Thursday, August 2, 2012

Education:  For-Profit Colleges Serve Shareholders over Students

... for-profit colleges have failed to support [their] students, the report states, by prizing recruitment over retention. The colleges studied spent 23% of their revenue on marketing and recruiting, the report found, and 17% on instruction.

The publicly traded companies that operate for-profit colleges yielded an average profit margin of 20% in 2009 and paid an average $7.3 million to their chief executives, the report found.

The companies are successful largely because they charge high tuition. Associate-degree programs at for-profit colleges cost at least four times as much as comparable programs at public community colleges, $34,988 vs. $8,313, the report found.

As of 2010, the for-profit colleges studied employed 35,202 student recruiters, far more than the staff charged with supporting the students who had already enrolled.

Recruiters were trained to make a hard sell on potential students, the report found, pushing "on the pain in students' lives" and creating "a false sense of urgency to enroll" as a path to a better life.

For-profit colleges have grown dramatically over the past decade and now consume one-quarter of all federal student aid; for-profit students represent about half of all federal student-loan defaults.

For more, see Report Finds For-Profit Colleges Serve Shareholders over Students by Daniel de Vise, July 29, 2012 at The Washington Post.

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