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The Rise and Fall of For-Profit Schools

74 points by bpolania 11y ago

peter303 11y ago
A lot of military and older prefer the online experience. It takes time to commute to classes. Also the straight out of high school students are immature and aimless. In the beginning the for-profit college offered a better online experience. But regular colleges are catching up.
madaxe_again 11y ago
Here in the UK, there's an ongoing headlong rush driven by the incumbent robber baron^W^Wconservative government to turn a majority of schools into "academies", which is a back-door to complete privatisation of the "educational sector" (it's only a "sector" to those who see it as a profit-bearing industry, rather than an investment in "our" collective future). Any negative news about the effects of privatisation elsewhere, such as this, is sidestepped deftly, as, you see, academies aren't privatisation, they're, uh, enabling, um, better education, for the children, saving the taxpayer.... look over there, shiny thing! Academies have already come under fire for all varieties of corruption and improper practice, but individuals ("a few bad eggs") are being blamed rather than the system which promotes the viewing of and engagement with children as nascent consumers. shakes head
- gjm11 11y ago
  I broadly share your opinion about the "academy" movement in the UK, but it's not terribly relevant to this article, which is about what in the UK are called universities rather than schools.
peter_l_downs 11y ago
The crackdown is long overdue, but there’s an important consequence: fewer nontraditional students will be able to go to college. Sure, but why would we want to encourage anyone to attend "colleges" like Corinthians and University of Phoenix, if the effects are on average as harmful as described in the article? Not sure if this is just the author trying to shoehorn in some "debate" at the end of the article but it feels like it, given the details of the rest of the piece.
- jccalhoun 11y ago
  The whole article has a weird tone when it comes to its descriptions about for-profit colleges. It starts with "Not too long ago, for-profit colleges looked like the future of education." When was that? People that knew anything about for-profit colleges have known they were mostly ripoffs for years. What people might have thought is that online colleges were the future. Those aren't dependent on the for-profit model at all. Lots of real colleges offer online courses - and quite often for less money than for-profit ones. Those will still be around for nontraditional students even if all for-profit colleges were eliminated.
  - johnward 11y ago
    > People that knew anything about for-profit colleges have known they were mostly ripoffs for years. The problem is many people, like myself and parents, didn't know this. I'm doing fine though but I would not recommend it to anyone.
  - geomark 11y ago
    "...they were mostly ripoffs..." Maybe my experience is not the norm. I've heard a lot of bad things about schools like Phoenix and DeVry. But I went to DeVry (quite a few years ago) and got a 2-year tech diploma. They also offered a 4 year accredited BSEE at the school I attended (Arizona). It was failry challenging, a lot of people dropped out, but literally eveyone who graduated had a job offer waiting for them, several if you had decent grades. I had three offers from which to choose. It launched a nice career for me, including getting an employer to sponsor me to complete my BSEE. Things must have changed, because it was pretty solid at that time.
    - resolaibohp 11y ago
      What a lot of people seem to forget is that there are some for profit schools that are regionally accredited. This includes DeVry. Unfortunately all of the for profit school hate lumps them all together which makes people biased towards any for profit degree regardless of accreditation.
laotzu 11y ago
Jon Oliver did a great bit on privatization of education: https://www.youtube.com/watch?v=J6lyURyVz7k https://www.youtube.com/watch?v=J6lyURyVz7k
exelius 11y ago
This is a good thing for the country; the education provided by these schools is often on par with sources like Kahn Academy and Coursera -- at a much higher price. It seemed like many for-profit colleges are simply a way for "schools" to collect federally guaranteed loans that the students then have to pay back. The student assumes all of the risk. The other side of this industry are charter schools. These are for-profit K-12 schools, often paid for by state / local governments. The problems with them are: 1) Graft is common, with charter school administrators sometimes taking home ludicrous salaries ($500k+ for schools with ~1,000 students) 2) Funding often comes directly from the local school district, most of which are already severely cash-strapped. The problem here is that the cost of a single student attending a school district is largely buried in fixed costs: when the state takes $6000/yr from a district and gives it to a charter school, the district's costs do not decrease by $6000. This makes school districts worse, which accelerates flight to charter / private schools. 3) Educational standards are different -- in most states, faith-based charter schools are totally ok. As long as they teach some bare-minimum requirements, they can teach as much religion as they want. Also, most states offer some sort of funding incentive based on test scores -- which just encourages schools to play the numbers game by finding reasons to suspend/expel struggling students, encourage cheating on tests, etc. To be fair, not all charter schools are for-profit, and there are good charter schools and bad ones. But the entire system stinks; it cuts funding to struggling districts, leaving them in a perpetual budget crisis. It often does little to improve the education of students, while placing more of the burden on parents to go shopping for a school.
- nmrm2 11y ago
  3 is crucially important -- and the religion thing is really unimportant compared to the larger problem. Charter schools, in many states, occupy the absurd position of being able to claim that they out-perform local schools while selecting or quasi-selecting their student population and still not actually participating -- at all -- in the standardized testing that justified their existence in the first place.
  - ThomPete 11y ago
    Again this is simply wrong. Success Academy one of the best performing schools have a lottery so there is no way to get your kids into that school otherwise. Also public schools in NY are zoned so you have to live the right place to get your kid into the right school.
randcraw 11y ago
IMHO, a better strategy for government would be to encourage community colleges to do more, especially: 1) to emphasize skills that are in demand locally, in the community where the school serves, and 2) to provide instruction for more advanced subjects as part of professional continuing education. Of course, they'll need more funds to do this, as badly cash strapped as they are today. For example, I'd dearly like to take some advanced math courses like those in the junior/senior years of any good undergrad curriculum. But no college in the Philadelphia area offers these on evenings or weekends, and no college (I know) offers them online. I can't imagine that there's no market for this. Why should this be? Given the wide availability of community colleges and today's computers and networking infrastructure, it should be easy to teach strong uppergraduate courses to nontraditional students in a wide range of useful tech subjects like engineering, physics, astronomy, chemistry, etc. Using the physical resources of local community colleges, even many uppergrad lab-based courses could be supported. But to expand their charter, community colleges will need better support, and not just from their local communities. Most CCs today are overwhelmed with lowergraduate demand, given the universal unaffordability of college education. If congress wants to do something constructive, they should shift their support and attention away from for-profit schools and transfer to community colleges.
- vezzy-fnord 11y ago
  Sounds like what you really want is more decentralized education networks, i.e. democratic free (as in freedom) schools. There's already several of these slowly emerging across the U.S., and indeed carry the advantages of lecturing on all sorts of niche subjects without a formal bureaucracy and instead based on principles of self-governance with a coop-like structure. They're exceptionally adept at serving local communities and the lecturers or educators invited do not undergo a certification process (as is commonly advocated by laissez-faire and left-wing proponents alike). My suggestion would be to simply extend the accreditation process to such networks, and have more of them appear grassroots on the level of individual communities and neighborhoods.
  - randcraw 11y ago
    Yes, I think the accreditation process probably should be central to any revisions/extensions of the current college system. That may have been the achilles heel of for-profit schools -- the lack of accreditation and their disinterest in delivering a product that must live up to recognized academic standards. Any entity or means that delivers a high quality education, and especially does so affordably, works for me. Ideally such accreditation would work to improve (or expand) the reputation of community college themselves. Too many provide a second rate experience, (probably due to their often demanding less from the student than the better four year schools do). If CCs were to offer some sort of degree beyond the Associate's by augmenting the existing CC workload (perhaps with courses and material arising from groups like Western Governors or even Kahn or Udacity) that met the standard of a good accredited university, that would be useful to many and a good start toward customizing their offerings while assuring academic repute and respectability.
mwsherman 11y ago
Honest question: what is the difference between a “for profit” school and one that ends the year with more than that it started with? If Harvard manages itself such that its endowment increases, is this not a profit? What is the practical, operational difference?
- TheCoelacanth 11y ago
  "For profit" vs "non profit" describes the ownership structure of the organization, not what happens on its financial statements. If a for profit school makes a profit, it has the option of paying out a dividend to its shareholders. If Harvard makes a profit, that profit must remaining within Harvard; there are no shareholders that the profit could be distributed to.
- piker 11y ago
  For profit schools have shareholders/members who are privately entitled to the equity that accumulates. They generally will have to pay some form of taxes (income, capital gains, etc.) on that leftover. Non-profit institutions like Harvard have received a federal exemption from most US taxes, provided that they continue to pursue their stated purpose and jump through some hoops. No individuals are legally entitled to Harvard's endowment.
drostie 11y ago
> Regulators have been cracking down on the industry’s misdeeds—most notably, lying about job-placement rates. One of the services that my company (IntegriShield) provides is collecting these placement statistics; it is one of the less-profitable things we do, the sort of grunt work that you'd usually offload to a call center, but we insist on Doing It Right. It's a messy business: usually contact information is sparse and incorrect, and graduates mostly just let calls go to voicemail rather than give us 5 minutes of their time, possibly because they hear "we're calling you on behalf of <your university's name here>" and think "we're calling you about your student loans" or so, which we're not. I guess my point is, I'm totally unsurprised that less-scrupulous employees faced with that hairball just said, eh, I'll make up that I successfully contacted them, what harm could that do? -- and if that happens, you've got across-the-board confirmation bias going on, "of course our graduates land good jobs in the field." > a 2010 undercover government investigation of fifteen for-profit colleges found that all fifteen “made deceptive or otherwise questionable statements.” Yep, that's another service we offer: we'll call your admissions reps undercover and see if you lie to us. Then you can retrain admissions reps to scale back or remove those claims. > For-profit colleges have capitalized on our desire to make education more inclusive. For chrissakes, don't blame the for-profit colleges for this! They did what any company does: they stepped into a business void. Your typical for-profit might be a barber/hairstyling/cosmetology college; they don't do anything that an apprenticeship at a similar business didn't already do; they just made it their raison d'être. The business gap existed because the apprenticeship normally takes a while and can't be done by dilettantes (people who have other jobs going on in their lives). What really happened was that the economic recession led to lots of people being laid off, and some of those people had always wanted to move into a more-artistic service industry instead. They funded this training with government-issued student loans, which unfortunately have draconian legislation on them (like they can't be discharged in bankruptcy, the government doesn't even try to audit where the money is going, etc.). Still, the people who took these loans in theory were taking an informed risk; there's been no scandal about "nobody told me how much tuition was until after I graduated;" nobody's been fleeced. Yes, there is some chicanery about for-profit colleges making the dream seem too-good-to-be-true (especially with regard to graduate placement). Combined with aggressive marketing that encourages people to dream big, there may be a valid complaint that they're overtraining the population so that more people are qualified barbers than any city legitimately needs, so that job prospects bottom out alongside wages. But they didn't provide the dream and they didn't provide the loan, they just inserted themselves in the middle, to take the loan money and service the dream. A voice of wisdom saying "hey, are you sure you want to drop everything for this dream? You're going to be in debt for quite some time if you take this loan" would be nice but it's also supererogatory: capitalism doesn't usually breed such saints.
mucker 11y ago
Can we kill the "teachers aren't paid enough" heads in here? They are the weakest of all performing of all majors (http://blogs.edweek.org/edweek/rick_hess_straight_up/2011/09/want_a_38_gpa_major_in_education.html http://blogs.edweek.org/edweek/rick_hess_straight_up/2011/09...). Get a business degree and you can end up in Starbucks. Get a Ed degree, work less in college, and end up with an above average starting salary when you calculate in time off. Or go STEM, work your butt off, and get paid well. These are grown up choices.
- kjdal2001 11y ago
  I think the "teachers aren't paid enough" thing is about the opposite of this. Its not that teachers would be better at their jobs if they get more money. Its that if you wan't to attract the type of people who currently go STEM instead of the people who currently major in education, you need to pay teachers more. Sort of a "you get what you pay for" type of thing.
deleted 11y ago
[deleted]

74 points by bpolania 11y ago

A lot of military and older prefer the online experience. It takes time to commute to classes. Also the straight out of high school students are immature and aimless. In the beginning the for-profit college offered a better online experience. But regular colleges are catching up.

madaxe_again 11y ago

Here in the UK, there's an ongoing headlong rush driven by the incumbent robber baron^W^Wconservative government to turn a majority of schools into "academies", which is a back-door to complete privatisation of the "educational sector" (it's only a "sector" to those who see it as a profit-bearing industry, rather than an investment in "our" collective future). Any negative news about the effects of privatisation elsewhere, such as this, is sidestepped deftly, as, you see, academies aren't privatisation, they're, uh, enabling, um, better education, for the children, saving the taxpayer.... look over there, shiny thing! Academies have already come under fire for all varieties of corruption and improper practice, but individuals ("a few bad eggs") are being blamed rather than the system which promotes the viewing of and engagement with children as nascent consumers. shakes head

gjm11 11y ago
I broadly share your opinion about the "academy" movement in the UK, but it's not terribly relevant to this article, which is about what in the UK are called universities rather than schools.

peter_l_downs 11y ago

The crackdown is long overdue, but there’s an important consequence: fewer nontraditional students will be able to go to college. Sure, but why would we want to encourage anyone to attend "colleges" like Corinthians and University of Phoenix, if the effects are on average as harmful as described in the article? Not sure if this is just the author trying to shoehorn in some "debate" at the end of the article but it feels like it, given the details of the rest of the piece.

jccalhoun 11y ago
The whole article has a weird tone when it comes to its descriptions about for-profit colleges. It starts with "Not too long ago, for-profit colleges looked like the future of education." When was that? People that knew anything about for-profit colleges have known they were mostly ripoffs for years. What people might have thought is that online colleges were the future. Those aren't dependent on the for-profit model at all. Lots of real colleges offer online courses - and quite often for less money than for-profit ones. Those will still be around for nontraditional students even if all for-profit colleges were eliminated.
- johnward 11y ago
  > People that knew anything about for-profit colleges have known they were mostly ripoffs for years. The problem is many people, like myself and parents, didn't know this. I'm doing fine though but I would not recommend it to anyone.
- geomark 11y ago
  "...they were mostly ripoffs..." Maybe my experience is not the norm. I've heard a lot of bad things about schools like Phoenix and DeVry. But I went to DeVry (quite a few years ago) and got a 2-year tech diploma. They also offered a 4 year accredited BSEE at the school I attended (Arizona). It was failry challenging, a lot of people dropped out, but literally eveyone who graduated had a job offer waiting for them, several if you had decent grades. I had three offers from which to choose. It launched a nice career for me, including getting an employer to sponsor me to complete my BSEE. Things must have changed, because it was pretty solid at that time.
  - resolaibohp 11y ago
    What a lot of people seem to forget is that there are some for profit schools that are regionally accredited. This includes DeVry. Unfortunately all of the for profit school hate lumps them all together which makes people biased towards any for profit degree regardless of accreditation.

laotzu 11y ago

Jon Oliver did a great bit on privatization of education: https://www.youtube.com/watch?v=J6lyURyVz7k https://www.youtube.com/watch?v=J6lyURyVz7k

exelius 11y ago

This is a good thing for the country; the education provided by these schools is often on par with sources like Kahn Academy and Coursera -- at a much higher price. It seemed like many for-profit colleges are simply a way for "schools" to collect federally guaranteed loans that the students then have to pay back. The student assumes all of the risk. The other side of this industry are charter schools. These are for-profit K-12 schools, often paid for by state / local governments. The problems with them are: 1) Graft is common, with charter school administrators sometimes taking home ludicrous salaries ($500k+ for schools with ~1,000 students) 2) Funding often comes directly from the local school district, most of which are already severely cash-strapped. The problem here is that the cost of a single student attending a school district is largely buried in fixed costs: when the state takes $6000/yr from a district and gives it to a charter school, the district's costs do not decrease by $6000. This makes school districts worse, which accelerates flight to charter / private schools. 3) Educational standards are different -- in most states, faith-based charter schools are totally ok. As long as they teach some bare-minimum requirements, they can teach as much religion as they want. Also, most states offer some sort of funding incentive based on test scores -- which just encourages schools to play the numbers game by finding reasons to suspend/expel struggling students, encourage cheating on tests, etc. To be fair, not all charter schools are for-profit, and there are good charter schools and bad ones. But the entire system stinks; it cuts funding to struggling districts, leaving them in a perpetual budget crisis. It often does little to improve the education of students, while placing more of the burden on parents to go shopping for a school.

nmrm2 11y ago
3 is crucially important -- and the religion thing is really unimportant compared to the larger problem. Charter schools, in many states, occupy the absurd position of being able to claim that they out-perform local schools while selecting or quasi-selecting their student population and still not actually participating -- at all -- in the standardized testing that justified their existence in the first place.
- ThomPete 11y ago
  Again this is simply wrong. Success Academy one of the best performing schools have a lottery so there is no way to get your kids into that school otherwise. Also public schools in NY are zoned so you have to live the right place to get your kid into the right school.

randcraw 11y ago

IMHO, a better strategy for government would be to encourage community colleges to do more, especially: 1) to emphasize skills that are in demand locally, in the community where the school serves, and 2) to provide instruction for more advanced subjects as part of professional continuing education. Of course, they'll need more funds to do this, as badly cash strapped as they are today. For example, I'd dearly like to take some advanced math courses like those in the junior/senior years of any good undergrad curriculum. But no college in the Philadelphia area offers these on evenings or weekends, and no college (I know) offers them online. I can't imagine that there's no market for this. Why should this be? Given the wide availability of community colleges and today's computers and networking infrastructure, it should be easy to teach strong uppergraduate courses to nontraditional students in a wide range of useful tech subjects like engineering, physics, astronomy, chemistry, etc. Using the physical resources of local community colleges, even many uppergrad lab-based courses could be supported. But to expand their charter, community colleges will need better support, and not just from their local communities. Most CCs today are overwhelmed with lowergraduate demand, given the universal unaffordability of college education. If congress wants to do something constructive, they should shift their support and attention away from for-profit schools and transfer to community colleges.

vezzy-fnord 11y ago
Sounds like what you really want is more decentralized education networks, i.e. democratic free (as in freedom) schools. There's already several of these slowly emerging across the U.S., and indeed carry the advantages of lecturing on all sorts of niche subjects without a formal bureaucracy and instead based on principles of self-governance with a coop-like structure. They're exceptionally adept at serving local communities and the lecturers or educators invited do not undergo a certification process (as is commonly advocated by laissez-faire and left-wing proponents alike). My suggestion would be to simply extend the accreditation process to such networks, and have more of them appear grassroots on the level of individual communities and neighborhoods.
- randcraw 11y ago
  Yes, I think the accreditation process probably should be central to any revisions/extensions of the current college system. That may have been the achilles heel of for-profit schools -- the lack of accreditation and their disinterest in delivering a product that must live up to recognized academic standards. Any entity or means that delivers a high quality education, and especially does so affordably, works for me. Ideally such accreditation would work to improve (or expand) the reputation of community college themselves. Too many provide a second rate experience, (probably due to their often demanding less from the student than the better four year schools do). If CCs were to offer some sort of degree beyond the Associate's by augmenting the existing CC workload (perhaps with courses and material arising from groups like Western Governors or even Kahn or Udacity) that met the standard of a good accredited university, that would be useful to many and a good start toward customizing their offerings while assuring academic repute and respectability.

mwsherman 11y ago

Honest question: what is the difference between a “for profit” school and one that ends the year with more than that it started with? If Harvard manages itself such that its endowment increases, is this not a profit? What is the practical, operational difference?

TheCoelacanth 11y ago
"For profit" vs "non profit" describes the ownership structure of the organization, not what happens on its financial statements. If a for profit school makes a profit, it has the option of paying out a dividend to its shareholders. If Harvard makes a profit, that profit must remaining within Harvard; there are no shareholders that the profit could be distributed to.
piker 11y ago
For profit schools have shareholders/members who are privately entitled to the equity that accumulates. They generally will have to pay some form of taxes (income, capital gains, etc.) on that leftover. Non-profit institutions like Harvard have received a federal exemption from most US taxes, provided that they continue to pursue their stated purpose and jump through some hoops. No individuals are legally entitled to Harvard's endowment.

drostie 11y ago

> Regulators have been cracking down on the industry’s misdeeds—most notably, lying about job-placement rates. One of the services that my company (IntegriShield) provides is collecting these placement statistics; it is one of the less-profitable things we do, the sort of grunt work that you'd usually offload to a call center, but we insist on Doing It Right. It's a messy business: usually contact information is sparse and incorrect, and graduates mostly just let calls go to voicemail rather than give us 5 minutes of their time, possibly because they hear "we're calling you on behalf of <your university's name here>" and think "we're calling you about your student loans" or so, which we're not. I guess my point is, I'm totally unsurprised that less-scrupulous employees faced with that hairball just said, eh, I'll make up that I successfully contacted them, what harm could that do? -- and if that happens, you've got across-the-board confirmation bias going on, "of course our graduates land good jobs in the field." > a 2010 undercover government investigation of fifteen for-profit colleges found that all fifteen “made deceptive or otherwise questionable statements.” Yep, that's another service we offer: we'll call your admissions reps undercover and see if you lie to us. Then you can retrain admissions reps to scale back or remove those claims. > For-profit colleges have capitalized on our desire to make education more inclusive. For chrissakes, don't blame the for-profit colleges for this! They did what any company does: they stepped into a business void. Your typical for-profit might be a barber/hairstyling/cosmetology college; they don't do anything that an apprenticeship at a similar business didn't already do; they just made it their raison d'être. The business gap existed because the apprenticeship normally takes a while and can't be done by dilettantes (people who have other jobs going on in their lives). What really happened was that the economic recession led to lots of people being laid off, and some of those people had always wanted to move into a more-artistic service industry instead. They funded this training with government-issued student loans, which unfortunately have draconian legislation on them (like they can't be discharged in bankruptcy, the government doesn't even try to audit where the money is going, etc.). Still, the people who took these loans in theory were taking an informed risk; there's been no scandal about "nobody told me how much tuition was until after I graduated;" nobody's been fleeced. Yes, there is some chicanery about for-profit colleges making the dream seem too-good-to-be-true (especially with regard to graduate placement). Combined with aggressive marketing that encourages people to dream big, there may be a valid complaint that they're overtraining the population so that more people are qualified barbers than any city legitimately needs, so that job prospects bottom out alongside wages. But they didn't provide the dream and they didn't provide the loan, they just inserted themselves in the middle, to take the loan money and service the dream. A voice of wisdom saying "hey, are you sure you want to drop everything for this dream? You're going to be in debt for quite some time if you take this loan" would be nice but it's also supererogatory: capitalism doesn't usually breed such saints.

mucker 11y ago

Can we kill the "teachers aren't paid enough" heads in here? They are the weakest of all performing of all majors (http://blogs.edweek.org/edweek/rick_hess_straight_up/2011/09/want_a_38_gpa_major_in_education.html http://blogs.edweek.org/edweek/rick_hess_straight_up/2011/09...). Get a business degree and you can end up in Starbucks. Get a Ed degree, work less in college, and end up with an above average starting salary when you calculate in time off. Or go STEM, work your butt off, and get paid well. These are grown up choices.

kjdal2001 11y ago
I think the "teachers aren't paid enough" thing is about the opposite of this. Its not that teachers would be better at their jobs if they get more money. Its that if you wan't to attract the type of people who currently go STEM instead of the people who currently major in education, you need to pay teachers more. Sort of a "you get what you pay for" type of thing.

deleted 11y ago

[deleted]