The past week has brought renewed focus on the fast-growing, for-profit college industry and the heavy debt loads for many of its students, who typically default at a higher rate than counterparts who attended traditional colleges and universities.
The PBS Frontline documentary, College, Inc., that aired Tuesday focused on for-profit colleges and universities that cater to “non-traditional students, often confer degrees over the Internet, and, along the way, successfully capture billions of federal financial aid dollars,” according to the program’s description.
The program and a study by the College Board, the not-for-profit organization, also focus on the high debt loads facing graduates of for-profit colleges.
These students opt to pay more through financial assistance for the promoted benefits of these schools, such as the University of Phoenix – now the largest college in the United States with nearly half a million students – because of their schedule flexibility, shorter time-frames toward degrees, online versatility and easier entrance qualifications.
Frontline reports that for-profit colleges enroll 10 percent of all post-secondary students, but receive almost a quarter of federal financial aid.
“But Department of Education figures for 2009 show that 44 percent of the students who defaulted within three years of graduation were from for-profit schools, leading to serious questions about one of the key pillars of the profit degree college movement: that their degrees help students boost their earning power,” Frontline said.
College Board’s study found that 53 percent of for-profit, four-year program graduates had a cumulative total debt in loans of more than $30,500. Of students graduating from private, not-for-profit programs, 24 percent had that much debt; and only 12 percent from public, four-year colleges.
The organization also found that nonfederal borrowing is also most widespread in the for-profit college sector. Among for-profit bachelor’s degree recipients, 65 percent of borrowers had an average of $11,300 in nonfederal debt — in addition to their federal student loans.
“The analyses emphasize the urgent need not only to strengthen postsecondary financing policies but to provide better guidance and improved financial literacy for students before they take out loans that will get them into trouble down the road,” said College Board President Gaston Caperton.
