We’ve all seen the ads and flyers for the University of Phoenix — an online school which has apparently captivated the attention of many minority students. In the last decade, that institution and many others like it, have exploded onto the education scene and aggressively marketed to students looking for more accessible degree programs.
The difference between schools like the University of Phoenix and other more recognizable colleges is the profit structure. "For-profit" schools like Everest College and University of Phoenix costs more in fees to students but provides less credibility to its degree holders. The US Department of Education is now looking to curb funding for these for-profit institutions (meaning less financial aid options for students attending these schools), arguing that these institutions are not preparing enough of their graduates for "gainful employment."
"I think the regulations are justified and should be highly executed to discourage these expensive paper mills," said S.E. Day, an author, consumer advocate and radio host of The Legally Steal Show. "Anyone can start a school without accreditation and issue degrees. Education should remain in the non-profit category and it should be socialized since the government ends up footing the bill."
Interestingly enough, Black leaders like Jesse Jackson and members of the Black Caucus are opposed to these new regulations. William Gray, a Pennsylvania Democrat and former Black Caucus member, has been tapped to lobby on the behalf of the for-profit schools.
According to the Career College Association, 43 percent of students attending these for-profit schools and 39 percent of their graduates are minorities. Many critics believe that first generation college students and minorities are most victimized by the high costs of these programs. Furthermore, graduates risk the chance that potential employers will look down on their alma mater.
“Sadly, for-profits are becoming the norm in the landscape of education because of the ignorance of the students as to how schools operate and the effectiveness of their education received from these schools,” said Day. “I also think these schools prey upon the fact that most Americans are lazy and want the convenient way out to achieve.”
The government’s aggressive stance against these schools relates to the fact that between 2006 and 2009, the annual default rate for student loans went up from 5.2 percent to 7.2 percent, with for-profit attendees being responsible for a substantial amount of the claims.
Out of the numerous for-profit schools out there, however, exceptions can be made and positive facts can be found.
“Are for-profit universities a ripoff? No,” said Dr. Carol Stewart, management professor and author of “Looking for Scholarships. “Just like any other nonprofit or state university, they serve a purpose.”
Wall Street Journal columnist Al From calls the targeting of for-profit schools “puzzling,” explaining that these schools are picking up the slack left behind by community colleges which are experiencing cutbacks. He wrote: “For-profit graduation rates at two-year institutions exceed 55%, more than twice the rate at community colleges. Because they pay taxes on their profits and don’t receive big subsidies, for-profit colleges cost the taxpayer less per student than do heavily subsidized community colleges.”
Despite these statistics, it’s questionable whether the black leaders challenging the Department of Education’s attempts are inspired by lobbying duties or genuine conviction. The for-profit industry is spending a lot of money to fight these proposed regulations and lobbying politicians constitutes a legal way of buying favors. According to Bloomberg, ten education companies have increased their spending on lobbying by $1.3 million over the last year. All that influx of money makes it difficult to discern why William Gray and Jesse Jackson are defending these schools
“While the regulations may prevent some black students from qualifying or attending for profit universities – that is not the real problem,” said Dr. Stewart. “The problem is the for-profit universities are not providing the tools and resources to black students so they can be successful.”
Maybe the focus should be on marketing the thousands of non-profit schools, which are able and willing to offer a lower-cost education to African-American students, rather than fighting for the preservation of these educational corporations. A cost-benefit analysis would reveal that would be a more effective way to go, although we can be sure that profit motives would resist it.