Federal report slams online for-profit colleges

Harkin requested the GAO report released Nov. 22.

Undercover investigators from the federal Government Accountability Office (GAO) earned course credit while skipping classes and submitting substandard work in online for-profit college programs – findings the for-profit industry has labeled politicized and unreliable.

“For-Profit Schools: Experiences of Undercover Students Enrolled in Online Classes at Selected Colleges,” a GAO report released Nov. 22, is the second government examination of for-profit colleges’ practices, which have been called into question by many in higher education and lawmakers in Congress.

Sen. Tom Harkin (D-Iowa), head of the Senate’s education committee, ordered the yearlong investigation in which GAO agents pretended to be online students at 15 for-profit colleges.…Read More

Opinion: 5 reasons why for-profit schools will survive

I am biased against for-profit schools. I have long thought of them as diploma mills, without ever having visited one. I like public charter schools, but only if they are nonprofit. When Kaplan, then the most profitable division of The Washington Post Co., built a chain of for-profit colleges, I never wrote about them, says Jay Mathews for the Washington Post. Teachers I admired saw education as a public trust. They weren’t in it for the money. They wanted to help kids. I noticed that Edison Schools, a management network run by some smart and well-meaning people, failed to win the confidence of many parents and teachers because it, too, was trying to make a profit. Now those of us who think this way have been vindicated. The federal government has tightened regulation of for-profit colleges, including Kaplan’s, in response to criticism that many students were being misled about loans they were likely to need to obtain a degree. This has put the entire industry on the defensive…

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Low job placement rates puts for-profits at risk

New figures show two California campuses owned by for-profit education firm Career Education Corp. appear to have placed fewer than 65 percent of graduates in jobs – the minimum job placement rate required by the Accrediting Council for Independent Colleges and Schools, California Watch reports. And while Career Education officials disclosed earlier this month that job placement rates at 36 of 49 health education and art and design schools had fallen below the minimum required by the accrediting agency, the new data show that as many as 45 of the campuses may have missed the mark.

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For-profit college company denies US recruitment lawsuit

Education Management could face a hefty settlement.

A large for-profit education company has asked a judge to throw out a Department of Justice lawsuit that claims it used improper sales tactics to lure unqualified students and the billions of dollars in financial aid they bring.

Education Management Corp. runs more than 100 higher-education programs across the country, offering diplomas and degrees in fashion, culinary arts, business and other fields, some through online courses.

A whistleblower lawsuit backed this year by the Department of Justice accuses the company of paying illegal incentives to recruiters to sign up students, in violation of a 1992 law that bans such practices.…Read More

Plan to outsource online classes to for-profit schools meets opposition

Some Nevada college officials oppose the creation of a new virtual school.

Members of a Nevada higher-education task force are pushing for a virtual college that would farm out community college courses to for-profit institutions, drawing criticism from educators who say the proposal constitutes privatization of public education and a lowering of academic standards.

In a report released in August by a task force created by the Nevada System of Higher Education (NSHE), officials introduced a range of reforms for Nevada’s four community colleges, with one suggestion grabbing national attention: establishing a new institution, the Nevada Virtual College (NVC), and hiring a for-profit school to “develop and deliver curriculum” to students.

The statewide proposal comes after several years of negative headlines and government reports showing how for-profit college students leave school with far more loan debt than their counterparts at traditional colleges, along with questionable recruiting tactics by some of the best-known for-profit schools, all with vast online programs.…Read More

For-profit college default rate spikes; industry hits back

Some for-profit colleges have default rates of more than 25 percent.

Colleges and universities of every kind have seen student loan default rates jump this year, with for-profit schools that have recently come under government scrutiny recording the sharpest increase in defaults.

For-profit colleges and the industry’s lobbyist groups criticized a new report from the U.S. Department of Education (ED), released Sept. 12, that showed 15 percent of for-profit college students have defaulted on their school loans, marking a four-percent increase.

The report focuses on students who should have begun repaying their academic loans in 2009. Overall, the national student loan default rate rose from 7 percent to 8.8 percent.…Read More

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

For-profit colleges account for about half of student loan defaults.

Congressional hearings and a barrage of criticism have put for-profit colleges on the defensive, and with many of the sector’s largest schools touting vast web-based course options, those who track the industry say for-profit programs could damage the public perception of online education.

Lawmakers from both major parties have defended the for-profit industry’s business practices, but Sen. Tom Harkin (D-Iowa) has remained one of the most vocal—and active—critics of for-profit colleges’ recruitment and student loan practices.

Read more about for-profit colleges in higher education……Read More

California headed for cuts for for-profit students

California’s student aid commission said on Friday that aid funds going to students at for-profit schools should be slashed first when the state cuts its education budget, Reuters reports. The U.S. Education Department has criticized some for-profit schools, which range from universities offering PhD’s to trade schools offering car-repair training, for low graduation rates and high loan default rates. The California Student Aid Commission, which administers financial aid programs, voted unanimously on Friday to put Cal Grant aid to for-profit schools’ students at the bottom of its priority list when the state is forced to make budget cuts relating to education financing…

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For-profit crackdown brings criticism to ED headquarters

Duncan said for-profit schools are a key to meeting President Obama's educational goals.

Opponents of the U.S. Education Department’s (ED) proposed “gainful employment” rules said the regulations unfairly target for-profit colleges, and at least one career college advocate said at a Nov. 5 public hearing that the department should scrap its plan entirely.

ED officials listened to testimony for and against the proposed rule last week at the department’s headquarters in Washington, D.C., where most speakers suggested tweaking certain statutes – with at least one political ally of the Obama administration suggesting that the regulations would put higher education out of reach for many low-income and minority students.

About 10 percent of U.S. college students attend for-profit institutions, some of the largest online education programs in the country.…Read More

For-profit schools cry foul on loan rules

For-profit schools are opposing what they argue is a “retroactive” crackdown on student loan defaults, and said on Thursday that they may challenge the U.S. Education Department in court, reports Reuters. The fight over whether the department can look at default data of students who left school three years ago is the latest twist in a larger battle over new rules aimed at cracking down on tuition loan abuses and ensuring courses lead to gainful employment. A preliminary rule says programs at for-profit schools could lose their eligibility for student loan funding if 65 percent of students default or are shown to be unable to pay their loans. Losing federal aid could cripple some for-profit schools. The Education Department opted to use default data from students who left the programs in previous years. The rule–which is not yet final–is slated to go into effect in mid-2012…

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