For-Profit Higher Ed: Temples of Fraud

We live in an era of fraud. Big banks resemble Goliaths more than ever before, professional sports are overrun with performance enhancing drugs, and special interests keep pulling the strings of politicians in the so-called “People’s House.”

While Wall Street, professional athletes, and Capitol Hill are scrutinized, rightfully so, an equally corrupt enterprise is ripping off student victims and taxpayers under the guise of a sanctimonious illusion. Institutions of higher education, for-profit higher education in particular, stand as temples of fraud, luring in prospective students blinded with a false hope and faith in the system. This faith, born from a cult-like assurance that access to higher education guarantees future success, has hurt students for far too long.

For every 10 students who enroll at the largest for-profit colleges — University of Phoenix, Kaplan, DeVry, Strayer, Ashford, ITT Tech, and the like — 7 of them will withdraw within 4 months of enrolling, and many more will follow in the months after. Matching these figures are industrywide default rates. Crushed under the weight of tens of thousands of dollars in student debt, with nothing to show for it, many students are sent into financial free fall with no foreseeable recovery. At ITT Tech, for example, 51 percent of students who entered repayment in 2009 defaulted on their student loans within 5 years.

Of those who do manage to graduate, many find out upon completion that the program was not accredited, barring them from sitting for occupational licensing exams that are required to practice in the field. This problem surfaces as a result of individual states establishing a series of occupational licensing boards. These committees oversee occupations that require licenses, ranging from the American Bar Association for attorneys, to the Commission on Accreditation of Allied Health Education Programs for diagnostic sonographers. Prof. S. David Young suggests that, combined, “[A]t least a fifth, and perhaps as much as a third, of the work force is directly affected by licensing laws.”

While traditional colleges virtually never face problems meeting these standards, many for-profit colleges function under a vastly different set of circumstances. This model consists of Programmatic Accreditation and Licensure: While some programs are recognized as being accredited, other programs, as well as entire for-profit colleges, are not.

Sara Pierce, a former student at Kaplan University, fell victim to this trap after earning a Bachelor’s Degree in Nutrition Science, a non-accredited program. Upon spending several years and over $40,000 in an honest attempt to improve her life, she found out that her efforts were in vain from the very beginning. In her words, for-profit colleges are “offering something they don’t have.”

For-profit colleges operate the ultimate bait and switch maneuver. Preying upon the ignorance and faith of prospective students in the system, for-profit colleges enroll millions of students each year knowing that a majority of them will face financial ruin as a result. In the words of Vince Martin, a former admissions advisor at Everest University, “From the students’ side, we’re admissions advisors … by definition of the title and because the industry has a certain nobility to the uninformed, they’re valuing our guidance and the only guidance is to get the person into school and sign their financial loan.” In other words, shepherds are leading the flock to slaughter, rather than safety. Once enrolled in these temples of fraud, students are sacrificed upon the altar of greed for the sake of profit.

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