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Quality Education: Part Three

Laura Schell

The Art Institutes Poster "Open Your Eyes"

Has the American dream turned into a scam? In the case of the for-profit this is not far from the truth. For-profit colleges have become popular across the US. You know their names from the television commercials: ITT Technical Institute, Kaplan, Sanford-Brown, University of Phoenix, and the list goes on. These types of schools started popping up in the 1990’s for those who wanted to earn a vocational degree on their own time through on-line or night courses. There are some art schools in the mix such as the Art Institutes, which are freckled across the map including in Chicago with the Illinois Institute of Art. Instead of receiving kudos for educating those who have felt a higher education was out of reach, for-profits are under the microscope for unusual recruitment techniques, high drop out rates, and lack in the quality of education. To add to the fire, for-profits are obtaining huge amounts of revenue that is being distributed to investors instead of being completely reinvested into the school, like in the case of non-profits such as SAIC and Columbia.

For-profit colleges target low-income and minority students who are more likely to need and receive federal student aid. More than a quarter of for-profit schools receive 80 percent of their revenues from that aid. For the Department of Education it became clear that many of these institutions are spending more money on marketing than for educational purposes, and their recruitment techniques are often times aggressive and devious. “It’s a ruthless business,” says Steven Burd, Editor of Higher Ed Watch, a public policy blog published by the New America Foundation. He has been producing award-wining coverage of federal higher education policy and financial policy for over a decade.

Complaints have been surfacing from students claiming that employers do not recognize their certificates or degrees. Although for-profit college students only represent 12 percent of higher education students, they take out 26 percent of all student loans, and 46 percent of the student loans given for for-profit education are now in default. In the end, the students are left with all the risks.  With low-quality education and high drop out rates many students are simply unable to find a job and repay their loans.

As of June 2nd, the final changes have been made to a “gainful employment” rule that the U.S. Department of Education developed to protect students from acquiring a mass amount of student loan debt without gaining the marketable skills they need to get a job. The strings have been loosened slightly from the original proposal presented last July in order to give for-profit colleges a chance to shape up before taking away their eligibility for federal financial aid. “I think there is a certain level of relief from the industry although they are going to continue to fight and try to get congress to repeal it,” Burd says. “The industry is so well connected with Congress and they have so many lobbyist that are spending a lot money, that basically, it just depends on what happens in the next elections.” Even though the comment period on the Department of Education’s gainful employment rule is over, the for-profit sector is aggressively opposing.

Corinthian Colleges Ad in New York Times

The New York Times recently featured a  full-page ad requesting readers to go to a website proposing the gainful employment rule be tossed out. In the small print it states that the ad was created by Corinthian Colleges, Inc., one of the nation’s largest for-profit higher education providers. According to the Education Sector, 15 percent of the Corinthian Colleges programs would face restrictions under the proposed gainful employment rules.

As long as the new policy remains, for-profit colleges will have to meet new standards starting in 2012. To continue eligibility for federal financial aid, one of the following three conditions need to be upheld: (1) At least 35 percent of their graduates must pay the principle on their student loans within three years. (2) Paying back the loan must take less than 12 percent of the graduate’s total income. (3) Or paying back the loan must take less than 30 percent of the graduate’s discretionary income, which is the spending money that is left after taxes and personal bills have been paid. Programs that fail to meet the benchmarks three times in a four-year period will lose eligibility and most likely be forced to close. “While the regulation will probably make a difference in the future, it will allow the very worst players to continue operating as they are for several more years. That means they will be able to continue overloading students with debt for programs that don’t provide the training they need to become gainfully employed.  In other words, this is a huge missed opportunity to clean up the sector now and stop these schools from putting more low-income and working class students in harm’s way,” Burd explains.

This is only a small step in the right direction to protect students and taxpayers from investing in what Illinois Senator, Dick Durbin, called “worthless diploma mills.” Being a recent art school graduate, I was curious as to how for-profits offering art programs around the city reacted to the new policy and whether they have begun to make an effort towards meeting the policies benchmarks. Five out seven for-profits I tried to contact never returned my phone calls. The Illinois Institute of Art said they were unwilling to talk to Chicago Art Magazine because “it is a sensitive time for the industry” and DeVry University, which offers a Media Arts and Technology program told me, “considering how recently the latest GE ruling was released, we’d like to hold from commenting until we’ve had some time to thoroughly review the regulations.” Unable to find answers I was only left with more questions.

I couldn’t help but wonder why public and non-profit institutions are not being held to the same standards? Simply put, the law was not written to include them. The Department of Education’s focus is on for-profits because their vocational nature and how they often promise employment after graduation. “Now that the Gainful Employment rule has been finalized, policymakers will inevitably start asking whether it should be extended to everyone,” Burd reassures me. But his optimism is followed by a cold, hard truth—students need to take responsibility. Research into options for financial aid and schools offering career-oriented programs can help students choose a school and field of study that ensures employment. As a result, they will be able to afford their education once they leave. “There is a question as to whether artists should be taking out huge loans. And whether as a society that is something we should promote,” Burd admits. In my case, the damage has already been done, but hopefully I have shed some light on the holes in America’s educational system for those considering higher education, especially in the arts. And for those, like me, who have already invested, know this—if you don’t leave school with at least some contempt for this country’s education then you have learned nothing at all. What is important is to learn to think independently and to request lawmakers and educational leaders to do the same in order to continue the path of improvement in America’s education system.