Government should stop supporting for-profit (opinion)

The federal government should at least do no harm in helping students earn college degrees. Instead, through student loans, our tax dollars are used to support more predatory institutions than education—for-profit educational institutions.

These institutions charge so much to the majority of low-income students that federal participation amounts to exploitation. Many times, the goal of these institutions is to make money before educating students. Their aggressive sales tactics persuaded the disadvantaged to go into debt for a degree that was less practical and more expensive than the equivalent at a community college or four-year college.

That is, if the student earns a degree. The truth is, most people don’t.

Only 30.7% of students attend a four-year for-profit institution and complete their degree within six years. Their education is often a failed promise. By comparison, 48.7 percent of students at public four-year institutions and 58.5 percent of students at private nonprofit four-year institutions completed their degrees within six years. The numbers were even worse for Pell Grant incomes who went to four-year for-profit institutions, 27.9% of whom completed their degrees within six years.

These dismal results are all the more troubling because many of these students are low-income or first-generation, often from families with little or no college experience.

For-profit colleges disproportionately enroll recipients of federal grants, including Pell Grants. Of all students attending four-year for-profit institutions in 2019-20, 69.2% were federal grant recipients. That’s about 20 percentage points higher than the percentage of students receiving federal aid at public four-year institutions.

Marketing strategies to persuade students with fewer resources or family support to enter for-profit institutions. They see a committed education as the key to entering the middle class. However, what these students often get from the experience is eye-popping debt that makes their finances worse, not better.

Students at four-year for-profit institutions borrow far more than students at four-year nonprofit institutions. About 87% of students who graduated from a for-profit college with a bachelor’s degree in 2015-16 had student loans, compared with 66% at public institutions; among for-profit borrowers, bachelor’s degree completers The average borrowing was $44,610, compared with $34,430 for private nonprofits and $29,070 for public nonprofits.

The price is staggering. Too many of these students are deeply in debt due to substandard education.

However, our government continues to allow our nation’s 704 for-profit institutions to administer student loans to the 787,811 students enrolled.

Our taxes shouldn’t be used this way. The federal government should stop lending students to for-profit colleges. These institutions provide no public service, and their outcomes and degree attainment figures have proven that governments should not support expensive speculative higher education institutions when students’ lives are at risk. At the very least, the government should enact stricter laws and regulations based on the success of the few for-profits that get it right.

For-profit institutions will oppose termination of their institution’s student loans. They will say they are market-oriented, more flexible than traditional universities, and provide students with practical classroom learning that enables them to work in the real world. They could even say that their market-based approach will inspire creativity, efficiency and effectiveness to meet the needs of shareholders and consumers.

But if they’re so market driven and proud of their role in our capitalist system, they shouldn’t need the federal government to keep supporting them with student loans. They shouldn’t rely on putting students into debt to make money. They should be completely market oriented and, like all other businesses in America, rely on their products to make money. As we all know, if your product fails, your business will shut down. Let these for-profit colleges work on their own merits or fail without federal help.

The federal government has moved to forgive student loan debt for students enrolled at defunct for-profit institutions. However, continuing to subsidize so other for-profit institutions continue to fail students is an insult to taxpayers. It is also a serious disservice to students who only want to improve themselves through education.

It is time for the government to stand with students, not those who exploit them.

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