Representative Tom Sannicandro joined his House colleagues Wednesday in passing a bill that protects students who enroll in for-profit occupational schools by expanding oversight of the industry, which has seen exponential growth in enrollment and profits in the last several years.
Sen. Dick Durbin [D-Ill.] recently proposed a bill that would dramatically change the way federal money can be allocated to for-profit colleges. Currently, for-profits are bound by what’s known as the “90-10 rule,” which says that 10 percent of for-profit college and universities’ revenues must come from sources outside of federal student aid. But G.I. Bill benefits can be counted towards the 10 percent, making them a lucrative source of revenue for the for-profits.
A little-known California law has dealt a blow to nearly half of the for-profit college campuses in the state, barring them from offering students a coveted Cal Grant this year.
It hasn’t gotten much attention on the campaign trail, but President Obama and Republican front-runner Mitt Romney are sharply divided over one of the most controversial issues in higher education today — the growth of for-profit colleges.
For-profit colleges and universities represent the fastest-growing but also most controversial sector of private higher education in the United States. Universities like Phoenix, DeVry and Kaplan have helped turn the for-profit sector into a massive revenue generator and the engine for higher education growth. From 1998 to 2008, for-profit enrolment grew by 225%.
A decade after Monash University in Melbourne became the first foreign university to gain registration as a private higher education institution in South Africa, its ambitious goal of establishing a profitable campus in Johannesburg has still to be achieved. Meanwhile the university has changed its approach, switching focus from being 'for-profit' to 'public purpose'.
Last year, the Obama administration vowed to stop for-profit colleges from luring students with false promises. In an opening volley that shook the $30 billion industry, officials proposed new restrictions to cut off the huge flow of federal aid to unfit programs.
The only for-profit institution in Britain authorized to offer higher-education degrees is in talks with several public universities about managing the business side of their operations, according to the Guardian. The company, BPP, “has launched an aggressive expansion plan to jointly run at least 10 of its publicly funded counterparts,” the paper reports.
Kaplan, the for-profit higher education provider, is to offer tuition for external University of London degrees in a direct echo of a model for widening participation suggested by universities and science minister David Willetts.
THERE used to be three near-certainties about higher education. It was supplied on a national basis, mostly to local students. It was government-regulated. And competition and profit were almost unknown concepts. As most education was publicly funded, the state had a big say in what was taught, to how many and for how long. Insofar as it existed at all, competition was a gentlemanly business; few educators thought much about customers, fewer about profit.
Another week, another transaction involving a for-profit online college. The latest: A private-equity group is buying Northcentral University, an all-online institution founded in 1996 and now...
The head of Britain's first for-profit university college was paid £738,000 ($1,177,000) in one year, while the co-chief executive officer of the firm’s U.S. owner has a long-term pay deal valued at £15.8 million ($25.2 million).
But today they are facing two imminent threats to their near-monopoly of higher education. The first is the expansion of educational providers that exist solely on private support. The second comes from the small but growing efforts of for-profit universities, heavily influenced by commercial education ventures in the United States.
But the for-profit college industry, currently under investigation by a bipartisan group of 23 state attorneys general for fraudulent practices and shoddy programs, is accustomed to earning billions without any accountability. So they fight every reform tooth and nail, and they often get their way, because they back up their expensive lobbyists with piles of campaign cash.
Rasmussen College is a relatively small fish that prefers small ponds. That may be why the for-profit chain is sitting pretty compared to many of its higher-profile peers.
For-profit colleges like ITT, DeVry, Kaplan, and the Art Institutes — sometimes called subprime schools because they leave many students deep in debt while taking billions of dollars from taxpayers — continue an expensive lobbying push to influence Congress and avoid accountability. Republic Report has received a 2011 draft strategy memo by the biggest for-profit college trade association, APSCU, outlining a plan to keep taxpayer money flowing to poorly-performing schools and to derail investigations of fraudulent activity.
Many for-profit colleges also still enroll students without diplomas, and the new regulation has caused concern, said Steve Gunderson, president of the Association of Private Sector Colleges and Universities.
Colombia is experimenting with more public-private partnerships in higher education in an effort to increase student enrolments through private sector expansion. But allowing for-profit universities is still highly controversial and opposed by students and university rectors alike, according to the country’s former education minister Cecilia María Vélez.
Laureate Education Inc, a for-profit higher education provider that boasts former U.S. President Bill Clinton as honorary chancellor, is planning to launch an initial public offering, according to people familiar with the matter.
It's also because the newly expanded Post 9/11 G.I. Bill will pay colleges of all types around $9 billion this year to educate nearly 600,000 veterans, and virtually every school wants to expand its slice of that pie.
From 2001-2 to 2009-10, the proportion of Pell grant recipients attending for-profit colleges rose from 15 to 25 percent, while declining from 35 percent to 32 percent at community colleges. Given the much higher prices at for profit institutions, this has meant a huge -- but hidden -- tuition increase for low-income students.
Since former Congressman Steve Gunderson (R-WI) was named in January as the new head of the largest for-profit college association, APSCU, there has been talk that he might take a “kinder, gentler” approach to leading the troubled industry, which has pursued a take-no-prisoners lobbying approach in Washington.
The for-profit college and university business is a $30-billion-dollar industry in the United States. According to investigative journalist Daniel Golden, in the last decade, the for-profit colleges and universities have tripled enrollment and recorded profits of $26 billion.
With for-profit colleges under siege in Washington, Mitt Romney’s full-throttled endorsement for Full Sail puts him squarely in the middle of a political debate.
The government is being urged to prevent universities being bought by private equity firms after the College of Law, a charity that provides teaches law courses in London and six other cities across England, was sold to a private equity firm for £200m.