More Latino students might be opting to enroll in for-profit institutions to facilitate their chances with employment. Yet, a recent investigation unveiled by U.S. Sen. Tom Harkin (D-IA) Monday cautions them to think twice before enrolling.
Two years ago, Harkin undertook an investigation on the for-profit industry of education in lieu of the new Congressional investments offered by the Pell grant. The investigative report outlines widespread problems in these types of institutions, including overpriced tuition, predatory recruiting practices, high dropout rates and companies gaming regulations to maximize profits.
“These practices are not the exception – they are the norm; they are systemic throughout the industry, with very few exceptions,” Harkin said.
Hispanics factor in a big chunk of that equation. Twenty percent, or 1 in 5 Latinos who graduate from high school are enrolled in the for-profit sector, according to the Education Trust Fund. These institutions enroll 13 percent of all post-secondary students in the United States, but take in 24 percent of all federal financial aid dollars.
“These schools go after the lowest-income students for one reason. They get the highest Pell grants and they get the most Stafford loans,” Harkin told VOXXI.
For-profits schools also account for 48 percent of all student loan defaults.
In less than ten years, enrollment in for-profit schools has tripled. The Senate Health, Education, Labor and Pensions (HELP) Committee report highlights a comprehensive analysis into the $32 billion annual investment in the sector. It draws on data not previously released including new student outcome statistics on each company reviewed.
Part of the problem facing many Latino students is the outpouring of marketing tactics, what the report considers as “predatory recruiting.”
“Along comes high pressure recruiting. ‘You can do this and don’t worry we’ll file all the paper work, won’t cost you a dime,’” Harkin told VOXXI. “Students sign up, they get their Pell Grants. They get the loans, but they don’t get any support.”
Internal documents, interviews with former employees and undercover recordings by the Government Accountability Office reveal that many companies train recruiters in tactics of emotional exploitation in order to get prospective students to enroll. In addition, there is also misleading information in regards to the cost of the program.
Jose Cruz of the Education Trust Fund has been researching the effect the for-profit industry has on education among Latinos for a couple of years. He told VOXXI that in comparison to public universities, tuition and fees at for-profits are twice or five times as high and the quality of education isn’t in par with what the institutions are advertising.
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Cruz cited that regardless of a degree a student aspires to obtain, the total cost of attendance in these schools burdens the students with high debt. According to his research, to obtain an Associate’s degree the average tuition and fees in a for-profit institution is $14,300 in comparison to $3,000 at a public university. To obtain a Bachelor’s degree, a student pays $15,700 on average versus $6,400 at a public university.
“They’re being disproportionately marketed to and many times lied to,” said Cruz. “They promise these students that they will be able to, as you’ve seen in the commercials, study from home and 24 hours a day whenever it’s convenient for you online, so there’s a significant marketing push that targets Latino students.”
The fact that states are also dis-investing in higher education has helped create a gap that for-profit institutions are filling by appealing as an alternative for students. Community colleges have long waiting lists for enrollment and funds are also being slashed for higher education by state legislators across the country.
Yet, not all for-profit institutions offer less-than quality education. Deborah Santiago of Excelencia in Education notes that some of the institutions have been proactive in access to Latinos and reaching out to them, although additional analyses is necessary in areas of concern.
“There’s some good for-profits out there and, if they’re looking for quick programs, it’s possible,” Santiago said.
She offers three recommendations: Talk to others who might have enrolled at the school, to see what their experiences were; become aware of the costs involved and the kinds of financial aid offered, if the bulk of financial aid is in loans it might not be as affordable an option; and make sure the program promises a decent income in the end.
Institutions such as Devry University, Laureate, and the National Hispanic University have a good track record of students graduating and becoming gainfully employed, said Santiago.
In addition to the report’s findings, the HELP committee identified that in 2008 and 2009, more than half of students enrolled in these schools withdrew by mid-2010. The amount allocated to marketing and profit in the same two-year period — $4.1 billion and $3.6 billion, respectively — each exceeded the $3.2 billion on student instruction.
“There’s no problem with them making a profit, but we feel that that profit should be through their ability to innovate in the way they deliver education to Latino, Black and low-income students,” Cruz said. “Not because of how they underinvest in student support services in order to get the profits that they are currently making.”
According to Congressional testimony, 15 companies control 60 percent of all students enrolled at for-profit schools. Cruz argues the business model relies on head count, not on student success.
“There’s a lot of talk about there just being a few bad apples out there, but the fact of the matter is, these are huge apples and they’re very toxic,” he said.