NORMAN — A recent congressional report on for-profit colleges was a stinging indictment of a racket in which some colleges are less interested in providing a good education and guiding students than they are in grabbing all the federal money they can.
The report, issued by Sen. Tom Harkin, D-Iowa, chairman of the Senate Health, Education, Labor and Pensions Committee, found that taxpayers are spending $32 billion a year in grants and loans to students attending for-profit colleges and getting too little in return.
The report found that in 2009m the for-profits spent, on average, just less than 18 percent of their revenue on instruction and more than 24 percent on marketing and recruitment.
The colleges reported, on average, more than 19 percent in profits. Pay to top executives averaged $7.3 million, far higher than top leaders at public colleges and university systems.
Unfortunately, the problems don’t stop with wasteful spending and high profits. Dropout rates are stunningly high, with more than half of students dropping out ...
While for-profit colleges do fill a need in higher education and they have every right to compete in the private marketplace, Congress has a critical stake because of federal loan and grant programs.
The government is considering cutting publicly funded loans for for-profit schools with default rates above 35 percent. That’s a start, but it doesn’t go far enough.
More pressure should be put on for-profits for both their dropout rates and for the high number of loan defaults by students who attend for-profit schools.
One possibility would be to make for-profits partly responsible for the loan repayments of students who drop out.
The federal government would also do well to better support and promote public community and technical colleges, which may lack the lobbying force of for-profit colleges but generally provide a more cost-effective education with higher degree completion rates.
— The Free Press, Mankato, Minn.