CRL Maps For-Profit College Harms and Demographic Impacts by State

Interactive Map and Fact Sheets Break Down Numbers

DURHAM, N.C. – The Center for Responsible Lending (CRL) released, “The State of For-Profit Colleges” today, featuring an interactive map that enumerates for-profit colleges by state and fact sheets that indicate, in most states, the disproportionate harms on low-income families, communities of color and women.

With certain exceptions, the scroll-over map shows for each state:

• Total undergraduate enrollment at all higher education institutions,
• Total undergraduate enrollment at all for-profit colleges, and
• The three largest for-profit colleges based on undergraduate enrollment.

A printable fact sheet is linked to each state, which provides statistics on the disproportionate impact of for-profit harms on low-income students, people of color and women in that state. (All data shown is for Title IV primarily undergraduate institutions.)

For-profit colleges are big business, primarily funded by taxpayers. Many colleges count on federal student loans and grants (Title IV funds) for almost 90% of their revenues—in some cases more, when including VA and current servicemember tuition benefits.

Nationally, for-profit colleges leave students with higher levels of debt and lower graduation rates, and often with no degree and no improvement in their job situations. While for-profit college enrollment represents 9.1% of all college students, these schools generate over 35% of all students who default on their loans. Only 27% of all for-profit students in four-year programs graduate within six years.

“For-profit colleges market aggressively to nontraditional students who often struggle to juggle school, work and family, and find their hopes for economic security and career success dashed,” said CRL Senior Researcher Robin Howarth. “We know that these poor outcomes weigh most heavily on low-income students, women and communities of color. This analysis pinpoints the situation by state, so students, advocates and policymakers can see the impact where they live — the size of the industry and the degree to which certain groups carry a heavier burden.”

The Department of Education recently rescinded two Obama Administration rules intended to improve outcomes for for-profit students. The Borrower Defense to Repayment rule would have provided student loan relief to students defrauded by their colleges, and the Gainful Employment rule would have held career training programs responsible for providing appropriate value in exchange for costs incurred, protecting both students and taxpayers.

“The rollback of protections at the federal level underscores the importance of states moving to prevent predatory for-profit colleges from abusing students,” said CRL Senior Policy Counsel Whitney Barkley-Denney. “Through a variety of ways, states can ensure that taxpayer dollars do not go to fraudulent institutions and citizens are not left with nothing to show for their educational investments other than steep, unaffordable debt.”

Some states are taking up reforms in the form of a state-level Tuition Integrity Act, which can include these components:

• Require for-profit colleges to spend more on student instruction
  In 2012, a Congressional investigation into the nation’s 30 largest for-profit schools found that on average, for-profit colleges spent just 7% of revenues on instruction, while much more was spent on marketing. States should require that at least 50% of student dollars be spent on instruction and no more than 15% be spent on advertising.
• Require for-profit colleges to avoid enrolling students in programs for fields where they will be ineligible for employment
  States should not allow for-profits to enroll students in programs that are not accredited for a field that requires that accreditation for licensing. Neither should states allow for-profit colleges to enroll students who will not be legally employable in their chosen field because of a criminal conviction or other factors. Last year, Maryland took the step to make this happen. Other states should follow.
• Protect students from steering and other predatory lending abuses
  States should make it illegal for schools to steer students into unaffordable loans, particularly where the for-profit has a financial incentive in making those loans and students have other options.  

For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Carol Hammerstein at carol.hammerstein@responsiblelending.org.