The Huffington Post
ONTARIO, Calif. -- Just after she started working for an ambulance company in this suburban enclave east of Los Angeles, Cierra Nelson came to admire the quick decision making and street smarts of the nurses she met on runs to local hospitals. She soon opted to pursue a nursing degree, settling on a low-cost, two-year program at a nearby community college that has an excellent job placement record.
But despite her efforts to complete the coursework in the ensuing four years, Nelson is still not a nurse. California's budget cuts have forced the state's community college system to scale back the availability of crucial science classes. Nelson found herself repeatedly turned away from the oversubscribed courses required for her degree.
Frustrated and seeking an alternative, she took out more than $50,000 in student loans to enroll last winter in a nursing program at Everest College, one of many for-profit institutions that have sprung up in the area amid massive cutbacks in public funding for higher education.
"When I first saw how high it was, it was kind of a shock," said Nelson, who eventually came to the conclusion that taking out loans made more sense than waiting semester after semester to take the community college classes she needed to advance. "I know it's a lot of money and I'll be in debt, but I've got to do what I need to do."
While the program at Everest comes with a much higher price tag -- nearly $60,000 in tuition, compared to less than $3,000 at area community colleges -- its degrees appear to be less valuable on the career marketplace. More than 90 percent of the nursing students at nearby community colleges last year passed state licensing exams, which are required to practice in California. Fewer than 70 percent of Everest students passed the exams, registering the lowest success rate of all nursing programs in the state.
Nelson's predicament mirrors that of many students navigating the world of higher education in recent years. Community college degree programs, which have long provided affordable pathways to careers, have been overloaded by soaring demand, just as state governments grappling with budget crises have slashed support for such programs. Lack of public funding is among the more potent forces behind the surge in enrollment at for-profit colleges, which has turned their corporate parents into Wall Street darlings.
This dynamic has played out powerfully in California, where cuts to public education have been particularly deep, and where for-profit colleges have been notably aggressive, tacking up marketing notices on bulletin boards at community colleges where students are increasingly unable to enroll in classes.
"The population that is being pushed out is the most needy," said Jane Patton, past president of the Academic Senate for California Community Colleges, a group representing college faculty members. "These are the most vulnerable students that the for-profits have preyed on."
The for-profit college sector has faced increasing scrutiny in the past two years, as attorneys general in at least four states, including Florida and New York, have prosecuted or launched investigations into more than a half-dozen companies for overly aggressive marketing practices and financial aid fraud. More than 20 state attorneys general have signed on to a working group probing industry abuses.
Federal data has shown high rates of default on student loans among students enrolled at these institutions, prompting the Obama administration to promulgate new rules aimed at limiting abuses. A year-long Huffington Post investigation has found widespread rule-breaking at several of the largest for-profit college chains, with many institutions systematically preying on the anxieties of potential students, while making false promises about the success rates of their graduates.
Faced with the fact that large numbers of students fail to secure jobs that pay enough to keep them current on their loans, the industry has defended itself in part by portraying its campuses as the last bastion of opportunity for many Americans aspiring to a college degree. In testimony on Capitol Hill and in media interviews, industry representatives have emphasized that its schools welcome the least advantaged, hardest-to-educate students: people from low-income households, minorities and first-generation college students.
In the for-profits' scenario, any change in policy that risks slowing enrollment growth at their colleges also risks eliminating the only alternative available to more vulnerable segments of the student population.
But while for-profit colleges do indeed educate more low-income and minority students than other institutions, this is in large part because support for the traditional alternative, community college, has failed to keep pace with demand.
Though no one maintains a comprehensive list of state funding for community colleges, state and local support for community colleges on a per-student basis declined by 5 percent in 2009 from a decade earlier, according to Department of Education statistics compiled by the Delta Project, a nonprofit research group that studies higher education spending. The total subsidies provided to students by community colleges, including funding from public sources and other outside support, fell by 10 percent over the last decade, on a per-student basis.
The Obama administration has significantly boosted funding for Pell Grants, which are available to low-income students. Over the last three years of the program, the federal government has more than doubled spending on Pell grants, budgeting $20 billion more this year than in the 2007-08 school year. For-profit colleges have captured an outsized share of this pool -- roughly 25 percent -- despite educating only 12 percent of college students nationwide, according to the most recent federal data.
Intake of federal Pell Grant dollars, by higher education sector
Source: Department of Education
Had the $7.5 billion that for-profit institutions received via Pell Grants during the 2009-2010 school year gone instead to fund community college systems nationwide, that money could have created capacity for an additional 629,000 community college students, The Huffington Post calculated, using available estimates for the average expenditure per student. That would represent a 20 percent increase in the number of full-time community college students currently enrolled nationwide.
At California's community colleges -- the nation's largest system of higher education, serving a quarter of community college students nationwide -- an estimated 200,000 students will be turned away from classes next school year, according to the state community college chancellor's office, following state cutbacks of nearly 20 percent across the entire system. That amounts to more than 7 percent of the entire state's community college student body, and that does not count those who gave up on plans to enroll due to the difficulties of securing classes.
After accounting for inflation, California is now spending the same amount on community colleges that it did six years ago, despite adding more than 175,000 students in that period, a nearly 20 percent increase. On a per-student basis, the state is spending less this year than it was 15 years ago.
The for-profit college programs that have been absorbing the resulting overflow of students are on average more than five times as expensive as their community college counterparts, according to a Senate report that examined such schools nationally. While only about one in five students at community colleges takes out loans to finance their tuition, four of five students at for-profit two- and four-year schools sign off on loans, according to Department of Education data.
Because of the high costs and high debt loads, students at for-profit colleges are responsible for about 45 percent of all student loan defaults.
In the eyes of public education advocates, for-profit colleges are the inevitable, opportunistic outgrowth of a society that simultaneously rewards those with greater education while it eliminates traditional support for public campuses.
"The economy is essentially telling people that you have to get some kind of post-secondary degree or credential," said Anthony Carnevale, director of Georgetown University's Center on Education and the Workforce. "So the demand is growing very fast, and our ability to fund this function is crashing. It's not just declining, it's crashing. The public sector is basically getting out of the business, so the costs are shifting to the individual students."
RED INK IN THE GOLDEN STATE
California's current status as the leading edge of for-profit college growth represents a substantial change in its history. A half-century ago when the state laid out its master plan for higher education, which quickly became a model for the rest of the country, it leaned heavily on public institutions.
The plan gave rise to one of the most prestigious public university systems in the nation, and it included a vast network of community colleges with a mission of educating "any student capable of benefiting from instruction."
"It is the intent of the Legislature that each resident of California who has the capacity and motivation to benefit from higher education should have the opportunity to enroll in an institution of higher education," the plan declared. "Once enrolled, each individual should have the opportunity to continue as long and as far as his or her capacity and motivation."
The community college system was crucial for career training, but it also provided a logical pathway for transfer to California State University or University of California schools. More than half of Cal State graduates started at community colleges, and nearly a third of UC system graduates began their education there. Nearly 70 percent of the state's college students are enrolled at a community college, a much higher rate than in other states, making California's system by far the largest in the nation.
Perhaps the most revolutionary concept was that of tuition-free education. Under the original master plan, the state subsidized every resident who came through the system, eliminating any out-of-pocket costs, save for some fees for specialized coursework such as labs.