Although many pursue online education because of its convenience and flexibility, there are quite a few issues in the for-profit education industry. To begin, tuition at for-profit universities is approximately 5-6 times more expensive than that of community colleges, and as much as twice as expensive as that of an in-state public university. For example, students pursuing an Associates Degree at a local community college can pay anywhere from $26-$130 per credit. In comparison, tuition at for-profit universities offering a similar Associates Degree can range from approximately $260 to $540 per credit. Most students cannot afford to pay tuition, so they apply for grants and take out various federal and private student loans to cover the costs. In many cases, if the students make it to graduation, they leave with massive debt loads. According to College Board, the average student debt upon graduation from 4-year universities is as follows:
Public - $7,960
Private - $17,040
For-profit - $31,190
The Department of Education recently released data on student loan repayment rates at colleges and universities in the United States in 2009. The data shows repayment rates were 54% at public colleges and universities, 56% percent at private nonprofit institutions, and 36% at for-profit institutions. "I think it's notable that the for-profits are the only type of school where the majority of the students are unable to repay their loans," said Debbie Frankle Cochrane, program director at the Institute for College Access and Success. Students who default on loans can have their wages garnished and tax return refunds held by the government and make them ineligible for federal employment and benefits. In many cases, filing for bankruptcy won't provide any protection. If debt-burdened students are forced to default on federally guaranteed student loans, taxpayers wind up picking up the tab.
Another issue with online education is its value in the real world. Although students put in the time and money to complete their studies, many companies in the real world do not see a degree from an online university as equivalent to a degree from a traditional institution. First of all, as previously mentioned, classes typically last for only five weeks. During this short period, how much material can actually be covered in a particular subject area and is this adequate time for students to gain enough valuable knowledge for real world application? Secondly, how much can students gain from virtual communication as opposed to daily face to face communication? Also, because assignments, videos, and presentations are all posted in the online classroom ahead of time, instructors aren't required to log in at a set time and day either. Instructors do make themselves available during the week via e-mail, chat, and phone office hours (a one hour block once or twice a week). However, because of this limited availability, it can be difficult to communicate one-on-one with an instructor. Additionally, many employers find networking and face to face interaction a very valuable part of the higher education experience. If graduates of for-profits cannot land meaningful employment, then it's nearly impossible to repay the student loans they've taken out, leading to the aforementioned low repayment rate and defaults.
Another controversial topic regarding for-profit education is the admissions process. Each student that enrolls is viewed as a "revenue stream" at for-profit universities. Because of expensive tuition rates, students are forced to apply for grants and take out student loans. According to the Department of Education, 75% of for-profit universities revenue come from federal loans and grants. To break this down further, for-profits enroll approximately 10% of the nation's students, but receive almost 25% of the $24 billion the government provides in Pell grants and Stafford loans. The importance of federal money to for-profits leads to the pressuring of enrollment advisers to sell as many enrollments as possible. In order to maximize the number of enrollments, enrollment advisers dial the phone numbers in their databases several times a day, every day. In fact, advisers are told in many cases to make at least 100-150 outbound dials per day and average four hours of talk time. In reality, it's a numbers game because more dials and talk time leads to increased odds of signing up students. When prospective students are reached, advisers ask questions about educational goals and motivating factors in going back to school. One former enrollment adviser, who chose to remain anonymous, said of the pressure, "I didn't realize just how many students we were expected to recruit. They used to tell us, ‘Dig deep. Get to their pain. Get to what's bothering them. That way you can convince them that a college degree is going to solve all their problems.'" Calls are randomly selected by quality assurance departments within the for-profits to be monitored. If a prospective student decides not to fill out an application, supervisors ask why the enrollment advisers were unable to close the deal. If an enrollment adviser does not enroll a certain number of students per month, then he/she faces the prospect of employment termination.
Enrollment advisers are encouraged by superiors to undertake aggressive recruiting tactics to secure more enrollments. During my time as an enrollment adviser, my co-workers and I were constantly reminded to "Dial, dial, dial!" and "Keep talking and asking questions until they say yes!" I was constantly pressured by supervisors to do whatever it took to get a prospective student to fill out an application. If the prospective student didn't have the money to pay the $50 application fee or wanted it waived, I was told to say, "Sure! We can do that. Just fill out the application by tomorrow." In truth, the prospective student wouldn't have to pay the application fee up front, but it would be incorporated into tuition instead, so the fee would not actually be waived.
Another time, a co-worker contacted a prospective student about enrolling at our university. The student said that she would submit the application, but would only do so if we promised her a free laptop, because she was offered one by a for-profit competitor. My co-worker told the student that he'd call her back, and asked our supervisor what to do, only to be told, "Go ahead and promise the free laptop. We can order and ship the laptop ASAP, then add the cost of the laptop to her tuition.bill later so she won't have a clue" Afterward, my co-worker called the student again, and promised that the laptop would arrive in a matter of days if she submitted the application by the next day. She did submit the application by the deadline, and received her "free" laptop as promised.
One of my least pleasant experiences as an enrollment adviser involved a prospect and making promises about our degree programs and their potential, despite knowing otherwise. The first student I enrolled was a young man who was interested in law enforcement. I spoke with him at length about his goals and why he wanted to go back to school. He had recently become a father, and wanted to provide for his family and set a good example for his daughter. He always had this dream of getting into law enforcement, so I suggested our Associate's degree in Criminal Justice. After describing the program and its features, he then asked me if getting this degree would guarantee him a job in law enforcement. Deep down, I knew that there was no such thing as a guarantee. However, in a meeting that took place earlier that day, my supervisor reminded my co-workers and I that our numbers were down that month, and that we needed to "step up" to the plate. "Stepping up" was my supervisor's way of saying "Do whatever you've got to do to hit your numbers." The rest of my conversation with the student went as follows:
Me: Yes, earning this degree will guarantee you a job in law enforcement.
Student: But what about the fact that classes are all online? Will the lack of face to face interaction and hands on training hurt my chances?
Me: Absolutely not. You have to get the classroom stuff out of the way first.. Most of what you'll need to know, you'll learn on the job anyway.
Student: Okay, can you guarantee that the credits I earn here are transferable to another school?
Me: Absolutely.
Student: Okay, sign me up.
The truth was, I didn't know if anything I said was accurate. All I knew was that I needed to enroll a few more students or I would be called into a one-on-one meeting with my supervisor and face the possibility of losing my job.
Having access to financial aid is a significant factor for prospective students when choosing a school. If students had questions about financial aid, we were instructed not to transfer them to our financial aid department. The only time we could transfer a student to speak with a financial aid advisor was after we received the completed application, the application fee, and the student was admitted. There would be times when the student wanted to find out beforehand if he/she would qualify for a Pell Grant or a Stafford Loan, however, we were in no position to make that determination. But if push came to shove, we basically were told by our superiors to say, "Well, I'm not supposed to tell you in advance, but I'm pretty sure you'll qualify." Anything to get the student to enroll I suppose. Aggressive and deceptive recruiting tactics such as these contributed to my departure from this industry.
Go to Part 3 - How Did Online Education Become What it is Today
Go to Part 5 - The Future of Online Education
