If you hope for a more equitable society, one with broader opportunities, then there's hardly a more important topic than job training. So it's especially distressing that so many disadvantaged young people — people who believe they're doing the smart thing by enrolling in for-profit colleges to train for careers in medical technology, criminal justice and other fields — are ending up disillusioned, in debt and without the careers they'd counted on.
Evidence increasingly suggests that some segments of the for-profit college industry are taking students — and taxpayers — for a ride. Drawing up to 90 percent of their revenue from various government programs intended to help low-income students pay tuition, some of these schools deliver questionable degrees, suffer extraordinarily high dropout rates and loan-default rates, and charge tuitions that are far higher than those at public community colleges.
Star Tribune reporter Mark Brunswick's story on Oct. 5 told of a military veteran who had nearly exhausted his GI benefits at the Minnesota School of Business only to discover that his criminal justice degree wasn't accredited in Minnesota and wouldn't qualify him for a job as a police officer. Moreover, his credits weren't transferable, leaving him $40,000 in debt, stuck in a menial job and worse off than he was before.
In July, Minnesota Attorney General Lori Swanson sued the Woodbury-based school and its partner, Globe University, for engaging in high-pressure sales tactics and misleading students about job prospects in some fields. More than two dozen attorneys general across the country have launched similar suits against the for-profit industry. Twice the Obama administration has tried to beef up regulation and oversight only to run up against resistance in the courts and in Congress.
Just this summer, when Congress reauthorized the Workforce Investment Act — a $3.1 billion effort aimed at helping low-income students pay for career training — few questions were asked; this was despite evidence that the program had become a cash cow for for-profit schools and a dubious investment for taxpayers. Lately, some of these schools have turned to tapping the GI Bill as a way to pad sagging enrollments.
After a decade of rapid growth, many for-profit schools are now in trouble. A shakeout is clearly underway as government, private investors and customers begin to sort the good actors from the bad. Corinthian Colleges and ITT Educational Services, with 130,000 students between them, have been notable targets of government investigators. The Consumer Financial Protection Bureau has sued both companies, charging predatory lending and other shoddy practices. The U.S. Department of Education has, in effect, shut down Corinthian, forcing the closure of 12 campuses and the sale of 85 others.
Still, it's too easy to dismiss altogether the for-profit sector's contributions. Despite obvious flaws, the career training offered by Globe, Minnesota School of Business and others across the nation have helped millions of challenged students. It's hard for many middle-class Americans to grasp the obstacles that these students face. Many are single mothers who, in their late 20s or mid-30s, realize for the first time that they're leading dead-end lives.
Going back to school while trying to hold down one or two jobs and raise three or four children is an immense challenge, especially for those who have already failed in community college or who lack confidence in their academic ability. As one local college administrator asked an editorial writer: "Is it a surprise that so many of our students find their programs just too hard to finish?"
Yes, critics are generally right: The industry needs more regulation and better oversight. Students and taxpayers deserve better outcomes than they're getting. Governments must find ways to ensure that their investments in students are paying off. For starters, it's imperative that prospective students have reliable, up-to-date information about the costs and performance of competing programs in all sectors. At a glance, they should be able to compare cost, location, quality of career counseling, loan availability, dropout rates, percentage of jobs offered, average salaries and so on.
But the realities are harsher than most critics imagine. Without a good start in life, many young Americans simply fall too far behind to ever catch up. College, even with remedial courses, can be too big a stretch for those with complicated lives. And the economy, while recovering, isn't delivering the kinds of high-paying jobs that people need to gain middle-class lives.
• $15,130: Average annual tuition and fees at a for-profit college.
• $3,264: Comparable in-state costs at a public two-year college.
• $8,893: Comparable in-state costs at a public four-year college.
• 22 percent less: Likelihood that for-profit students will get hired for a job, compared with applicants from a public community college.
• 4 times higher: The rate that for-profit students are likely to default on their loans, compared with public community college students.
• $40,000: Average debt of graduates of for-profit colleges.
• $5,400: Average 10-year income gain for graduates of for-profit colleges.
• $12,300: Comparable gain for graduates of public, nonprofit colleges.
Sources: College Board, National Bureau of Economic Research, Institute for College Access and Success, Center for Analysis of Postsecondary Education and Employment.