Benefits and Challenges of Attending a For-Profit School

Benefits and Challenges of Attending a For-Profit School

When potential students see the phrase “for-profit schools” they may associate it with a convenient way to obtain an education or have concerns because of the negative press about these schools over the past two years. Here are some of the most important benefits and challenges associated with for-profit schools, which can help students decide for themselves if this is an option to consider for their academic goals.

Student Loans

For-profit schools have been questioned because they rely upon federal student aid as a primary source of revenue and their students have a higher student loan default rate. Senator Tom Harkin issued a report in 2010, Debt without a Diploma, and noted that “nearly half of all federal student loan defaults occur at for-profit schools, although the schools have only 10% of higher education students.” A student loan is in default status when the borrower is behind on payments for a minimum of nine months. Many students who attend for-profits are there to increase the possibility of gaining new career options and student loans are the only financing option available for them to use.

Should for-profit schools be the sole source of blame for the student loan default rate? An argument has been made by The Senate Health, Education, Labor and Pensions Committee that these schools aggressively recruit students without helping them prepare for a career that results in an ability to pay the student loans back. It seems that there are other factors at work here. From the schools’ perspective, most offer career services – often through their alumni networks. There is never a guarantee made by for-profit schools that an education will produce a particular result, which means that students must also do their research and determine what careers may be available during an economically challenging time. Another question that comes up is about the cost of attending a for-profit school.

Cost of Tuition

A recent report indicated that the average student at a for-profit school “spends $30,900 per year for tuition and living expenses, according to the Education Department” and that is “almost twice the $15,600 that students at public colleges spend, and considerably more than the $26,600 that students at private, non-profit colleges spend.” While tuition at these schools may be higher than some institutions (community colleges) there are expenses students do not incur, such as travel time. Some of the for-profits are also delivering course materials electronically and that reduces the cost of purchasing numerous textbooks. It is possible that the final, net cost of attending a for-profit school may not be that much higher than traditional, private schools when all factors are considered.

It becomes absolutely essential that prospective students calculate the potential cost of tuition prior to starting a degree program. The U.S. Department of Education requires that schools publish a Net Price Calculator on their websites. The “net price is the published price minus the grant aid “” and sometimes the tax credits and deductions “” that students receive. Net prices are frequently much lower than published prices and represent the amount students actually pay.” The net price calculator will help students “more accurately estimate how much they must spend – or borrow – to attend a particular school” because it will include tuition, books, and housing costs within the cost estimations. This will help students make a decision based upon the total potential costs, not just the cost of tuition, of attending a for-profit school.

Preparing for Career Opportunities

Another development related to for-profit schools was the gainful employment regulation announced in June 2011. The primary criteria stated: “To qualify for Federal aid, the law requires that most for-profit programs and certificate programs at nonprofit and public institutions prepare students for gainful employment in a recognized occupation.” Arthur Keiser, chancellor of Keiser University (a for-profit school) has argued that this is unfair to students who are starting new careers because “tying student loan amounts to starting salaries upon graduation would severely limit the opportunity of many to follow their career dreams in fields such as nursing, teaching and law enforcement.”

Regardless of the type of career goals students pursue, many discover that an advanced education is often a requirement for most jobs, which means they must go back to school. For-profit schools provide accessible education because online delivery and classes usually include working adults that cannot attend class during the day and thus have few other options for obtaining a degree. A degree is a necessary qualification for career advancement and student loans are the means of making that a reality.

Graduation or Completion Rates

For-profit schools have been criticized because the graduation rate of their students has been lower than the national average. Some of these institutions are developing their own completion rates because “the official calculation doesn’t take into account the vast majority of the students who attend their institutions, most of whom are neither “first-time” nor “full-time.” This is a very good point. A for-profit school is a non-traditional institution and most students would also be classified as non-traditional, which means they did not follow the traditional path of graduating from high school and going straight to college.

Consider Academic Preparedness
After reading these reports there is another perspective that is not being considered – the academic preparedness of students who attend for-profit schools. In other words, don’t just blame the school itself. It is true that students are recruited and admitted to most for-profits without an entrance exam, which means they aren’t pre-screened prior to starting. However, prior to the scrutiny of this industry a couple of years ago, little was done to help prepare students for the start of the degree program.

Now many schools are offering orientation workshops and some allow students to start with a trial period. Academic preparedness is an important aspect of degree completion because these adults often come back to school many years after they have left an academic environment. What I’ve seen in my experience with for-profit schools is that they maintain academic rigor and are not “giving away” degrees, and many students simply lack the skills necessary to persist and complete their program.  I know first-hand that quality is a primary concern for most for-profit schools.

The Case In Support of For-Profit School

There are valid concerns that for-profit schools must address and it seems likely that the issues raised over the past couple of years have led to changes and enhancements that will benefit students. As an educator and previous student within this sector of higher education, I am still making a case for earning a degree through these institutions because it met my specific academic needs as it continues to meet the needs of many students.

Prior to starting my degree program, I did the research necessary to determine the potential costs, the requirements and obligation associated with acquiring student loan debt, the potential career options available once the degree was completed, and I prepared myself to complete the degree. Students must make an informed decision about starting any type of degree program, weighing both the benefits and challenges before selecting a school. For additional insight, look for my next post, the top ten myths about online learning.

Have you considered attending a for-profit school? What benefits and challenges have you discovered? Share your thoughts and concerns via Twitter @DrBruceJ.

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