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  • The World View

    A blog from the Center for International Higher Education

For-Profit Higher Education Scandals in the United States: International Lessons
August 30, 2010 - 1:45pm

Hardly a day goes by in the United States without another report of malfeasance and exploitation by the for-profit education industry. ABC’s national television news featured a story about how the University of Phoenix, owned by the Apollo Group, one of the largest for-profit education corporations, misrepresents job possibilities to prospective students. A story in the New York Times on August 14, 2010 discussed in detail how repayment rates on government backed student loans in the for-profit sector are much lower than in the non-profit sector. The story, based on government statistics, mentioned Phoenix, DeVry, and Kaplan, three of the largest for-profit education providers. These are only two of numerous reports, based both on a series of government investigations that have been highlighted in U.S. Senate hearings and in independent reporting by the print and television media.

The Career College Association (CCA), the lobbying organization of the for-profits has been busy explaining how the stories are the result of unfair reporting, or examples of just a few “rotten apples” in the barrel. Some who have been involved in the investigation, such as Senator Tom Harkin (D) of Iowa, has said that the entire barrel is rotten. Amazingly, the CCA claims that the industry would run better without government regulation. In fact, it has been largely unregulated for the past decade of Republican control of the federal government—and the results are now becoming apparent. It is rather clear that the for-profit industry is mainly devoted to making profits—and is quite willing to cut corners on quality and truth in order to make money.

Several of the American accrediting agencies should be embarrassed by this situation. They have accredited many of the for-profits, and now must deal with the implications of what seem to be poor judgment. So far, the accreditors have been silent.

All of this has relevance globally for several reasons. American for-profits are increasingly active outside the United States—buying or starting universities in other countries, linking with overseas institutions (for example, the University of Liverpool in the UK is the partner of Laureate Education, a large US for-profit, and works with Laureate on many on-line degrees). The US for-profits also offer many on-line degrees internationally.

Hopefully, these American scandals will give governmental and other authorities as well as the public globally some pause. If the well organized American for-profits, most of which are public corporations and are listed on the stock exchanges, can be involved in shady dealings that are rather clearly exploiting students, what must less transparent and poorly regulated private for-profits around the world be doing?

It is time to take a careful look at the entire for-profit higher education industry around the world. More regulation is needed. The idea of “private higher education for the public good” must become part of the dominating vocabulary for the private higher education sector.



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