Report Criticizes Lack of Data on For-Profit Students

Agencies should push for more and better information on completion and job placement rates, consumer group says.
June 30, 2005

Finding accurate and up-to-date statistics about the completion and job-placement rates of students at for-profit career colleges is difficult and the information that is available suggests that the schools are falling short of their marketing claims, a consumer advocacy group said in a report issued Wednesday.

Officials of for-profit institutions blasted the study, with one leading lobbyist calling it "appallingly badly done."

The National Consumer Law Center's study, "Making the Numbers Count: Why Proprietary School Performance Data Doesn't Add Up and What Can Be Done About It," offers a bleak assessment of for-profit institutions, arguing that they serve a highly vulnerable group of students (many from low-income families), put their growth and profits above all else, and have a history of fraud and abuse. The center works mainly with low-income people.

Much of the report is a recounting of previously publicized charges -- some now resolved -- against some of the most visible for-profit higher education companies, including the Apollo Group, the parent of the University of Phoenix, and ITT Educational Services. 

The newest information in the report is an assessment of whether for-profit institutions, and the agencies and entities responsible for overseeing them, are adequately reporting how successful the colleges are at helping students finish their programs and at placing their graduates in jobs. 

Because students are increasingly turning to for-profit institutions and often going into debt to do so, the report says, "it is essential for prospective students to have access to as much information as possible about a school, especially prior to enrolling. Whether students can actually obtain this information and whether this information is useful and meaningful is the subject of this report."
Its conclusion, derived "through a series of site visits, phone interviews, and other inquiries," is that "prospective students do not have easy access to verifiable information about the success of proprietary schools," it says. "The U.S. Department of Education statistics are incomplete and unreliable, state licensure processes differ in rigor and do not publicize results, and accreditation agencies guard the data they collect from schools closely, considering it private." 

The schools themselves, the report asserts, do not publish the information widely, and school officials reportedly declined to tell undercover investigators sent by the law center what their completion or placement rates were. The report also faults the career colleges for failing to report information about their many campuses to the Education Department and other entities that are potential repositories for collecting and distributing it. 

And because those agencies do little or nothing to verify the information they do collect, the report asserts, "it leaves nearly absolute discretion in the hands of schools that have every incentive to inflate the numbers." The report suggests that the Education Department's latest four-year completion rates for several publicly traded higher education companies -- 7 percent for the Apollo Group, 59 percent for Career Education Corp., and 47 percent for Education Management Corp., among others -- are lower than the companies have led the public to believe.

A spokeswoman for the Apollo Group, Terri Bishop, said the law center had "seriously misrepresented the facts about the University of Phoenix." The university, she said, primarily employs working adults, and as such "have never provided job placement services to students, nor have we ever made claims to do so."

Bishop also said that the consumer group had "deceived the public" with the 7 percent figure it cited as Phoenix's completion rate. "The number they pulled from the public [Education Department] database represents only those students who had no prior college experience, which represents less than 3 percent of the university’s student population."

Nancy Broff, general counsel of the Career College Association, the primary trade association for for-profit institutions, said of the authors of the report: "They've come to this with an agenda and used an unfair and selective set of data to try to make their point."

Broff said that the completion rates for for-profit institutions cited in the report, "while not as high as we would all like to see," still "stand up favorably" to the graduation rates of many community colleges and public universities. She also noted that there is no federal requirement that colleges report their job-placement rates, except for programs that offer very short-term training.


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