Record numbers of Americans are turning to higher education to give them a stronger edge in the job market. One of the fastest growing—and most controversial—sectors of the higher-education industry is for-profit colleges and universities. In this video clip from College, Inc., students will learn about the aggressive marketing of for-profit colleges, concerns about their enrollment practices, and how the debt load for students at for-profit schools is often more than twice that of those at traditional schools.
For classrooms studying economics, civics and language arts, FRONTLINE provides a set of video themes and discussion questions to help students analyze and understand key current events. Watch the video chapter and start a discussion that examines the business practices of for-profit colleges and universities. Go further into this topic with the College, Inc. Lesson Plan that asks students to evaluate a proposed policy designed to help graduates of for-profit schools successfully repay their student loans.
For-profit colleges and universities spend more money on marketing than some multinational brands like Tide, Revlon and FedEx. This spending can rival or exceed what is spent on instruction.
The pressure on for-profit schools to continually add students and increase profits has raised concerns about some schools’ recruiting practices. In the early ’90s, a congressional investigation accused a number of for-profit schools of using false or misleading advertising and illegal recruitment efforts.
While students at for-profit schools make up only 10 percent of the college-going public, they consume almost a quarter of all federal financial aid. The majority of a for-profit school’s revenue comes from federal grants and loans.
Critics of for-profit schools say such institutions use high-pressure sales tactics to recruit students, provide easy access to federal financial aid, load them with debt, and leave the taxpayer stuck with the bill.
For-profit institutions say they provide a valuable service to low-income and adult students that traditional higher education has given up on.
Watch closely the montage of commercials at the beginning of the video segment. Describe the images you see and audio messages you hear. What messages do for-profit colleges want you to get from these promotional clips? What types of people are most likely to respond to these commercials?
For-profit colleges spend 20 to 25 percent of their total revenue on getting people to come to the college and only about 10 to 20 percent on instruction once the student is there. How would you allocate funds if you ran a for-profit college?
How do federal grants and loans benefit both students and for-profit schools? Why do many graduates find it difficult to repay student loans? Do you feel the for-profit schools that arrange for these loans are partly responsible for the problem? Explain.
For-profit colleges’ have been criticized for their high-pressure recruitment and enrollment practices. What do you think about them? How do for-profit institutions answer these criticisms?
Consider the case of Anne Cobb. At 35, Anne made less than $7,000 a year but was able to apply for a student loan. She graduated with more than $30,000 in debt and has struggled to pay back her loans. What do you think about Anne’s situation? Do you think students at other higher-education institutions face similar problems? Explain your answers.
Featured Lesson Plan: “Policy Analysis: The ‘Gainful Employment’ Rule”
Web-exclusive Resources: Perspectives on For-profit Colleges and Universities
ABOUT THIS GUIDE
Featured Lesson Plan “Policy Analysis: The ‘Gainful Employment’ Rule”
- The “Gainful Employment” Rule
- Stakeholders’ Points of View
- Deliberation Procedures
- Deliberation Records
- Agreement Form
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