With the Higher Education Act of 1965 up for possible reauthorization next year, there’s a patter of feet hitting the halls of Congress in anticipation. Many of the bodies attached to those feet are seeking to recoup lost ground after the release of a scathing report on for-profit colleges by Sen. Tom Harkin (D-Iowa), Chairman of the Senate Health, Education, Labor and Pensions Committee, July 30.
Here’s what the hoopla’s all about:
* Proprietary, or for-profit, colleges have been around since 1850, but until the 1980s they typically had small enrollments, programs focused in a single area of expertise, and relatively low tuition costs.
* They first became eligible to participate in federal student financial aid programs in 1972, Slate noted in a retrospective.
* As Slate describes the progression, “the enticement of unlimited federal cash led proprietary schools into their darkest era in the 1980s. With little federal oversight, unscrupulous recruiters haunted welfare offices to sign up unqualified and even homeless students, collected their aid money, and offered useless courses in return.”
* For-profits constitute the lion’s share of the U.S. Dept. of Education’s fraud caseload, according to Slate.
* From 1998 to 2008, enrollment in for-profits tripled, reaching 2.4 million, the New York Times said.
* The Times noted three-quarters of for-profits today are owned by large publicly-traded companies and private equity firms.
* Whereas traditional colleges report spending about 30 percent of their revenues on instruction (a number a report by Change Magazine suggests may be somewhat slippery), for-profits spend only 17.7 percent of their revenues on instruction, according to the Government Accountability Office . According to the Chronicle of Higher Education, the for-profits typically spend more on advertising (22.7 percent) and profit (19.4 percent) than instruction.
* The for-profit colleges HELP looked at employed almost 10 times as many recruiters as career services staff, indicating “enrolling students, and getting their federal financial aid, is the heart of the business,” the Times reported.
* While the median salary paid to traditional college presidents is $245,530, the New York Times noted that for-profit college chief executive officers rake in on average $7.3 million per year.
* Federal taxpayers footed a $32 billion for-profit tuition bill in the most recent year for which data has been compiled, the Times said.
* When it comes to what all that money buys, the Harkin report suggests the answer is not much. More than half of those who enrolled in for-profit colleges during the period focused on by HELP withdrew without attaining a credential. While this rate is comparable to the drop-out rates at community colleges, the Chronicle said, the costs for the students are considerably higher. Almost all students attending for-profit colleges take out loans while only 13 percent of community college students do so, the Chronicle reported.
* The Harkin report cited students at many for profit-schools finding out only after enrolling that their courses wouldn’t prepare them for professional licensing or transfer to a traditional college.