The nation’s for-profit colleges, including those in the Louisville region, are undergoing increasing federal scrutiny about how they perform and operate.
A Senate education committee led by Chairman Tom Harkin, D-Iowa, met Thursday to discuss how these colleges spend federal dollars. Earlier this week, five congressmen asked the U.S. Government Accountability Office to examine the quality of academic programs and business practices at the for-profits.
Meanwhile, the U.S. Department of Education is drafting new rules calling for these colleges to be more open about how they operate and to change their aggressive recruiting tactics, which have included paying recruiters based on how many students they bring in. Other proposed changes could cut off some federal financial aid to these schools, because their students have higher loan default rates.
The federal government has intensified its review of these colleges because of the large amount of aid they receive. While these schools enroll less than 10 percent of all college students, they get more than 20 percent of federal financial aid, according to the federal education department. Harkin cited one recent analysis by the U.S. Department of Education that said for-profit colleges accounted for only 10 percent of enrolled students but 44 percent of loan defaults.
Harkin said many people have great experiences through for-profit schools and get an education that prepares them for good paying jobs that allow them to pay off their students loans. However, he said that’s not always the case.
“But, unfortunately, many students have had a very different experience at for-profit schools,” he said. “They have left without a certificate or degree, but saddled with very large debts. Many students were misled about the value of the education they would receive. Just in the past week, my office has received hundreds of stories from students who believe they were exploited by a for-profit institution …
“Low-income students depend on the federal government to provide them with the opportunity to attend college. Congress has a responsibility to ensure that this opportunity is real, and not just false hopes pedaled on a billboard or pop-up ad.”
Supporters of these colleges say they provide an important alternative for students who were often neglected by traditional colleges. They explained the higher default rates by saying defaults are more common among nontraditional students — the audience most likely to attend these colleges.
“The work at our institutions should not be defined by a select few who do not appreciate the quality of education we provide,” said Jeff Leshay, a spokesman for Career Education Corp., which owns American Inter Continental University.
Career College Association, a for-profit trade group, has said it supports an examination from the accountability office, because it would rely on facts and figures and provide a “full and fair review.” The group also said the education department should withdraw its proposed rule changes until the review is complete.
The University of Phoenix, another for-profit college, has multiple locations across the nation, including one in Louisville. Manny Rivera, a spokesman for the Apollo Group, which owns Phoenix, said that about 18 months ago the company began reviewing and changing its policies to improve academic quality, minimize student debt and ensure government funds are used properly.
He said the company supports the education department’s “overall intent to protect borrowers and taxpayers.” He cautioned, however, that some policy changes could have unintended consequences that limit some students’ access to college.