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Laura Gilbert: For-profit colleges could ruin educational dreams of next generation

For-profit colleges are again the subject of negative news.

First we heard about former students with $65k or more in loans and an unrecognized, inferior or at best salary-neutral degree.  These adult learners, often first in their family to attend college, relied on sometimes unscrupulous college (sales) reps for accurate information, signed financial aid forms and devoted precious time and energy to their studies: all in search of the “better life” promised or implied by the school. 

Instead of a great new life they left with crushing debt that will remind them of their unfortunate decision until the day they die.  Law suits are pending.

Next came details about questionable business practices at a sub-category of for-profits called “bad apples”.  A few examples: Sales (admissions) rep incentive pay based on the number of students enrolled (and retained past the refundable drop date.)  Tales of repeated don’t-take-no style calls in a single hour. Assistance preparing federal aid documents to hide income or resources.  Pressure tactics based on promises, guilt and shame. Anything to get the prospective student to sign on the financial aid dotted line.  Assertive marketing is one thing.  Aggressive and deceptive marketing is another.  On October 29 President Obama signed Federal Regulations to address 13 of 14 integrity issues identified in a Senate investigation of publicly-traded for-profit colleges.

Today the topic is executive pay – rarely a comfortable subject for the average hard-working American, even less comfortable for those hit hard by the economy.  Bloomberg reports the 2009 total was above $2 billion dollars.  Most of that is divided among the 14 publicly-traded for-profits.  For those readers who are employed, that’s about 6,825,939 unemployment checks.  One CEO collected $41.9 million, more than 26 times the compensation earned by the highest paid president at a traditional university.  That begs the question: does the average for-profit president offer consumers (aka students) a value (knowledge and diploma) that is really 26 times the value offered by presidents of, say Illinois State University or Inver Hills Community College or Harvard?  I could argue equal in some cases; 26X, not so much.

To be clear, I support effective business models that lead to corporate success and include nice executive comp packages.  But again, what about the product?   Within the higher education community, the for-profit college industry has the highest drop-out rate and the worst loan-default rate, in part due to alleged pressure for students to take on excessive loan balances.  And for the record, as much as 90% of a for-profit’s revenue can come from student federal financial aid programs; the majority through student loans which can last a lifetime – for the student.

Each of these stories is, indeed, bad news.  But as an advocate for adult learning, I see an even greater wrong being perpetrated by these “bad apples.” This wrong is the unintended message  that education may be worthless, can result in a lifelong burden of debt and that educational professionals cannot be trusted and are at worst predatory.  At greatest risk are the children of the first-in-family, low-income adult learners whose dream of education is about to become a nightmare.

The tragedy is that as a society Americans have worked so hard for so long to build up those among us whose lives have been burdened by generation upon generation of poverty and misfortune.  In a few short years an unprecedented number of first-in-family, low-income students have entered higher education,  many in for-profit programs.  These adult learners stepped up to take charge of their destinies.  They embraced the message that education is the way out of poverty; the way out of welfare; the way to a better life – and perhaps the American dream.  They are taking a stand for themselves, their future and their families by stating “The struggle stops with me.”

Signing up for college takes courage and a huge leap of faith.  First-in-family students often rely on higher ed marketing materials and staff for information and encouragement.  Few have mentors to guide them toward good decisions or to steer them away from poor ones.   And the motivation to keep studying at 3 a.m.  is often to be a role model for a sibling, niece/nephew or child.  Their education may result in a better job, but a better life is viewed as one that begins with good choices early in life; choices they hope to model for the next generation.  “I want my kids to know you don’t give up when school gets hard.”  “I told my son I was  doing this for us.  Now when his homework is tough he says the same to me.”  “Today was the greatest day of my life because my teenage son said he wants to go to college, just like me.”

As an advocate for adult learners and degree programs I believe every school is the right school for someone.  Yet the unscrupulous practices of a few will leave their hopeful, hard-working and unsuspecting learners with financial and emotional burdens that could last a lifetime.  To repeatedly play on someone’s hopes and dreams while knowingly burdening them with crushing debt that fills the executive coffers semester after semester is truly egregious.

But, what is the damage to those looking on?  What taste do these “bad apples” leave in the mouths of kids who watch a parent work night and day to earn the promised ticket to a better life, only to be left with the same life and a big bill?   What message is sent as they watch a parent rise with new-found confidence in themselves and the system – only to have it dashed.   Even if loan forgiveness programs are expanded or bankruptcy laws changed to cover student debt the emotional scar of feeling “burned” will remain.

As lawyers and politicians attempt to right the wrongs and improve the system, my heart wonders what can be done to keep the educational dream alive for this next generation.

This post was written by Laura Gilbert and originally published on Back To School for Grownups.

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