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Scam U.
When profits come first, students may come last
Marco Salazar
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DeVry University hijacked my English class.

Early in my senior year of high school, I went to English one day and found that a representative of DeVry would lead the day’s “lesson.” The representative said he would be giving us tips on the college search process.

He handed out PDA devices to everyone in the room and had us use them to play a game. We were all supposed to be running a business and had to make decisions about where to spend money. Everyone participated excitedly and competitively.

Afterwards, he collected the PDAs and said, “At DeVry we like to use technology like this to enhance learning.” Then he went around the room asking questions like, “Who would you make proud by attending college?” and, “What can college offer you?” He then asked us whether our parents had gone to college and if not, what jobs they had.

He was indirectly suggesting that our parents who hadn’t gone to college weren’t successful, and that we, too, would end up that way if we didn’t go to college. This representative did not give us a single helpful tip for the college search process; instead he advertised DeVry all period and attempted to convince my class that college, specifically DeVry, should be our next step.

Why was he being allowed to preempt my English class to give me a sales pitch? To my knowledge, only one other college had visited my school—CUNY’s Macaulay Honors College—and they held an optional information session after school. They didn’t interrupt our class time. (According to a New York City Department of Education spokesperson, the department does not allow these visits during the school day.) Nor did Macaulay show off PDA devices in a shallow attempt to appeal to youth, particularly low-income youth.

Suspicions Raised

I’d seen DeVry advertised on TV and the subway, and my friends had made fun of it a few times, so I knew it wasn’t exactly a top school. Watching their representative talk to my class, I was able to identify certain advertising techniques I’d learned about in school. For example, we’d been taught that advertisers use fear to manipulate people’s decisions. The representative was clearly trying to scare students about the consequences of not attending college—to scare them into considering DeVry.

The only thing I didn’t understand was why DeVry was working so hard to recruit students, while the schools I was interested in attending more or less let applicants come to them. So I did some research at home. I figured that DeVry was a low-tier school trying to round up students who didn’t have a lot of other options. I suspected they recruited at high schools like mine, where many students are low-income minorities who have trouble getting into and affording college.

It turns out my suspicions were correct. But the case against DeVry—and a lot of similar colleges—was much stronger than I’d thought.

The Profit Motive

It turns out that DeVry is a for-profit college. What does that mean? You might not think much of this fact at first—after all, traditional colleges are often so expensive that their “nonprofit” status is hard to understand.

The difference is that for-profit colleges have owners—either private families, or companies, or stock market shareholders—whose main intention is to make money. A for-profit college’s first responsibility is to its owners or shareholders, so it may focus more on making a profit than on your quality of education. A nonprofit college, on the other hand, has no owner and has more incentive to focus on graduating satisfied students. In fact, many schools receive big donations from alumni who feel their college education contributed to their success in life.

Complaints from students at for-profit colleges suggest what can go wrong when student success is not a college’s first priority. Students who filed a lawsuit against the for-profit Everest College told the current affairs TV program Frontline that they graduated from a $30,000 nursing program without ever setting foot inside a hospital. The students claimed their education was a huge rip-off, because they were effectively unhireable as graduates.

Another lawsuit involving student loan fraud resulted in DeVry paying out $88,122 to students. After an investigation by the New York State Attorney General, DeVry admitted that it had steered students into taking out loans from Citibank, and in return the school received a commission from the bank for each loan made. This violated the Attorney General’s College Code of Conduct, because the practice meant that students weren’t informed of other loan sources that might have given them better deals.

Targeting the Vulnerable

Meanwhile, the outlook for graduates of for-profit colleges is often bleak. The U.S. Department of Education has released figures showing that, compared to students at other colleges, students at for-profit schools take out more federal student aid and are much less likely to repay their loans. This may mean that the for-profit colleges’ students aren’t getting good jobs after graduating, or that these colleges prey on students who are in bad financial circumstances in the first place (most likely, it means both).

Some for-profit schools are blunt about targeting vulnerable people. When a Senate oversight committee investigated the for-profit industry, it obtained a document in which leaders at Vatterott Educational Centers, Inc., told employees, “We serve the UN-DER world”—that is, the “Unemployed, Underpaid, Unsatisfied, Unskilled, Unprepared, Unsupported, Unmotivated, Unhappy, Underserved!”

image by Patricia Battles

The committee also found that training documents from another for-profit, the ITT Technical Institute, included a “Pain Funnel and Pain Puzzle”—a set of instructions advising recruiters on how to stimulate negative emotional responses, such as regret, to manipulate students to enroll.


Cracking Down

Following the investigations of the Senate oversight committee, Congress passed a bill placing stricter regulations on for-profit colleges. One of the new policies forces career colleges to tell students upfront about the school’s graduation rate, success at placing graduates in jobs, and students’ median debt load. This information can help prospective students make informed decisions, and avoid colleges that seem to have lots of drop outs who leave with tons of debt.

Another set of regulations, which is still being debated, would withdraw federal funding from vocational college programs that don’t adequately help their students find jobs.

I think it’s about time for a real crackdown. And I don’t see why anyone would want to pay high tuition to a for-profit college when they could attend community college instead. Community colleges offer many of the programs for-profit schools offer at a fraction of the price.

Value for Money?

I’m not sure if students realize this, or realize that for-profit colleges generally have the same open-admissions policy as most two-year community colleges: They accept just about everyone who applies.

In fact, I did a quick search on Facebook (using the “search posts by everyone” feature), looking for the phrase “accepted to DeVry.” I figured that people who were excited about attending this college would be likely to mention it in a status update. Sure enough, my search turned up many people—most of them minorities—happily announcing their acceptance.

In reality, getting into a for-profit school is as easy as getting a store to take your money. My advice is to avoid attending a for-profit school. Not all are guilty of the practices described above, but they all require you to pay for something you could get for less money elsewhere. Employers are unlikely to see any difference between a degree from DeVry and a degree from a community college. In fact, they might even question your judgment for choosing a for-profit school over a much cheaper community college.

Not once during the DeVry presentation at my school did the representative even mention that it’s a for-profit institution. Perhaps he didn’t want us to uncover the investigations surrounding the school. Nor did anyone at my school ever warn my classmates or me against taking out big loans to attend for-profit schools. So I’m warning you now: Don’t become prey.

Start Your Search Here

As you consider your college options, use this link: nces.ed.gov/collegenavigator

Provided by the U.S. Department of Education, this online tool lets you quickly view lots of important information about any college in the country.

To judge whether a college represents value for your money, take a look at the “Cohort Default Rates” category. This shows you the percentage of recent graduates who have been unable to pay back their student loans in a given year. At some colleges, this rate is close to 0%—indicating that former students earn enough to cover living expenses and student loans comfortably.

At others, the default rate may be 10%, 20%, or even higher. Be extremely wary of colleges with such high default rates, which suggest that a college is not giving its students the education they need to make a living while repaying loans. (According to a 2010 story in The Chronicle of Higher Education, 40% of loans taken out by students at for-profit colleges are in default—that is, the students are unable to repay them—after 15 years. For a list of the 20 for-profit colleges with the highest default rates, go to: chronicle.com/article/For-Profit-Colleges-Face-Risk/66215/)

The college navigator tool also lets you look at statistics like graduation rates, percentage of students returning after freshman year, net price, and percentages of students receiving different types of financial aid. These figures will give you a good idea of how much academic and financial support you’re likely to receive at a particular college. If the graduation rate is low, it’s a sign that many students struggle.

Meanwhile, you’ll be better off at a college where students get more of their financial aid in the form of grants and scholarships (which don’t have to be repaid) and less in the form of student loans (which do need to be repaid and can be a long-term financial burden).

A lot of the figures you find won’t mean much on their own—to understand whether a college is doing well or badly in a certain category, you’ll need to look at lots of colleges (preferably different kinds of colleges) and compare them. So get online and start navigating!

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(NYC-2011-09-16)

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