For-profit universities such as University of Phoenix, Grand Canyon University, and DeVry University may be taking over the education system. They have been around for a long time but recently it has become a huge controversy on whether or not this negatively or positively affects the students, tax-payers, and economy. In 2010, multiple lawsuits were held against certain for-profits for fraud. Many believe that these “colleges” are just big businesses scamming people to get government money. Others think that they are legitimate universities that provide a convenient education to those often forgotten by “normal” universities. However, a lot of people, such as Kevin Carey, are on the fence and see the good and bad in these for-profits. Carey is the director of the Education Policy Program at New America and is widely considered an expert on education issues. Carey has written many articles for the New York Times and many other magazines and is publishing a book in 2015. Most of his publications focus on higher education in the United States. In his article, “Why Do You Think They’re Called For-Profits?”, published in The Chronicle of Higher Education in 2010, Carey explains his views on the for-profits. He starts out by explaining how these colleges have become money-making machines that prey on less-fortunate people in order to get the tax-payers’ money in the form of government grants. Although, Carey later claims that these schools aren’t all bad because of the convenience of them, they just need more government regulations. In this essay, I will extend Carey’s claims that for-profits have issues but are not all bad by using other sources of the same topic.
Carey’s first claim is that the for-profits scam less-fortunate people who are unlikely to pay back their loans in order to get government money. He says, “most of that money comes from the federal government, in the form of Pell Grants and subsidized student loans”(Carey). Supposedly, the recruiters send the students straight to the financial aid office where they are able to take out large loans with high interest. When these loans aren’t able to be paid back, the borrower, the college is still promised by the US government to get the money they are owed. This money comes right out of the taxpayers pockets. It doesn't matter if the student is able to pay the high price of the school or not, the school gets their money regardless. A government report extends Carey’s argument by showing that in addition to targeting to low-income people, many for-profits even commit fraud in order to get more money from the government. A report written about an undercover investigation of for-profits and discovered that many financial aid officers attempt to convince people to falsify their information on the FAFSA in order to qualify for a bigger Pell grant(“Excerpts from Government Accountability…”). This shows that these businesses are even willing to commit huge crimes in order to get more money rather than only aiming for people with low-incomes.
Carey claims that for-profits should have more government regulation. He says, “The federal government has every right to regulate the billions of taxpayer dollars it is pouring into the pockets of for-profit shareholders”(Carey). However, he doesn't go much further on the subject rather than his vague mention of the 90-10 rule. The 90-10 rule makes it so that the school can only get 90% of its revenue from government aid. However, these corporations have found a loop hole. The other 10% can come recruiting veterans and receiving government money through the GI Bill. Pertreaus illustrates the possible outcomes of this lack of regulation with the example, “prior to the Military Lending Act of 2007, which capped the annual interest rate for some consumer loans to service members at 36 percent, they were victims of unchecked payday lending and other predatory financial services. I see a parallel in what is happening today with for-profit colleges”(Pertreaus). She is arguing that without more regulation on these companies, veterans will continue to be victims of these predators just searching for any money they can get. She goes on to say that “the benefits provided to our military and their families should not be wasted on programs that do not promote — and may even frustrate — their educational goals”(Pertreaus). She is extending Carey’s claim that the government needs more regulations to stop the exploitation of veterans for more money, by adding that they also need more regulations to make sure they are providing an actual education to those who want it.
Although Carey starts out by arguing the for-profits’ negatives, he goes on to argue that they aren't all bad. Carey claims that “for-profits exist in large part to fix educational market failures left by traditional institutions, and they profit by serving students that public and private nonprofit institutions too often ignore. “(Carey) With the deteriorating economy, many people are going back to school for a college degree. However, most community colleges are not able to offer classes to all of the people who are trying to get an education. That’s where for-profits come in. With the option of online courses, it is possible to educate many more people than ever before. Also, the non-profit universities are much less convenient to a person who has to work full time and can’t make it to regular hour classes. For-profits usually offer online and night classes. Sieden extends this by showing how the for-profits are even helpful to the instructors. “For example, a student has at times introduced me to a new concept in my field that I have been able to explore and transfer to my own work situation. In many other instances, I have explained a concept to a student and then watched him or her actually put it into practice in the workplace — eventually describing the results to the rest of the class”(Seiden). We often only think about the students when thinking about the effects of for-profits. But there are also teachers who work other jobs or possibly don't have the right connections to become a public university professor. Tenure is not a thing at for-profits, making it possible to always have good instructors that are learning themselves as they teach. A group of working individuals can create an interesting atmosphere where almost everyone is able to apply lessons to real-life situations.
Carey also claims that traditional colleges may be no better than these corporations, academic wise.Carey says that “traditional institutions have long resisted subjecting themselves to any objective measures of academic quality. They've pointed instead to regional accreditation, which conveniently allows colleges to decide for themselves whether they're doing a good job”(Carey). However, many for-profits also have regional accreditation which means degrees from for-profits may be just as legitimate as the ones from public or private non-profits. Darling extends this by saying that it would be unfair to regulate for-profits and not non-profits. He explains that the government is trying to make for-profits release all of their graduation and debt statistics. Darling explains how the non-profits don't have to release this information, so it would just seem like they are better schools when they might have the same job placement rates.
In conclusion, Carey claims that the for-profits aren't all bad, but could definitely use some reform and regulations. However, Pertreaus government reports, and Seiden, go into further detail with this. In my opinion, these for-profits are necessary to improve the economy because today an education is much needed to get a job. Many people are going back to school and need the convenience and specialty training that these colleges provide. If we can figure out how to make them more affordable, we could have a much larger group of educated and trained people and possibly improve the economy by creating more jobs.
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