Blogs:

For profit colleges in US focus on and target the minority students and students from the low income group. According to a report, these colleges promise access to American dream but end up delivering a crippling debt.

More than fifty percent of students in for-profit colleges consist of low income students and at least 37% of minorities according to the Federal Data cited by the Education Trust, Washington.

Funded by Lumina Foundation for Education and partly funded by Bill Gates and Melinda Gates Foundation, the nonprofit advocacy and research group, this research pointed out that non-profit colleges like Apollo Group Inc. have higher student debt loads and higher rates of dropout as compared to traditional universities.

Recent regulations by Obama administration on restricting taxpayer money flow to for profit colleges led to this follow up report. According to the administration’s proposal of regulations, at least ninety percent of for profit college revenue comes from federal grants. These colleges received about $26.5 in student aid.

The expensive degree programs offered by the for-profit colleges are not good enough to lead students to high paying careers. This results in a scenario where vulnerable students are saddled with heavy debts, says the report.

The present paper will be distributed by the Education Trust to Congress members. According to the group’s president Kati Haycock, they will be supporting proponents of the regulation. For profit schools that come under the axe will be those with higher rate of bad student debt repayment.

Responding to the report, Phoenix based Apollo spokesman Ryan Rauzon said that data points in the report is no doubt interesting. However, the report does not include the fact that as compared to what they pay for traditional schools without a tax-free status and without benefit of direct state subsidies, taxpayers pay significantly lesser for proprietary institutions.

The academic year 2008-09 saw for-profit colleges receiving $4.3 billion in Federal Pell grants towards helping students from the low income bracket pay for their education. As compared to 65% in private non-profit universities and 55% at the public colleges, graduation rate in for-profit colleges for first time, full time students was 22%, according to the Education Trust report.

Education Trust also said that Apollo’s University of Phoenix showed a nine percent graduation rate. This is the largest for-profit college with regard to enrolment. In an email, Rauzon opined that it is not reasonable to expect students from non-traditional colleges to complete their higher education within a time frame that is pre-determined and within the arbitrary of the government.

Their professional obligations and family obligations make this time frame longer, he said. 
According to a report from the company, within six years, University of Phoenix completion rate for bachelor’s degree is 36%. As compared to the public institutions where the median student debt level stands at $7960, it is $31,190 at for profit colleges and $17,040 at private non-profit colleges, says the Education Trust.

Higher education work of the Education Trust is being funded by Lumina fund based in Indianapolis and Gates Foundation based in Seattle.