Most of us can identify with some level of pain resulting from the mortgage loan debacle. However, is anyone paying attention to the next tidal wave heading towards our shore? Riding its crest are for-profit universities. Consider this, the average associate degree at a for-profit university costs a student $14,000. Over the next 10 years, Economists’ estimate that students at for-profit universities will default on more than $275 billion in government loans. For-profit universities represent only 10 percent of all university students. However, according to the Department of Education, they account for 44 percent of all student-loan defaults. Last year alone, federal student loans to for-profit colleges surpassed $26 billion, about one-third of all student Title IV loans and Pell grants issued. These market driven entities are designed to put butts in seats, and who really cares, right? But the real issue here is the defaults will cost taxpayers billions.
“Act Now to Avoid College Student-Loan Crisis,” Jennifer Openshaw, Wall Street Journal Market Watch, 11/19/10
“U.S. Senate Hearings: Fraud in For-Profit Education Industry,” Matt Rosenberg, Social Capital Review, socialcaptialreview.org, 8/9/10
“For-Profit Colleges: Undercover Testing Finds Colleges Encouraged Fraud and Engaged in Deceptive and Questionable Marketing Practices,” Gregory D. Kutz, United States Government Accountability Office, gao.gov, 8/4/10 http://www.gao.gov/new.items/d10948t.pdf
“$78.5M Settles U. of Phoenix Case,” Doug Lederman, Inside Higher Ed, insidehigered.com, 12/15/09 http://www.insidehighered.com/news/2009/12/15/apollo
“University of Phoenix Settles in Recruiting Violation Case,” Daniel Luzer, Washington Monthly, washingtonmonthly.com, 12/15/10 http://www.washingtonmonthly.com/college_guide/blog/university_of_phoenix_settles.php
Student researchers: Cara Peracchi Douglas, Sarah Schmidt, Katie Whitney
Faculty Evaluator: Douglas Swanson, Ed.D., CSU Fullerton