This article was originally published in The Notebook. In August 2020, The Notebook became Chalkbeat Philadelphia.
For-profit colleges often target low-income students because they qualify for large federal loans. But students who enroll are less likely to graduate with a meaningful credential and eight times more likely to default on the loan.
"For-profit schools are businesses that are designed with the bottom line of making shareholders money," explained Rich Williams, the higher education advocate with the U.S. Public Interest Research Group.
"Where tuition at a community college is based on how much it costs to educate a student, tuition at a for-profit college is based on how much money a student can get from the federal loans."
While for-profit colleges represent 10 percent of students, they soak up 25 percent of federal aid, Williams said. Often, students never obtain the credential or get jobs.
For example, just 3 percent of 2004 Philadelphia public school graduates who enrolled in the for-profit University of Phoenix as their first college had obtained a degree six years later. The school’s overall graduation rate is just 10 percent.
Along with better known for-profits like Phoenix, DeVry, and Strayer, many technical institutes that promise certification in fields like medical records, hair and beauty care, culinary studies, and auto mechanics – popular options for Philadelphia students – are also for-profit.
If a student is considering a for-profit school, the Better Business Bureau says to beware of the following red flags:
If a sales rep bullies you or claims you must sign up immediately, walk away. A reputable school will take time to answer questions, make available a financial aid advisor, and not push you into a hasty decision.
Beware of any school that guarantees you will get a job after completing its program. Landing a job is never a sure thing, especially in this economy. Confirm any income claims with a third party.
A recent Government Accounting Office (GAO) investigation alleged price gouging at some for-profit schools. One charged $14,000 for a certification in massage therapy that was available for $520 at a public college. Before signing anything, compare costs against other institutions.
Accreditation is important, but not always easy to confirm. Ask about national and regional accreditation and then confirm with the accrediting organization. You can check claims with the U.S. Department of Education at http://ope.ed.gov/accreditation.
Diploma mills pose as online schools and often promise a cheap degree. If the degree seems too easy to earn – this includes simply taking a test online or getting most of the credits for "life experience" – it probably isn’t legitimate.
Some for-profit schools the GAO investigated "failed to provide clear information about the college’s program duration, costs, or graduation rate despite federal regulations requiring them to do so."
The GAO report also found that some recruiters encouraged students to lie on their applications in order to get more government money. This is a crime that could result in a fine or even prison, and no reputable school will ask you to do this.
Ask pointed questions and leave if you don’t get clear answers.
For more information: "For-Profit Colleges Mislead Students, Report Finds," New York Times and GAO report on for-profit colleges.