Romney and Ryan Wrong to Praise For Profit Universities


Ryan and Romney have made no secret of their support for for-profit colleges. One of their first campaign rallies together was held at the for-profit NASCAR Technical Institute, where they hailed for-profit colleges as a way to hold down the costs of higher education. Romney also visited Full Sail University, and Ryan showed his support by voting against increased government scrutiny of for-profits. Ryan, like many Republicans, seems to consider for-profit education more efficient and cost-effective than traditional higher education. However, the numbers show that the government gives a large portion of money to for-profit schools, which produce a small number of graduates, who tend to have higher rates of unemployment that their non-profit school counterparts.

In 2010, 2.4 million students were enrolled in for-profit colleges at an average tuition of $63,000 for a four year degree, as compared to an average cost of $52,500 at a state university. So, at first glance, for-profit universities are, on average, more expensive for students than public universities. However, people like Ryan who are concerned about cutting the federal budget might point out that for-profit colleges, since they are privately run, save the government and the taxpayers’ money by leaving the cost to the person actually receiving the education.

But, while for-profit colleges are not directly funded by the government, the majority of them rely on federal student aid for 90% of their revenue. In the 2009-10 school year, students at for-profit colleges received $7.5 billion in federal Pell grants and 96% of students at for-profit colleges take out federal student loans. The average student at a for-profit college in 2010 graduated with $32,700 dollars in debt and for-profit college graduates account for 40% of the defaults on Federal loans.

It could be argued that students at for-profit colleges receive such a large amount of need based aid and take out so many loans because for-profit colleges serve lower-income students not served by other schools, and indeed, for-profit schools enroll a much larger proportion of lower-income students than other colleges. But it’s worth looking at how well for-profit colleges serve these students.

For-profit colleges spend $2,050 on instruction (professors’ salaries, equipment, etc.) per student each year vs. $7,239 spent at public universities and $15,321 at the nonprofit private schools. It can be assumed that much of the money that for-profit schools aren’t spending on instruction goes to their shareholders. Even more interestingly, for-profit colleges employed 35,202 recruiters to attract students to their colleges, approximately one recruiter for each 49 students. On the other hand, the same colleges only employ 3,512 career center staff to help their graduates find jobs. Most importantly, only 20% of students at for-profit colleges graduate within four years, less than half the national average.   And students who do graduate from the schools are more likely to be unemployed after graduation and to remain unemployed for more than three months. It’s worth noting that all of these numbers apply to four year programs equivalent to those offered at public and nonprofit private universities. Some studies suggest that two year vocational and technical programs at for-profit schools fill a necessary niche in the higher education market.

These statistics show that students at for-profit colleges are less likely to graduate than students at other institutions and those who graduate are less likely to find a job and more likely to graduate in debt. The students admitted to these colleges are more likely to be from low income backgrounds and to struggle academically. The numbers suggest that the schools are more interested in making a profit by enrolling unqualified students than in teaching them to helping them find employment. And yet the government pours billions of dollars in financial aid into these institutions, as Romney and Ryan praise them as efficient models for education. Higher education may be broken, but for-profit colleges are not the way to fix it.  The fact that hold it up as a solution shows a profound misunderstanding of the situation.