Report criticizes for-profit colleges for high tuition, low graduation, high loan default rates

Thousands of Connecticut students are expected to enroll in for-profit colleges this upcoming school year, and according to a new report, most will not graduate. Nevertheless, they will be charged more for tuition than they would have been at a nearby public college, and taxpayers will pick up much of the cost in the form of defaulted loans or student aid.

Amid a gamut of dismal performance ratings, enrollment in the state’s for-profit colleges has almost doubled in the state over the last decade while other colleges experienced a modest 17-percent igrowth. One out of every 20 students attending college on a campus in the state is now doing so at a for-profit institution. However, thousands more Connecticut residents are believed to be flocking to the Internet for college, which is often outside of state and federal oversight.

“These for-profit colleges are left largely on their own,” said U.S. Sen. Richard Blumenthal, D-Conn., a member of the Senate education committee that released the report examining the nation’s largest for-profit colleges. “There is really no monitoring of the online programs.”

Blumenthal estimates that 10,000 Connecticut residents enroll in for-profit institutions each year, either online or at one of the four with a physical campus in the state.

“We don’t have any jurisdiction” over the strictly online programs, said Patricia Santoro, director of academic affairs for the Office of Higher Education. The office does regulate programs with a campus in the state. “What we tell people is that you need to be a savvy consumer. Look at their graduations rates. Compare tuition.”

Of the five national for-profit colleges with campuses in Connecticut, Lincoln College Sanford Brown College and University of Pheonix were highlighted in the congressional report for their subpar records. (See their reports herehere and here.)

And another for-profit referenced in the report — the Education Management Corporation — is awaiting approval from the State Board of Education to open five art programs throughout the state. Lincoln and Sanford’s accredidation expires before the end of the calendar year and will need to be reapproved by the state board

At Lincoln, for example, more than half the students who enroll will not make it to their second semester. It also outlines the school’s “guerrilla marketing” recruitment plan. It requires its admissions staff to call someone who makes an online inquiry within 12 minutes, and follow up with five phone calls over the next two days. Lincoln also offers vacations and other incentives to recruiters who meet their quotas in enrolling new students, the report says.

Seth Grenier was one of those students who went online to search for colleges. Before he knew it, he was on the phone with Westwood, a for-profit college also lambasted by the Senate committee.

“It was easy. I was almost immediately enrolled,” he recalled. “They dealt with everything. They convinced me it’s the right thing to do,” said Grenier, who works at Wal-Mart and lives in Madison. He attended for only about a year, and has  a $30,000 student loan to show for it. He said he’s been told the credits he earned before dropping out will not transfer to his local community college.

Officials at Lincoln College, Sandford Brown and Westwood were not available for comment Tuesday.

For-profits have been criticized for years amid concerns the schools are saddling students with debt they cannot afford for degrees they cannot use. Nationally, for-profits enroll 11 percent of higher education students but produce almost half of all loan defaulters. These criticisms led to this report and some new rules issued by the U.S. Department of Education in 2010.

By far the largest of the for-profits in the state, Post University in Waterbury, was not referenced in the congressional report. But the U.S. Department of Education reports Post’s 6-year graduation rate for students enrolling in bachelor degree programs has never topped 36 percent over the last five years. Central Connecticut State University, a nearby four-year public university, has never had its comparable graduation rate drop below 40 percent during that time.

Almost three quarters of Post college’s part-time students don’t make it past their freshman year and only about half of their full-time students do.

According to the report, most of the money for-profit colleges are receiving is from federal student loans. Lincoln and Sanford Brown get almost 84 percent of their revenue from federal education funds, the report said. To get an automotive certificate from Lincoln, students will pay almost $14,000 compared to $6,050 for a similiar program at a nearby community college.

The rates at which former students of these colleges default on their students loans is much higher than the state’s other colleges and universities, reports the U.S. Department of Education.

While officials the Office of Higher Education said they get very few complaints about the colleges with campuses here – about 20 a year — Blumenthal said it’s the colleges located primarily online that residents need to be most wary of.

“My office has received a number of complaints from students who feel they’ve been deceived or misled,” he said, noting the findings during this investigation of the practices are “astonishing and appalling.”

He said he plans to introduce legislation in the coming weeks that will attempt to increase federal oversight of for-profit schools. Included in his proposal will be strict limitations on marketing practices and spending, and a requirement that the schools provide potential students with a list of indicators, such as graduation and default rates.

“I think disclosure in how they’re doing, for these students, is key,” he said.