STUDENT PULSE: The Cost of For-Profit Education: How Much is Your Degree Really Worth?

Career College Central Summary:

On March 14, 2014, the United States Department of Education released to the public a Notice of Proposed Rulemaking through which the administration is making known its proposal to amend federal regulations for addressing the issue of whether several post-secondary educational program offerings are appropriate in preparing students for gainful employment in a recognized occupation, and under which conditions these educational program offerings can remain eligible for student financial aid authorized under Title IV of the Higher Education Act of 1965 (U.S. Department of Education, 2014).
The goal of this intended regulatory action by the federal government, which would take effect in 2016, is to address growing concerns that certain for-profit as well as non-profit institutions of higher education are currently using their Title IV eligibility to attract students into programs that do not effectively prepare them to enter the workforce as intended and which may leave graduates in considerable debt at a level not justified for the expected earnings of the career or occupation they invested in.
This article explores the issue that brought about this proposed regulatory action by the U.S. Department of Education by first providing an overview of for-profit education in the United States and the growing numbers of students involved, and access, financial and academic issues of student enrollment at these institutions. Furthermore, related policy formation and regulatory background is also discussed in order to provide more context to the reader, as well as highlights of the proposed regulation, its expected outcomes and effects, and its possible intended and unintended consequences on all stakeholders.
A Brief History of For-Profit Education
- The history of for-profit (and career colleges and universities in general) in the United States is not as recent as many would expect. Many in the education history arena are probably familiar with a private career college in the early 20th century founded in Rhode Island in 1911 by Katherine Gibbs, the Katherine Gibbs School; the school was established as an opportunity for young women to obtain or improve skills necessary for successful secretarial positions. The school was in existence for almost a century when it was acquired in 1997 by one of the largest for-profit education corporations in the country, Career Education Corporation. Another well-known for-profit institution of higher education in the United States is Apollo Group’s University of Phoenix; founded in 1976, it is best known for its many online programs. The University of Phoenix is currently the second largest institution by total enrollment in the country (Tierney, 2011). Other well-known for-profit educational institutions include DeVry University, Educational Management Corporation, Washington Post’s Kaplan University, Bridgepoint Education, and Corinthian Colleges (Winston, 1999)

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STUDENT PULSE