Senator Tom Harkin says a new report shows for-profit colleges and universities spend more on getting students to enroll than on teaching those students once they’re in class. According to the report, taxpayers spent $32 billion on companies that operate for-profit colleges last year, but the majority of students left without a degree.
“In just one year that we examined more than half a million students enrolled in for-profit colleges and then quit,” Harkin said during a speech on the senate floor. “Almost every one of those drop-outs left school worse off than when they began with no tangible economic benefit, but saddled with debt that cannot be discharged in bankruptcy — far less able, now, to continue their higher education in the future.”
Harkin’s the chairman of the Senate Health, Education, Labor and Pensions Committee which commissioned the report. The report analyzed documents from 30 for-profit colleges and Harkin says they found about 22-and-a-half percent of the schools’ revenue went to marketing and recruiting students, while less than 18 percent was spent on instruction and nearly 19-and-a-half percent went to profits. The bulk of the revenue for the schools comes from taxpayers in the form of government loans.
“Since these schools don’t have bricks and mortar — they don’t have to pay heating bills and cooling bills and upkeep of dorms and all that kind of stuff — you would think that they could offer these courses much cheaper than what they’re doing,” Harkin said on the senate floor. “That’s not the case — much more expensive.”
According to Harkin, a Democrat, the cost of a for-profit education is about four times as much as a degree from a community college or public university. Federal officials say 47 percent of student loan defaults are from loans used to attend a for-profit college, but only 13 percent of Americans who are enrolled in higher education are taking classes at a for-profit college.
The association that represents the University of Phoenix and other for-profit colleges called Harkin’s report flawed, and accused Harkin of “unfairly” targeting “private sector schools.”