by David Safier

University of Phoenix is a for-profit college.It makes its money the old fashioned way — by getting 88% of its revenue through U.S. student grants and loans. When the students graduate or drop out, they either have to pay back the loans, even if the college didn't give them marketable skills (they often don't), or default. And if they default, the government coughs up the money.

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It's win-win for University of Phoenix. For U of P's 470,000 students and the federal government, it's more of a crap shoot: win, lose-and-pay, or default. U of P, by the way, is the largest for-profit college in the country.

No wonder for-profit colleges pay their recruiters bonuses for snagging students by any means necessary, including lying to them. Every student means more money from the feds. Last year, government aid to the for-profits amounted to $26.5 billion.

For-profit colleges got about 23 percent of all federal student grants and loans that went to U.S. universities in 2008-2009, according to the Government Accountability Office, while educating about 12 percent of all students.

The Feds are starting to clamp down by forbidding bonuses for recruiters. That should only be the beginning of the clamping down. We need more investigations to find out how many for-profit colleges dupe their students by offering shoddy education and training or hold out the promise of jobs to their students in areas where there isn't much demand.

 

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