For-profit education industry: What you should know before you vote
by Michael Hricik, Professor of English at Westmoreland (PA) Community College
Pennsylvania Governor Tom Corbett believes that allowing more choices in education will promote positive changes. However, it is apparent that many Pennsylvanians do not agree. This summer, his approval rating fell to 36 percent. In May, while he spoke to the Reading Chamber of Commerce, local teachers nearby protested the effects of dramatic state budget cuts. With a budget gap of about $40 million next year, thanks to Corbett’s $860 million in funding cuts for K-12 education, the Reading School District is considering laying off up to 170 teachers.
The governor’s solution? Send those students to private, for-profit schools. But the reality is, those for-profit schools would accept only the highest performing students. Many — like those with learning disabilities — would have a hard time finding for-profit schools that would accept them.
‘Voters need to seek out the facts about for-profit education’
These are the consequences of the choices that voters make, because elections do have consequences. Voters need to seek out more of the facts about for-profit education before voting in November.
The impact of for-profit education is not only felt in Pennsylvania, but across the country at all levels of education. Recently, a U.S. Senate subcommittee concluded its two-year investigation of the for-profit industry, and found a great deal of evidence that for-profit colleges, like Pittsburgh-based Education Management Corporation, put the interests of their shareholders ahead of the needs of their students. This is a bad deal for all of us.
To pad their own pockets, they charge sky-high tuition: for example, an associate’s degree in web design and interactive media from the Art Institute of Pittsburgh costs $47,410, according to the report, while the Community College of Allegheny County offers the same for $6,800.
And students rarely get what they pay for. According to a recent Pittsburgh Post-Gazette article, federal auditors found that Education Management Corporation has one of the highest numbers of dropouts. Across the industry, 64 percent of two-year students leave for-profits without a degree, according to the Senate investigation.
Default rates on student loans, which 96 percent of students at for-profit colleges must take to pay the exorbitant tuition, are 22.5 percent for students at for-profit schools, compared with 9 percent for students at other schools. And their loans are typically more because tuition is higher.
‘Public institutions are a much better investment for American taxpayers’
Meanwhile, taxpayers are subsidizing these schools: 80 percent of their funding comes from federal Pell grants and Stafford loans, totaling more than $32 billion a year. Equally troubling is how much money comes from the post-9/11 GI Bill. For-profits trained 25 percent of veterans during the first two years of the program, but took in 37 percent of the program’s money. Too many veterans are going to these schools and leaving without degrees.
The truth is that public institutions are a much better investment for American taxpayers. A student graduating from a community college or state university will have much less debt and be much more able to repay their loans. For example, at current rates, the cost for a bachelor’s degree in business from one of Pennsylvania’s State System of Higher Education universities is slightly more than $25,000. Conversely, the same degree from the University of Phoenix would cost $74,000.
What would the two presidential candidates do about these issues? Mitt Romney has urged voters concerned about college affordability to consider for-profits as a good alternative. He has not mentioned that a major donor to his campaign is a for-profit college CEO. Obama has pressed for greater regulation of for-profits, and threatened to withhold federal funds from the worst.
For some students perhaps these schools can meet their needs. But, the overall emphasis on education as a business is a concern. Institutions should focus on education first, not profits. With this focus, we all pay a price.