While a couple of these institutions are comparable to the averages for public an private non-profit institutions, showing that the model is not incapable of delivering the education it promises, if there were outside quality control measures in place to bring all such institutions up to the same level, this says nothing about the other problems with such institutions--most notably the high debts incurred. Although the report doesn't include data limited to the most successful examples, it seems dubious indeed if there's a salvageable sub-sample that actually performs at a level competitive with the existing traditional models. It's even more dubious that the entire sector could ever improve so dramatically that these graduation rates could be sustained by the for-profit sector as a whole.
Next, let's look at the growth of Pell Grants--federal subsidies, in effect--that has helped fuel the dramatic growth of the for-profit college sector. As you can see, almost a quarter of Pell Grant dollars now goes to students in this sector, with their much, much lower graduation rates:
Looked at from a slightly different perspective, the percentage of students getting Pell grants is higher at for-profits at every level of education:
However, these higher levels of federal aid are overmatched by the much higher costs involved in for-profit education:
The end result is dramatically higher levels of median debt:
And an even more lopsided picture when we look at how many students end up with crippling levels of debt:
Not surprisingly, this results in much higher levels of defaults on students:
Finally, there's one thing that's accurate about such institutions. They often put themsleves forward as opportunity pathways for those traditionally excluded, and enrollment figures bear this out:
As the report itself notes:
The rapid rise of the for-profit industry has largely been driven by the aggressive recruitment of low-income students and students of color-a fact that is not disputed by the sector, but rather heralded as a sign of its commitment to underserved populations.
But the promise rings hollow:
The rapid growth and record profit levels reported by these institutions might be acceptable if students were succeeding at record rates. But they are not, forcing us to ask: Access to what? And at what cost?
.... Low-income students and
students of color are getting access, but not much success. And access without success-without graduation, without employment-is something the nation cannot afford.
It goes without saying that the makeup of the target student population is one of the reasons that this model has been so successful on the business side, while it's utter failure on the education side has not resulted in any sort of corrective action. One could hardly imagine that this outrageous situation could have ever developed, much less grown dramatically, if the target student population were white and affluent.
And that's just the point: The traditional American welfare state was established to benefit white Americans, and to help move a large segment of them into the middle class. While heavily black employment areas, such as agricultural and domestic were excluded from the initial Social Security Act, exempt from minimum wages as well Social Security benefits, later benefits, such housing and education vis the GI Bill were technically available to many blacks who served in the military, but were practically useless for the vast majority due to the persistence of private discrimination, which the government did virtually nothing to combat, and often actively supported (in promoting redlining, for example, that favored the creation of lilly-white suburbs with generous mortgages and tax subsidies.) Blacks could get college educations under the GI Bill--and end up sweeping floors with their PhDs.
Although some degree of closing the gap did finally occur from the mid-to-late 60s onward, the Reagan era marked a turning of the tide, and the for-profit college sector followed as a supposed "way out" that conformed to Reaganite promotions of the market, but delivered precious little to the supposed "beneficiaries" as opposed to the actual beneficiaries, those college CEOs and their investors who made out like bandits.
In my February 2010 diary, "What's wrong with the third "Third Way", I explain how the American welfare state at its best was an attempt to deal with market failures in a minimally intrusive way, a model common in the British-speaking world known as the "[19th century] liberal welfare state". This differed from the "[continental] conservative welfare state" which had the primary aim of caring for its citizens in a way that bound them to the state and enhanced the power and prestige of conservative elites. As American conservatives discovered how hard it was to destroy the American welfare state, they turned to an alternative strategy of re-purposing it, overlaying the conservative welfare state goals of continental Europe onto the existing liberal welfare state model. The resulting hybrid, American conservative welfare state, is typified by enormous subsidies to conservative elites, such as the early example of the military-industrial complex. The for-profit college industry discussed here is but one of the more recent additions to this model.