For-Profit Colleges: Marketing to the Desperate, Supported by Our Taxes
In the summer issue of The American Prospect, Mark Huelsman profiles the for-profit colleges he calls Betrayers of the Dream. “The students targeted and affected most by fraudulent operators are disproportionately black, “explains Huelsman. “The story of predatory for-profit colleges is not unlike that of subprime lending or the proliferation of payday loans. Wider economic unease was used by the cynical to bring further distress to people of color.”
Huelsman lists the trail of investigations that finally resulted in the closure of Corinthian Colleges—a for-profit that had “enrolled more students than the Ohio State University and the University of Texas combined.” Corinthian had been flagged by attorneys general in several states, Tom Harkin and the U.S. Senate, lawsuits from the federal government, and an investigation by the SEC: “These found a broad pattern of deception in recruiting students, bogus reporting of job placement data, and a strategy of combining high tuition and debt levels with a substandard educational product.” “Corinthian’s story,” writes Huelsman, “is a microcosm of the for-profit college sector….”
Huelsman reports that what finally brought down Corinthian was a relatively simple action by the Obama Department of Education—a decision to force Corinthian to fulfill the Department’s reporting requirements by withholding federal funds—student loans, Pell Grants, and G.I Bill Benefits—until the college submitted reports. Corinthian was unable to comply with regulations before its cash flow ran out. Like other publicly-traded, for-profit colleges that depend on federal financial aid for 86 percent of their funding, Corinthian was unable to survive the freeze on access to federal dollars. (Holding the college, not its vulnerable students accountable, U.S. Secretary of Education, Arne Duncan later announced debt relief for 40,000 of Corinthian’s former students and a chance for 300,000 others to apply for relief for student loans that had paid for their Corinthian tuition.)
Huelsman describes explosive enrollment growth at for-profit colleges—an increase of 225 percent from 1998-2008 compared to growth during the same period of only 31 percent in the total college-going population. “This enrollment growth included a massive targeting of students of color. The University of Phoenix, for example, was spending as much as $400,000 a day on advertising. Ads for these colleges were ubiquitous in communities of color, on commercials for day-time television programs, at bus stops and subways…. They enlisted leaders in the black community to advertise on their behalf…” Recruiters for a St. Louis for-profit, Vatterott College, told recruiters to ‘target the welfare mom with kids’ and ‘pregnant ladies,’ as well as those with records of ‘recent incarceration’ and ‘drug rehabilitation.’ Other colleges had recruiters drop off information at Section 8 housing and and unemployment offices….”
Huelsman quotes Johns Hopkins sociologist, Stefanie DeLuca describing the young people targeted with such advertising: “These are students often without the benefit of college For-Profit Colleges: Marketing to the Desperate, Supported by Our Taxes | janresseger: