For Sale: Education You Can't Afford

University of Phoenix.  Kaplan.  Keiser.  Argosy.  For profit colleges everywhere, branching out like a giant squid sucking in poor souls with no options.  I spent an hour today trolling around their websites, learning about how I could earn a Associate of Science in Interdisciplinary studies which I’m sure will prepare me well for the workforce.  These schools make a living enrolling people who shouldn’t be there and overcharging them for the privilege.  But the main thing they seem to be doing  is to scam Uncle Sam out of all his dollars and sense. 

To get them in the door, “admissions officers” aka “recruiters” read from almost prepared scripts.  From a recent investigation, all 15 colleges visited made false or misleading statements and four committed outright fraud.  Students were encouraged to lie on their FAFSA Student Aid forms in order to be eligible for more loans and grants.  Over 83% of their revenue comes from students receiving Pell grants or taking out Stafford and PLUS Federal Loans.  

This might sound like good social policy, helping students to afford an education that should lead to better things.  But first over 30% of revenue is often spent on advertising.  Your Federal tax dollars are paying for you to watch “I’m a Phoenix” ads.  Next, few students are graduating. the University of Phoenix has a 16% graduation rate.  The other 84% rack up debt that they are not in a position to repay.  The Washington Post, which owns Kaplan, reports that only 24% of Kaplan’s students are repaying their debt.  I am on the only one that sees the irony there?  These students might as well have taken out a credit card and enjoyed themselves.  They’d probably be better off as you can discharge credit card debt in bankruptcy.  Once you have them, student loans join death and taxes as things you will always be certain of for the rest of your life, at least until paid.

For profit schools also seem to account for the lowest income segment of the population.  For-profit schools account for 6% of students and 20% of Pell recipients or those with the least resources.  This group likely have a lower educational level to begin with.  Remember all those folks who took out $500k mortgages with $25 incomes?  Well they can often take out PLUS loans to help pay their "cost of living."  Yup, you and I are both sure there are a lot of repeat offenders.

So what about those hearty souls that have made it through the rigor of of for profit education?  Then the final problem arrises.  The "college" has turned out a newly minted graduate who is looking to enter the workforce or find a position of increased responsibility.  What are the job prospects from the good old U of P?  The colleges put out relatively high job placement rates, but they count someone as “placed” if they have a job available.  An accounting major working in sales at Wal-Mart was employed in his field.  I certainly haven’t heard someone say they’d want an accounting graduate from a for profit college over say a Buffalo State where they would have paid a lot less.  

A college education shouldn't be a business or even worse a factory.  Schools should be putting all of their resources into improving their educational quality, not paying dividends to their shareholders from Federal loans that will never be repaid, sticking the taxpayer with the bill.  We have great public and private educational institutions for people at all levels all over the country.  We don't need to subsidize marketing companies.