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TERRY GROSS, host:

This is FRESH AIR. I'm Terry Gross.

It's great to think of disabled veterans, poor people, immigrants, even the homeless having the opportunity to earn a college degree, and a new breed of for-profit colleges has been offering that opportunity. But that opportunity can come with a life-changing downside.

My guest Daniel Golden won a George Polk and was a finalist for a Pulitzer Prize for a series of articles he co-wrote for Bloomberg News, investigating the $30 billion industry of for-profit colleges.

The investigation found that many of these colleges make their money through federal grants and loans given to the students to pay tuition. But while aggressively recruiting students who will bring those federal dollars, little consideration is given to whether those students are likely to graduate, get a good job and ever be able to pay back their student loans.

Many of the students can do none of the above and are unprepared for the debt they're stuck with. The House and Senate have been hearings on for-profit colleges, and the Government Accountability Office found that these colleges encouraged fraud and engaged in deceptive and questionable marketing practices.

My guest Daniel Golden now writes for Business Week. He won a Pulitzer Prize when he wrote for the Wall Street Journal.

Daniel Golden, welcome to FRESH AIR. How do most of the for-profit colleges that you're writing about compare to, say, vocational schools?

Mr. DANIEL GOLDEN (Writer, Business Week): Well, the for-profit sector originally was made up predominately of sort of trade and vocational schools that had subjects like truck driving or hairdressing.

But it's expanded a great deal in the past 10 years. So now, for-profit colleges offer programs in business and education and health administration and criminal justice, and they command a far greater proportion of the country's college students than they used to, when they were just vocational or trade schools.

GROSS: Most colleges and universities are either public, like state universities, or they're nonprofit. So these are for-profits that you're talking about. Explain where the profit is made.

Mr. GOLDEN: Well, the for-profit colleges make a profit because they charge quite a high tuition compared to, say, state universities. It's generally $15,000 a year and up, all the way to 35 or $40,000. And they derive that profit mostly not from students paying out of their own pocket, but from federal grants and loans to the students, federal financial aid.

Most of their students are eligible for this aid because they predominately serve low-income students. So close to 90 percent of the revenue of the for-profit sector actually comes from the federal government.

GROSS: So that sounds great. That sounds like a real public service, that the federal government is helping low-income students get this training. So the problem comes in, though, that a lot of the students will never be able to repay the loans.

Mr. GOLDEN: That's right. At for-profit colleges, you know, estimates of the graduation rates vary, but it seems probable that about just one-third of the students at the for-profit colleges graduate.

So most of them drop out, and because the tuitions are high and they've had to borrow to pay the tuition, they drop out. They're laden with debt, and often they can't find a good enough job to be able to pay that debt off.

And because these student loans can't be discharged even in bankruptcy, they follow these former students throughout life. The government will garnish their wages or their tax refunds, and it becomes harder for them to get housing and other benefits. So it's a - it can be a life-long drag on people who already are struggling.

GROSS: So this can be a real problem for the students who can't pay back their loans. But it's not a problem for the for-profit college. Why not?

Mr. GOLDEN: It's not a problem for the for-profit college because they get the money essentially paid up front from the government. They don't bear the risk if the student defaults on the loan.

In that sense, it's very akin to the subprime mortgage scandal, in which the lenders, you know, were selling the American dream - housing ownership in that case, education in this one - and saddling people with debts they couldn't repay. And yet the lenders also, in the subprime crisis, they didn't bear the brunt if the person couldn't pay their mortgage.

GROSS: Now, the for-profit college system has been offered as an example - a positive example, of how private enterprise can be very successful. On the other hand, it's been criticized for making its profit primarily on taxpayer money. Can you expand on both sides of that for us?

Mr. GOLDEN: Yeah. Well, I think one way to begin to think about that is to realize that the business model of for-profit colleges has not always been the one we're talking about now. You know, the leader in the industry is the Apollo Group's University of Phoenix.

And years ago, that had a very successful model that didn't depend so much on federal student aid. Essentially, what it would do is it would enroll middle managers who had some prior college experience and were stuck in their jobs because they didn't have a college degree. And they would complete their degree at Phoenix.

And it was - and in general, their tuition was paid by their employer, and it was quite successful. The courses were convenient. They took place at night. The people knew what college was like. There was a lot of group work that took advantage of their knowledge and understanding that they'd already gleaned about the subject, and it worked very well.

Now, the problem, though, for Phoenix was after it became publicly traded in the mid-'90s, it was in a market that couldn't grow that much. There's a limit to how many middle managers seeking degree completion there are.

And so to me, one of the seminal moments was in 2001 at the 80th birthday party of the University of Phoenix' founder, John Sperling, and kind of the patriarch of the industry, where there was a big celebration. There was mock money with his face on it given out to guests, and so on.

And there he proclaimed that Phoenix, which had just reached 100,000 in enrollment, that, you know, next stop, 500,000 students. And in the ensuing years, I think the Phoenix people realized that they couldn't get there with the model they had.

And so they started this two-year online program called Axia College, which just skyrocketed to more than 200,000 students. And virtually all of them were funded by federal aid. They were low-income students with no prior college experience. And the Phoenix model that had worked so well for a different population didn't work as well for these people.

And the result was, you know, Phoenix's graduation rate went down. Its default rate went up, and it was imitated throughout the industry because other for-profit colleges - many of whom were run by former Phoenix executives - recognized that they could tap this big bucket of federal funding.

And so you've got this situation where the for-profit industry says, you know, we serve low-income people. We're filling a niche. They're underserved by traditional colleges. But, of course, the criticism is that they serve them at a high tuition, and these students frequently don't graduate and aren't able to repay the loans they take out.

GROSS: Are a lot of these colleges the equivalent of chains?

Mr. GOLDEN: Yeah. They are, in a way, the equivalent of chains. I mean, if you think of the University of Phoenix, for example, it has its online component, which, you know, most of its students now go to. It has close to 500,000 students.

And then it has buildings around the country, but no matter where you go to the University of Phoenix, essentially, you take the same course. You know, Economics I is the same all around the University of Phoenix.

It's not like, you know, going to Harvard or Yale, where the professor -you have a tenured professor who's designed a unique course with distinctive requirements and textbooks. At one of these - at any University of Phoenix campus, the curriculum's been designed centrally. So it's the same curriculum, the same text, and so on.

And the teacher is usually a part-timer who's more of a facilitator. They, you know, they grade the papers and so on, but they don't generally make up the assignments or pick the textbooks. So it is kind of a mass-produced education, and that's one way of saving costs. I think the colleges would also say it also assures a certain degree of quality.

GROSS: If the for-profit colleges are making money through federal loans to students, they're looking for students who can qualify for federal loans. So who is the target population?

Mr. GOLDEN: Well, the target population tends to be predominately low-income, and often minorities. In my reporting, I visited homeless shelters where for-profit colleges were seeking students.

They've also looked for students very aggressively among active-duty military, whose tuition is paid by the Defense Department, and war veterans, whose tuition is paid by the GI Bill. And that's been particularly true since the new, more generous GI bill took effect a couple years ago.

GROSS: Okay. So recruiters for for-profit colleges go to homeless shelters to recruit. Can homeless people easily get loans from the federal government to go to school? I mean, in a lot of ways, you'd hope that they would. I mean, if anybody needs help, it's homeless people.

You know, if you can get an education, think of how great that would be. So on the one hand, it sounds great that they're going to homeless shelters trying to help people get an education. What's the downside?

Mr. GOLDEN: Well, the downside again is that the tuition is quite high, so that the government can perhaps give them a Pell Grant, which is five or $6,000 straight grant, but then there's loans on top of that from the government.

And many of these homeless people have other problems, such as alcoholism, mental illness. And so they may not very well-equipped to actually graduate from a college and get a job so that they end up just in a worse financial plight because they can't afford to repay the loans.

I should also, perhaps, mention that a lot of the for-profit college programs tend to be online rather than in person. And for people who are not that well-prepared academically and who are low-income, it may be harder to go to school online, in a way, because the - they may need tutoring and help. And that can often be better done in an in-person setting, rather than just having a sort of tutor over the computer.

GROSS: My guest is Daniel Golden. He won a George Polk Award for the series of articles he co-wrote for Bloomberg News, investigating for-profit colleges.

We'll talk more after a break. This is FRESH AIR.

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GROSS: My guest is Daniel Golden, who now writes for Business Week. We're talking about the series of articles he co-wrote for Bloomberg News investigating how for-profit colleges often make misleading claims and promises to recruit financially vulnerable students who qualify for federal grants or loans. The colleges make big profits on those federal dollars.

So veterans, through the GI Bill, can get grants from the federal government to go to college, including private colleges. So have for-profit colleges been very active in recruiting vets?

Mr. GOLDEN: Yes. For-profit colleges are very active in recruiting veterans. There's a lot of federal money available under the GI Bill for veterans. It's increased greatly since the passage of the post-9/11 GI Bill for veterans returning from Iraq and Afghanistan.

And so you'll find for-profit colleges, they show up at conventions of veterans groups. They have separate recruiting divisions devoted to active-duty military and veterans. They advertise in military and veteran-related publications. And they've been very successful in signing up veterans.

I think the University of Phoenix has more veterans than any other college in the country, and there's many other for-profit colleges in the top 10 among recruiting of students funded by the GI Bill.

And it serves two purposes for the colleges. Not only does it provide them with the GI Bill funding, but it also helps them get around an obscure federal law known as the 90/10 rule, which says that colleges can only get 90 percent of their revenue or less from federal financial aid.

And many of the for-profit colleges, because they have so many low-income students who qualify for aid, are bumping right up against this 90 percent. And they're concerned about exceeding it, which could jeopardize their access to aid.

And it turns out that the GI Bill funds, as well as the tuition assistance for active-duty service members, under the law it counts as private money. It counts toward that 10 percent. So for every veteran or active-duty service member that they enroll who's paid for by Defense Department tuition assistance or Veterans Administration money under the GI Bill, for each one of those people that they enroll as students, it helps cushion them against the 90/10 rule. And so they're - that gives them even increased motivation to pursue service members and veterans.

GROSS: Tell us one of the stories you uncovered during your reporting of how for-profit colleges recruit veterans.

Mr. GOLDEN: Well, I did a story profiling an Iraq veteran named Chris Pansky(ph), and it was a sad story. He had post-traumatic stress disorder pretty severely, and he had enrolled at an institute owned by Education Management, which is - its major investor is - it's biggest investor is Goldman Sachs, and it runs a lot of for-profit colleges and these art institutes.

And at least by his account, you know, the college kind of rushed him into its student body, even though he kind of warned he would need, you know, special help and special attention because of his disability.

And when I went to see him at his house in southern Virginia, he had -right behind his computer where he would take his online classes, there were holes in the wall that he had punched out of frustration with his courses.

And he had - I forget the exact numbers, but he had failed quite a few of his classes, and he had, you know, begged for in-person tutoring -which the college didn't provide because it was an online program - and for simplified homework assignments. They said they wouldn't do that kind of accommodation. And so he was really feeling stressed, isolated and overwhelmed.

And the broader point was that a lot of veterans do come back with PTSD, and for them, it may look simpler in the short term to just stay home in their living room or their basement and take classes on the computer from a for-profit college.

But, you know, sooner or later, they're going to need to reintegrate into society, and for that, going to a traditional classroom with classmates and a professor right there is probably more helpful.

And so I think that, you know, the GI Bill - which was, of course, funding Chris' education. I mean, it was designed to help returning veterans reintegrate into society and rise in society. And so when I visited Chris, it made me wonder if, you know, the best use of the money was really to pay for somebody like him to sit alone in his house and take these online classes.

GROSS: So correct me if I'm wrong, but the way you're describing this, it sounds like recruiters for some for-profit colleges intentionally recruit many people who are very unlikely to succeed. They're almost more likely to fail, both at school and financially. And they're almost being set up to owe money.

Mr. GOLDEN: Well, that's true. And there's another component to this, which is until recently, most of these schools were paying their recruiters based on how many people they would sign up. It's known as incentive compensation. So the recruiters had, you know, a motivation to sign up anybody they could, and that's what they were doing.

Incentive compensation in college recruiting was actually banned in 1992, but in 2002, the Bush administration put through a series of loopholes, and the companies used those loopholes to get around the ban and pay their recruiters just per head of students enrolled.

Now since this has become an issue, in recent months, the Obama administration has sought to rein this in and has essentially gotten rid of those loopholes. And now incentive compensation is not a practice that for-profit colleges will be able to use.

GROSS: The GAO, the General Accountability Office, found that some recruiters from for-profit colleges exaggerated applicants' potential salaries after graduation, and they failed to provide clear information about the colleges' program duration, the colleges' costs, the actual graduation rate.

So did you find the same thing in your investigation?

Mr. GOLDEN: Yes. You know, we found a lot of the same problems with the recruiters for for-profit colleges.

GROSS: So how would you compare the tuition at for-profits with, say, community colleges?

Mr. GOLDEN: Well, the tuition at for-profit colleges is far higher than at community colleges. You know, tuition at for-profit colleges can range from, you know, $15,000 a year, up to $35,000 or $40,000. And community colleges are generally, you know, up to $5,000 and probably no higher than that.

And the result is that a student who goes to a community college can cover that cost with a Pell Grant, primarily, and they don't need to take out loans - whereas to go to for-profit colleges, even if they get the Pell Grant, they also need government loans on top of that, and in some cases private loans, which are at higher interest rates.

GROSS: So are nonprofits having to compete with for-profits, or are they dealing with different populations of students?

Mr. GOLDEN: I think in general, the for-profit colleges are competing most directly with community colleges - which, of course, are two-year public colleges - because the community colleges are kind of the traditional system's way of serving low-income students who have a high school degree but don't necessarily have strong test scores or strong academic preparation.

And the community colleges and the for-profit colleges are, in a way, going head-to-head for students.

GROSS: But I thought the community colleges were pretty overcrowded, that they're already - a lot of them are so full, there's such competition to get in, that the overflow is going to the for-profits.

Mr. GOLDEN: That's right. A lot of the community colleges are very crowded. And, you know, the classes they have available may be at an inconvenient time and so on. And, you know, the for-profit colleges, one of the big, you know, arguments they make on their behalf is that they're customer friendly, they're flexible.

If you sign up online, you can start a class right away. You don't have to, you know, wait months for the semester to begin. If you want to - if you go to an actual building for your class, you know, the time will be convenient for you.

And so the for-profit colleges say that they're more convenient, more flexible, more customer-friendly than community colleges, which do - are often overcrowded, and that's one reason the for-profit colleges are growing so quickly in their student body.

GROSS: Daniel Golden will be back in the second half of the show. He won a George Polk Award for co-writing a series of articles on for-profit colleges published in Bloomberg News. He now writes for Business Week.

I'm Terry Gross, and this is FRESH AIR.

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GROSS: This is FRESH AIR. I'm Terry Gross, back with Daniel Golden. We're talking about the series of articles he co-wrote for Bloomberg News investigating how for-profit colleges often make misleading claims and promises to recruit financially vulnerable students who qualify for federal grants or loans. The colleges make big profits on those federal dollars. Some stockholders and executives have done quite well, but a majority of the students don't graduate, don't get the jobs they were expecting and are left with an unmanageable debt.

One of the really interesting twists in the story of for-profit colleges is that The Washington Post, which like all newspapers is - in a new world where it's harder to turn a profit than it used to be for newspapers - The Washington Post bought Kaplan, which is one of the largest for-profit college companies. Would you describe the company Kaplan?

Mr. GOLDEN: Yeah. When the Post bought Kaplan, it was a test-preparation company, giving, you know, helping students do well on the SATs and in other standardized tests. But it branched into the college business, which has become the dominant part of Kaplan, and almost, I think, around a third of The Washington Post company's entire revenues.

First, Kaplan bought a string of little for-profit colleges, and then it's opened its own online university called Kaplan University. And together, they have something like 100,000 students. And that's, as I said, the backbone of, you know, The Washington Post's finances at this point.

GROSS: Has that put the Post in an awkward position? The Post reported on it in an article not long ago.

Mr. GOLDEN: I think it has. I mean, that was a very good piece that they did, kind of reconstructing the Post's, you know, movement into Kaplan and how they viewed it now. Before that, they waited a long time before doing that kind of in-depth piece, and I think it's, you know, it's naturally awkward when there's corporate interests involved and yet the, you know, the newsroom wants to do the best possible job.

GROSS: So, how has The Washington Post dealt with the fact the Obama administration is trying to regulate for-profit colleges? And since the Washington Post owns a for-profit college chain, has the Post been trying to get involved on one side or another in that argument? And is it affecting the paper's coverage of that issue?

Mr. GOLDEN: Well, I don't work there, so I can't say if it's affecting the coverage. But certainly, The Washington Post has been very upfront in opposing - as a company - very upfront in opposing the Obama administration's regulations. There's one particularly controversial regulation known as gainful employment, where the proposal would essentially tie the college's access to government financial aid to the student ability at the other end to pay back their loans and earn a decent income. And Kaplan's very concerned about this. Its loan repayment rate is not very strong, and the Post has, you know, lobbied strenuously against this regulation. And Donald Graham has been, you know, personally out front leading the charge.

GROSS: So let me just see if I understand the issue correctly. The Obama administration wants a regulation that would say, basically, if you're a for-profit college and, you know, a high percentage of your students are unable to pay back their loans, the federal government is not going to allow as many students with federal loans to be in your school.

Mr. GOLDEN: Well, potentially, the ultimate penalty would be that the Obama administration would cut off a college's eligibility for financial aid entirely so they wouldn't receive those funds. I believe when the regulation was first announced, the government estimated that something like five percent of for-profit college programs would be cut off from aid, you know, when this regulation would take effect.

GROSS: One of the things that sets apart for-profit colleges is that they have stockholders. They're public, and the stockholders want profits like in all corporations that are public. So do you think that the demand of stockholders for increasing profits puts pressure on for-profit colleges to not only recruit a lot of students, but to keep the tuition high?

Mr. GOLDEN: I don't think there's any question that when a for-profit college becomes publicly traded, there's extra pressure to satisfy their investors. And that usually translates into efforts to boost enrollment. So I'd say a lot of these sort of practice incentive compensation in the last few years, paying recruiters based on how many students they enroll, and some of the abuses where maybe they were signing up students who needed more academic training or weren't likely to succeed in college, I think a lot of that can probably be attributed to the pressure to satisfy Wall Street.

GROSS: You know, the students who default on their loans and don't graduate, nobody forced them to go to college. Nobody forced them to take out a loan. How much responsibility do they bear for the predicament that they're in? Your article's very, you know, critical of the for-profit colleges, but what about the students?

Mr. GOLDEN: I mean, that's a difficult question, and I guess it depends partly to whether they were given full and accurate information by the recruiters and, you know, how much they knew they were getting into. And, you know, the evidence seems to suggest that recruiters who were paid on the basis of how many students they would sign-up, you know, did not necessarily provide a balanced picture of the pluses and minuses, and didn't also necessarily give people enough time to make a thorough assessment for themselves.

And, you know, often, you're dealing with people whose family do not include, you know, college graduates and do not have a lot of sophistication about the system and may just have seen, you know, an ad on a website or a late-night television program, called up on a whim and, you know, got themselves signed up in a college and on the hook for federal student loans almost before they knew what happened. And that doesn't absolve them totally of responsibility, but it does - you know, it suggests that the colleges have a responsibility, too.

GROSS: So would you give any suggestions to people who are or who know somebody who will be trying to enroll in a for-profit college, things to watch out for?

Mr. GOLDEN: Well, I would look closely at the for-profit colleges, you know, whatever statistics are available about it: the graduation rate, the loan repayment rate, the tuition rate. If you're looking for a program that has a sort of clinical component, such as nursing, make sure that the college offers that program and not just an online course, that you get the they arrange for the actual clinical experience that you may need. And check the accreditation of the for-profit college.

Often, for-profit colleges may have been accreditation that is kind of of a second-tier compared to the accreditation of a traditional college, so that if you go to the for-profit college for a while and you want to transfer to a traditional college, that college may not accept your credits. And so you'd have to start all over.

So make sure your course credits can transfer. Make sure there's the needed clinical experience, and make sure that there's a decent chance of being able to repay whatever loans you get.

GROSS: How can you tell if a college has second-tier accreditation?

Mr. GOLDEN: Well, the highest level of accreditation is known as regional accreditation, and there's six regional accreditors, and each of them has a website and lists the colleges that they do accredit. Now one thing that's interesting, there was a pattern over the last decade was that for-profit colleges that had a kind of accreditation known as national accreditation, which isn't sort of considered quite as desirable in traditional circles.

They were buying small, struggling religious colleges or nonprofit colleges that had very few students and were losing money, but had the coveted regional accreditation. And because the accreditation essentially went with the institution rather than changing with the owner, the colleges were essentially buying accreditation, and so a number of for-profit colleges now to have regional accreditation by virtue of those acquisitions.

GROSS: But that doesn't make the quality of the education you're going to get there any better. Is that what you're saying?

Mr. GOLDEN: Yeah. And what they did was that they acquired the college, but then they would totally transform it. So they would acquire the accreditation, but the college, then, they would turn into an online, standard for-profit college, offering the same programs as many of the others: business, education, criminal justice. So the traditional college often only existed in name, and often the name was changed, too. And essentially, the accreditation was passed on, and the, you know, only the shell of the old college that had gained that accreditation remained. So the accreditation, in a sense, said very little about the actual quality of the new for-profit college. There has been some tightening of the, you know, a crackdown by the accreditation agencies after this encountered a lot of criticism.

GROSS: My guest is Daniel Golden. He won a George Polk Award for the series of articles he co-wrote for Bloomberg News, investigating for-profit colleges.

We'll talk more after a break.

This is FRESH AIR.

(Soundbite of music)

GROSS: My guest is Daniel Golden. We're talking about the series of articles he co-wrote for Bloomberg News, investigating how for-profit colleges often use misleading claims and promises to recruit financially vulnerable students who qualify for federal grants or loans. The colleges make big profits on those federal dollars, but many students don't graduate and are left with a debt they cannot manage.

So what's going on in Congress now in terms of investigating for-profit colleges and taking sides for and against them?

Mr. GOLDEN: Well, the Senate Education Committee has been holding, for close to a year, series of hearings on various aspects of for-profit colleges and some of the alleged abuses. And then there was a lot of -has been a lot of battling over this particular regulation I mentioned before. There was an effort in Congress by supporters of for-profit colleges to essentially defund that rule that could have cut off some of the access to financial aid for the schools. That didn't pass - the effort to defund it and so I think the regulation, it looks as if it will be taking effect at some point.

And - but the for-profit colleges have a lot of allies in Congress. I mean, it's another parallel, in a way, to the subprime in a sense that they're a little bit like Fannie Mae and Freddie Mac, where the for-profit colleges, because they're Wall Street companies, they have a lot of sympathizers among Republican supporters of free enterprise and big business. And because they serve low-income families, they have quite a few allies among, you know, Democrats who know that a lot of their constituents go there.

So they have powerful political presence. And in addition, they have spent a lot of money and hired a lot of Washington insiders to lobby and, you know, they're not to be under estimated as a political force.

GROSS: So you shared a George Polk Award for reporting for your Bloomberg News story on for-profit colleges. Now in 2004, you won a Pulitzer Prize for your investigative stories on another end of education: elite universities, like Yale and Harvard. You ended up writing a book called "Price of Admission: How America's Ruling Class Buys its Way into Elite Colleges - and Who Gets Left Outside the Gates."

So it's interesting that you've written about, you know, the very poor and the very rich going to college. What were some of the issues that you raised in your examination of elite universities?

Mr. GOLDEN: Well, what I documented in my series of stories for The Wall Street Journal and then in my book was that elite universities and the Ivy Leagues and also some elite state universities and others were essentially lowering their admission standards to admit children of alumni, of donors and others sort of wealthier or well-connected people. Some people refer to that as white affirmative action.

I have documented in the context of efforts at the time to, you know, eliminate traditional affirmative action for minority students. And I point out that more students benefited from affirmative action for the rich and well-connected.

And it's funny, you know, since I began writing about for-profit colleges, some people have said to me, well, you know, before you were critical of the, you know, traditional public and nonprofit schools. Now you're attacking the for-profit colleges. You know, don't you like anybody?

And, you know, I gave that some thought, and I realized that there was kind of a common theme in these stories in that while the elite colleges were, you know, going after - you know, lowering their standards to go after wealthy students and the for-profit colleges were pursuing the neediest students, I mean, the motive was essentially the same, which was, you know, financial gain - for the endowments in the first case, and from the financial aid from the government in the second case.

And it just kind of - I think the lesson to be drawn from my coverage over these many years now is that, you know, education is obviously a business, and there's a place for money in it. But when, you know, financial considerations drive the recruiting and the admission of students, kind of to the detriment of other factors, there's going to be problems in the long run.

GROSS: You know, my takeout from some of your reporting is that something that sounds so good, you know, government giving loans to poor students to go to college, to improve themselves, and then the colleges being there, willing to take students who don't have sterling academic records, who don't have money, willing to take them in and help them get a college degree, that sounds so good. But the results are often not always - but often actually damaging to the students while the colleges themselves make profits.

Mr. GOLDEN: Yeah, that's part of the heartache because if the - ideally this could be a route to upward mobility and the American dream and in that sense it has the same pathos as it did for many people who took out subprime mortgages in the, you know, with the goal of home ownership and were unable to attain that and ended up burdened with debt instead. So, yes, theres great promise to it.

And to be fair to the for-profit colleges, I don't think any type of system has really figured out how to solve the problem of taking academically poorly prepared low-income students and making sure that they attain great college success.

I mean graduation rates are not very strong at community colleges either. So I mean it's a challenge that, you know, perhaps the for-profit colleges haven't figured out yet and with, you know, great damage to some individual lives, but it's also a challenge that our entire society still has to solve.

GROSS: So your stories have focused on students at for-profit colleges who have gotten federal loans that they couldn't repay because they never got the jobs that they were led to believe theyd be able to get, they maybe never even graduated out of a college program. Did you also look at students who got the federal loans, went to the for-profit college, graduated, got a job, and their lives actually did improve and they were able to pay off their debts?

Mr. GOLDEN: Yeah. Certainly. I mean, there are any number of satisfied customers and there are people for whom these colleges have been a leg up to a better life. I mean, you know, there's no question of that. I mean the question is sort of how widespread is the harm versus how widespread is the benefit.

And, you know, these colleges will say well, look, we have huge numbers of students. I mean the University of Phoenix has, you know, close to 500,000 students and there's, you know, more than a 100,000 at several other companies. So there's no doubt that, you know, many of them are, you know, benefit from this and it works out for them.

I mean but you just had to overall also look at the percentages that show that startlingly low rates of being able to repay loans, high rates of defaulting on loans, low graduation rates, and also just the anecdotal evidence pouring in from so many people, you know, complaining about having been misled. And there's a large number of court cases and so on with some of these similar allegations and the GAO Report. And you put it all together and then the conclusion has to be that, you know, these colleges provide a definite service for some of their students, but many others, you know, come out, you know, either the same or worse.

GROSS: Well, Daniel Golden, thank you so much for talking with us.

Mr. GOLDEN: Thank you. It's been my pleasure.

GROSS: Daniel Golden won a George Polk Award and was a Pulitzer Prize finalist for the series of articles he co-wrote about for-profit colleges which was published in Bloomberg News. He now writes for BusinessWeek.

You'll find links to his series on for-profit colleges and his series on elite colleges on our website, freshair.npr.org.

Coming up, Milo Miles reviews a new legit Iggy Pop box-set with bootleg live recordings. This is FRESH AIR.

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