The for-profit higher education sector is rife with problems, according to a report released in June by the National Consumer Law Center. Making the Numbers Count: Why Proprietary School Performance Data Doesn’t Add Up and What Can Be Done About It, cites inefficiency in the reporting system used by the for-profit programs and misrepresented placement and completion rates. The report, available online at www.consumerlaw.org/news/ProprietarySchoolsReport.pdf, includes suggestions for improvement. 

The companies studied are those that best represent the growth potential of this sector (as demonstrated through their financial records, enrollment and campus growth). Included are the Apollo Group (University of Phoenix), ITT Educational Services, Career Education Corporation (CEC), Corinthian Colleges and Education Management Corporation (EDMC). Making the Numbers Count finds that the graduation and job placement rates that are publicly reported and the rates reported to the government differ too greatly, the calculation formula is flawed, too few campuses collect and report data, and there is a lack of enforcement of data collection and reporting mandates, among other things.  The report notes that Department of Education Inspector General John P. Higgins testified in May 2005 that "over the last six completed fiscal years, the majority—approximately 74 percent—of our institutional fraud cases involved proprietary schools."

The report comes just as Congress considers the reauthorization of the Higher Education Act.  The nonprofit community views oversight of the for-profit higher education sector as essential to protecting students from fraud and abuse and to ensure they attain the education levels and technical skills they need.

Gabriella Gomez, assistant director in the AFT legislation department, applauds NCLC for preparing the report. "It is the responsibility of these schools under the Higher Education Act to give prospective students accurate and substantial information," she says.  "Miscalculating or withholding information that is supposed to be provided to students violates their rights under the HEA and is an abuse of the system."

Deanne Loonin, staff attorney at the NCLC, says the group had "very good reasons" for conducting the study. There has been a history of abuses in that sector, she said, and in order to participate in the financial aid programs, proprietaries are required by law to provide programs that specifically prepare students for gainful employment.

"I really see this report as criticizing the enforcement entities and the schools," she added. "The schools…tout their numbers to investors and students, but give out misleading or in some cases inaccurate information." [Molly Kinsella]

July 13, 2005