For-profit schools take a hit from Frontline

(Update: Comments below and links to related blog posts) If you've had doubts about for-profit schools, many of your worst suspicions will be confirmed in the new Frontline documentary about for-profit higher education. I've embedded the video of "College, Inc." at the bottom of this post. It's about an hour long, with sections on the boom in for-profit education sparked by the success of the University of Phoenix, the high-pressure sales tactics used by some of universities, how regulators are treating the industry, and the huge problems students have encountered with student debt. Unfortunately, though, there's not a lot of discussion about teaching quality or job placement data.

Here are a few of the highlights and quotes, from the narrator and subjects interviewed on camera:

Why the industry has grown so rapidly:

• There are 30-50 million working American adults without a college diploma. In years past, this segment of the population could find good jobs with just a high school degree. Not anymore.
• "The demand is so great, community colleges can't keep up."
• Federal educational loans: "The taxpayers are essentially funding this industry." UOP gets something like 86% of its revenue from the federal government, through FAFSA loans.
• For-profit salespeople set up shop at job fairs
• 2.8 million students attending for profit schools

The University of Phoenix model and the boom it helped create:

• "They hired people on short-term contracts, to keep costs low."
• "They did away with tenure"
• For-profit schools cost as much as 5-6 times as a community college: $400-$550 per credit hour
• Profits have attracted Wall Street, which has boosted the number of players in the market. Investors, seeing the huge profits that Apollo Group/University of Phoenix made (the founder is a billionaire), are trying to scoop up small, failing local non-profit colleges and turn them into for-profit schools. Why? "If you can find an underperforming traditional school with regional accreditation, that's a very valuable property."
• Why not build a for-profit school from the ground up? "It costs 10 million dollars, 10 years, and a 50/50 chance of success, to obtain regional accreditation. … Once you have accreditation, you qualify for student loan program." (Fortunately, accrediting bodies have been increasing scrutiny of this sort of "flipping")

Marketing for-profit degrees:

• Grand Canyon college spent $25 million last year on marketing.
• University of Phoenix spent $130 million on marketing in just one year. This rivals what they spend on teaching.
• Former UOP exec: 1/4 of revenue spent on sales and marketing, about 20% on faculty

Online education:

• Grand Canyon college: 90% of GC students are logging in. About 40,000 students total, 35,000 online.
• Crucial to Grand Canyon's success: Physical campus helps build the brand, says the CEO
• Online education at some schools: Mostly instructor-led discussion groups
• "It is difficult to assess the quality of the degrees."
• Some students are happy with their education, and said so on camera.
• University of Illinois education expert: "The danger obviously is a kind of fast fooditization of higher education itself, where low cost, convenience and ease of finishing become values in themselves to the possible detriment to the things that can be accomplished slowly and over time."

Problems with for-profit schools:

• Argosy University and its parent company EDMC: Unaccredited in Dallas area, and are facing a lawsuit from former graduate students who said they were misled about job prospects.
• Everest College and parent Corinthian: 3 former vocational nursing students describing how their pediatric rotation took place in a daycare, and psych rotation took place in some sort of Scientology center. They paid more than $28,000 for their education, but haven't been able to get jobs in hospitals because their education did not include any hospital experience.
• Lobbyist for traditional universities believes for-profit student default rate could be as high as 50%
• High-pressure sales tactics described at about 21:30
• "On average, the debt load of for-profit students is more than twice that of students at traditional schools."
• When defaults happen, "The for-profit college … is not on the hook. It's the taxpayer. It's you and me. It's the federal government."

Frontline: College, Inc.:



At some point in the future, I hope to see Frontline or some other news organization take a hard look at both the good and bad when it comes to quality of instruction at for-profit and online education.

Update: Since writing this post, I have taken an online math class for credit, and have this to say about the online education experience:

• My online math class: Convenience gets an 'A,' but at what cost?

You may also be interested in reading my other posts about the University of Phoenix, online education, and other educational issues:

• SNL's "University of Westfield" ad: The reputation of online degrees takes another hit
• What's the value of a University of Phoenix degree?
• MBA math review
• Louis Menand and the American PhD problem
• Online education: A teacher speaks
• More distance education commentary from Harry Lewis, ClueHQ, and yours truly
• A giant step for ALM thesis research
• Follow-up: My online education experience
• Thoughts on academic publishing, electronic archives, and Scribd
• A final farewell to Randy Pausch