For-Profit Colleges Try To Polish Their Image Regulatory pressures are pushing for-profit schools to retool their business model. Schools are bracing for slower growth, and are focusing on retaining students more likely to succeed and repay their loans.

For-Profit Colleges Try To Polish Their Image

For-Profit Colleges Try To Polish Their Image

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Regulatory pressures are pushing for-profit schools to retool their business model. Schools are bracing for slower growth, and are focusing on retaining students more likely to succeed and repay their loans.


Let's turn now to a crackdown here in the U.S. on for-profit colleges and universities. New federal rules will pressure them to make sure students graduate, get jobs and repay their student loans.

The industry has tried hard to fight those regulations, but as NPR's Larry Abramson reports, there are also signs that the industry is trying to improve its image and students' chances for success.

LARRY ABRAMSON: At ITT Technical Institute in Chantilly, Virginia, students pay around $16,000 a year for training in fields like computer technology, electronics, and criminal justice. Why do people pay so much money for classes you could take a lot less at a community college? Spokeswoman Deborah Brent says students here get a smooth path into the job market thanks to career counseling and good relations with government agencies just up the road.

Ms. DEBORAH BRENT (ITT Technical Institute): The FBI came in. The CIA came in. They looked at our students, but it really helped that they were here and, you know, were investing in their education to have the right fit.

ABRAMSON: But many students say when they got out of ITT Tech, they got nothing. Jerry Rohde studied computers at the ITT Tech school in Mount Prospect, Illinois.

Mr. JERRY ROHDE (ITT Tech Graduate): Well, they said that they had, like, the state-of-the-art career services that is always there for you 24/7, and they don't do anything.

ABRAMSON: Rohde says the school just sent him want ads from Craigslist. When he complained, they threw up their hands.

Mr. ROHDE: They just told me that they don't have any leads right now and they just blame it on the economy.

ABRAMSON: So Jerry Rohde is working at a mortgage company. It's the only way he can make the payments on the $40,000 loan he took out to pay his tuition bills. Industry critics say the for-profit business model is a big part of the problem. Schools rely on constant growth and enrollment to satisfy investors, so they end up attracting students who aren't ready to study or aren't financially savvy enough to repay huge loans.

Margaret Reiter prosecuted these firms repeatedly during her 20 years in the California attorney general's office.

Ms. MARGARET REITER (Former Prosecutor, California Attorney General): These are businesses, private businesses, that are relying 80 to 90 percent on government money. And so they will do what they have to do to keep the government money.

ABRAMSON: Government money in the form of loans that students take out and often cannot repay. For years the for-profit industry deflected these criticisms, but a series of embarrassing congressional hearing and an aggressive campaign by the Obama administration may be making a difference.

Mr. JARREL PRICE (Vice President, Height Analytics): I think the landscape has changed.

ABRAMSON: Jarrel Price is vice president for Height Analytics, an investment firm. He notes that schools are tightening their admission criteria. Some are now refusing to take students without a high school diploma. Others are spending money on programs meant to weed out unsuccessful students.

Mr. PRICE: It's becoming increasingly important for the companies to focus on retention of their students.

ABRAMSON: That means doing more than just courting any student who can pay the tab - a tactic that has made for-profit schools infamous. The University of Phoenix, for-profit's biggest player, has introduced a mandatory orientation program for students new to college. University president Bill Pepicello says 80 percent of students go on to take courses after they take the orientation.

Mr. BILL PEPICELLO (President, University of Phoenix): Which means, obviously, that 20 percent are self-selecting out and do not come into a degree-granting program.

ABRAMSON: The University of Phoenix has told investors that program and other steps have led to a 10 percent drop in new enrollments this year. Pepicello describes this as nothing more than a good-faith effort to help students succeed.

But for-profit schools have another motive: survival. If they don't shed students likely to default on loans, new regulations being phased in by the federal government will cut off their federal funds. Again, Jarrel Price of Height Analytics.

Mr. PRICE: If schools are willing to spend money and invest in particularly year one retention, these are metrics that they can affect.

ABRAMSON: One thing remains unclear: what will happen to students who can't get into for-profit schools that once took all comers? If they turn to community colleges, they may find waiting lists at schools hit by budget cuts. So the effort to crack down on schools could leave a lot of struggling students in the lurch.

Larry Abramson, NPR News.

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MONTAGNE: Later today on ALL THINGS CONSIDERED, we'll examine why many students are willing to take on huge debts to attend for-profit schools. The simple answer is jobs.

And it's MORNING EDITION from NPR News.

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