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Report: For-Profit Schools Better Value for Low-Income Students Than Two-Year Publics

by Arelis Hernandez , April 2, 2010

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An Everest College counselor advises a student on career options. Everest College is a system of for-profit colleges in the U.S. and Ontario, Canada owned by Corinthian Colleges Inc. (photo courtesy of Everest College)
An Everest College counselor advises a student on career options. Everest College is a system of for-profit colleges in the U.S. and Ontario, Canada owned by Corinthian Colleges Inc. (photo courtesy of Everest College)

Aiming to assure the public that for-profit higher education institutions provide as much value as public schools, researchers commissioned by a leading career college company released a report Thursday claiming that private-sector institutions increase access and student success among first-generation, low-income, and non-traditional students better than two-year public colleges.

The report, sponsored by the Santa Ana, Calif.-based Corinthian Colleges Inc., also claims that private-sector institutions do a better job in helping advance students, leading to higher wage gains upon employment and more manageable debt burden.

Recently coming under considerable scrutiny, for-profit institutions have been criticized by college access advocates and higher education officials skeptical of what they perceive to be aggressive marketing campaigns by for-profits that offer big promises to students. For-profit schools have also been accused of “misleading” students about the costs and debt they will incur.

“There has been an awful lot of discussion about our sector of higher education that has been driven by anecdote, hyperbole, and conjecture,” said Mark Pelesh, executive vice president for legislative and regulatory affairs at Corinthian Colleges. “We decided, rather than fighting with the stories, we’ll get some real research done by a reputable firm and use (U.S.) Department of Education data to get some real answers.”

A degree from the schools of well-known companies such as the Apollo Group Inc., which owns the University of Phoenix, is not cheap—about $14,000 annually, the College Board has estimated—while these companies have made billions of dollars in revenues and reaping substantial profits in the last few years.

Robert Lytle, co-director of the Education Center of Excellence at the Parthenon Group, a Boston-based global management consulting firm, said he sought to answer one central question using data from the U.S. Department of Education: Do they [private-sector schools] deliver value to students and society to reach President Obama’s degree completion goals?

Nationally, there are close to 2,800 career colleges (those that offer career-specific fields of study) and trade schools, and, in regards to underrepresented minority students, they found that:

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