CHARLESTON, W.Va. -- Dismally, a new congressional report says many for-profit colleges use high-pressure recruiting to enroll marginal students, saddle them with large federal loans, and cast them adrift with no degrees -- while school executives and stockholders pocket fat profits.
The commercial colleges mostly live off U.S. taxpayers, taking more than $30 billion a year in student loan money. Their students fail to repay the loans at a sickening rate.
Sen. Tom Harkin, D-Iowa, conducted five hearings and obtained internal documents from 30 for-profit schools. He issued these findings:
* From 1998 to 2008, the number of students in U.S. for-profit schools more than tripled, from 553,000 to 1.8 million. To entice enrollees, the colleges spend heavily on TV ads, billboards, phone solicitation and Web marketing. Recruiters often are rewarded for using exaggerated pitches to hook students.
* An astounding 96 percent of such students incur federal loans, compared to a mere 13 percent at community colleges and 48 percent at four-year public schools.
* For-profit colleges are much more expensive, with tuition six times higher than a community college and twice as high as a four-year school.
* More than half of for-profit students quit. Among those who enrolled in 2008, about 54 percent had dropped out by 2010.
* One-fourth of such students default on their government loans. The for-profit sector accounts for only one-tenth of American college students, but nearly half of loan defaults.
* Despite poor student outcomes, the for-profit schools are lucrative. Profits at 16 of them totaled $2.7 billion in 2009 -- an average profit margin of 19.7 percent. CEOs averaged $7.3 million compensation.
This report paints a disgusting picture of greed and exploitation. It should make families think twice before sending their children to commercial colleges. If community colleges cost only one-sixth as much, why pay through the nose to a for-profit school?
West Virginia is suffering the collapse of Mountain State University at Beckley, which paid its president up to $1.8 million a year, and yet lost its accreditation. Technically, Mountain State was a nonprofit institution, but insiders say it operated much like a for-profit school. Thank heaven, the University of Charleston rescued MSU students.
Education is the key to the future, both for students and society as a whole. It shouldn't be turned into a fast-buck enterprise that delivers scant benefits.