The Oakland-based independent Institute for College Access and Success this month released a study showing that 350,000 two-year or four-year grads of for-profit colleges left school in 2012 with a collective $7.5 billion of debt.
The institute got the data from combing through earlier government studies. The report seems to have been timed to refute Education Secretary Betsy DeVos’ proposal this month to drop the “gainful employment" regulation of 2015 meant to assure that students graduating from for-profit schools made enough money to pay off their student loans. “The gainful employment rule is needed to prevent programs like these from bilking students and taxpayers,” said James Kvaal, president of the institute.
The United States Senate has issued studies on the non-profit schools. Then-Sen. Tom Harkin, head of the Health, Education, Labor, and Pensions Committee, noted that in 2008 students at for-profit schools accounted for 10 percent of enrollees but a stunning 44 percent of loan defaults. Since for-profit schools get around 85 percent of their income from government-sponsored programs, such as Pell grants, people are concerned that the for-profits are ripping off the government as well as the students, who have consistently low graduation rates and high fees.
San Diego’s Bridgepoint Education came under study of the Senate committee. Harkin noted in 2010 that in Fall, 2009 Bridgepoint signed up 48,000 students and later added 77,000. Over the school year, there were 125,000 enrollees, but at year-end there were only 67,000. “What do you think happened to their [federal] loans?” asked Harkin. Did students get them back? “Not on your life. Bridgepoint kept them; the money went to [Bridgepoint’s] shareholders,” said Harkin, who called Bridgepoint “”an absolute scam.”
As earlier reported, Bridgepoint stock shot up sharply after DeVos made her proposal. It has stayed up.