Would You Go to Strayer University?

Looking Beyond the Marketing to Discern Value in For-Profit Education

We need to be looking for more than just fraud in for-profit education—students need to know what kind of value they’re getting for their money, writes Julie Margetta Morgan.

Due to deceptive advertising and withheld information, many students choose to go to "bad-actor" colleges even though they are far more expensive than the community colleges, like the one pictured here, which offer comparable programs. (AP/J Pat Carter)
Due to deceptive advertising and withheld information, many students choose to go to "bad-actor" colleges even though they are far more expensive than the community colleges, like the one pictured here, which offer comparable programs. (AP/J Pat Carter)

For-profit higher education is under scrutiny, but institutions’ misdeeds may be overshadowing students’ needs. The Senate Health Education Labor and Pensions Committee kicked off a series of hearings on June 24 that will investigate the for-profit higher education sector. The first hearing focused on protecting the taxpayers’ investment in federal financial aid by weeding out “bad actors”—colleges that use deceptive recruitment tactics to pressure students into attendance or fraudulently tinker with enrollment numbers in pursuit of revenue from student Pell Grants.

Addressing these abuses is certainly important, but accounts of fraud can obscure the larger issue at hand. President Barack Obama made college completion a national priority. And with a lingering employment crisis, we need to ensure that students obtain the credentials and skills that will lead to gainful employment and a stronger workforce. Regulating institutions can play a role in meeting this goal, but achieving it will require helping students choose institutions where they will be engaged enough to persist through to graduation. Even after eliminating bad actor programs, students are left to choose among institutions that vary considerably in quality, price, and the market value of their degrees, with little information to guide their decisions.

“Bad actor” colleges’ success at attracting students is a symptom of this problem. Student Yasmine Issa testified before the committee about her experiences at the for-profit Sanford Brown Institute. She was seeking a leg up in the job market, but had only minimal information about program quality and available alternatives, and so left dissatisfied, unemployed, and saddled with loans.

Many students like Yasmine choose these institutions even though they are far more expensive than the community colleges that offer comparable programs—likely because for-profit institutions advertise at every opportunity on television, the Internet, and even public transportation. They position their message where prospective students are most likely to find it. The fact that the programs may not be certified by state licensing agencies or that the payoff is not worth the hefty price tag is not apparent, because the richest, most readily available sources of information about colleges are their own marketing materials.

It’s not the for-profit colleges’ educational model that is the problem; in fact, their flexible, career-focused programs may be exactly what students need. The problem is that the choice to attend these institutions is not an informed one. The enticement is flashy, accessible, and easy to understand, while hard facts about program quality are scarce, complicated, and often hidden from the public.

Senate Health Education Labor and Pensions Committee Chair Senator Tom Harkin (D-IA) stated that students flooded his office with accounts of falling prey to a for-profit institution’s marketing, only to find that the credentials they attained were not worth their time or money. Shutting down “bad actor” colleges would keep students from attending one of these schools, but it would still leave them to make a choice among a variety of other institutions without any reliable information about the likely outcome of their investment beside what the school itself provides.

As the committee continues with its investigation of the for-profit sector, its members must remember that the federal financial aid system invests in students, not colleges. Students carry the taxpayers’ investment to the institutions they choose. It is important to regulate for-profit colleges and ensure that institutions offer quality programs, but these measures are not all that is needed to protect this investment.

Students also need policies that support them in making the choices that lead from college access to graduation, including better, more readily available information about program quality, occupational outcomes, and the risks involved in taking on educational debt. And students need greater transparency around colleges’ educational services so that they can become informed consumers.

Once senators put to rest those important—but more easily fixed—problems of fraud and abuse, they should focus on the deeper issue of how the for-profit college industry can be part of a postsecondary system that is built around the needs of a large and diverse body of students seeking postsecondary credentials.

Julie Morgan is a Policy Analyst at American Progress.

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Julie Margetta Morgan

Director of Postsecondary Access and Success