For-Profit College Investigation
As a result of rapid increases in the amount of federal financial aid and other federal student assistance programs flowing to for-profit schools, Senator Tom Harkin has launched a broad-based oversight effort to better understand how well for-profit schools, many of which are highly profitable publicly traded corporations, are serving students and taxpayers. As part of this effort, Senator Harkin has led five hearings and collected internal document from 30 for-profit schools.
Senator Harkin's investigation has found:
- Enrollment at for-profit schools has grown dramatically over the past decade. Between 1998 and 2008, the number of students attending for-profit schools has grown from 553,000 to 1.8 million, an increase of more than 225 percent.
- In order to drive enrollment growth, for-profit schools spend heavily on television advertisements, billboards, phone solicitation, and web marketing. The pressure on recruiters to enroll as many potential students as possible can give rise to recruiting practices that are overzealous or misleading.
- For-profit schools are far more expensive than comparable programs at community colleges or public universities. The average tuition for a for-profit school is about six times higher than a community college and twice as high as a 4-year public school.
- For-profit schools provide access to many students who have historically not been well served by traditional institutions of higher education. But data collected by the Senate H.E.L.P. Committee shows that many for-profit schools are not providing the support structure to help these students succeed. The data shows that fifty-four percent of students who enrolled in the 2008-2009 school year withdrew by summer 2010.
- Close to one in four students who attends a for-profit school defaults on his or her federal student loans within 3 years of leaving school. This high rate of default combined with the fact that nearly all students at for-profit schools must borrow money to pay the cost of tuition, has resulted in a sector that enrolls approximately 10 percent of American higher education students but accounts for nearly 50 percent of all student loan defaults.
- Despite poor student outcomes, for-profit schools are highly profitable companies. Profits at 16 of the largest for-profit schools totaled $2.7 billion in 2009.