For-profits schools have become the scapegoat for the growing concern about mounting student debt. Rapidly growing student populations have lead to an equally rapid growth in concern about the quality of for-profit schools. Last summer, the North Carolina legislature approved the creation of a board to specifically oversee the growing for-profit industry in the state.
What are the hazards and controversies surrounding for-profit schools? Here’s a quick FAQ on the for-profit education industry.
Q: What are for-profit schools?
A: For-profit schools offer associate degrees and vocational training for professions like cosmetologists and barbers. For-profit or proprietary education can be traced back to the early 20th century, but the industry has seen an explosion of growth in the past decade. From 2000 to 2009, the enrollment at for-profit schools increased five-fold to 1.2 million students. North Carolina law states that these schools must be licensed by the State Board of Community Colleges. Seventy-six for-profit schools currently are licensed in North Carolina, according to the State Board of Community Colleges directory.
Q: What is the controversy surrounding for-profit schools?
A: Critics have characterized the for-profit education industry as one driven by maximizing profits at the expense of low-income students and taxpayers. Critics say the schools use aggressive marketing campaigns and recruiting techniques to lure under-qualified students into overpriced programs. Last year, fifteen students enrolled in an unaccredited dental assistance program at a Kaplan University campus in Charlotte, leaving each student $18,000 in debt and lacking the certification they were promised.
At most for-profit schools, the majority of revenue comes from federal student loans and grants, but data has shown that their students cannot afford the loans they take out. Students at for-profit schools are twice as likely to default on their loans as their counterparts at public and private institutions. Only one in 10 students attend for-profit universities, but they account for a disproportionate amount of the nation’s total outstanding student loan debt, at about 44 percent.
Q: What’s being done to regulate for-profit schools in North Carolina?
The North Carolina Board of Community Colleges previously oversaw the licensing and regulation of for-profit schools. But last summer the board, along with the association of proprietary schools, successfully pushed for legislation to create a separate board to oversee the industry in the state. The new board has the authority to conduct investigations and set fees for schools. The licensing approval still remains with the community college board, however.
Executive vice president of the North Carolina Community College system Kennon Briggs said members of the community college board believed it was a conflict of interest to regulate the industry because community colleges compete with for-profit schools for students.
Who sits on the new board?
- Jack Henderson – Vice-Chair, NC Association of Career Colleges and Schools, Brookstone College of Business-Charlotte
- John Pettitt – Secretary/Treasurer and Retired from NC Community College System Office
- Kuburat Ganiyu – Care One Health Training Institute
- Scott Aaron – Creative Computer Learning Systems, Inc. dba New Horizons Computer Learning Center of Raleigh/ Durham/ Chapel Hill
- Ashley Wallace – College of Wilmington
Q: Why so many school owners?
A: It is true that four of the five members of the new board are current or former for-profit school owners. It may raise a few eyebrows to have an industry so ripe with controversy be overseen by those with direct interest in for-profit schools’ financial success. But Briggs said the for-profit industry has made several good faith efforts to ensure their top priority remains in educating students. Several owners of for-profit schools asked that ultimate licensing authority remained with the community college board. The association of proprietary schools also created a fund to reimburse students if a licensed school should close or go bankrupt.
“The board is absolutely trying to be proactive rather than reactive,” said Briggs.
Q: Where can I learn more about for-profit schools?
- The Department of Education has a searchable database of schools’ student loan default rates for 2007-2009.
- In 2010, the Government Accountability Office released a video of for-profit college recruiters engaging in questionable recruiting tactics.
- The North Carolina Community College system provides a directory of all licensed for-profit schools in North Carolina.