For-Profit Colleges: Game-Changers Or 'Diploma Mills'?

For-profit colleges have a lot of accusatory fingers pointing in their direction, mostly from politicians and commentators looking for someone to blame for soaring levels of student debt.

But are for-profits indeed fatally flawed ‘diploma mills’? Or convenient scapegoats?

In Indiana, this debate has special significance. The state’s student default rate is one of the nation’s highest — and Congress has singled out for-profit universities as a source for these high rates.

Nationally, the discussion over whether for-profit degrees are affordable — or even worth the cost — is far from over.

‘Mixed’ Results?

The Government Accountability Office released a report on for-profit colleges last month.

Its findings? For-profit colleges are a “mixed bag.”

The GAO enrolled “undercover” students in online, for-profit college courses. The report found instructors in some colleges held students to appropriate standards. But in other colleges, students were able to easily skirt the obligations their online instructors laid out.

“One student submitted photos of celebrities and political figures in lieu of essay question responses but still earned a passing grade,” the GAO reported.

Kevin Carey with non-partisan think tank Education Sector summed up the report:

Some of the for-profits expelled GAO investigators posing as students for cutting class, skipping assignments, and turning in plagiarized or deliberately bad work. Others let the behavior slide and happily cashed the tuition checks. Given that some big for-profits get 90 percent of their revenue from federal financial aid programs, and many students at for-profits are academically and economically at-risk, this kind of scrutiny is entirely appropriate and the percentage of for-profit colleges with lax or nonexistent standards is far too high.

These criticisms have been repeated by for-profit colleges’ biggest skeptics, who tend to lean left politically. From the Center for American Progress, a liberal think tank:

Many for-profit colleges have been abusing the trust students place in them by misrepresenting the educational services they offer and overcharging for substandard educational experiences. As a result, their students end up with high student loan debt and such bleak job prospects that they cannot hope to pay their debts.

Reasons For Wariness, Reasons For Hope

But are criticisms of for-profit ed a tad too hyperbolic? Education Sector’s Carey continues:

HOWEVER — does anyone seriously think that the problems of skipping class and turning in plagiarized work are isolated in the for-profit sector?

Studies show that many students learn little or nothing in four years of traditional college… The heightened federal scrutiny of for-profits over the last few years has been entirely warranted but the time has come to start asking these same questions about other colleges, too.

Andrew Kelly, a research fellow at the conservative American Enterprise Institute, writes in The Atlantic “for-profit colleges are on the ropes,” but argues there are still things they do better than their public sector counterparts. For example:

For-profits have shown a knack for getting students over the finish line in their two-year programs. Though graduates of two-year programs at for-profits are saddled with far more debt than their community college peers and default at higher rates, those who attend full-time are also much more likely to finish their degree in three years.

The latest data… reveal that about 57 percent of first-time, full time two-year degree seeking students who started at a for-profit in 2005 finished within 150 percent of normal time. The analogous figure for public community colleges? Under 21 percent.

President Obama says we need 5 million more community college degrees. The for-profits clearly know something about how to get there.

CORRECTION: A previous version of this story identified WGU Indiana — a state-sponsored partnership with Western Governors University — as a for-profit university. While it is an online university (like many for-profits), Western Governors University and WGU Indiana are not-for-profit organizations. (Nov. 25, 2:00 p.m.)