Nonprofit Universities Prey on Students

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Author: The Editors
Date: 2018
Publisher: Gale, a Cengage Company
Document Type: Viewpoint essay
Length: 841 words
Content Level: (Level 5)
Lexile Measure: 1320L

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Article Commentary

“While education advocates malign for-profit schools, the underlying problems afflicting nonprofit colleges are less widely discussed.”

The editors of the Weekly Standard determine the positions and perspectives of the magazine. In the following viewpoint, the editors critique a study from the University of San Diego Child Advocacy Center called Failing U, which examines whether state laws adequately protect students against predatory practices in the for-profit college sector. The editors argue that Failing U echoes similar research produced on for-profit education that overemphasizes the problems of for-profit education while ignoring its benefits. The authors acknowledge well-publicized cases of fraudulent for-profit colleges but contend that focusing too much on such cases takes attention away from predatory and fraudulent practices that occur in nonprofit higher education institutions. Nonprofit colleges and universities, the editors argue, engage in some of the same practices that nonprofits refer to as predatory when discussing for-profit schools and therefore deserve a similar level of scrutiny.

As you read, consider the following questions:

  1. How do the authors use student loan data to support their claim that nonprofit colleges and universities also engage in fraudulent practices?
  2. What evidence do the authors provide to demonstrate that the quality of nonprofit colleges and universities has diminished?
  3. In your opinion, should all higher education institutions be subject to the same requirements and scrutiny, or should different types of institutions be regulated differently? Explain your answer.

A recent study of abuses in for-profit postsecondary education highlights a reputational disparity within American higher education. For-profit programs and colleges are distrusted and maligned. Their proven value to populations for whom traditional college is out of reach and the various good-faith reforms win little or no notice. Neither do the abuses of nonprofit colleges, themselves rife with institutional decadence and dishonesty.

The study, a 780-page doorstopper from the University of San Diego’s Child Advocacy Center entitled “Failing U.,” asks whether state laws adequately protect students from “for-profit predators.” It lines up one critique after the next of recruitment and regulatory oversight. Any time the premises of a study identically match its conclusions, we pause. And what immediately struck us about the USD study is that many of these complaints are equally applicable to for-profit and nonprofit programs.

Hypocrisy in Higher Education

One of the study’s stated goals is “to start a discussion about how to protect taxpayers, who ultimately pay the price when students who attend unscrupulous institutions cannot repay federal student loans.” But of course taxpayers ultimately pay the price whether a defaulter has attended for-profit Strayer University or nonprofit Stanford University. Loan-default rates have risen significantly at nonprofits and for-profits alike.

The stories of fraudulent for-profits like the Corinthian Colleges, whose closure in 2015 set Congress on the warpath, are well known. The sham of Trump University has been hard to miss. And lately a crackdown on DeVry University’s dishonest recruitment techniques demonstrates the value of stricter accreditation oversight and auditing. No one needed an 800-page study to learn this.

The highest concentration of student-loan defaults has, since the late 1970s, come from the ranks of the for-profit college, according to a recent data report from the College Board. But for-profit graduates’ debt loads are lighter than those of their nonprofit-college-going counterparts. To put it the other way around: Nonprofits’ loan defaulters, though they’re less common school by school, tend to owe more. There are, moreover, far fewer for-profit than nonprofit schools, and the for-profit sector is shrinking fast—11 percent of the country’s for-profit colleges closed in 2016, and the trend continues. The spectacle of traditional universities funding giant studies about the problems of their tiny and shrinking competitors seems a bit rich.

While education advocates malign for-profit schools, the underlying problems afflicting nonprofit colleges are less widely discussed. Graduation rates at expensive four-year schools are faltering, and graduates are failing to find work. There are growing financial pressures.

Failures in the Nonprofit Sector

Indeed, the vast majority of the 177 colleges designated financial failures by the Department of Education last year are small, nonprofit private colleges. A 2016 study from the center-left think tank Third Way used the Education Department’s college scorecard to diagnose an unexamined “quality crisis” in nonprofit colleges. It found that “at the typical institution, nearly half of the students aren’t graduating, many students aren’t earning sufficient incomes even years after enrollment, and far too many are unable to repay their loans.”

None of this will come as a shock to anybody who’s followed the follies and failings of traditional nonprofit higher ed: the politicized and hyperspecialized curricula, the astronomical prices, the ever-expanding armies of administrators, the diminishing quality of teaching. All this at institutions that pay no taxes and that, in the case of state universities, receive hundreds of millions in direct appropriations every year.

The essential premise of USD’s report is that for-profit colleges need stricter oversight lest they find new ways to swindle uninformed students and saddle them with debts they can’t repay. But the far deeper and less studied scam may be the nonprofit private college. Perhaps the University of San Diego should confront its own demons.

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Gale Document Number: GALE|QIEAVM451908055