For-profit universities are educational institutions run by private, profit-seeking companies or organizations. Now the true mission of these institutions is being brought into question by the Department of Education and a growing number of concerned education insiders.

An alarming report has been released by Frontline examining how some for-profit colleges and universities catering to working adults are graduating students with “worthless degrees leaving students with a mountain of debt.”

A correspondent for College, Inc. investigated the student loan crisis by interviewing school executives, government officials, admissions counselors, former students, and industry observers to get down to the matter.

One of many conclusions the report arrives at is that there is a vulnerable populous of potential students who are often working adults desperate for a university degree that will help them to move up the company ranks. One former staffer at a California-based for-profit university says she faced a lot of pressure to sign up an increasing quantity of students. The former enrollment counselor tells “Frontline,” “I didn’t realize just how many students we were expected to recruit.” She says she was encouraged to dig deep and get to the potential student’s pain. “They used to tell us, get to what’s bothering them. So, that way, you can convince them that a college degree is going to solve all of their problems.”

College degrees can give Americans a professional edge, as they traditionally have. But one of the most troubling findings is that a lot of for-profit universities lack the proper accreditation for students to compete in the workforce. The report reveals that one woman who enrolled in an online for-profit doctorate program in Dallas later found out that the school she attended never acquired the proper accreditation she needed to win the job for which she trained.

Moreover, the report received testimonials from several students who revealed that they had received medical degrees without setting foot in a hospital. Some students are unable to get competitive, decent-paying jobs because employers perceive their degrees to be worthless.

“Frontline” reports that the biggest player in the for-profit sector is the popular University of Phoenix. The school is now the largest college in the U.S., with total enrollment of nearly a half-million students. University of Phoenix could hold a candle to any Wall Street company, with revenues at almost four billion.

Jeffery Siber, a senior analyst at BMO Capital Markets, told “Frontline” that, from a business perspective, for-profit universities are great. “You’re serving a market that’s been traditionally underserved . . . and it’s a very profitable business—it generates a lot of free cash flow.”

But at who’s expense? “Frontline” reports that though for-profit universities enroll 10 percent of all post-secondary students, they receive almost a quarter of federal financial aid. The Department of Education’s figures show that,in  2009, 44 percent of students who defaulted within three years of graduation were from schools like University of Phoenix. And now these figures are sparking major concerns for the Obama administration.

The government recently revamped the federal student loan program and have proposed changes that may makes it more difficult for for-profit universities to qualify. The Department of Education will now make for-profit schools demonstrate how the education they provide has enough value in the job market to merit receiving money from student loans.

According to industry insiders, this makes them nervous. Kevin Carey from the Washington think tank Education Sector says, “They’re worried because they know that many of their members are charging a lot of money. They’re afraid that this rule will cut them out of the program.” And Carey says that’s the whole point.

University and college accreditation regulators aren’t having it either. Dr. Sylvia Manning, president of the Higher Learning Commission, says they have elevated the scrutiny of for-profit universities tremendously. “When we see any problematic institution being acquired and being changed, we put it on a short leash.”

What do you think about for-profit universities like University of Phoenix, DeVry and Capella? Are they really useful in the competitive marketplace?

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  • Top recruiters and headhunters rightfully look down their nose at most “for-profit universities” because they should! Straight up and point blank!!!

    I can’t fathom why anyone would waste their time attending some scam of a ‘school’ that’s not even accredited (do most attendees even know what accreditation means?), and I hope like hell the current administration cuts off all funding to these joints.

    I mean, like, really…what sane person would want to deal with an individual that has a “medical degree” from some Jack-In-The-Box setup who took all their classes online and never did a residency, completed an internship, drew blood, touched a cadaver, stepped one foot in a gross anatomy class and couldn’t tell the difference between a femur, tibia or fibula bone? Being educated, competent and qualified takes a bit more more than ‘passing’ some doggone test!

    To those who won’t listen, I say…ga’ head! Take the easy route but don’t whine, cry or snivel when you catch a clue – while bagging my grandmother’s groceries – that your ‘degree’ and schooling was/is totally worthless and unmarketable.