According to the U.S. Department of Education, for-profit colleges educated around one in 10 students in 2008, but these students took out nearly a fourth of all federal student financial aid dollars — around $24 billion of taxpayer money.
They also account for almost half of loan defaulters. In many of the larger for-profit schools, federal dollars account for around 90 percent of revenues.
Harris Miller, the chief executive officer and president of the Association of Private Sector Colleges and Universities, said for-profits aren’t at fault.
“The default rate among students is not based on whether a school is profit or not-for-profit. It’s based on the demographics of the student population,” Miller said in an interview.
“We accept and try to educate students that the traditional higher education system is not interested in educating or is not willing to educate,” he said.
An investigation by the Senate Committee on Health, Education, Labor and Pensions found that one for-profit college, Bridgepoint, enrolled about 8,000 students in associate degree programs for the 2008 school year.
By 2010, 85 percent had withdrawn, and only about 1 percent had received a degree. Dropout rates at most of the other schools investigated hover around two-thirds.
If the numbers are right, however, they clearly show that taxpayers aren’t getting a good return on their investment.