Citizen Wausau

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Are For Profit Colleges good for the Community?

by on July 3rd, 2010

What are we to make of the private, for-profit colleges that have descended into our fair city over the last few years? Are they, as a Daily Herald editorial suggests, good for the area because they offer flexible choices for students in their pursuit of higher education goals? They certainly have benefits to offer such as the sponsorship of local events and facilities. Further, they provide much needed jobs to the area. And they offer place-bound students the possibility of acquiring a bachelor’s degree in an area without many options. In fact, data shows that these types of higher education facilities account for about 10% of enrollment of all post-secondary students.

But a dark cloud looms. Recent testimony of experts on Capitol Hill suggests that the academic credit to debt ratio of students who graduate from these types of institutions may be too high. An article in this week’s Chronicle of Higher Education notes that many if not most students attending these businesses/colleges borrow money from the federal student loan program. This creates a spiral similar to the sub-prime mortgage fiasco that led to the recessionary bust, as students who cannot find reliable employment are unable to pay back their federal loans. The hedge fund manager Steven Eisman, who made a fortune in the for-profit college sector, provided the most caustic testimony. Eisman argued that these institutions prey upon the most vulnerable of society by filling them with false hopes that their degrees will improve their lives, but in reality leave them saddled with unpayable, unforgivable debt. Eisman contends: “Until recently, I thought that there would never again be an opportunity to be involved with an industry as socially destructive as the subprime mortgage industry. I was wrong. The for-profit education industry has proven equal to the task.” Eisman predicts that students attending for-profits will default on 275 billion dollars of debt over the next decade.

Recently, Senator Durbin of Illinois and Senator Tom Harkin of Iowa joined a growing number of lawmakers critical of the growth and costs stemming from the “bad actors” in the for-profit higher education scene. Much is unknown and the benefits and consequences of the for-profit higher education industry are long-term question marks. To be sure, these institutions maintain their supporters. But a recent article by Patti Zarling in the Green Bay Gazette contends that these institutions “may not provide adequate training for specific jobs.” Thus, the US Department of Education has begun a review of financial aid payments to these post-secondary schools.

At both Globe University and Rasmussen College, tuition varies based on the program of study. Globe University charges over 400 dollars per general undergraduate credit, and their nursing program charges students over 600 dollars a credit hour. I found it difficult to track down exact numbers for Rasmussen College and their website doesn’t publish readily available information on costs. But from what I could find online courses at Rasmussen College cost roughly 400 dollars per credit hour. Including books, fees and administrative costs, students will pay close to 20 thousand dollars per year at both institutions for a full time credit load. Compare this to UW Marathon County and North Central Technical College at less than 200 dollars per academic credit. At both public and private institutions, costs will be mitigated by grants and other forms of financial aid.

As a public educator and a product of state education, I have my own bias where students will acquire the best learning experiences in the area. However, I imagine we all agree that students should take very seriously the kind of education they receive.

One factor in assessing the quality of a higher education institution concerns the type of learning environment that students must negotiate. A large portion (sometimes all depending on the program) of the classes from a for-profit are taught in a mediated format. Although everyone learns differently, people learn better when they enjoy the experience. Would you be a successful student taking accounting or anatomy online? I might figure out how to get a good grade, but I suspect I wouldn’t receive much out of the experience. This is because for me a significant part of the learning process derives from the face-to-face interaction with the teacher and the other students in the class.

Another key part in the educational calculus involves the qualifications of the instructor. Does it make a difference whether or not the teacher maintains expertise in their respective field with a doctorate (or relevant terminal) degree from a reputable institution? Of course it does. I still remember the stimulating influence that great profs had on my mind and it’s been over two decades since I graduated with a BA from San Diego State University. Relatedly, as cited in the Green Bay Gazette, Chris Lindstrom, higher education program director for the State Public Interest Research Groups argues that “More than 80 percent of federal aid grant and loan dollars (schools collect) go to revenue, while about 20 percent is instructional costs. Not only is the student maybe getting ripped off, but it’s costing taxpayers, too.”

Marshall McLuhan once said that “the trouble with a cheap, specialized education is that you never stop paying for it.” If the experts on capitol hill are correct, who will have to foot the bill for the defaults in the private, for-profit education industry? The individual students will pay, but also the general public and future generations. If you’re thinking about going to college, choose your school wisely. Do the research and realize that the money you borrow must be paid back.

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