools to pay off their loans:
There are likely many reasons for the higher percentage, including the inadequacy of the curriculum, lack of reputable accreditation making it harder to find employment after graduation, and misinformation spread by the admission counselors, leaving many students unaware of the terms of their loans.
Defaulting on your student debt can have many negative consequences, including wage and income tax garnishment, ineligibility for future deferments or financial aid, and possibly even a lawsuit for the full amount of your loan. For seven years, the default will also significantly impact your credit score.
9. Above Average Withdrawal Rates
Not just do many students default on their loans, but a high percentage also withdraw from for-profit schools before graduation. In fact, according to the Senate committee study, more than half of the students attending the top ten for-profit education companies have withdrawal rates above 56%. This means more than half of the students don’t finish their studies.
If you think this is serious, that rate is even higher for associate degree programs:
How does this compare to other colleges and universities? Well, there doesn’t seem to be too much data, but the average withdrawal rate for all U.S. colleges and universities is 46%, the highest rate in the developed world. All of the top ten largest for-profit colleges are above this average.
10. Revenue is from Federal Aid
With such high withdrawal and default rates, you might be wondering how these for-profit schools turn a profit. Well, look no further than your tax dollars:
“Committee staff estimates that in 2009 when all sources of Federal taxpayer funds, including
military and veterans’ benefits, are included, the 15 publicly traded for-profit education companies received 86 percent of revenues from taxpayers.”
How can these schools take so much taxpayer money for expensive programs which fail the needs of so many students? Well, the Department of Education does have a rule which states that no more than 90% of the revenues of these companies can be from federal aid. Even this was too stringent for many schools, as 27 for-profit schools exceeded this cap last year.
This 90/10 ratio doesn’t even include military benefits. Based on the Senate report, 37% of all post-9/11 GI Bill and 50% of Department of Defense Tuition Assistance benefits go to these high-cost for-profit programs.
Do you want to attend a school which is basically just using your attendance to reap profits in the form of our tax dollars?
As you can see, schools like The Art Institutes, Devry, ITT Tech, and hundreds of others have been misleading prospective students and profiting from Federal aid for years. On behalf of the thousands of students who had their lives negatively effected by attending these schools, please heed these warnings and think deeply about the choice you are making for your future.