The For-Profit College Bubble: Exploiting the Poor to Give to the Rich

The Education Trust's recent report "Subprime Opportunity: The Unfulfilled Promise of For-Profit Colleges and Universities" documents the way that private for-profit colleges are cashing in on the current financial crisis by offering disadvantaged students an opportunity to earn degrees during a time when public universities and colleges are reducing their enrollments. The catch is that the vast majority of these students never graduate, and the only thing they accomplish is racking up huge student loans. According to this report, "only 22 percent of students who enroll in four-year-degree programs at for-profit colleges graduate within six years, compared with 55 percent and 65 percent at public and private nonprofit colleges, respectively."

One reason why the students at these schools often fail to complete their programs is that these institutions pour much of their money into marketing and compensation for senior administrators, while they short-change classroom instruction and student services. Furthermore, these schools now receive most of their income through federal student aid, and the result is that taxpayers are supporting a system where lower- and middle-class students go into debt in order to bring profits to wealthy corporations.

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