This year’s Super Bowl Sunday shed new light on the for-profit college industry after advocates took to twitter to share the latest disturbing facts about the industry’s practices. The Super Bowl was held in the University of Phoenix Stadium, which is named for the largest for-profit college in the country. The university agreed to pay more than $150 million over 20 years for the naming rights on the new stadium in 2006.
In the past year, greater scrutiny of for-profit colleges, those that are managed by companies accountable to shareholders and, or publicly traded, has led to a series of legal actions and rising concern from policymakers about the role of these institutions in a context in which post-secondary attainment is the path to the middle class.
The problems with for-profit colleges are many. First, they tend to cost students at least three and half times as much as the same education at a community college. Second, their students are more likely to leave a program without a degree but with a significant level of debt. Leading to the next issue that default rates are far higher among students who attended for-profit institutions relative to their share of the total population: for-profit students represent 12 percent of all enrolled and 44 percent of those who default on their student loans.
Now, new data secured by the Center for Investigative Reporting shows that taxpayers are subsidizing the for-profit college industry to the tune of $9.5 billion a year. This is because the majority of for-profit institutions rely on public funds through Pell Grants, Stafford loans and various military tuition assistance programs to fund their operations. In fact, the analysis finds that more than 90 percent of these institutions’ revenue is from public funds. Read More