Trump University Shows Why For-Profit Motives Don't Belong In Education

Revelations from documents connected to Trump University are generating outrage across the political spectrum, from my colleague Terrance Heath, who called it "a scheme to transfer wealth from people who had little," to the conservative journal National Review which carried an editorial proclaiming it "a massive scam."

Much of the commentary has focused on the "playbook" that guided sales reps for Trump U in how to coerce prospective students to sign up for the bogus degree program. A review of the document by CBS News highlights the hard sell tactics Trump U staffers used to push prospects into committing many thousands of dollars - upwards of $35,000 - to a course of study that many of those students now concede turned out to be "useless information."

The outrage is much deserved, but we shouldn't lose sight of the fact that making a buck off people's urges to fulfill their education destinies has become commonplace in American society.

As reports of the Trump U documents were breaking, Politico reported on how the Obama administration is currently engaged in a struggle to rein in the practices of for-profit colleges that lure students into degree programs that plunge them deeply into debt without advancing their financial well beings in the long run.

The federal government wants to make it easier for people who believe they've been defrauded by these colleges to challenge those organizations in court. And the U.S. Department of Education wants to require for-profit career college programs to better prepare students for "gainful employment" or risk losing access to Federal student aid. But representatives from for-profit institutions such as Kaplan University are lobbying against these attempts to limit their enormous profits

The federal government has already forgiven more than $27 million in debt swindled by for-profit colleges from over 35,000 students, according to a report in The Atlantic.

A new study adds yet more evidence that these for-profit higher education programs do more harm than good. As The Washington Post reports, the study finds that not only do these for-profit programs mire students in huge debts that take many years to pay off; they also have negative effects on the students' potential incomes. "Students who sought vocational certificates at for-profit colleges made an average of $900 less annually after attending the schools than they did before," the Post reports. The study concludes students, in general would be far better off if they attend community colleges, which are non-profit public institutions.

As I reported in 2013, the Obama administration's effort to rein in for-profit colleges such as University of Phoenix, Kaplan, Devry, Corinthian Colleges, and others, has battled conservative Republicans and some Democrats in Washington D.C., who oftentimes receive campaign donations from this roughly $35 billion industry.

More recently, a report by ProPublica recounts how Corinthian College, "the country's second largest chain of for-profit colleges before it collapsed into bankruptcy last year," coerced vulnerable students, including those who were homeless, into scam degree programs that left the students deep in debt with few job prospects. Then the company "pushed students to borrow from a bank that Corinthian had undisclosed financial ties to" and lied to federal regulators about its results.

Scamming students for the sake of easy profits is not limited to higher education. In the K-12 sector, for-profit companies are reaping millions in the charter school industry. The most notorious providers in this rapidly expanding market are online charters that deliver the bulk of instruction over the internet. These schools currently enroll less than one percent of students, but they are rapidly growing in many states. The largest providers by far are two for-profit companies K12 Inc. and Connections Academy, which account for 70 percent of students in these programs.

A recent investigative report from a newspaper in the Bay Area of California found a K12 affiliated online charter found "reaps tens of millions of dollars in state funding while graduating fewer than half of the students enrolled in its high schools. It also found that teachers at K12's California Virtual Academies have been asked to inflate attendance and enrollment records used to determine how much state funding the schools receive." The report has prompted calls by legislators of both political parties to conduct a state audit of the company.

In Ohio, a statewide online charter has routinely faked enrollment to defraud the state of million, and in Pennsylvania, reports of widespread fraud and poor academic results have prompted an audit of that state's online charters, called cyber charters.

The academic results of these online charters are similar to results from for-profit colleges: awful.

The most comprehensive study of these schools, conducted last year by a researcher connected to Stanford University, found that these schools have an "overwhelmingly negative impact" on student achievement. As Education Week reports, "More than two-thirds of online charter schools had weaker overall academic growth than similar brick-and-mortar schools. In math, 88 percent of online charters had weaker academic growth than their comparison schools. On average, online charter students achieved each year the equivalent of 180 fewer days of learning in math and 72 fewer days of learning in reading than similar students in district-run brick-and-mortar schools."

So sure, Trump University is an outrage. But the lesson to learn goes beyond Trump himself and his alleged crookedness. What's also likely true is that this egregious institution is yet another example of how profit making and education are a bad mix for all except the few who are able to bank the results.