For-Profit Colleges Are Wasting Public Funds
On August 16, 2012, The Spokesman Review published an editorial which stated the for-profit colleges are wasting public funds.A couple interesting facts and quotes pulled from the editorial, include:
Enrollment at for-profit colleges has exploded in the past 15 years as more people are drawn to the flexibility of online learning offered at schools such as University of Phoenix, Kaplan and ITT Technical Institute which are publicly traded companies.
A U.S. Senate report found that the companies that operate the for-profit schools employ more than 32, 000 recruiters and have less than 16,000 workers in student support and career services.
The majority (more than 80%) of the revenue for for-profit schools can be traced to Federal Student Loans or Pell Grants, according to the New York Times.
The editorialist stated the obvious: “No taxpayer money, no profits.”But the lobbying of Congress probably will not stop.For-profit schools spent approximately $8 billion in 2010 on lobbying Congress and the same amount in the first nine months of 2011.The Senate report, referred to in the editorial, noted that on average for-profit schools spend 22.4 percent on marketing, 17.7 percent on instruction, and 19.4 percent goes to profits.In contrast, Public Universities spend less than 2 percent of their budgets on marketing.The editorialist concluded: “[no] wonder the typical associates degree at a for-profit college costs nearly $35,000 versus $8,300 at a community college.”
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