For-Profit Final Draft

Education in the United States has been becoming a larger priority for citizens to have as every new year passes. More employers are looking for people with degrees in the corresponding field of the work they will be doing. Although more employers 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 saviors for the rejected students, many have another view on what they really are. Many see the schools as a powerful empire 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, but in all he is out to defend the For-Profit school system and argues that they are a viable place for education. 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 complicate it and extend the ideas that are made using outside sources from various professionals that view the For-Profit sector as adequate higher education or unsatisfactory.

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.(College Results) 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”(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, Goldin, & Katz, 2013). 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. Some believe that the reason for the high default rates is that the For-Profit “recruiters” will sign up anyone they can, no matter how likely they are to default on their loans. 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). The Harvard scholars help qualify Carey’s text as they support the side that it is not the For-Profit schools fault that the students default but they believe that the students who default were destined to fail from the start. The students later go on to compare the Community College system to the For-Profits as they are both feasible options for students that were rejected from the public Universities. They claim that the For-Profits have a much better guidance system that allows the students to complete the classes they need and graduate in a short period of time. They discovered a study conducted by James Rosenbaum, Regina Deil-Amen and Ann Person where they researched and compared the completion rates between community colleges and For-Profits alone and they came to the conclusion that “”Private Occupational Colleges”(Meaning for-profit, proprietary or career colleges) had higher completion

ratings than students at community colleges”(Deming, Goldin, & Katz, 2013). These students are helping support and qualify Carey’s claims as they are stating that although the For-Profits are more expensive than the community colleges, the for-profits have higher completion ratings and they offer much better programs with more guidance that the community colleges are unable to offer.

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, 2010). He goes on to state that the schools are making attempts to re brand 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 2010), and that they 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. He complicates Carey’s claim by supporting the enforcement of laws, such as one requiring the department of education to evaluate students of post-secondary 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, 2011). 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. Both authors complicate the Claim Carey makes and states that the government shouldn’t take only the for-profits into discussion when creating these laws and that instead of singling the schools out in these laws that would limit the amount of money the schools can make, the schools should be able to provide the student with enough information on what the school can offer them and how likely they are to succeed. Darling later states that the government making these laws “unfairly hold for-profit institutions to a higher standard for student debt and default than all other institutions of higher education”(Darling, 2010)  But much of the reason these laws are being created are not because of the large risk of default but because the hgih percentage of federal aid coming to for-profits. Carey states that “A quarter of federal aid goes to for-profits, while they enroll only 10 percent of students”(Carey, 2010). Although these claims made by these professionals do complicate the claims made by Carey, the claims Carey makes prove to show compelling evidence that the government should be able to put a higher regulation on the federal aid the for profits can receive as they are such a small percentage of higher education but they still gain such a large proportion from the government

After doing in-depth research on the topic of higher education in the form of For-Profit schools, it is shown by the evidence provided by Carey and various outside sources that this sector of higher education proves to be a vital source of education for low income students rejected by the formal university. The claims made by Carey showed that he believed that the For-Profits were a suitable place for education but had stated that it should also be regulated slightly by the government. Some outside sources had qualified Carey while others had complicated his claims, but in the end the claims originally made by Carey had been proven much more applicable. Although For-Profits do have a much higher price tag than those on community colleges, the For-Profits provide much better programs that allow students to get their degrees completed in a short amount of time and keep them on track throughout the way.