Predatory Pursuit of Students by For-Profit Colleges

HLAA as well as other disability and consumer advocacy organizations were welcomed to a meeting the Senate HELP Committee (Health, Education, Labor and Pensions) focusing on issues related to predatory recruiting of students by for-profit colleges. At that meeting, participants discussed the newly released report by the US Government Accounting Office (GAO) detailing questionable academic practices, as well as poor results for these colleges. “Once again a report reveals that too many students at for-profit colleges end up without a diploma and saddled with debt,” said Senator Tom Harkin.

76% of for-profit colleges are owned by Wall Street firms, including Goldman Sachs. Once these firms take over the schools, often academic considerations became secondary to profits. Even though over 86% of revenues comes from federal tax payer dollars in the form of student loans and grants, these colleges spend the majority of their revenues (approximately 60%) on marketing and profits, not academics. For example, Bridgepoint Education, a publically traded for-profit company spent 29.7% of its income on marketing, 30.3% on profits. Other for profits spent between 18%-22% of their funds on marketing. CEO Andrew Clark of Bridgepoint Education, Inc’s compensation in 2009 was $20.5 million.

The HELP Committee got involved because many of these students found that after taking the coursework, they couldn’t get the jobs they were looking for. Many ended up not finding jobs at all. Others found jobs but at a lower salary than people who attended state or community colleges. And all were saddled with debt. Without a job, these students find it difficult to pay back their loans. The rate of defaults on government loans has increased steadily since 2005.

The HELP Committee is also concerned because they are seeing more and more veterans targeted by these companies. The New York Times September 21, 2011 reports that returning veterans eager to earn post-secondary degrees have been exploited by unscrupulous for-profit companies. PBS’ Frontline reported that some recruiters signed up Marines with serious brain injuries who could not remember what courses they were taking. “Vast sums are involved. Between 2006 and 2010, the money received in military benefits but just 20 for-profit companies soared to $521.2 million from $66.6 million.” (NYTimes, For Profit Colleges, Vulnerable G.I.’s,” September 21, 2011. http://www.nytimes.com/2011/09/22/opinion/for-profit-colleges-vulnerable-gis.html?ref=forprofitschools )

Why was HLAA invited to a meeting about predatory practices by for-profit companies?

The HELP Committee has been gathering information about for-profit companies aggressive recruiting of students for over a year. They are now reaching out to a variety of communities of people who may have been targeted by these companies.

We know that people with disabilities in general, including people with hearing loss, are often underemployed or unemployed in the best of times. In a sagging economy, we are often “last hired, first fired.” People who are out of work often turn to schools to get the education and training they need to get back to work. It wouldn’t come as a great surprise if people with disabilities were among those targeted by these for-profit companies.

HLAA is seeking input from students, or people who know students, who have been targeted by these companies. If you have information on this topic, contact us. People who want to do better by going back to school should have all the information they need to get the best education possible.