For-Profit Schools

For-profit Schools have made the news the last few days as rumors that U.S. Education Deputy Undersecretary Robert Shireman is planning to resign have surfaced. Shireman has been considered a leader among those seeking tougher regulations of for-profit schools—regulations that could potentially reduce their Federal financial aid, which had increased six-fold from 2000 to 2009.

What are the for-profit companies for which Shireman has wanted to see increased regulation? They include Corinthian Colleges, Apollo Group Inc. (which owns University of Phoenix), Career Education Corp., DeVry Inc., and ITT Educational Series Inc. Upon news of his leaving, stocks rose significantly Monday for all of these companies. On Tuesday, with breaking news that Shireman would continue his relationship with the US DOE in an advisory capacity, the stocks all slid down, some more than others.

One of the main criticisms of for-profit schools is that they serve a predominantly low-income population of students who can end up with large, and sometimes unpayable, debt. Shireman had proposed that for-profit schools be required to demonstrate that graduates of the for-profit programs would have incomes commensurate with paying back their student loans.

Many of the schools that offer online technical or vocational training are for-profit schools. Certain of them have been known to have issues with proper accreditation as well as the funding issues, but careful vetting can help you sort these out. You can find useful information for making an assessment in our articles: “Distance Learning” and “Online Technical Schools.”

Technical and vocational education is also offered through schools that are not-for-profit, like high schools with technical centers, community colleges, and state-run colleges, universities, and technical colleges.

Sources

www.businessweek.com/news/2010-05-17/colleges-surge-as-government-official-is-said-to-quit-update1-.html

www.reuters.com/article/idUSSGE64H0JO20100518