Are For-Profit Colleges Providing Value for Their Students?

Recent lawsuit filings naming for-profit colleges as defendants would indicate there is a disconnect between the value of course credits and the cost of the course credits.

Time and time again students are too late discovering that course credits they were assured would transfer to public and private universities and contribute to a useful education, in fact, will not. In many cases students have taken on debt of many thousands of dollars to pay the for-profit college for these course credits.

About 9% of all college students now attend for-profit colleges. Most attend schools owned by one of 15 large, publicly traded companies. In the last year federal student loans and grants made up an average 77% of revenue at the five largest for-profit colleges.

There is a proposal by the Education Department to penalize for-profits whose students graduate with more debt than they can afford. Congress has been holding hearings on whether federal aid to for-profit colleges - over $24 Billion in 2008 and 2009 - is being put to good use.

In their defense, the for-profit colleges say their programs serve a key role in educating students who juggle work and family demands. The U.S. government has stepped up its scrutiny amid growing concern that for-profits are reeling in billions of dollars in federal aid by using aggressive, deceptive practices to lure students to programs that may not contribute to a useful education.

For a lot of students the problems with for-profits begins with accreditation. Accreditation is an assurance of educational quality, and is a third-party seal of approval, if you will, designed to protect consumers and taxpayers from diploma mills. It is important to colleges because the Education Department relies on it to determine which schools may get federal student aid or not. Accreditation is important to students because it can help them transfer credits from one college to another and can signal that a candidate's academic training has met certain standards.

For-profit colleges historically have been accredited mostly by national groups that have focused on short-term college programs in fields such as the culinary arts, medical billing or business administration.

On the other hand, most non-profit, degree-granting public and private institutions are accredited by one of six regional bodies.

These two distinctions are important because regional accreditation, which takes at least two years for a college to earn and must be renewed every 10 years, is considered the most rigorous and most prestigious of the two.

To further confuse things it is up to institutions to decide whether to accept or deny transfer credits. Many use accreditation status as a guideline. Even when a school does become regionally accredited, other non-profit schools will often take a discriminatory attitude simply because the other school is for-profit.

Regional and national accreditors were questioned by lawmakers this summer about whether colleges found to engage in questionable practices - such as encouraging students to lie on financial aid forms or pressuring students to sign binding contracts - should be allowed to keep their accreditation.

Until accreditation is sorted out and penalties established for violations of student trust, misleading guidance and answers to student questions will continue to plague the for-profit education industry. Students will continue to take on more debt while being misled by guidance counselors and not receiving correct information in response to their questions about course transferability.

Our firm, Brady & Associates, has spoken with for-profit college counselors that are working off the clock in the performance of their duties. Many are working through a lunch or returning a student call after business hours and not being paid for that time.

For-profit colleges under fire over value, accreditation, USA Today, September 29, 2010