For-profit colleges swindle students

Education comes second to institutional income at a steep price

Bridgepoint, which also owns the University of the Rockies, grew from just 12,623 students in 2007 to 77,892 in 2010. Its profits also exploded, going from just $4 million to over $216 million annually. About 85 percent of its revenue comes directly from the federal treasury.

But if Bridgeport and Warburg Pincus are billing top dollar, they're unrepentant misers when it comes to educating kids. In 2009, Bridgepoint spent less than $700 per student on actual instruction. By comparison, the nearby University of Iowa spends 17 times that figure.

What Bridgeport doesn't short is its marketing, spending $2,714 per student to keep the turnstiles spinning. Overall, the 15 largest for-profit colleges spend nearly $13 billion a year on recruiting and marketing.

According to Suzanne Lawrence, who worked as a recruiter at Argosy University's online division, the pressure to recruit students prompted all sorts of illicit shenanigans, including falsifying documents
courtesy of Suzanne Lawrence
According to Suzanne Lawrence, who worked as a recruiter at Argosy University's online division, the pressure to recruit students prompted all sorts of illicit shenanigans, including falsifying documents
Iraq war veteran Chris Pantzke ran up $26,000 in debt and burned through an additional $65,000 of his G.I. Bill benefits with almost nothing to show for it at the Art Institute of Pittsburgh
courtesy of Chris Pantzke
Iraq war veteran Chris Pantzke ran up $26,000 in debt and burned through an additional $65,000 of his G.I. Bill benefits with almost nothing to show for it at the Art Institute of Pittsburgh

Needless to say, it's a terrific business if don't have to worry about educating kids. Nearly 80 percent of the students won't complete their program within six years — almost double the failure rate at traditional schools.

The tactics have become so brazen that even accreditors are taking notice. Last month, Ashford conceded that the Western Association of Schools & Colleges had denied its accreditation renewal, noting that the school had just 50 full-time faculty members to teach 90,000 online students. Within a week, Bridgepoint's stock price had plunged 50 percent.

"It's basically consumer fraud rendered to a business model," says Nassirian. "Over-advertise, oversell, overcharge, and under-deliver. They found a system where the pitch goes to one guy and the bill to someone else."

We've Got Your Money. Now Beat It.

Mary had been a good student all her life, earning a Master's in psychology from William & Mary University in Virginia. When the military transferred her husband to Tampa, she chose Argosy University, the only area school offering a psychology doctorate geared toward clinicians rather than researchers.

Mary, who doesn't want her real name disclosed, figured it was legit. Argosy was accredited by the American Psychological Association.

She aced her studies with a 3.7 GPA. All she needed was an internship to graduate. That's where her problems began.

Argosy University, with 19 campuses, is owned by Education Management Corporation [EDMC], whose investors include Goldman Sachs and Providence Equity Partners, a Rhode Island private equity firm. To wring out more profit, Argosy began taking on more students than it could handle, says Mary's lawyer, Florida state Rep. Rick Kriseman.

But Argosy didn't have the professional connections to supply enough internships. So, like air traffic controllers, it decided to place students into holding patterns.

Mary was asked to accept a practicum instead. It's like a lesser form of internship that wouldn't bring her any closer to her doctorate.

She was upset but went along, spending the next eight months volunteering at a mental health facility. But by the time she was finished, Argosy still didn't have enough internships. Her instructors ordered her to take a second practicum.

She didn't have much choice. Mary had already invested four years and over $100,000. She spent another five months volunteering. By then, her instructors had begun to question her intellectual rigor.

They not only flunked her out of the program, but refused to let her defend her work before a board of teachers and peers, then denied her a chance to address administrators before they rejected her appeal. (EDMC refused repeated requests for comment.)

Mary was shocked. "I was an A student," she says. "It was baffling to me how this could happen at the last minute. You have to understand the shame of going to school and being an A student and becoming a flunked-out person. It's so foreign and confusing."

Yet Kriseman would discover a pattern at play, finding three more students who'd suffered a fate similar to Mary's. "When the school did not have those [internship] slots, they found reasons to either dismiss the students or to make it so uncomfortable for them that they left on their own accord," he says.

Argosy's problems seemed to be spread nationwide. Across the country, in the psychology program at Argosy-Seattle, the school had assured its doctoral candidates that accreditation was moments away — since without certification, their degrees would be all but worthless. It wouldn't be until later that administrators confessed that their application had failed — and they were closing the entire program.

Failure at a Luxury Price

For-profit colleges like to place their alarming failure rates in charitable terms. They claim to disproportionately serve low-income students who struggle in school.

But if they're serving people of lesser means, why are they charging so much money?

On average, a four-year degree from a for-profit runs twice what in-state tuition costs at a public school. When it comes to two-year programs, the disparity widens: For-profits charge three to four times the rates of their public counterparts. Yet they've still managed to lull the political class into believing their competition is driving down tuition.

During the Republican primary, Mitt Romney praised a major donor and co-chairman of his Florida fundraising team — Bill Heavener, owner of Full Sail University — for helping to "hold down the cost of education." What Romney failed to mention is that a 21-month degree in video game art at Full Sail costs over $80,000. And that's not unusual.

A four-year bachelor's degree in business from Indiana-based ITT Tech costs almost $89,000. That's more than twice the in-state tuition at more venerated Indiana University.

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This article has to be the worst piece of one-sided journalism I've read in a long time! 

Having attended Argosy I feel I can speak to the education I received.  It would appear the author specfically found stuents who are disgruntled with their educational experience no matter the thousands of others who are quite happy with the education they have received. 

The people speaking out here can say anything they like about their experience... including lie... because it makes for more emotional reading!  It gets you riled up and feeling anti-for-profit school!

The schools, of course, cannot defend themselves because, by law, they cannot disclose any student information.  So for-profit schools make nice easy target for bored jouranalists looking to bump up the drama factor for their news rag.  For all anyone knows, these students could have been lazy, never studied, spent their financial aid on a new stereo, big screen tv, bought a new wardrobe... whatever.  But, the school is still guilty. Not the students! 


It's funny how accountability always falls on someone else and not you.  Same old story... "It's not MY fault!  It's THEM!  I'm innocent!"  We'll never get the real story... half the remarks made here about these school are halve truths as well!


You get from an education what you put into it.  You don't have to put effort into anything in life and still pass.... DUH! I know a good chunck of people at the U of M right now who pass their classes by going to homework sites to have their papers done for them... but of course it's a non-profit school so the education is much better!  

If you want something genuine out of any education... you put effort into it!  Don't blame the school... it falls to the student!


Every instructor I've ever had at Argosy was extemely intelligent, well versed, and taught with dedication and passion. The work required was on par with other institutions I've attended as well.  Having graduated from a Big Ten school I can say the education I recieved at Argosy was just as valuable and even more flexible in many ways. I never felt under challenged or that my grade was just "given" to me.  I never felt like I was being pressured into getting more financial aid than I needed.  I never felt pressured to enroll at Argosy either.  Everyone was very genuine and accommodating.   It's easy to report on something you know little to nothing about and make it look like it's crap for the sake of publicity.  (Like a bully picking on a kid they know can't fight back!)


Even the comments below are from people who have absolutely ZERO knowledge of the schools or the industry.  They read this article and immediately assigned blame and passed judgement without ever having met someone who attended, talked to the shool or a student enrolled. 

It's funny how non-profit schools follow the exact same proceedures for student financial aid, students acquire the same if not more amount of debt, but now are somehow immune to this criticism.  Is it because there are investors on one end that makes student debt that much different?


For-profit schools are not bad like this author what's everyone to believe and the education they provide is just as good, if not better than many non-profit schools!


This article is just depressing!

Truth_Teller_1 topcommenter

Having graduated from two top Universities (Lehigh and Penn State) with degrees in Engineering and Computer Science, I fell qualified to judge these ‘for profit’ schools.


Having direct experience with (and interviewing many of their graduates), I can say that many of the graduates are not college material, and they didn’t receive a ‘real education’.


There’s something about ‘going to school’, getting immersed in the subject.   Yes, there are parties and good times, but there is an environment to being in school.  You get something more in your head than a collection of facts.


The one thing that’s been proven here:  College is not meant to be a vo-tech.


For profit schools exist for four reasons: 


#1.  The mistaken reason that everyone should go to college.


#2.  Because of #1 our government is going to give anyone who has a pulse – a student loan.  A loan that cannot be discharged by bankruptcy.  A loan that will live with them probably till they’re 40 or 50 or death.


#3.  The student loans became the lifeblood of For Profit schools.


#4.  The economy is so bad that people are willing to try anything – including getting $25,000 to $40,000 in debt for a $12/hr job.   When you realize the job market is saturated, and these jobs don’t pay a liveable wage – well “your gonna carry that weight for a long time “(the Beatles).


We used to call these schools: “high school with ash trays” or “clown college of comic book knowledge”.  But hell, you can’t even smoke anymore.


Get a culinary arts degree?  How about TSA?   Criminal Justice (security guard), Medical Coding, Veterinary assistant?  


Twenty years ago all of these jobs were for HS graduates, now you’re going to get a ‘degree’.   But read that degree carefully:  Most if not all of those credits are non-transferrable, the school prints those degrees in the same way our government now prints money.


It's obvious the commercials are aimed at 'trailer trash' or 'ghetto' folks, whom they will help apply for a student loan.


These scammers need to be PUT OUT OF BUSINESS.


Education from Penn State, huh?  Are you a child molestor too?  I mean... I'm applying the same logic you are in your points.  Your non-profit education seems to have really prepared you to comment on something you don't understand.


and every single student they've ripped off need to be paid back WITH interest.


 @mikehext Not only should these schools be put out of business, but those who created and perpetuated this fraud knowingly should be put behind bars. There's a reason we have jails.