For-profit colleges are driving student debt

By Stefan Herlitz

(Cade Belisle/Daily Collegian)
(Cade Belisle/Daily Collegian)

While student debt is a growing problem across the nation, in no sector is its impact on society seen more severely than for-profit education.

Institutions, such as the University of Phoenix, ITT Technical Institutes and DeVry University are for-profit colleges. To anyone who ever watches television, these names are extremely familiar, likely because the institutions spend exorbitant sums of money on advertising. The University of Phoenix alone spent $655 million on marketing in 2011, a number made even more interesting when one considers it is nearly impossible not to be admitted should one apply.

Most importantly, while for-profit colleges only enroll 22 percent of students nationwide, 44 percent of students who default on their student loans come from for-profit colleges, according to U.S. News.

For-profit colleges are, quite bluntly, malicious marketing schemes that recruit desperate people looking for a college education, load them with debt, provide a subpar “education” and leave them to drown in student debt with a nearly worthless degree, if that.

While this may sound like an exaggeration, it really isn’t. The University of Phoenix’s Detroit campus only has a 10 percent graduation rate, a rate less than half its disturbingly high student loan default rate of 26.4 percent. Across the University of Phoenix system, new enrolling students are far more likely to default on student loans than they are to graduate.

This is, however, unsurprising. It’s a tale common throughout the for-profit college industry – an industry predicated on the idea the best educational outcomes occur when 100 students enroll, all take out massive loans, 90 drop out, 24 default on their loans and 10 graduate. Of all industries, higher education is among the least conducive to for-profit operation As in the current system, the best way to maximize profits is to recruit as many students as possible, load them with debt and provide as cheap an education as possible, a method which goes against everything higher education ought to stand for.

Congress needs to pass legislation to prohibit federal student aid to for-profit institutions, or at least put stringent academic requirements in place for institutions accepting such aid. Federal and state prosecutors should pursue these institutions for predatory recruiting practices and false advertising, and all institutions of higher learning should be required to disclose their graduation rate, default rate and average student debt prominently on all promotional materials. The for-profit college business is a predatory, malicious scourge on society without any redeeming qualities, one that truly ought to be brought to an end.

Stefan Herlitz is a Collegian columnist and can be reached at [email protected]