Sunday, May 9, 2010

PBS Frontline Airs Excellent Program on For-Profit Colleges

Earlier this week PBS's excellent Frontline documentary series aired an insightful program on for-profit colleges called College Inc., which you can watch online.  Although this was not about graduate and professional education nor even undergraduate education at legitimate colleges and state universities, it was still very worthwhile.  Rather, this was about education at the for-profit McColleges or College-Marts that have sprung up like dandelions across the land, such as the University of Phoenix, DeVry, ITT, and others.  I found the program to be very interesting because I knew little about these businesses, my never having paid much attention to them.  The New York Times also has an excellent article about for-profit colleges, here, which is worth reading:  The New Poor: In Hard Times, Lured Into Trade School and Debt.

Apparently, the cost of attendance is much greater than what I had ever imagined, perhaps reaching as high as a whopping $500 per credit hour.  (If you need 128 semester credit hours to graduate with a bachelors degree from a legitimate university, then the cost of attending at $500 per credit hour would come out to a whopping $64,000 over four years for a podunk bachelors degree.)  Much of this is funded by non-dischargeable federal student loans, and it sounds as though those loans are the lifeblood of these businesses.  [End the federal student loans (or, in essence, the non-dischargeability in bankruptcy of these loans) and these businesses would probably die.]  So, various types of accreditation that allow these businesses to fund themselves through students' federal student loans are essential.  Guess who is involved with investing in these for-profit colleges?  Wall Street, which is a sure sign that the owners of these for-profit colleges have students' and society's best interests at heart (not).

As with many for-profit businesses, advertising consumes a considerable percentage of some of the schools' budgets.  It was also mentioned that the cost of the contract-based faculty at some of these schools was less than the advertising budget; the percentage of money spent on the educational product is not great.  (I think it was reported that one school only spent around 10% on faculty--the educational product.)  It also looked like some of the schools may have used telemarketers (!!!) to call people (in presumably low-income neighborhoods) in an attempt to sell them on the idea of going to college.  Admissions and finance counselors may have even received commission-based or at least sales performance-based compensation for trying to convince people to go to college.  So, in essence, some of the schools may have been telemarketing federal student loans and convincing people to take out federal loans on a commission-like basis!

The problem?  Many of these people end up being burdened with non-dischargeable student loan debt and degrees that have questionable economic and employment value.  Of course, many will not find jobs in the fields they trained for and won't be any better off than they were before but will have student loans to pay.  The program also reported about a couple lawsuits.  For example, some nursing graduates are suing one of the schools because, although the program was accredited and allowed them to obtain legitimate nursing licenses, their degrees were not credible in the job market and thus did not really allow them to obtain employment as nurses.  They said that their pediatrics internship was held at a day care center.  (On a side note, you have to wonder whether the accreditation has meaning any longer and whether the accrediting body was doing its job properly.)  In another case, students who had entered into a psychology PhD. program allege that they were (fraudulently?) told that the program was accredited when it was merely seeking accreditation, which means that they cannot obtain licenses to practice as psychologists, essentially rendering their podunk PhD's worthless.  I'm under the impression that these students received a hard-sell; they may have been sold on the program by people who were, in essence, salespeople for the college.

So who are these for-profit colleges marketed to?  They seem to be marketed to the lower classes, especially to minorities and people who might be the first member of a family to ever go to college and whose relatives wouldn't know (better) to advise them to attend legitimate, more established colleges and universities.  Also, presumably many of those people would be unable to gain admission to state universities.  It was also mentioned that (far less expensive and "non-profit") community colleges are packed and that now people are having difficulty gaining admission to them, leaving the for-profit mills as their only higher education alternative.

So why are all of these people, non-traditional students whose backgrounds probably would not allow them to gain admission to state universities and perhaps even crowded community colleges, so desperate to go to college?  Because our nation's economy is in the shitter and everyone has been indoctrinated with the notion that the only way to advance economically (or to merely be able to obtain a lower middle class job) is to get a college education.  Presumably, the only jobs they can find otherwise are dead-end poverty-wage jobs, so why not roll the dice on these for-profit colleges?  Since our politicians and economists, in their great wisdom, allowed American manufacturing (as well as knowledge-based) jobs to be sent to India, China, and Mexico, to be filled with foreigners on H-1B and L-1 visas, or (more likely to affect the students attending these for-profit colleges) given to masses of immigrants (both legal and illegal) the students are under tremendous pressure to find knowledge-based employment.
The end result is that the job market will be flooded with these McBachelors degrees.  (Traditional state universities and established private colleges were already flooding the market.)  Also the bachelors degree will become the modern equivalent of a high school diploma, except it isn't free.  However, in spite of all of this higher education, knowledge-based, college-education-requiring jobs will not magically materialize into existence to accommodate everyone who has a college degree.  All of the time, money, and resources invested in this unprecedented amount of higher education will change almost nothing about the state of our nation's job market.  It will not create jobs or wealth for anyone other than the owners of the colleges, some administrators, and perhaps some faculty (if they receive decent compensation at all which I highly doubt).  Instead, in reality, it is all just a huge amount of economic waste.  Consequently, our society will be filled with unemployed or underemployed-and-out-of-field people with student loan debt and our nation may gain the distinction of having the most well-educated Walmart employees.

I have been railing against the problems of degree overproduction in graduate and professional education for years.  Prior to a viewing of College, Inc. I was aware of the existence of the for-profit schools, but I was unaware how expensive they were nor that the scope of these operations was so large.  Thus, I highly recommend a viewing of this video.  Hopefully Frontline will one day do a report about the law school and graduate school scams at "non-profit" state universities and private colleges, but I doubt it.


Anonymous said...

Devry and ITT have been around a lot of years, predating UoP, and had pretty good reputations, IIRC. There were a lot of smaller technical colleges that were shadier, back in the 70s and 80s, teaching computer programming etc.

I went to one in Dallas, and they were advertising heavily on TV and dragneting poor minority students for their loan-getting ability. But even with loans, much coddling and probably impossibility of failing, most the students could not make it through the earliest courses and dropped like flies. So getting through the right Devry tech course probably means something.

I did graduate, but it only encouraged me to go to a real school.

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