For-Profit Draft

Education in the United States has been becoming a larger priority for citizens to have as every new year passes. More jobs are looking for people with degrees in the corresponding field of the work they will be doing. Although more jobs are looking for a degree and more students are going to college every year, the limit for students that large Universities can take in, both public and private, is reaching its maximum intake of students. With this overflow of students that want a higher education, entrepreneurs like John Sperling and Michael Clifford are stepping in and innovating a branch of higher education known as For-Profit institutions designed for the students that were ignored from a standard university. For-Profit colleges have made a large change in the past decade as they have turned from being mainly “Mom and Pop Trade” Trade schools to being publicly traded giants. With this large growth in the past years it has allowed for many schools such as University of Phoenix and Grand Canyon University to build schools all over the nation for easy access by the United States. With this large uprise up schools they allow more students to attend every year. Although these schools sound like saviours for the rejected students, many have another view on what they really are. Many see the schools as a powerful mongol that is out to steal these students money and leave the in the dirt in the end. Kevin Carey wrote an article called “Why Do You Think They’re Called For-Profit Colleges”, He goes and reaches out to some of the powerful leaders of this industry such as Michael Clifford, the owner of Grand Canyon University, to find out what these schools are all about. He discusses all of the horrific horror stories of many of the students that went to these schools who feel as though they were scammed and left with nothing but a massive pile of debt. Carey and many others claim that For-Profit colleges are just looking to make money out of these students and they will take in anyone that is eligible for a loan no matter how underqualified they are or how likely they will be to default on their loan and even if they succeed in the school they are left with a practically worthless degree. In my paper I will discuss Carey’s paper and link it to other outside works in establishing the validity of the facts that Carey is presenting to his audience.
In Carey’s Article he discusses how the For-Profit schools mainly target low-income families mainly because they are more likely to receive government loans which will help them pay for the hefty tuition that the schools charge, but although they are able to find government aid doesn’t mean that they will be able to pay the loan back in the end. This is why the For-Profit sector has led so many students to default on their loans, because they require low-income students to take on massive amounts of debt to get their degree that many students end up not being able to receive in the end as many students will likely drop out. It is shown that the graduation rate for the University of Phoenix online campus is less than 5% for students that have received a degree in 6 years and only .5% graduate in 4 years. With the graduation rate so low for these students it  leaves them in the end with no degree to help them get the job they will need to pay off all of the debt that they have accumulated. As Carey states in his work “Large debt plus small income equals high risk of default”(Carrey 9), he says this because many of the students will end up defaulting on their loans because they didn’t have the funds necessary to pay for the loan they took out and now that they are left with their same previous income and no degree to help them find a better job, they have no other option but to default on their loans. Although Carey believes that it is the schools fault that they end up defaulting but the the Harvard scholars that wrote the article “For-Profit Colleges” on the Future of Children think otherwise. In their article they state how the students at For-Profits are hurt financially but they don’t believe that it is the schools fault as they state “Students in for-profits tend to be in more precarious financial situations than other students before they enroll. Many of those from for-profits who defaulted on their loans or were unable to find work might have been in the same predicament even if they had attended a public or nonprofit institution”(Deming 6). This statement shows that in general even if this student had gone to a regular non-profit university they would have had the same likeliness to default on their loan. Although this statement is true it is shown that the For-Profit schools will take anyone even if the have a high risk of default while non-profits will deny these students loans if they are unfit to pay them back. But the employees of the for-profit schools such as Michael Clifford of the Grand Canyon University  denies that the schools “have any responsibility whatsoever for how much students borrow and whether they can pay it back”(Carrey 8). This shows that the argument could go either way of people saying that it is either the schools fault or that the student was destined still default even after a non-profit university. Another claim that Carey makes in his paper that can also be retaliated against is the claim about how the For-Profit schools are making attempts to sneak by the laws the government is making to prevent them from receiving the majority of their money from government subsidies.
Carey makes many claims speaking against what the For-Profit schools are doing, one of the claims he makes is how the For-Profit schools are fighting against many of the government laws being created to limit the money the schools can receive from government subsidies. He states that “the “90/10 rule,” a federal rule that bars for-profits from receiving more than 90 percent of their revenue from federal aid”(Carey 10). He goes on to state that the schools are making attempts to rebrand as “Market based” instead of for-profit to make it seem as though they are less in it for the money and more in it to give the students a better education. Although Carey is on the side to enforce these sorts of laws, there are many people out there that believe that these schools are being singled out and that these laws shouldn’t only be enforced on for-profits but on the higher education sector as a whole. People such as Brian Darling, an aide to senators on the US counsel, believes that “the non-profit sector feels threatened”(Darling 1), and that the have aided with the government to limit the power that the for-profits can hold. Darling supports the Education for All Act which forbids the singling out of students from proprietary and vocational schools. Darling believes that the enforcement of laws, such as one requiring the department of education to evaluate students of postsecondary schools and deny them if they are deemed unfit, would make it very difficult for these schools to operate. As Darling states that it would be more difficult for the institutions to operate if the students were evaluated, there is much more room to argue that these rules should be enforced because the students that they are taking in are not fit to take on this higher education and being able to pay it off in the end. Others that help strengthen Carey's case such as a professor of law at the University of Miami argue that “By civic and economic standards, for-profit higher education outcomes are disappointing”(James 3). James believes that many students are misguided and they should be provided with the facts on graduation rates and salaries after graduation so that students can see the dangers and make the decision for themselves whether they want to take the risk of entering into the school or not.
After doing in depth research on this topic of for-profit schools, I am now lead to believe that the schools are very corrupted and regulations need to be set to limit what they can and can’t do. Although I believe this, I also see some sort of light at the end of the tunnel for these schools as they do show some positives and they could possibly evolve and change in a way so they can still operate efficiently and make a profit, but also do good for the community by continuing to save dying schools and educate those that want to be highly educated but can’t do the denial from the non-profit school system. So for-profits should not be completely disregarded, but with the right pushing of some laws and restrictions, the for-profit sector can be a great asset in providing the general public with a way to get more people to recieve a higher education.