The for-profit college industry, featuring some of the most expansive online learning programs in the United States, was the only higher-education sector that saw a drop in employment last year despite massive growth over the past decade, according to newly-released federal statistics.
The U.S. Education Department’s National Center for Education Statistics on Sept. 25 released its latest higher-education employment numbers, showing that colleges and universities have slowed hiring to rates not seen since 2003.
For-profit colleges, mostly catering to nontraditional learners who earn degrees and credentials online, were the only schools to end 2011 with fewer employees than they started with. The number of for-profit college employees dropped to 288,890 in fall 2011 from 295,495 in 2010, according to the federal report.
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However, the number of for-profit college executives and managers ticked up slightly in 2011.
Ashford University, among the most prominent for-profit institutions, announced just this week that 450 student recruiters were laid off so the school could better focus on “student success.” Ashford is owned by Bridgepoint Education, which has been under intense federal scrutiny for its recruitment practices over the past two years.
Higher education employed 3,920,836 people in 2011, up from around 3.9 million in 2010, according to the report. That’s the lowest rate of growth in eight years.
The department’s thorough rundown of college employment and student aid also showed that for-profit colleges cost students much more than public institutions, on average—though not as much as private nonprofit schools. Students attending public four-year universities paid an average of $17,600 per year, before student aid was accounted for. At for-profits, students paid an average of $27,900 before aid was incorporated.
College students at private, nonprofit four-year institutions paid an average of $34,000 a year.
For-profit colleges have long been criticized for taking in a disproportionate amount of federally backed student aid while maintaining high student dropout and loan default rates. For-profit industry officials have argued that skyrocketing dropout and default rates are to be expected in a sector that serves low-income, nontraditional students.
Jeremy Dehn, a former professor at the Art Institute of Colorado, said that argument would be more persuasive if for-profit schools weren’t so expensive.
“You can’t claim that you’re reasonably priced because you’re cheaper than Ivy League schools, then also claim to have reasonable default rates because they’re on par with community colleges,” he wrote in a blog post. “That’s even if your comparable default rates typically don’t include the fact that far fewer students at less-expensive community colleges take out loans in the first place.”
A Congressional report on for-profit colleges’ business practices, released July 30 by Sen. Tom Harkin, D-Iowa, found that federal taxpayers spent $32 billion on for-profit colleges in 2009-10, while more than half of the students who enrolled in them dropped out without a degree after about four months in 2008-09.
“In this report, you will find overwhelming documentation of exorbitant tuition, aggressive recruiting practices, abysmal student outcomes, taxpayer dollars spent on marketing and pocketed as profit, and regulatory evasion and manipulation,” Harkin said. “These practices are not the exception—they are the norm.”
Steve Gunderson, president of the Association of Private Sector Colleges and Universities and a former GOP congressman, said the report “twists the facts to fit a narrative, proving that this is nothing more than continued political attacks on private sector colleges and universities.”
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