For-profit universities: A fool and his money are soon parted?

Parents Forum
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<p>I honestly don't understand what compels a person to spend $25K+ per year on a university that has a NASDAQ ticker symbol. Why do people still attend DeVry, ITT Tech, University of Pheonix, etc. even amidst the countless Federal lawsuits, audits, stories of fraud, debt, inability to find employment, and inability to transfer credit? Many employers openly laugh at DeVry resumes before proceeding to throw them in the trash. Don't people realize that community colleges offer far superior prospects for 1/6 the cost of a for-profit?</p>

<p>I feel like society has a moral obligation to end an industry whose entire livelihood depends on exploiting the poor and gullible. It's more than just a personal ideological bias against the very idea of for-profit education though. Taxpayers are literally funding this fraud. The for-profit colleges mislead customers who are financially unable and academically unfit for college with the promise of Federal loans to fund their entire program and high salaries post-graduation. Until recently I was unaware that DoE Federal aid was even an option for for-profit university customers. For-profit customers make up 10% of all higher ed students yet they constitute over 45% of defaults on Federal student loans. The inability to find gainful employment with a for-profit degree along with a presumably poor prior financial background frequently preclude the repayment of DoE loans. It seems like there are many parallels between for-profit student defaults and the sub prime crisis. Predatory tactics to lure unfit applicants. Perhaps a wave of mass defaults is looming?</p>

<p>A small part of me feels that if somebody is sincerely dumb enough to think a DeVry degree will land them a six-figure salary, then that person deserves to be exploited but I guess that's not a civically responsible position to take.</p>

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<p>^^ I know people who graduated from DeVry who were recruited by major corporations and who are making 6 figure incomes. Why do you think none are?</p>

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<p>I don’t think the OP meant DeVry specifically when he mentioned horror stories, just that for these for-profit institutions, there ARE horror stories. I’ve definitely heard them for IIT Tech, but not really for the other two. </p>

<p>And as for the original question, its probably because its “easier” to take these courses than for the students to go to a community college. I disagree with that, but that’s what i’m guessing is the reason.</p>

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<p>ucsd<em>ucla</em>dad, I’ll bite. Who (what major) makes a six figure income out of DeVry - or do you mean that they graduated many years ago and moved up through the ranks?</p>

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<p>For one branch of DW side of family. About 95% of the kids went to DeVry. Most of them are gainfully employed including some at Homedepot and IBM.</p>

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<p>Once you get a first job, where you went to school is less important. That said, a lot of students at these for-profit schools don’t finish and are then saddled with loans to pay that they cannot. There are different entry level jobs. Sometimes a student can get their foot in the door in a very basic data entry job and then work their way up.</p>

<p>** Where did your DW go to college, D2??</p>

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<p>I had thought that the degrees that The University of Phoenix offers were okay. I guess it depends on the program there. </p>

<p>This site is interesting - some people had no problem transferring UoP classes to a state school and others found their classes would not transfer. The classes that would not transfer may have been more of tech classes, though.
[url=&lt;a href=“Answers - The Most Trusted Place for Answering Life's Questions”&gt;Can you transfer your credits from University of Phoenix to any traditional university? - Answers]Can_you_transfer_your_credits_from_University_of_Phoenix_to_any_traditional_university?[/url</a>]</p>

<p>I think you are paying extra for classes that are convenient but don’t offer the interaction with professors and students that you would get at a traditional school.</p>

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<p>These schools make it easier to enroll. They also have a system in place to shell out all the available funds to pay the costs. </p>

<p>They also often offer the courses a student needs and wants that often are not so accessible at other schools. One summer, my son was looking for specific tech course. It got cancelled at the community college due to lack of interest, and the only nearby place he could get it was at a for profit school. They often get right down to business at these places, and if a student has a narrow focused interest, it can be the most efficient way to get the courses and skills needed.</p>

<p>These technical programs can be a boon to those who successfully complete them I, too, know a number of DeVry grads who got much upgraded jobs after completing a course of study there.</p>

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<p>In the education world, aka teachers, a Master’s is usually an automatic salary boost -for life. Educ doesn’t care where its from, as long as it is certified by a Higher Ed authority.</p>

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<p>Boy, are you right, Bluebayou. My good friend got a job in academia and her master’s was essential to her job and where her salary started. She got hers from some little known defunct program, but a valid master’s it is and that is all that counted. It’s just a check mark on the list when consideration for jobs like hers.</p>

<p>The same for many teachers. At our son’s school, a lot of the teachers are taking courses at a very inexpensive program, just to get that master’ designation. It doesn’t matter a whit for their purposes where that designation comes from as long as it is a certified program on the list of what is acceptable.</p>

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<p>As I understand it, the 3 schools the OP mentioned have actual locations all over the country, while most of the other for-profit schools do not. Is there a significant difference between those that have lots of actual classrooms and those that are almost completely online?</p>

<p>30+ years ago I was a grad student in higher ed at Indiana U. One of my professors was a fascinating and insightful guy who was about 70 years old. He’d often mention that the future of higher education was “overcoming the restrictions of time and place.” In other words, not requiring that the students be in a particular place at a particular time (like they have to be in a typical on-campus classroom situation). This was before personal computers and the internet. I hope he lived long enough to see the birth of online education. Does anybody doubt that in 50 years the physical classroom will be on its way out?</p>

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<p>Yeah, the fed usually starts you a GS level or two higher if you have a master’s, as long as it is accredited. I could be wrong since I’ve never worked for the gov.</p>

<p>Speaking of DeVry, my BIL graduated and got a very low paying job. He fed up, started his own restaurant. Pretty wealthy. Another friend of mine also graduated from DeVry, working at a gas station after graduating. Many years gone by, he now owns a small chain. Why DeVry? From the two I know, they wanted a degree but they didn’t want to work for it. Glad that it’s working out for them.</p>

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<p>For-profit colleges are not necessarily bad. My sister has been in a degree program through the University of Phoenix for about two years, and the material is just as thorough as any that I took for my bachelor’s and master’s degrees at traditional universities. It works well for her because she has young kids and can’t afford to put them in daycare while she’s in class, so she does most of the work at night when they’re in bed.</p>

<p>The problem, I think, is that these schools recruit a lot of people who don’t belong in college, people who want a quick route to a higher income without the dedication and genuine love of learning that college requires. They amass debt and either drop out or finish with a mediocre education that doesn’t garner a good enough job to pay the debt off. Hence the high default rate on students loans by those who have attended for-profit colleges.</p>

<p>Of course, these colleges have every incentive to take the money of people who can’t handle college, and little incentive to give them failing grades if they’re just not capable, so the cycle will continue until the law catches up. But there’s no reason a smart person with good work habits and a desire to learn can’t get an excellent education at a for-profit college. I don’t recommend it at all, but it’s not the worst thing.</p>

<p>Posted while I was typing:</p>

<p>

</p>

<p>That’s the kind of student I was referring to.</p>

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<p>“Does anybody doubt that in 50 years the physical classroom will be on its way out?”</p>

<p><em>Raises hand</em></p>

<p>Unless you simply mean that some Universities deemed “legit” will be fully online, I doubt this. I’m betting there’ll always (reasonably) be a physical Harvard, and all the other major universities we know today, with classes in classrooms.</p>

<p>Anyway, I do wonder what compels someone to go to a for-profit over some nearby public university? Is there some reason that people feel that ITT and University of Phoenix are better than a school like say, Eastern Michigan? (Or whatever equivalent they have near them)</p>

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<p>I know nothing about UoP or ITT, but I’ll ditto the experience about DeVry. Although my current employer does not hire DeVry grads, both my two former employers did. I think the key is finding places that already have a number of DeVry grads.</p>

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<p>i know some people go to schools like these that cant go to school full time, like my cousin. she works at some health center now and she was an A.A. but shes doing something at baker college so she can go into social work. i have a friend thats going to full sail, a for-profit college although its not online. he wants to do graphic design and i think the school focuses on fields like that mostly.
ha thought this would be good to share: [Hulu</a> - Saturday Night Live: University of Westfield Online](<a href=“http://www.hulu.com/watch/101506/saturday-night-live-university-of-westfield-online]Hulu”>http://www.hulu.com/watch/101506/saturday-night-live-university-of-westfield-online)</p>

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<p>Here is an article on BusinessWeek on Goldman Sachs who invested millions in a for profit university. The parent company EDMC is reported as the second largest private university after Apollo (University of Phoenix) and runs schools like Argosy, Art Design Institute etc. </p>

<p>The same story: unaccredited programs, high fess, poor education and degree that is often worthless. But there is money in it, why else would Goldman Sachs buy stakes in the company. And guess who is paying for these profits: The tax payer!!! </p>

<p>[Goldman</a> Schools Students on Debt - BusinessWeek](<a href=“Bloomberg - Are you a robot?”>Bloomberg - Are you a robot?)
Here is a small excerpt</p>

<p>*
Near their peak in April, Goldman’s shares in EDMC were worth $1.39 billion. Since then they’ve fallen by 42 percent, to about $800 million.</p>

<p>A proposed government crackdown could have a disproportionate effect on EDMC. The U.S. Education Dept. could restrict taxpayer-funded grants and loans to for-profit colleges like EDMC that offer $50,000 associate’s and $100,000 bachelor’s degrees in such low-paying fields as cooking, art, and design.</p>

<p>Until recently the education business looked like a bonanza for Goldman. Pittsburgh-based EDMC, the second-largest U.S. chain of for-profit colleges after Apollo Group’s (APOL) University of Phoenix, has 136,000 students—more than three times as many as the University of Michigan. Its annual revenue doubled over the last five years, to $2.4 billion. Goldman and two other firms bought EDMC in 2006 and took it public in 2009. Along the way they shared at least $70 million in advisory, management, and other fees, according to securities filings. Goldman also became EDMC’s biggest stockholder.</p>

<p>Government grants and loans to students, combined with booming enrollment, have made for-profit colleges a rewarding investment. Federal aid to for-profit colleges jumped to $26.5 billion in 2009 from $4.6 billion in 2000, according to the Education Dept. EDMC currently receives almost 82 percent of its revenue from federal financial aid programs. *</p>

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<p>

Yes - that’s what I meant - not that they start out at 6 figures. But once in the workplace they can do as well or better (or worse) than anyone else. I know some who have done better in salary and position than some peers from Stanford, UCB, etc. It really ends up coming down to the individual and although for the initial job opportunities the Stanford or UCB grad would have a clear advantage, after some years in the business it tends to come down to the individual.</p>

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I think that’s the bigger problem with many of these schools. They probably have more students who aren’t ready for or really committed to attending college and of course, will still have to pay the bill if they quit. This is true for any college but I assume the percentages are higher at some of the colleges who advertise (just an assumption on my part).</p>

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Students with a BS degree from DeVry typically would start out at a much higher level job than data entry which essentially requires almost no training (maybe a day or two and most HS students could easily do data entry).</p>

<p>I’ve also known people from DeVry who went on to get Masters degrees from not-for-profit (mainstream) state or private colleges. I’ve also known people who obtained degrees from U of Phoenix because it was flexible enough to fit in with their work schedules.</p>

<p>I’m not really familiar with anyone from ITT tech and some of the other schools that advertise all the time on TV and would be suspect of some of them - especially any that just popped up within the last few years (DeVry’s been around for 75 years). So I agree that it should be caveat emptor for those thinking of attending the for profit schools but I think it’s true for not-for-profit schools as well which can cost the student far more than the former and not necessarily put them further ahead but I don’t think the broad brush that the OP applied to for-profit schools is valid.</p>

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<p>I work at a major corporation that pays for employees to go to U of Phoenix night classes. It’s expensive for the employer (who must think it is worthwhile), but the employee only invests time. From what I’ve heard, the Phoenix MBA students to invest A LOT of time in each course.</p>

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<p>Very few other universities (including state schools) offer evening classes or if they do, they are difficult to get in. Hence a school that offers evening classes is very desirable. The other thing about U of Phoenix is that the campus comes to us. They rent a few buildings (or a part of building) in downtown or a place where a lot of business are. So it becomes very convenient, finish work, walk to the building next door and go to school. </p>

<p>Would an employer prefer that their employees go to a better institution for the same fees: Yes, but only if it is convenient. I known a person who got admitted into an evening program at well known school but would have to leave work at about 4:30 PM to get to the program. On the other hand, there was U of P campus five minutes away and the student could leave at 6 PM and it was not as rigorous but gave him the basics. What employers are paying is for the convenience factor.</p>