“Subprime Opportunity: The Unfulfilled Promise of For-Profit Colleges and Universities,” a new report from The Education Trust, represents one of the few pieces of independent research on the fast-growing, yet underregulated, for-profit college industry.
Picture a business that systematically puts its customers in hock—and provides them with very little in return. This is the experience of far too many students who put their hopes for a better future in the hands of for-profit colleges.
These companies aggressively market to low-income individuals and people of color whose dreams of a secure place in the American mainstream include a college degree. And yet these institutions do a far better job at turning a profit for stockholders than ensuring that their students graduate. And while too few of their students acquire degrees, too many end up saddled with crippling debt.
The report finds the high-cost programs of the for-profit sector have little chance of leading to high-paying careers. Consider the following facts:
- For-profits boosted enrollments by a staggering 236 percent over the decade from 1998-99 through 2008-09, far outpacing modest growth in public and private nonprofit institutions.
- For-profits offering bachelor’s degrees in 2008 graduated, on average, just 22 percent of their first-time, full-time students seeking these degrees—compared with 55 percent of such students who earn a bachelor’s at public institutions and 65 percent who do so at private nonprofits.
- Median debt of bachelor’s degree recipients from for-profits in 2007-08 stood at $31,190, almost twice that of comparable graduates of private nonprofits ($17,040) and more than three and a half times that of graduates of public colleges ($7,960).
Lax regulation, unconscionable loan debt, high default rates, and low graduation rates for those seeking bachelor’s degrees add up to big problems for both our democracy and our economy: The rich get richer and the poor, poorer.