Lawmakers are divided over how best to regulate them.
The Education Department wants to require for-profit colleges and vocational programs to be held more accountable and ensure that their students graduate prepared for “gainful employment.”
These institutions have been under fire for months because they receive a disproportionately large amount of federal financial aid and too many students are defaulting on their loans and unable to find jobs in their fields of study. In addition, some critics say, the for-profit sector targets minority and low-income students with unscrupulous and abusive recruiting practices. Proponents argue that they offer unprecedented access to higher education that those students would not otherwise have.
African-American and Hispanic students make up 28 percent of all college undergraduates but represent 46 percent of undergraduates in the for-profit sector, according to the Institute for College Access & Success. Sixty-four percent of for-profits’ student populations are from low-income households.
Speaking before the House Education and the Workforce Committee on Thursday, Arnold Mitchem, head of the Council for Opportunity in Education, an organization that helps low-income students prepare for higher education through such programs as Upward Bound, said that many families they work with are unable to “distinguish between a for-profit education and a traditional college experience when both can put ‘college’ in their names and both are ‘endorsed’ by the federal government which provides financing to facilitate their attendance.”
Mitchem testified that more often than not, COE counselors are able to identify less expensive alternatives that would not require the students to take on burdensome debt. In addition, he said they found that many for-profit admissions counselors use marketing techniques to lure low-income students to their institutions. Meanwhile, many public and independent colleges offer comparable programs at a lower cost but students are unaware of them.
“Unwittingly, we have created an environment in which for-profit institutions have very good reason (and an exceptional level of resources) to heavily recruit low-income students while many publically supported and independent colleges have neither the financial incentives nor the resources to engage in the same state-of-the-art, well-targeted, high pressure marketing,” Mitchem said.
Congressional lawmakers have held several hearings on the for-profit sector but are divided over the Education Department’s proposed gainful employment regulation. The Senate education committee supports it, while the House panel is largely against it.
“I think all of us in this room agree that access is critical, but access to what?” Mitchem said at the hearing. “Mountains of debt? We are seeing students who emerge with considerable loan burdens and without the ability to obtain meaningful employment or transfer the credits earned at for-profit institutions to accredited, publically supported or independent institutions.”