| For-profit colleges in the US came under increased scrutiny onseveral counts. This case study describes the problems faced by“for-profit colleges” in the US such as high loandefault rates, vague accreditation standards, and low graduationand job placement rates. Complaints such as overpriced degrees,misleading claims, and increasing level of student debt resulted inthe government turning its attention to the entire for-profitcollege sector. According to some reports, too much taxpayer moneywas being used to generate profits for the colleges, instead ofproviding students with useful high-quality education. The casealso focuses on the alleged fraudulent practices adopted byfor-profit colleges in the US to gain access to more federalfinancial aid. The Study Concerned about the disproportionate percentage of federalstudent aid flowing to “for-profit colleges”, someanalysts began raising questions about the rapid growth of thefor-profit education sector, the aggressive recruitment ofstudents, and the value of the education provided by suchinstitutions.
There are strategies followed by “for-profitcolleges” in the US to attract more students. According toa report released by US Government Accountability Office (GAO),some for-profit colleges in the US were involved in deceptivepractices and had made misleading statements to prospectivestudents which included not providing clear information about thecollege's graduation rate, applicant's likely salary aftergraduation, accreditation of the school, and the duration and costsof the programs offered by the schools. This study concludes bydetailing the new regulations proposed by the federal governmentfor the “for-profit” education sector in order to safeguardstudents from misleading recruitment practices and incurring hugedebts, among other issues. This study also focus on studentenrollments and the methods these colleges were adopting to attractmore students.
On release of the GAO report, the shares of for-profit educationcompanies in the US, including Apollo Group Inc. (Apollo Group–owner of University of Phoenix), DeVry Inc. (DeVry), EducationManagement Corp, and Corinthian Colleges, Inc. (Corinthian), fellsignificantly. "GAO's findings make it disturbingly clear thatabuses in “for-profit” recruiting are not limited to a few roguerecruiters or even a few schools with lax oversight. |
