March 3, 2011 - 4:31pm
Education panel discusses future of for-profit colleges
BY NATHAN RANNS
In a panel last night, four experts on for-profit colleges discussed the mounting concerns over this emerging industry and its potential negative impact on students.
A crowd of about 60 gathered in the Ford School of Public Policy’s Annenberg Auditorium to listen to the panel, which also aired online. The panel consisted of both critics and proponents of for-profit post-secondary institutions.
The discussion took place as Congress continues to explore imposing regulations that would deny for-profit colleges federal aid. For-profit colleges offer training in a specific trade over the traditional public school curriculum, according to panel member Thomas Howlett, chief operating officer of the Googasian Firm, P.C.
These institutions, which Howlett said are modeled like “a three-legged stool,” must secure accreditation and a license from the state in which they wish to operate, in addition to revenue in order to function.
Critics of the for-profit college model cite “students’ low earnings and high debt loads” as proof that these institutions don’t provide a quality education to their students, according to an information sheet distributed at the event.
Howlett, a lawyer who has worked with numerous students with claims against for-profit colleges, said he has noticed five crucial problems with for-profit institutions: accreditation, transfer of credits, program costs, the admissions process and enrollment. These five issues, he said, can be summed up as a “lack of transparency.”
“These problems, while they exist, are not clear to the student who is making the decision to enroll and commit thousands, if not tens of thousands of dollars to these programs,” Howlett said.
For-profit colleges have few admission standards, and entice students by appearing as if they utilize a selective admissions process, Howlett said. In reality, Howlett said, he’s found that admissions essays go unread and virtually everyone is admitted. Additionally, he noted that administrators at for-profit institutions are often unaware of graduation and placement statistics.
Panel member Richard Vedder, a senior fellow at a non-profit research and educational organization called the Independent Institute, said these institutions possess both negative and positive attributes.
Vedder, also an Edwin and Ruth Kennedy distinguished professor of economics and faculty associate at the Contemporary History Institute at Ohio University, said that on the negative side, such colleges utilize “misleading claims” and have significant “default rates on student loans”.
But these institutions hold slightly higher retention rates than public schools and have lower costs than many alternatives, according to Vedder.
Panelist Arnold M. Jacob is a board member of New Horizons Worldwide, Inc., “a computer training school operator” with 350 franchises in 55 countries, according to the event flyer. He said there are many overwhelming benefits of for-profit institutions, specifically those associated with New Horizons.
According to Jacob, for-profit institutions offer flexibility in terms of time and location. For-profit organizations also utilize funds more effectively than traditional schools, he said, specifically referencing the University.
“There’s about $200,000 of investment for every student that sits in class (at the University),” Jacob said. “There’s obviously implicit subsidies that go into that space because they’re financed with usually public money.”
He explained that it’s hard to compare for-profit and non-profit institutions since they don’t have the same cost inputs.
Regardless of pros and cons, for-profit institutions have seen a rapid increase in enrollment in recent years. According to panelist Christopher Mullin, program director for policy analysis at the American Association of Community Colleges, the for-profit sector is growing significantly. According to Mullin, 35 for-profit colleges existed in 1986-1987; today there are about 540 of these institutions.
Nevertheless, Rachkam student Tim Whittemore, who attended the event, said it may be necessary to solve some issues this new model has been facing prior to pursuing legislation relegating federal funding for for-profit institutions.
“Because it’s a young industry, there is a place for legislation,” Whittemore said. “Universities have been around for a much longer time, and they’ve been tested in some ways that for-profit schools haven’t been tested.”
