Education Trust Report Signals Trouble for For Profit Colleges

November 29, 2010 | posted by College Money Insider.

Last year, for profit colleges received $26.5 billion in student aid, according to a recent article on However, regulations proposed over the summer by the Obama administration may drastically reduce that by restricting the amount of federal student aid to for profit colleges.

A report published by the Education Trust, a nonprofit research and advocacy group, called Subprime Opportunity: The Unfulfilled Promise of For-Profit Colleges and Universities, contains data indicating that the cost of attending for-profit colleges is high, but the results are low because six-year graduation rates are significantly lower than public or private nonprofit schools.

“For-profits proudly claim to be models of access in higher education because they willingly open their doors to disadvantaged, underprepared students. But we must ask the question, ‘Access to what?’” said José L. Cruz, vice president for higher education policy and practice at The Education Trust. “The odds of earning a degree are stacked against students who enroll at these institutions. And yet, they are virtually guaranteed one thing: years of student loan debt.” (Read the press release here)

According to an article published on, Ryan Rauzon, a spokesperson for Apollo, Inc (the company that owns University of Phoenix) cited a recent report that indicates that “the cost to taxpayers to educate a student at the University of Phoenix is less than at any other type of institution.”

Additionally, the APSCU (Association of Private Sector Colleges and Universities) released a statement in opposition of the Education Trust report, stating “We are disheartened to find that during the very time working adults who are enrolled across the higher education spectrum are battling a tough economy and difficult job market, the Education Trust publishes a report unfairly criticizing the career education sector and devaluing the education of its students.”


  • Eugene Murray

    Referring to Table 3 in the Ed Trust report, I see that two schools have the following 6-year, graduation rates for 2008:

    School of Visual Arts: 67 percent
    ITT Technical Institute: 66 percent.

    These numbers compare favorably to the same item for private, non-profit colleges which, I believe, is 65 percent per a recent article I saw online in the Seattle Times.

    Clearly, other schools, like the University of Phoenix and Westwood College, have a long way to go to improve their performance.

  • Tia Peterson

    Hi, Eugene. There certainly are a number of interesting comparisons in the report. Thanks for your comment!