There are about 19.9 million students that enrolled in an American university in the fall of 2018, according to the National Organization of Education Statistics. This indicates about $34.740 billion is made in college tuition for the 2018-19 school year, according to the CNBC.com.
Not many Americans think of colleges as companies, however, when someone realizes how much money goes into colleges, it is a bigger amount than can be imagined. This leaves people with a significant amount of debt and useless degrees. Now, for-profit colleges are under investigation by the federal government because it is leaving students with much more debt by false advertisements to students and the public.
Former enrollment officer of a profit college, Tressie Mcmillan Cottom, told NPR that for-profit universities tend to recruit students that qualify for the maximum amount of financial aid.
Cottom also noted that for-profit schools are 30 to 40 percent more expensive than non-profit public institutions.
“Most students end up dropping out and not finishing their degrees, leaving them in debt and credits that aren’t easily transferable,” Cottom told NPR in March 2017.
In December 2015, $28 million of student loans were cleared because the government saw the dramatic increase of debt that these profit universities were creating for students, according to Forbes. Federal loans are the only income that these universities make revenue from, which is why 95 percent of students that attend for-profit schools take out student loans.
Profit universities understand the financial instability of the students they are qualifying for expensive schooling. They target these specific students because they have a higher chance of choosing alternative education, such as Phoenix University. This will decrease the amount of debt that students pile under their name because they aren’t able to afford the amount of education that is falsely advertised by colleges.
Some of the most expensive for-profit schools aren’t accredited, including the University of Phoenix, ITT Technical Institute, Devry University and Westech College.
Non-profit institutions are operated by an owner and are free to focus on the quality of education to students. This is different from for-profit colleges, because they must provide revenue returns to their shareholders, making their profit a priority, according to Franklin University,
It is important for students to research the benefits and drawbacks of the college their are attending. This can help steer them from invalid facts about a school that may be told from for-profit admissions workers who want to target students who need financial aid. When looking for affordable schools, students should make sure the amount of debt they are adding to their name is reasonable.
What colleges do you think are for-profit universities? Let us know your thoughts below.