For-Profit Education: The Thieves in Teachers’ Clothing

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In the past few months, there have been a number of alarming news reports about the failing records of for-profit schools, from online K-12 schools to for-profit colleges. According to the investigative reports, what we’re seeing is a takeover of public education by large corporations, who are delivering abysmal results.

We’ve seen it right here in Oregon. Back in June, Oregon legislators passed a bill that gave an easy enrollment boost to online charter schools, which are run by out-of-state for-profit corporations. Now, these K-12 schools are able to sap more taxpayer dollars away from our local schools and send it directly to the pockets of charter school shareholders.

While the motive behind the passage of the bill may be murky, the results are unmistakable. Oregon is losing tax dollars to for-profit institutions under the guise that they are educating our youth.

These for-profit institutions face little to no accountability, evident by the abysmal graduation rate of Oregon Connections Academy, Oregon’s largest online charter school. Only 30% of their students graduate from their program, one of the lowest graduation rates in the state.

For each student that these for-profit schools enroll, they snatch up $6,000 of government funds. This has become an extremely profitable business in Oregon, with over $12.5 million in taxpayers’ dollars going to Oregon Connections Academy.

Oregon journalists have so far failed to do any investigative work on for-profit virtual schools, reporters in Colorado recently uncovered some alarming facts about online schools in their state:

•    Half of online students dropout within a year.
•    Online schools produce three times more dropouts than they do graduates.
•    Online schools are diverting millions away from local schools and putting further pressure on them to help students who’ve been failed by the for-profit corporations.
•    Contrary to claims by the online schools’ PR departments, their students don’t initially face more challenges than the general school population:

However, the I-News/EdNews analysis of state data shows that most online school students do not appear to be at-risk students. Only about 120 students of the more than 10,000 entering online programs last year were identified as previous dropouts returning to school, and only 290 entered online schools after spending the prior year in an alternative school for troubled youth.

In addition, most are not struggling academically when they leave their traditional schools. Among the 2,400 online students who had taken a state standardized reading test in a brick-and-motor school the year before, the analysis showed that more than half had scored proficient or better.

The analysis also looked at dropouts—those students who leave school permanently. In Colorado’s online schools, dropouts outnumber graduates by three to one. That’s the reverse of the statewide average, where graduates outnumber dropouts by three to one.

Still, despite the mounting evidence against for-profit online K-12 schools, there hasn’t been much scrutiny given to them by the press or by politicians. What has gotten more attention, however, are for-profit higher education institutions, which have come under fire from the press and the White House.

The Week had an in-depth briefing about the appalling performance of the for-profit colleges:

Do these colleges deliver on their promises?
No, says a growing group of critics, including educators, former students, and the federal Department of Education. They say the schools provide dubious coursework and degrees that don’t lead to good jobs, but do leave students with crushing debt. Most students never complete their degrees. The University of Phoenix, for example, is the industry leader, yet it graduates less than 9 percent of its bachelor’s degree candidates within six years. Schools have been accused of misleading applicants about loan costs, exaggerating potential post-graduation salaries, and targeting disabled veterans and homeless people to boost enrollment. Former students of for-profit colleges now account for about half of all student-loan defaults. “I don’t think I learned anything at the Art Institute [of Philadelphia], other than how to get scammed by somebody,” said Taryn Zychal, who accumulated $150,000 in loans, only to find that no other institution would recognize her academic credits. Legions of other students tell similar stories.

Another indicator of the poor quality of the institutions can be found with a simple glance at the student loan default rate.  The inferior quality of the education and inadequate placement programs at for-profit colleges result in few students finding jobs, causing them to default on their loan payments. In fact, The U.S. Education Department figures show that 15% of students who attend for-profit institutions default on their student loan payments compared to 8.8% default rate of students of all types of schools.

The quality of the education (or lack thereof) is not the only appalling revelation about the for-profit colleges. Investigations exploring the strategies used by the companies to recruit students have discovered that the schools are funneling government money straight into their coffers — at the expense of veterans. One such ploy involves exploiting the Post-Sept. 11 GI Bill, which provides funding to veterans for college, by creating, a website that appears to be a helpful tool for recipients of the bill’s funding, but is in actuality a private site that directs its users to a list comprised only of for-profit institutions. Rather than assist veterans with finding a school that best suits them, the institutions are actively trying to mislead veterans into thinking they can only spend their education dollars at for-profit schools.

The many transgressions of these institutions have gotten so bad that the federal government had to step in. The Department of Education has recently tightened its regulations; as the New York Times reports, “under the new rules, programs would lose their eligibility to dispense federal student aid — and as a practical matter, be shut down — if, over the next four years, their graduates fail to meet new benchmarks for loan repayment and ratio of debt to income.”

Yet, while the federal government is creating new regulations to bring accountability to for-profit colleges, little has been done to stop the similarly negligent practices rampant in the K-12 sector. The young students in Oregon are still losing out, due to lack of oversight in the for-profit K-12 sector.

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