For-Profit Draft

Karina Torres

Professor Christopher Werry

RWS 100

16 October 2014

For-Profit Essay Draft

College, a place where many young students and even adults aspire to go to in order to further their studies. What many people do not know is there are two types of colleges, for-profit and non-profit (traditional colleges). For-profit colleges, which have been receiving a lot of attention over the years, operate as a business and include schools such as the University of Phoenix, Grand Canyon University, Corinthian, and many more. On the other hand non-profits are the opposite and include schools such as California Baptist University, New York University, Stanford University, along with many others. Knowing the difference between these types of colleges is important because it can help a prospective student make the right decision based on the information that will be provided. Kevin Carey is an American higher education writer, policy analyst, and author of “Why Do You Think They’re Called For-Profit Colleges?”. In his text Carey looks at both sides of the argument, which is whether or not for-profit colleges are beneficial or not. In my analysis of Carey’s text I will examine the pros and cons of for-profit colleges and argue whether traditional colleges or for-profit colleges are a better option for those whom are either going back to school or recent high school graduates. 

In his text, Carey says that although for-profit colleges often get a bad reputation they are actually a great addition to our society. For-profit colleges actually help fill the void that is often left by traditional colleges. For example, a student that is underprivileged who does not have a great SAT score or GPA gets rejected by a university then turns to a for-profit college and is accepted. Carey states, “For-profits exist in large part to fix educational market failures left by traditional institutions and they profit by serving students that public and private nonprofit institutions often ignore” (Carey). In other words, because these students do not stand out to the regular colleges/universities they turn to the schools which will pay attention to them and allow them to further their studies.  Kevin Lang a professor of Economics at Boston University and Russell Weinstein an Assistant Professor of Economics wrote “Evaluating Student Outcomes at For-Profit Colleges”. Some of the information in this text written by Lang and Weinstein extends Carey’s claim that for-profits fill the need that traditional colleges leave behind. Lang and Weinstein write, “…students starting in certificate programs at for- profit institutions are much more likely to be Black, Hispanic, female, younger, and single at the time they enter college… Furthermore, income…and expected family contribution to college are much lower.” (Evaluating Student Outcomes at For-Profit Colleges 10). Lang and Weinstein’s text help extend Carey’s claim because it is more specific on which types of people are admitted into these for-profit universities and why. Not only is it just students who are underprivileged, don't have good grades, and a poor SAT score, for-profits are taking in those who might not have enough money to attend regular colleges.

For-profits do good to our society but there are also stories which paint them as a nightmare. Typically for-profits tend to charge their students much more than regular colleges do to be able to obtain the same degree. Because of this many students have to take out loans in order to be able to pay their schooling and after they graduate, paying back those loans is nearly impossible for them. In the words of Carey, “…a large and growing number of graduates of for-profit colleges are having trouble paying those loans back” (Carey). Since these students are having to take out all of this money and are unable to pay that money back it gives for-profits a bad look because it goes on their record. Gregory D. Kutz released a statement called, “For-Profit Colleges: Undercover Testing Finds Colleges Encouraged Fraud and Engaged in Deceptive and Questionable Marketing Practices”. In his text, Kutz sent a people in undercover to various for-profit universities to find out the truth about them. Kutz’s text helps illustrate Carey’s claim when he writes, “In August 2009, GAO [Government Accountability Office] reported that in the repayment period, students who attended for-profit colleges were more likely to default on federal student loans than were students from other colleges” (Kutz 5). Since these students can not pay back their federal student loans the federal government and taxpayers are left with the cost. Many times they attend these schools and take out loans because it seems like a good investment for their future but in the end their degrees are not valid or they do not have proper training to perform their jobs. It is important for people to be smart and know that for-profit colleges tend to at least charge twenty-five times more than regular colleges and universities do so that when they are making their decisions on what school to attend to they will not be in debt for the rest of their lives.

Traditional schools often try and look down on for-profit universities by saying that they classes that they offer do not count in a traditional college/university. For example, if a person attended for-profit school such as Grand Canyon University and was studying for a degree in computer science all of the classes this person took at GCU would not transfer to a school such as New York University because for-profits are usually nationally accredited and not regionally accredited. Carey refutes this statement by saying, “They’ve [traditional institutions] pointed instead to regional accreditation, which conveniently allows colleges to decide for themselves whether they're doing a good job. But many for-profit institutions have regional accreditation, too” (Carey). Carey points out that an argument that traditional schools once had against for-profit institutions is no longer valid because a lot of them now are equal to traditional schools. Tying this back to his argument, for-profit universities are as good and no different from traditional institutions now so they deserve some respect. Jane Bennett Clark, a Northwestern University alumni, wrote a text called “The Real Deal on For-Profit Colleges” which can complicate Carey’s argument. In her text Clark talks about Justin Logsdon, he attended Westwood College to pursue a career in graphic design and when he failed to find a job in that field he decided to transfer his credits to a four-year public college but they did not count. Clark writes, “Most public and nonprofit colleges, however, are accredited by regional associations, deemed the gold standard by traditional academia. Those colleges typically refuse to accept credits from schools with national accreditation. To go from one to the other, as Logsdon tried to do, you have to start over” (Clark). Like Carey said most for-profit institutions do have regional and national accreditation but not all do. If they all did it would be much easier for students to be able to transfer in between them without having to start all over again.

Like every other colleges and universities, for-profits allow their students to have the option of applying for FAFSA (Free Application for Federal Student Aid), grants, and different types of loans. Carey states in his text that for-profit institutions make a large sum of their money from the government when he writes, “Most of that money comes from the federal government, in the form of Pell Grants and subsidized student loans. [University of] Phoenix alone is on pace to reap $1-billion from Pell Grants this year, along with $4-billion from federal loans” (Carey). For-profit institutions receive approximately a quarter of all federal aid even though they only enroll ten percent of all students. One way or another for-profit institutions have to make their money but sometimes the way they do it is not legal. Gregory D. Kutz, a Managing Director Forensics Audits and Special Investigations, released a statement called  “For-Profit Colleges: Undercover Testing Finds Colleges Encouraged Fraud and Engaged in Deceptive and Questionable Marketing Practices” which can complicate Carey’s claim. In this text Kutz performed a sort of investigation by sending people into for profit institutions and made them pose as a person who was interested in applying for their college. What Kutz found out about for profits can make people change their opinions quickly, on whether or no the way they make a large sum of their money is in a moral and most importantly illegal manner. On various occasions some of the colleges encouraged the undercover applicant to falsify their FAFSA in order to be able to receive financial aid. One of the many occasions happened in a privately owned college in California, “Undercover applicant was encouraged by a financial aid representative to change the FAFSA to falsely increase the number of dependents in the household in order to qualify for Pell Grants” (Kutz 8). It is not bad that for-profits get most of their money from the government but it is bad that many times they encourage others lie in order for them to be able to receive more money from the government. 

All in all, there are many benefits in having for-profits as a way to educate those who are deciding to further their studies but there is also a greedy side to them. This text has provided the reader with information on for-profit institutions that can either make them believe that for-profit schools are the way to go or if they should avoid them. After all for-profits take in those who are rejected by regular institutions, and a lot of them are nationally and regionally accredited. But a lot of times students are left with load bearing debts and the way they make their money is not legal most of the time. Carey’s text provided claims which showed the benefits and possible disadvantages that can come with attending those types of institutions. What he failed to do was provide strong solid evidence after each of his claims, he did hint at them but never went into actual data or specific examples. After looking at Carey’s text along with all of the others I now know more about for-profit institutions and how they work and after analyzing them I believe that they are a great addition in providing students with an education but they need to be regulated so that students are not taken advantage of. 

Works Cited

Carey, Kevin. "Why Do You Think They're Called For-Profit Colleges?" The Chronicle of Higher Education. N.p., 25 July 2010. Web. 17 Oct. 2014. <http://chronicle.com/article/Why-Do-You-Think-Theyre/123660/>.

Clark, Jane B. "The Real Deal on For-Profit Colleges-Kiplinger." Www.kiplinger.com. Kiplinger, May 2011. Web. 17 Oct. 2014. <http://www.kiplinger.com/article/college/T012-C000-S002-the-real-deal-on-for-profit-colleges.html>.

Kutz, Gregory D. "For-Profit Colleges: Undercover Testing Finds Colleges Encouraged Fraud and Engaged in Deceptive and Questionable Marketing Practices." (2010): 27. United States Government Accountability Office. Web. 18 Oct. 2014. <http://www.gao.gov/new.items/d10948t.pdf>.

Lang, Kevin, and Russell Weinstein. Evaluating Student Outcomes at For-Profit Colleges (2012): 32. June 2012. Web. 18 Oct. 2014. <http://inpathways.net/for_profit_outcomes_2012.pdf>.