Add Kaplan to the Growing List of For-Profit Schools Facing Scrutiny
A recent New York Times article profiling Kaplan University adds insight into the growing scrutiny facing for-profit universities. Last year a Government Accountability Office report on for-profit universities found two Kaplan University campuses were engaging in fraudulent recruiting and marketing practices.
Now, as the article sets forth, several whistle blowers are coming out and shedding further light on the University's practices. What is portrayed is an example of a education provider that cares more about dollars and less about making good sense. As troubles for their students grow, CEOs of these multi-billionaire corporations are breaking the bank. In fact, as bloomberg.com recently reported, CEOs from the top 15 for-profit universities have collected a combined $2 billion over the last seven years from selling their stock alone.
That's great news if you have been a stock holder for the last three year, but not great news if you have been a student at one of the Universities: many for-profit university grads are having difficulty making anything of their degrees. Thus, as Bloomberg writes, when one graduate, now a barista, was informed of his school's CEO pay --
""It's nice to know that that's what I was paying for, because it certainly wasn't the courses."
Though perhaps what is most concerning is not how much these CEOs are making, but just how they are making so much money. For most students, post secondary education is a difficult choice to make, it's a decision process that, especially in these trying times, should be weighed carefully. However, for interested students deciding whether to enroll in a for-profit university, the sales pitch proffered by these universities seems to be clouding their judgment as numerous students are now coming forward, claiming they were led to believe their degrees would lead to career level placement. Not so. The reality is such students are finding themselves defaulting on their student loans at a rate much higher than the norm.
Consider these alarming statistics about for-profit universities presented in the NY Times article:
- They enroll 11% of the nation's college students
- Their students receive 25% of all federal student aid
- Their students account for 43% of those defaulting on student loans
Something obviously needs to be done to fix this problem and educate the general public of the economic realities facing the decision to purchase an online degree. As the federal government treads water on the idea of imposing regulations, for-profit universities continue to spend on average 30% of their revenue on marketing costs -- revenue that largely comes directly from the federal government in the form of student loans, grants, and benefits. With so many students defaulting on their loans, that is a lot of american tax dollars being spent that seem to be working against the american people, not for it.
In preparing for this blog post I went to Kaplan University's webpage for more information about the University. As the web portal loaded, I was prompted by a quote from legendary blues artist, B.B. King, in which he said, "The beautiful thing about learning is that they can never take it away from you." That's true B.B., but they can always take a lot of your money.
And that will give you something to sing the blues about.
(image from Seattle Pacific University)
