Unregulated Universities Make Profit off Their Students

U.S. Secretary Betsy DeVos speaks at the 2017 Conservative Political Action Conference (CPAC) in National Harbor, Maryland.

We’ve all seen the commercials before — the ones with successful members of the workforce raving about their experience at their respective for-profit institutions: Kaplan University, DeVry University, Everest University, ITT Technical Institute and a myriad of others. The promises they boast include hands-on learning experience, fast-tracked Associate’s, Bachelor’s and even Master’s degrees, financial aid, flexible class schedules and stable employment.

Behind these glowing testimonials hides the murky, unethical and predatory practices of for-profit colleges that are now being endorsed by the Trump administration.

For-profit colleges seemingly operate solely on one namesake principle: to make a profit. Their way of doing this, though, targets the most vulnerable and desperate members of society to maximize their influx of federal student aid. Tressie McMillan Cotton, a former enrollment counselor at ITT Technical Institute, said she was told to put enrollment and profit over the well-being of students.

“I was told explicitly that we don’t enroll and we don’t admit: We are a sales force,” Cotton said to Mother Jones.

Corinthian Colleges, the former owner of hundreds of for-profit schools before being shut down in 2015, was revealed in court documents to have included blatant lies about job placement statistics and nonexistent programs to prospective students in their recruitment strategies.

Naturally, this encourages students to take out loans they can’t afford. According to the Senate Health, Education, Labor and Pensions Committee’s report on for-profit colleges, 96 percent of for-profit college students take out loans, as opposed to 13 percent of community college students, and while students of nonprofit institutions make up 13 percent of higher education students, they receive 25 percent of federal student aid and make up 47 percent of all student loan defaults.

In addition to taking advantage of students financially, recruiters at ITT Tech, among other institutions, are also instructed to take advantage of prospective students’ emotions and past experiences. Disturbingly, a former ITT recruiter told the U.S. Senate of a policy called a “funnel of pain;” recruiters are instructed to find students’ vulnerabilities and push them to their breaking points, making a degree from their institution seem like a way out of their circumstances: a dead-end job, raising children on a single low-income or living in poverty.

Too often after the intense recruitment process, students are left with unfulfilled promises from their institutions. Although students of for-profits pay significantly more than community college students, their degree is worth much less on the job market, according to a paper by the National Bureau of Economic Research. This is if they even earn their degree, and more than 60 percent don’t, according to the Senate’s 2012 report.

Whether they earn their degree or not, students are likely left in debt and financially worse off, usually unable to even transfer the credits they earned to other schools.

In 2015, the Obama administration began to crack down on the for-profit college industry. It began enacting regulations such as the “gainful employment” rule, ensuring that for-profit programs supply most graduates with well-paying jobs in their respective fields, and generally discouraging Americans from enrolling at for-profit colleges; instead advising enrollment in community colleges. Most notably with recent events in the Trump administration, though, they denied requests by those for-profit colleges to become nonprofits.

President Donald Trump and Secretary of Education Betsy DeVos, though, have different plans for the regulation of these for-profit institutions. It was reported on Sept. 19 that the Department of Education would go through with allowing two major for-profit colleges, Kaplan University and the Art Institutes, to gain nonprofit status. This is a controversial move that the Department of Education, under Obama, had previously struck down in 2016.

If for-profit colleges are nonchalantly allowed to be incorporated as nonprofits, they will lose extensive federal regulation given to for-profits, likely without reform to their educational and business practices.

Upon denying these requests in 2016, former Secretary of Education John King Jr. said, “This should send a clear message to anyone who thinks converting to nonprofit status is a way to avoid oversight while hanging onto the financial benefits: don’t waste your time.”

With public college Purdue University’s purchase of Kaplan University, it’s been stated that the for-profit company associated with Kaplan will still be closely incorporated with the operations of the university, although Purdue insists they have “total control.”

The Department of Education’s decision under DeVos is disappointing but doesn’t come as a surprise. DeVos holds an investment with Laureate Education, an operator of for-profit colleges, and holds other investments in firms that hold ownership of for-profit colleges. Trump’s venture with his own for-profit college, Trump University, is widely known for its deception and unethical practices — in January former students won a lawsuit against Trump receiving $25 million in settlement.

The Trump administration’s lax approach to incorporating these institutions as nonprofits will likely only serve as a precedent for future regulations of the industry. This is a major discrepancy within the Department of Education’s duties to the American people. Its purpose is to promote equal educational opportunities and gainful employment for all Americans. Instead, the Department is enabling for-profit institutions to prey on America’s most desperate and leech off their federal aid and defaulted loans. Education is supposed to be a universal equalizer, and low-income and disenfranchised people, especially young ones, see it this way more than anyone.

An administration that aligns itself with these businesses isn’t one that stands for the rights or interests of these students. Granting these institutions less federal oversight with their new nonprofit status without explicit reform to their operations is an omen for the future of higher education — one where the school’s profit comes before the well-being of the student.

Upholding the Obama-era regulations and skepticism toward these predatory institutions is essential in maintaining the integrity of higher education in the United States.

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