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Report condemns  for-profit colleges, including GCU

NORTHFIELD — The college that may soon come to town was among the for-profit colleges studied in a U.S. Senate staff report condemning the for-profit education model.

The study, put together by the Senate Committee on Health, Education, Labor and Pensions with Sen. Tom Harkin, D-Iowa, as chairman, studied 30 for-profit colleges, using data from 2010 and prior years.

The title of the report, “For-Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success,” does well to summarize its findings.

The study concluded that students at for-profit colleges were more likely to drop out, often leaving them with thousands in college loans and no degree. It also said that for-profit schools focused more money and employees on recruiting and marketing than on education and support services. In many instances, it said, the same education at the for-profit colleges cost considerably more than at a public college in the same state.

The report pointed out that many students withdraw not only after taking on student loans, but receiving federal financial assistance as well. That provides a poor return on the taxpayers’ investment in education, said the report. In the 2009-2010 academic year, it said, for-profit colleges received 25 percent of Department of Education student aid funds, or $32 billion.

The report concluded that the 15 publicly traded colleges in the study received about 86 percent of their revenue from taxpayer-funded programs. Specifically, GCU was reported as receiving 87.1 percent of its revenue from federal programs.

The report stated that degrees at private for-profit schools cost more than the same degree at a public college. However, the report did not compare these costs to those at private nonprofit schools.

The study cited the cost of a 4-year bachelor’s degree in business administration at GCU at $55,950, compared to the same degree at University of Arizona for $44,200.

For comparison,just one year’s tuition, room and board, and other fees at Harvard University total $54,946 for the 2012-2013 academic year, according to Harvard’s website.

GCU officials countered that the $55,950 did not factor in the scholarships provided to students by the college, reducing the cost of that degree to about $32,000.

GCU was in the middle of the pack in several categories examined.

The overall student withdrawal rate for GCU was 52.7 percent as of 2010. The lowest was 26.6 percent, at American Career College. The highest withdrawal rate was Bridgepoint Education’s 66.8 percent. Bridgepoint runs Ashford University and University of the Rockies.

Withdrawal rates were assessed by determining how many students who enrolled in the 2008-2009 academic year had left without a degree in 2010.

The study did not compare withdrawal rates at the studied for-profit colleges to rates at non-profit colleges, though such comparisons were given in other areas studied.

GCU was listed as spending $2,177 per student on instruction. The lowest was Apollo Group, which runs the University of Phoenix, at $892. The most spent on instruction per student was at Chancellor University, with $10,893. Most of the 30 schools studied fell in the $1,000 to $3,000 range.

In profit per student, GCU was again in the middle, with $1,848. Universal Technical Institute was the lowest, and took in $541 per student. Highest was Rasmussen College’s $9,017. Most earned between $1,500 to $3,000 per student.

Though the study condemned for-profit colleges, some members of the committee did not agree with the way the study arrived at its conclusions.

A statement prepared by four members of the study pointed out possible faults with the study’s process.

“(T)he majority’s refusal to work in the committee’s bipartisan tradition and the biased conduct throughout this process have raised substantial doubt about the accuracy of the information contained in the report,” reads the minority’s report, which also acknowledged that “It is indisputable that significant problems exist at some for-profit institutions of higher education.”

The committee’s full report and the minority’s objections can be viewed at www.help.senate.gov/imo/media/for_profit_report/Contents.pdf.

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