Are for-profit colleges hurting online education’s reputation?

One-fourth of for-profit students default on their loans after three years, for-profit students account for almost half of all federal loan defaults, and graduation rates at those schools hover around 50 percent, according to national education statistics.

A college must fail all three of the government’s “performance requirements” in three out of four years before the institution can no longer receive federal loans, according to ED’s new regulations, which take effect in 2015.

Commercials and internet videos from telling prospective college students that they could pursue a degree from the comfort of their pajamas could do more to degrade web-based learning than any government reports criticizing for-profits, said Andrew Magda, a senior analyst for Eduventures, a higher-education consulting firm based in Massachusetts.

“I would think such ads may be tarnishing web-based learning in general, but I would not link it with one school or type of school,” he said. “If there is a perception that [for-profits] are cheapening web-based instruction, I would say it is misinformed or I would say that if it is happening, it is mostly on the fringes and not mainstreamed. For-profit institutions have been innovating over the last decade and trying to position themselves as being similar to nonprofit institutions. For-profits have been trying to raise perceptions of themselves as well as their offerings, many being web-based.”

With Congress tackling the national debt and a stubbornly high unemployment rate, Magda said it’s unlikely Harkin’s hearings or reports would lead to legislation in either chamber of Congress, barring “a massive event or scandal” involving for-profit institutions.

Even if Harkin were to draft legislation further regulating for-profit schools, McClusky said, the proposal would be a nonstarter in the Republican-controlled House of Representatives.

“It would be very low on the overall list of congressional priorities and [would have] no chance of getting through the House,” he said.

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