The Era of Predatory For-Profit Colleges Might Be Over

I felt like sharing this good read:

The Era of Predatory For-Profit Colleges Might Be Over |

For more information about the investigation of the For-Profit college industry and its abuses, please see the link below:

http://www.help.senate.gov/imo/media/for_profit_report/Contents.pdf

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--chris--

It is a step in the right direction for sure. One of the worst things about not attending an easily recognized school is the immediate doubt that it raises (in the minds of HR) since these 'for-profit' schools have stained the name of almost every obscure school.

Danielm7

Good, no reason these schools should allow fed student loans, GI Bill, etc, it just makes some people feel like they are legit.

Legacy User

Hopefully they can take the for profit out of the picture or do something to make a change. I blame the public schools that let these for profits waltz right in and give there sales pitch to a group of high school students which usually do not have a clue what to do after hs. I know I almost fell for the Devry sales pitch but the cost was ridiculous and my parents said I should just go to the local college which was a quarter of the cost. Unfortunately, so many people who do not know any better due to a lack of research fall for for the recruiter hype on the immediate ROI you will get from the avg $60k BS degree or vocational degree.

markulous

I wish I would have known how bad these places are several years ago. My wife and I are probably close to 100k in debt because of this. All we have to show for it is my Associate's degree (finishing my BS at WGU). They ended up tapping out her financial aid to the maximum limit (which we didn't even know there was one) for her BS and they let her know at the last second that she's out of aid, so now she's scrambling to find private loans and jump to SNHU since that's non-profit and regionally accredited. Only issue is the private loans we applied for now aren't approving us so basically she get dumped with a ton of debt and no degree to show for it and can't continue until we pay out of pocket (not gonna happen anytime soon) or drastically improve our credit. So until that happens, she can't go to school. Sucks big time.

ajs1976

markulous,

Has your wife looked into Thomas Edison, Excelsior, or Charter Oak? they have a lower residency requirements or one that can be meet through CBE. If she is a business major, she may be able to test out of the remaining classes through Thomas Edison. If she is set on SMHU, what is their CBE policy? There may be some CLEP or DSST exams she can take while the financial issues get straightened out and to reduce the cost.

markulous

ajs1976 wrote: »

markulous,

Has your wife looked into Thomas Edison, Excelsior, or Charter Oak? they have a lower residency requirements or one that can be meet through CBE. If she is a business major, she may be able to test out of the remaining classes through Thomas Edison. If she is set on SMHU, what is their CBE policy? There may be some CLEP or DSST exams she can take while the financial issues get straightened out and to reduce the cost.

She is a Criminal Justice major.

I haven't looked into the other colleges. What do you mean by CBE? SMHU just seemed like a good fit since they will transfer in all of her credits and have low tuition costs.

ajs1976

Credit By Exam. CLEP and AP are accepted by most schools, but AP is mainly for current high school students. DSST (formerly DANTES) is also accepted by some. BA in Criminal Justice at Thomas Edison State College I'm not sure if there are many options for upper level CBE for the Criminal Justice major.

markulous

ajs1976 wrote: »

Credit By Exam. CLEP and AP are accepted by most schools, but AP is mainly for current high school students. DSST (formerly DANTES) is also accepted by some. BA in Criminal Justice at Thomas Edison State College I'm not sure if there are many options for upper level CBE for the Criminal Justice major.

I'll have to have her look into that and see. It doesn't hurt at this point. If that doesn't work, I guess we try to just fix our credit score and hope we can get another loan. I'm not even sure that's the reason they turned us down though as I thought you were pretty much approved for those things automatically since you can't file bankruptcy on them.

--chris--

Thats awful man. Its safe to say we all know someone who has been taken by the for profit scams. I have Canadian friends that love to poke fun at me (us; any US citizen) for stuff like Phoenix & ITT.

aspiringsoul

--chris-- wrote: »

Thats awful man. Its safe to say we all know someone who has been taken by the for profit scams. I have Canadian friends that love to poke fun at me (us; any US citizen) for stuff like Phoenix & ITT.

I get very pissed off when I see people make fun of or put down those who have attended For-Profit schools. There is nothing funny about it....These schools ruin people's lives financially and they make some students lose faith in higher education.

I used to be naive enough to believe that all higher institutions of learning were legitimate and that there was no way that schools would ever take advantage of their students. The concept of a "For-Profit" school was unknown to me when I enrolled. I did not discover the true nature of ITT Tech until I was half way through the Associate's degree program. I did not want to become a statistic and withdraw from the program without a degree, so I finished the program. The AAS from ITT ended up helping me to get my first IT job, but I would have saved so much money (and time pursuing my Bachelor degree) if I had went to a community college instead of attending a predatory for-profit institution.

There was also much less information online about these schools when I enrolled in 2006. The HELP committee's findings were not published until 2012.

These schools target Military veterans heavily ( due to the GI Bill being exempt from the 90/10 rule), which is why so many Veterans enroll at for-profit schools. Then you have the first generation college students like myself who don't understand what a For-Profit school is, and are mislead to believe that the school has the interests of its students as its highest priority, instead of its shareholders...

It's beyond my understanding how these for-profit schools are allowed to receive federal money to finance programs that lack the accreditiation that will lead to gainful employment for the students that they enroll. Instead, the students are conferred degrees or certificates that are worthless and they are up to their eyeballs in debt with nothing to show for it. The Shareholders of the for-profit schools make off like bandits and the students suffer for it.

Oh, I understand how this is legal now....lobbying....and corruption.

Do your friends, family, and colleagues a favor, and educate them about For-Profit schools...

--chris--

aspiringsoul wrote: »

I get very pissed off when I see people make fun of or put down those who have attended For-Profit schools. There is nothing funny about it....These schools ruin people's lives financially and they make some students lose faith in higher education.

I used to be naive enough to believe that all higher institutions of learning were legitimate and that there was no way that schools would ever take advantage of their students. The concept of a "For-Profit" school was unknown to me when I enrolled. I did not discover the true nature of ITT Tech until I was half way through the Associate's degree program. I did not want to become a statistic and withdraw from the program without a degree, so I finished the program. The AAS from ITT ended up helping me to get my first IT job, but I would have saved so much money (and time pursuing my Bachelor degree) if I had went to a community college instead of attending a predatory for-profit institution.

There was also much less information online about these schools when I enrolled in 2006. The HELP committee's findings were not published until 2012.

These schools target Military veterans heavily ( due to the GI Bill being exempt from the 90/10 rule), which is why so many Veterans enroll at for-profit schools. Then you have the first generation college students like myself who don't understand what a For-Profit school is, and are mislead to believe that the school has the interests of its students as its highest priority, instead of its shareholders...

It's beyond my understanding how these for-profit schools are allowed to receive federal money to finance programs that lack the accreditiation that will lead to gainful employment for the students that they enroll. Instead, the students are conferred degrees or certificates that are worthless and they are up to their eyeballs in debt with nothing to show for it. The Shareholders of the for-profit schools make off like bandits and the students suffer for it.

Oh, I understand how this is legal now....lobbying....and corruption.

Do your friends, family, and colleagues a favor, and educate them about For-Profit schools...

My parents both have college degrees and neither of them are aware of the pit falls of for profit schools, they just know they exist and that they are probably on par with other schools.

My cousin earned a BA from somewhere in Chicago that was unaccredited in 2005; tons of student loan debt and is managing a CVS (nothing against that, but my point here is she is trying to put her BA to use in architecture and no one will even give her a phone call).

And my final $0.02. I hate absolutes, so I am certain someone will post up with a a positive experience from a for profit school. Its important to note that this rant'sh topic is aimed at the institutions and not the students. If you have attended a school like this, my thoughts are not a judgement of you.

ArabianKnight

I am currently enrolled at NCU for my MBA in Infosec and I don't really see anything that makes me think they just want my money. I chose them because they had the degree I wanted, accepted the GI Bill, is online and regionally accredited. Only difference I see is that they cost more than a non-profit. Seems like the ones that are unhappy had to pay tons of money for school and could not use something like a GI Bill and are heavily in debt.

NetworkingStudent

I went to 2 For Profit colleges

One for Profit school was regionally accredited and one wasn't.

My decision to go to a for profit school was because of the flexibility.

The college that was regionally accredited said I had to take 3 classes my next quarter no matter what.
I told them I couldn't, and I eventually left the college.

The college I went to never explained regional accreditation.

In fact, I remember one girl in one of the classes mention that when she was done she wanted to go to the U of M.

I remember the instructor was ahh struck, because he didn't know what to tell her.

I have found out the hard way that if you don't graduate from a regional accredited college, you can't transfer your credits to a sate or local college.

Here is a good series on the for profit colleges:
Higher-Ed Hustle | Overview

Here are questions you should ask before you go to any college:
Higher-Ed Hustle | Protecting Yourself

aspiringsoul

--chris-- wrote: »

My parents both have college degrees and neither of them are aware of the pit falls of for profit schools, they just know they exist and that they are probably on par with other schools.

My cousin earned a BA from somewhere in Chicago that was unaccredited in 2005; tons of student loan debt and is managing a CVS (nothing against that, but my point here is she is trying to put her BA to use in architecture and no one will even give her a phone call).

And my final $0.02. I hate absolutes, so I am certain someone will post up with a a positive experience from a for profit school. Its important to note that this rant'sh topic is aimed at the institutions and not the students. If you have attended a school like this, my thoughts are not a judgement of you.

Thank you for your input on this topic Chris. I just want to make sure that you are aware that my previous comment was not directed at you, but as a general comment that I find it very upsetting when people make fun of people who attend for-profit schools, or say things like "well they should have known better than to attend such a school."

This topic may be rant-ish in nature, but its purpose is to inform those who are considering to pursue a degree from a For-Profit college.

aspiringsoul

ArabianKnight wrote: »

I am currently enrolled at NCU for my MBA in Infosec and I don't really see anything that makes me think they just want my money. I chose them because they had the degree I wanted, accepted the GI Bill, is online and regionally accredited. Only difference I see is that they cost more than a non-profit. Seems like the ones that are unhappy had to pay tons of money for school and could not use something like a GI Bill and are heavily in debt.

ArabianKnight,

It's not just for the reason that people are disatisfied with their experiences at For-Profit schools because they are heavily in debt. It's because they are heavily in debt, and they can't obtain gainful employment with their degrees. They do not get a return on investment for the thousands of dollars that they spent for the degree, and they are usually unable to transfer the credits to other schools and continue their education. It can be a nightmare for thousands of Americans.

Just for your edification, Northcentral University has been placed on Heightened cash monitoring:

SolvencyURL="http://en.wikipedia.org/w/index.php?title=Northcentral_University&action=edit&section=9"]edit[/URL

In 2011 the US Department of Education determined Northcentral was one of 75 US institutions failing its 2009-2010 financial responsibility test (a measure of the institution's financial solvency), and would be required to post aletter of credit in order for students to receive federal financial aid.^[17] Northcentral also failed its 2010-2011, 2011-2012 and 2012-2013 financial responsibility tests, scoring zero for 2010-2011 on a scale of -1 to 3, lower than the 0.2 it earned the prior term; 0.2 for 2011-2012; and 0.2 again for 2012-2013.^[18] In 2015 the US Department of Education placed Northcentral on "HCM-Cash Monitoring 1" status because of its financial issues.

Source: Northcentral University - Wikipedia, the free encyclopedia

NCU Not Financially Responsible Say Feds

For-Profit schools target Veterans HEAVILY because they see walking dollar signs $$$$$$$$ when you step in the door, due to the fact that Veterans are excluded from the 90/10 rule. Your GI bill doesn't count as federal money. VETERANS DESERVE TO KNOW ABOUT THIS.

How Pricey For-Profit Colleges Target Vets' GI Bill Money

The GI Bill has long been veterans' ticket to the middle class. But it has also become a cash cow for corporate colleges.

Last winter, the Department of Veterans Affairs tasked its newly hired blogger, a cantankerous Iraq vet named Alex Horton, with investigating the websiteGIBill.com, one of many official-looking links that come up when you Google terms like "GI Bill schools." With names like ArmedForcesEDU.com and UseYourGIBill.us, these sites purport toinform military veterans how to best use their education benefits. In reality, Horton found, they're run by marketing firms hired by for-profit colleges to extol the virtues of high-priced online or evening courses. He concluded that GIBill.com "serves little purpose other than to funnel student veterans and convince them their options for education are limited to their advertisers."
The 65-year-old GI Bill is widely credited with transforming post-World War II America by subsidizing vets' college education and fueling the expansion of the middle class. Yet recently, the program has also become a cash cow for for-profit schools like Capella, DeVry, ITT Tech, Kaplan, and the University of Phoenix, eager to capitalize on vets coming back from Iraq and Afghanistan.
Advertise on MotherJones.com
As a beefier post-9/11 GI Bill has kicked in, a surge of service members has left the ranks armed with benefits that will cover the full cost of attending public college. In 2009, the for-profits took in almost as much military money as public colleges, even though they enrolled about one-third the number of vets. Spending on military education benefits has shot upto $10 billion; for-profit schools' share of that money has gone up 600 percent, as revealed in a recent PBS Frontlineexposé. For example, at Kaplan—owned by the Washington Post Co.—military revenues grew to an estimated $48.9 million last year, up from $2.6 million in 2006.
The result has been a bonanza for schools' executives and shareholders. "We didn't foresee that the for-profit sector, eager to please Wall Street investors, would go after this new funding aggressively, often in ways that are not in the best interests of veterans and service members," stated Sen. Tom Harkin (D-Iowa) after leading an investigation into 30 major for-profits earlier this year. Or as one University of Phoenix alum put it on RipoffReport.com, the school "treats military students like cash piñatas."
Online ads are just the opening salvo in the for-profit schools' recruitment campaign. The 400,000-student University of Phoenix runs a "military division" that employs 600 vets, operates satellite campuses on military bases worldwide, and publishes an online military newsletter called the Patriot. The American Forces Network has made an exception to its no-commercials policy to air the school's ads. "We feel putting this information on the air is beneficial to the community," a program director at the network told Stars and Stripes. For-profit schools' "military enrollment advisers" are also routinely given access to soldiers on bases. An investigation by Bloombergfound that a recruiter visited Camp Lejeune's Wounded Warrior ward, hoping to enroll injured Marines.
"I felt that I have been misled, deceived, or even outright lied to," one vet testified
For-profit colleges bill themselves as flexible job-training programs, but their costs can outweigh the benefits. At 8 of the 10 for-profits that take in the most GI Bill cash, more than half of students drop out within a year of matriculation. Many students find that prospective employers and graduate schools won't take their coursework seriously since most for-profits lack accreditation from legitimate academic bodies. "I researched the accreditation and it seemed legit. I had no idea...none of my schooling would transfer," an Army vet and University of Phoenix alum from St. Petersburg, Florida, wrote on the VA's GI Bill Facebook page. "A lot of places see the guaranteed GI Bill as cash in hand and it's a shame they take advantage of us."
Some for-profits have cleaned out students' military benefits while also signing them up for thousands of dollars in loans without their knowledge. A vet who enrolled at the largely online Ashford University after being told the GI Bill would cover his tuition ended up owing the school $11,000. "I felt that I have been misled, deceived, or even outright lied to," he told Senate investigators.
At some schools, more than 60 percent of military students ultimately default on their loans. A 2010 VA audit found serious bookkeeping errors at nearly every school it reviewed: An Arizona school didn't give a veteran promised tuition discounts and pocketed $20,000; a New Jersey school collected nearly $5,000 in tuition from a student after he'd been recalled to active duty.
How did this much-loved program become corporate welfare? Congress expanded GI Bill benefits for service members and their spouses just as investors were looking for fast-growing stocks—like educational for-profits—to replace the once-hot real estate market. Tuition assistance is now paid directly to institutions, not soldiers, making it easier for schools to convince vets to sign over their benefits. GI Bill dollars have also enabled for-profits to boost how much federal financial aid they receive. In order to collect federal Title IV aid—Pell grants, Stafford loans, and Plus loans—the schools must obey the "90/10 rule": They can't derive more than 90 percent of their total income from Title IV programs. GI Bill funds don't count toward that total. So every dollar of military aid enables for-profit schools to collect nine dollars from the Department of Education.
The VA oversees the disbursement of GI Bill money, but its bureaucracy has been swamped by the glut of soldiers-turned-students. It relies heavily on reporting from state agencies, which in turn frequently rely on information cherry-picked by the schools themselves—an approach, the Government Accountability Office notes, that "undermines the independence of the review." Harkin and a cohort of Democratic senators have proposed stricter guidelines for the for-profits, which spent more than $7 million on lobbying last year. The plan has found few additional supporters in Congress.
In the meantime, Horton and his colleagues on the VA's outreach team continue their war on misinformation. "We're not in the business of telling veterans where they can and can't go to school," says his boss and fellow Iraq vet Brandon Friedman. "But we can give vets enough knowledge to make a decision."
Horton encourages service members to do their homework so they get the best value for their benefits. "Take a look at the CEOs and directors of those for-profit schools, Kaplan, DeVry, Ashford. Where'd they go to school? Harvard, Stanford, Oxford," he says. "Zero are for-profit graduates."

Source: How Pricey For-Profit Colleges Target Vets' GI Bill Money | Mother Jones

aspiringsoul

NetworkingStudent wrote: »

I went to 2 For Profit colleges

One for Profit school was regionally accredited and one wasn't.

My decision to go to a for profit school was because of the flexibility.

The college that was regionally accredited said I had to take 3 classes my next quarter no matter what.
I told them I couldn't, and I eventually left the college.

The college I went to never explained regional accreditation.

In fact, I remember one girl in one of the classes mention that when she was done she wanted to go to the U of M.

I remember the instructor was ahh struck, because he didn't know what to tell her.

I have found out the hard way that if you don't graduate from a regional accredited college, you can't transfer your credits to a sate or local college.

Here is a good series on the for profit colleges:
Higher-Ed Hustle | Overview

Here are questions you should ask before you go to any college:
Higher-Ed Hustle | Protecting Yourself

Thank you for your input Networkingstudent!

aspiringsoul

Want to make good on your student loans? You may want to steer clear of for-profit colleges.
A study released this week by The Institute for College Access & Success, an independent nonprofit dedicated to making higher education more available and affordable, found that former attendees of for-profit colleges make up a large portion of the 650,000 people who had entered into loan repayment in 2011 but had defaulted on their federal student loans by 2013.
Despite enrolling just 12% of college students nationally, for-profit colleges account for nearly half (44%) of all federal student loan defaults. Nearly one in five (19.1%) borrowers from for-profit colleges have defaulted on their student loans, compared with just 12.9% at public colleges and 7.2% at nonprofit colleges (the overall average across types of colleges is 13.7%). The study, which used data from the Department of Education, looked at federal loan borrowers who default on their loan within three years of entering repayment (so they are not currently enrolled students and they may or may not have graduated (some may have dropped out); it takes at least nine months of nonpayment to default on a federal student loan.

“The likelihood of a student defaulting at a for-profit college is more than three times higher than at a four-year public or nonprofit college and almost four times higher than at a community college (where a student’s chance of defaulting is just 3.5% after considering the borrowing rate),” the report revealed.

There may be myriad reasons for this phenomenon — some of which further underline why you may want to avoid for-profit colleges. For one, for-profit schools are pricey: In the 2013-2014 school year, for-profit institutions charged $15,130 in tuition and fees, compared with $8,893 for a public four-year in-state school, according to the College Board.
Furthermore, the graduation rates at for-profit colleges are significantly lower than at other four-year institutions, according to data from the National Center for Education Statistics — a fact that can significantly reduce the career earnings edge that those with college degrees earn (and thus make it even harder to pay off those student loans). While 57% of first-time, full-time undergraduate students seeking a four-year degree at a public institution graduated within six years (and 66% of those at private non-profits within six years), just 32% of students at private for-profit schools did.
And finally, the job market for for-profit grads may not be as great as they where expecting it to be: A working paper published this year from the National Center for Analysis of Longitudinal Data in Education Research found “no evidence that employers prefer applicants with resumes listing a for-profit college relative to those whose resumes list either a community college or no college at all.” In other words, it’s possible that many of these for-profit colleges don’t, in fact, help you with your career prospects, despite their cost.

Still, these high rates of student loan default at for-profit schools matter because they can have horrendous consequences for your financial life. For one, a default seriously damages your credit score, which can cost you for years to come in terms of getting charged higher interest rates — which can add up to tens of thousands of extra dollars you must shell out — on everything from a mortgage loan to a car loan. This will surely eat into the possibly higher salary you’re commanding with that college degree (if you even graduated, which is less likely than if you want to a public or private nonprofit four-year school).
What’s more, if you don’t pay your student loans, debt collectors are allowed to garnish a percentage of your wages to put toward your student loan balance. The amount varies from state to state, but if the point of going to college was to score a higher-paying job, defaulting on your student loans could erase the extra pay edge the degree gave you. And don’t think you’ll be able to skirt this: Nearly one-third of wage garnishments in the U.S. are for student and consumer loans, according to payroll processor ADP.
Plus, it’s nearly impossible to get student loans discharged in bankruptcy, explains Catherine Hawley, a Monterey, Calif.-based certified financial planner — so you can’t use that as a last-ditch effort to clear your name.

Source:
The No. 1 reason not to attend a for-profit college - MarketWatch

aspiringsoul

[h=1]Screw U: How For-Profit Colleges Rip You Off[/h]
[h=3]The for-profit college industry makes a killing while handing out expensive degrees that fizzle in the real world.[/h]
Source: Screw U: How For-Profit Colleges Rip You Off | Mother Jones

The folks who walked through Tressie McMillan Cottom's door at an ITT Technical Institute campus in North Carolina were desperate. They had graduated from struggling high schools in low-income neighborhoods. They'd worked crappy jobs. Many were single mothers determined to make better lives for their children. "We blocked off a corner, and that's where we would put the car seats and the strollers," she recalls. "They would bring their babies with them and we'd encourage them to do so, because this is about building motivation and urgency."
McMillan Cottom now studies education issues at the University of California-Davis'Center for Poverty Research, but back then her job was to sign up people who'd stopped in for information, often after seeing one of the TV ads in which ITT graduates rave about recession-proof jobs. The idea was to prey on their anxieties—and to close the deal fast. Her title was "enrollment counselor," but she felt uncomfortable calling herself one, because she quickly realized she couldn't act in the best interest of the students. "I was told explicitly that we don't enroll and we don't admit: We are a sales force."
After six months at ITT Tech, McMillan Cottom quit. That same day, she called up every one of the students she'd enrolled and gave them the phone number for the local community college.
With 147 campuses and more than 60,000 students nationwide, ITT Educational Services (which operates both ITT Tech and the smaller Daniel Webster College) is one of the largest companies in the burgeoning for-profit college industry, which now enrolls up to 13 percent of higher-education students. ITT is also the most profitable of the big industry players: Its revenue has nearly doubled over the past seven years, closing in on $1.3 billion last year, when CEO Kevin Modany's compensationtopped $8 million.
To achieve those returns, regulators suspect, ITT has been pushing students to take on financial commitments they can't afford. The Consumer Financial Protection Bureau is looking into ITT's student loan program, and the Securities and Exchange Commission is investigating how those loans were issued and sold to investors. (Neither agency would comment about the probes.) The attorneys general of some 30 states have banded together to investigate for-profit colleges; targets include ITT, Corinthian, Kaplan, and the University of Phoenix.
A 2012 investigation led by Sen. Tom Harkin (D-Iowa) singled out ITT for employing"some of the most disturbing recruiting tactics among the companies examined." A former ITT recruiter told the Senate education committee that she used and taught a process called the "pain funnel," in which admissions officers would ask students increasingly probing questions about where their lives were going wrong. Properly used, she said, it would "bring a prospect to their inner child, an emotional place intended to have the prospect say, 'Yes, I will enroll.'"
For-profit schools recruit heavily in low-income communities, and most students finance their education with a mix of federal Pell grants and federal student loans. But government-backed student loans max out at $12,500 per school year, and tuition at for-profits can go much higher; at ITT Tech it runs up to $25,000. What's more, for-profit colleges can only receive 90 percent of their revenue from government money. For the remaining 10 percent, they count on veterans—GI Bill money counts as outside funds—as well as scholarships and private loans.
[h=3]STUDY HAUL[/h]How for-profit schools leave their students high and dry.
96% of students at for-profit colleges take out loans. 13% of community college students, 48% of public college students, and 57% of nonprofit private college students do.
For-profit colleges enroll 13% of higher-education students but receive25% of federal student aid.
The 15 publicly traded for-profit colleges receive more than 85% of their revenue from federal student loans and aid.
42% of students attending for-profit two-year colleges take out private student loans. 5% of students at community colleges and 18% at private not-for-profit two-year colleges do.
1 in 25 borrowers who graduate from college defaults on his or her student loans. But among graduates of two-year for-profit colleges, the rate is 1 in 5.
Students who attended for-profit schools account for 47% of all student loan defaults.
Sources: Sen. Harkin, Consumer Finance Protection Bureau, Education Sector

Whatever the source of the funds, the schools' focus is on boosting enrollment. A former ITT financial-aid counselor named Jennifer (she asked us not to use her last name) recalls that prospects were "browbeaten and hassled into signing forms on their first visit to the school because it was all slam, bam, thank you ma'am." The moment students enrolled, Jennifer would check their federal loan and grant eligibility to see how much money they qualified for. After students maxed out their federal grants and loans, there was typically an outstanding tuition balance of several thousand dollars. Jennifer says she was given weekly reports detailing how much money students on her roster owed. She would pull them from class and present them with a stark choice: get kicked out of school or make a payment on the spot. For years, ITT even ran a (now discontinued) in-house private loan program, known as PEAKS, in partnership with Connecticut-based Liberty Bank, with interest rates reaching 14.75 percent. (Federal student loans top out at 6.8 percent.)
Jennifer, who had previously worked at the University of Alabama, says she felt like a collection agent. "My supervisors and my campus president were breathing down my neck, and I was threatened that I was going to be fired if I didn't do this," she says. Yet she knew that students would have little means to get out from under the debt they were signing up for. Roughly half of ITT Tech students dropped out during the period covered by the Harkin report, and the job prospects for those who did graduate were hardly stellar. Even though a for-profit degree "costs a lot more," Harkin told Dan Rather Reports, "in the job market it's worth less than a degree from, say, a community college."
Jennifer says the career services office at her campus wasn't much help; students told her they were simply given a printout from Monster.com. (ITT says its career counselors connect students with a range of job services and also help them write résumés, find leads, and arrange interviews.) By the time she was laid off, Jennifer believed the college "left students in worse situations than they were to begin with."
It's not just whistleblowers who are complaining about ITT. There's an entire website, myittexperience.com, dedicated to stories from disappointed alumni. That's how we found Margie Donaldson, a 38-year-old who says her dream has always been to get a college degree and work in corporate America: "Especially being a little black girl in the city of Detroit, [a degree] was everything to me."
Donaldson was making nearly $80,000 packing parts at Chrysler when the company, struggling to survive the recession, offered her a buyout. She decided to use it to get the college degree that she never finished 13 years before. Five years later, she is $75,000 in debt and can't find a full-time job despite her B.A. in criminal justice from ITT. She's applied for more than 200 positions but says 95 percent of the applications went nowhere because her degree is not regionally accredited, so employers don't see it as legitimate. Nor can she use her creditstoward a degree at another school. Working part time as an anger management counselor, she brings in about $1,400 a month, but there are no health benefits, and with three kids ages 7, 14, and 18, she can barely make ends meet. She has been able to defer her federal student loans, but the more than $20,000 in private loans she took out via ITT can't be put off, so she's in default with 14.75 percent interest—a detail she says her ITT financial-aid adviser never explained to her—and $150 in late fees tacked on to her balance each month. Donaldson says she has tried to work out an affordable payment plan, but the PEAKS servicers won't agree until she pays an outstanding balance of more than $3,500—more than double her monthly income. "It puts me and my family, and other families, I'm sure, in a very tough situation financially," she says.
Donaldson says she didn't understand how different ITT was from a public college. If she had attended one of Michigan's 40-plus state and community colleges, her tuition would have been roughly one-third of what it was at ITT. Now, she says, all that time and money feels wasted: "It's almost like I'm like a paycheck away from going back to where I grew up."

aspiringsoul

This is one of the last posts that I will submit on this topic unless it's a reply. I'm just wanting to do my best to make sure that everyone is well informed.

Please see the executive summary from the HELP Committee here:

http://www.help.senate.gov/imo/media/for_profit_report/ExecutiveSummary.pdf

The rise of for-profit universities have given students increased choices when it comes to picking schools. Since college is rather expensive and schools vary in regards to the success of their graduates, it is wise to carefully consider the options before writing those checks. Or, more likely these days, going into debt.
While there is a popular view that the for-profit free-market will consistently create better goods and services at ever lower prices, it is wisest to accept facts over ideological theory. As such, when picking between public, non-profit, and for-profit schools one should look at the numbers. Fortunately, ProPublicahas been engaged in crunching the numbers.

Today most people go to college in order to have better job prospects. As such, one rather important consideration is the likelihood of getting a job after graduation and the likely salary. While for-profit schools spend about $4.2 billion in 2009 for recruiting and marketing and pay their own college presidents an average of $7.3 million per year, the typical graduate does rather poorly. According to the U.S. Department of Education 74% of the programs at for-profit colleges produced graduates whose average pay is less than that of high-school dropouts. In contrast, graduates of non-profit and public colleges do better financially than high school graduates.
Another important consideration is the cost of education. While the free-market is supposed to result in higher quality services at lower prices and the myth of public education is that it creates low quality services at high prices, the for-profit schools are considerably more expensive than their non-profit and public competition. A two-year degree costs, on average, $35,000 at a for-profit school. The average community college offers that degree at a mere $8,300. In the case of four year degrees, the average is $63,000 at a for-profit and $52,000 for a “flagship” state college. For certificate programs, public colleges will set a student back $4,250 while a for-profit school will cost the student $19,806 on average. By these numbers, the public schools offer a better “product” at a much lower price—thus making public education the rational choice over the for-profit option.
Student debt and loans, which have been getting considerable attention in the media, are also a matter of consideration. The median debt of the average student at a for-profit college is $32,700 and 96% of the students at such schools take out loans. At non-profit private colleges, the amount is $24,600 and 57%. For public colleges, the median debt is $20,000 and 48% of students take out loans. Only 13% of community college students take out loans (thanks, no doubt, to the relatively low cost of community college).
For those who are taxpayers, another point of concern is how much taxpayer money gets funneled into for-profit schools. In a typical year, the federal government provides $6 billion in Pell Grants and $16 billion in student loans to students attending for-profit colleges. In 2010 there were 2.4 million students enrolled in these schools. It is instructive to look at the breakdown of how the for-profits expend their money.
As noted above, the average salary of the president of a for-profit college was $7.3 million in 2009. The five highest paid presidents of non-profit colleges averaged $3 million and the five highest paid presidents at public colleges were paid $1 million.
The for-profit colleges also spent heavily in marketing, spending $4.2 billion in recruiting, marketing and admissions staffing in 2009. In 2009 thirty for-profit colleges hired 35,202 recruiters which is about 1 recruiter per 49 students. As might be suspected, public schools do not spend that sort of money. My experience with recruiting at public schools is that a common approach is for a considerable amount of recruiting to fall to faculty—who do not, in general, get extra compensation for this extra work.
In terms of what is spent per student, for-profit schools average $2,050 per student per year. Public colleges spend, on average, $7,239 per student per year. Private non-profit schools spend the mots and average $15,321 per student per year. This spending does seem to yield results: at for-profit schools only 20% of students complete the bachelor’s degree within four years. Public schools do somewhat better with 31% and private non-profits do best at 52%. As such, a public or non-profit school would be the better choice over the for-profit school.
Because so much public money gets funneled into for-profit, public and private schools, there has been a push for “gainful employment” regulation. The gist of this regulation is that schools will be graded based on the annual student loan payments of their graduates relative to their earnings. A school will be graded as failing if its graduates have annual student loan payments that exceed 12% of total earnings or 30% of discretionary earnings. The “danger zone” is 8-12% of total earnings or 20-30% of discretionary earnings. Currently, there are about 1,400 programs with about 840,000 enrolled students in the “danger zone” or worse. 99% of them are, shockingly enough, at for-profit schools.
For those who speak of accountability, these regulations should seem quite reasonable. For those who like the free-market, the regulation’s target is the federal government: the goal is to prevent the government from dumping more taxpayer money into failing programs. Schools will need to earn this money by success.
However, this is not the first time that there has been an attempt to link federal money to success. In 2010 regulations were put in place that included a requirement that a school have at least 35% of its students actively repaying student loans. As might be guessed, for-profit schools are the leaders in loan defaults. In 2012 lobbyists for the for-profit schools (who have the highest default rates) brought a law suit to federal court. The judge agreed with them and struck down the requirement.
In November of 2014 an association of for-profit colleges brought a law suit against the current gainful employment requirements, presumably on the principle that it is better to pay lawyers and lobbyists rather than addressing problems with their educational model. If this lawsuit succeeds, which is likely, for-profits will be rather less accountable and this will serve to make things worse for their students.
Based on the numbers, you should definitely not attend the typical for-profit college. On average, it will cost you more, you will have more debt, and you will make less money. For the most for the least cost, the two year community college is the best deal. For the four year degree, the public school will cost less, but private non-profits generally have more successful results. But, of course, much depends on you.

Source: Should You Attend a For-Profit College? | Talking Philosophy

aspiringsoul

markulous wrote: »

I wish I would have known how bad these places are several years ago. My wife and I are probably close to 100k in debt because of this. All we have to show for it is my Associate's degree (finishing my BS at WGU). They ended up tapping out her financial aid to the maximum limit (which we didn't even know there was one) for her BS and they let her know at the last second that she's out of aid, so now she's scrambling to find private loans and jump to SNHU since that's non-profit and regionally accredited. Only issue is the private loans we applied for now aren't approving us so basically she get dumped with a ton of debt and no degree to show for it and can't continue until we pay out of pocket (not gonna happen anytime soon) or drastically improve our credit. So until that happens, she can't go to school. Sucks big time.

marklous,

You and your wife have my sympathy. We could each learn a lesson in Depravity from some of these For-Profit schools.

Goteki54

These for profit schools are cons. I've seen the youtube videos on these for profit school. $45,000 for an Associates Degree!! The average cost for an AA degree at a local community college is around only $9,000, and their AA Degree is transferable at any accredited college or university.

markulous

aspiringsoul wrote: »

marklous,

You and your wife have my sympathy. We could each learn a lesson in Depravity from some of these For-Profit schools.

Thanks for your posts and support.

I at least know my kids won't be a part of these schools. So many options that I know now that I didn't know even 3 years ago. I don't regret going to school at all, but I regret us getting involved with Kaplan University.

beads

I don't know how many hiring managers read this board but I will have to say that I've never bothered even considered a hire with an educational background from one of these schools, past or present. My high powered HR wife... much the same. Sorry folks. Never meet anyone of quality coming out of these schools and that is why I don't hire from them myself. My experience is based on seeing other managers who have hired from these schools over the years as well.

My sympathies but no thanks.

-b/eads

dou2ble

Beads, but now you're throwing out a lot of applicants who went the IT route right after HS, got certified, gained experience, and then came back to get a degree.

In addition to being annoyed with my tax dollars going to for profit schools I also think many state schools, including jr colleges, are too cheap. Ever wonder why California is so broke?

And if anyone think the problem with students that never complete their degree is exclusive to for profit schools think again. One of the problems with jr colleges is students that enroll in 2 classes over a semester to be considered full-time and receive the pell grant. It's a joke! The pell grant covers way more than the tuition and these kids only enroll to get the money and blow it all on other stuff.

beads

dou2ble wrote: »

Beads, but now you're throwing out a lot of applicants who went the IT route right after HS, got certified, gained experience, and then came back to get a degree.

In addition to being annoyed with my tax dollars going to for profit schools I also think many state schools, including jr colleges, are too cheap. Ever wonder why California is so broke?

And if anyone think the problem with students that never complete their degree is exclusive to for profit schools think again. One of the problems with jr colleges is students that enroll in 2 classes over a semester to be considered full-time and receive the pell grant. It's a joke! The pell grant covers way more than the tuition and these kids only enroll to get the money and blow it all on other stuff.

Its the reality of my personal experience. I've hired some really great people without degrees but couldn't move them past administrator level positions as well.

My previous position I had a tech I was saddled with who was completing his "Master's in Security". His final term paper was seven (7) pages, riddled with inaccuracies, poor grammar, double spaced. Just trash as far as I was concerned. He got an 'A'. Yep! Winner.

Pay for play.

-b/eads

dou2ble

beads wrote: »

Its the reality of my personal experience. I've hired some really great people without degrees but couldn't move them past administrator level positions as well.

My previous position I had a tech I was saddled with who was completing his "Master's in Security". His final term paper was seven (7) pages, riddled with inaccuracies, poor grammar, double spaced. Just trash as far as I was concerned. He got an 'A'. Yep! Winner.

Pay for play.

-b/eads

Do you mind sharing what school that was? Poor writing skills is one of my pet peeves in the work place, and unfortunately far too many IT professionals don't see the importance of this skill.

aspiringsoul

beads wrote: »

Its the reality of my personal experience. I've hired some really great people without degrees but couldn't move them past administrator level positions as well.

My previous position I had a tech I was saddled with who was completing his "Master's in Security". His final term paper was seven (7) pages, riddled with inaccuracies, poor grammar, double spaced. Just trash as far as I was concerned. He got an 'A'. Yep! Winner.

Pay for play.

-b/eads

I am also curious about this...

ArabianKnight

I think another big part about some for profit schools it that they are not RA. Having that accreditation is the ONLY standard really, and allows you to transfer to other schools.

I think when HR makes hiring decisions based on if the school was online or not is something I am seeing more of, besides, some people have no choice but to attend school online, so I think auto rejecting applicants based on this is a little pre-mature.

On the flip side getting my masters allows me to reduce the experience required for the job....for example a job posting may say a BS degree and 6 years experience or a Masters and 4 years experience.

I think another reason is the lack of knowledge and education about the school, it's accreditation and cost before moving forward. If vets and non vets would do more research I think they would be a little happier about their choice.

I for one know that NCU's MBA is not a Harvard MBA but I get to have MBA at the end of my name and it looks good on a resume

markulous

ArabianKnight wrote: »

I think another big part about some for profit schools it that they are not RA. Having that accreditation is the ONLY standard really, and allows you to transfer to other schools.

I think when HR makes hiring decisions based on if the school was online or not is something I am seeing more of, besides, some people have no choice but to attend school online, so I think auto rejecting applicants based on this is a little pre-mature.

On the flip side getting my masters allows me to reduce the experience required for the job....for example a job posting may say a BS degree and 6 years experience or a Masters and 4 years experience.

I think another reason is the lack of knowledge and education about the school, it's accreditation and cost before moving forward. If vets and non vets would do more research I think they would be a little happier about their choice.

I for one know that NCU's MBA is not a Harvard MBA but I get to have MBA at the end of my name and it looks good on a resume

Actually, the reason I joined Kaplan University (a for-profit school) was because they had regional accreditation. There are quite a few that are for-profit yet still have that RA. My Associate's transferred just fine to WGU.

aspiringsoul

ITT Educational Services and its two top executives lied and concealed information from investors about losses on two student loan programs that eventually amounted to hundreds of millions of dollars, according to a lawsuit filed Tuesday by the U.S. Securities and Exchange Commission.SEC files fraud lawsuit against ITT, 2 executives