For-Profit Schools See “Subprime-Opportunity”
Julianne Hing, Colorlines, November 29, 2010
A new report out from the liberal education policy group EducationTrust says that the arc of the for-profit schools industry, and the disproportionate impact its had on the poor and people of color, mirrors another financial debacle that the country should be in no rush to relive: the subprime mortgage crisis.
The growth of the industry has been just as quick, the financial devastation similarly crushing. In the last decade, enrollment at for-profit schools has jumped 236 percent, even though public and not-for-profit private schools saw just 20 percent growth. The growth has come primarily for low-income students and students of color, which the industry proudly claims is a testament to their commitment to the nation’s neediest and most disenfranchised. According to the Ed Trust report, low-income students make up 50 percent of for-profit schools’ consumer base, students of color make up 37 percent; there’s likely a great deal of overlap between the two statistics. For-profit schools make their money off of students’ Pell Grants, the federal money that’s set aside for low-income students, and from everyone else’s federal student loans.
Students enroll in for-profit schools under bloated promises of future employment, often obtaining bogus certificates from unaccredited institutions, or taking credits that aren’t transferable to other schools. Along the way, they rack up tens of thousands in debt, which they often cannot repay. (Read the full article)