Monday AM November 29th, 2010
by: Ed Mayberry, November 29, 2010 4:11:00 am
The report says for-profit colleges make up 12 percent of enrollments and 24 percent of federal loan dollars, but produce 43 percent of federal loan defaults. Amy Wilkins with the non-profit Education Trust says many still fail to get their degree.
"At for-profit colleges across the country they have about a 22 percent chance of earning a BA over six years. That's in sharp contrast to the 65 percent BA earning rate at our non-profit colleges around the country. The non-profit sector, when you look at costs that go directly into the classroom, spend about three times as much per student as do the for-profit colleges. So one would imagine that at the non-profit college and the public colleges, students are receiving much more support than they do at the for-profit colleges."
Wilkins says for-profit colleges rack up profits from federal student aid subsidies and high-cost private student loans.
"When you look at the debt that students leaving for-profit have, it's four times the debt. In the case of non-profit private colleges and public colleges and universities, usually the combination of Pell and a federal loan will meet the student's financial needs. But because the costs at for-profit colleges are so much higher, students get their Pell grant, they get a federal loan, and then they have to turn to the private loan market to make up the difference. So they're carrying two types of debt—they owe the federal government and they owe a private bank."
Wilkins says the for-profit college system has increased enrollments by 236 percent over the last ten years.