Mitt Romney is a big fan of for-profit colleges, although he doesn’t seem to know much about them.
An article that ran in Sunday’s New York Times highlighted recent statements that the Republican presidential frontrunner has made on the campaign trail praising the for-profit higher education sector for offering an affordable alternative to traditional higher education. Romney, for instance, told the editorial board of The Ames Tribune in Iowa last month that when prospective students check out career colleges such as the University of Phoenix and the lesser-known Full Sail University, “you’re going to find students saying: You know what? That’s not a bad deal. I’m not willing to come out of college with a hundred thousand dollars in debt.”
Both the New York Times and the Huffington Post did a good job pointing out that for-profit colleges are not exactly a bargain. As the Times notes, the tuition for Full Sail’s 21-month “video arts program” exceeds $80,000. A similar program at the local community college would undoubtedly cost a fraction of the price.
But even more troubling is Romney’s suggestion that students will borrow less by going to a for-profit school — when, in fact, the exact opposite is true. As a group, for-profit college students go deeper in debt than their peers at public and private colleges, and are much more likely to have trouble paying the loans back.
According to an analysis that researchers at the College Board conducted of the most recent data available from the Department of Education’s National Postsecondary Student Aid Study, more than half (53 percent) of all bachelor’s degree recipients at for-profit colleges left school in 2007-08 with a total student debt load of $30,500 or more. That was more than double the proportion of students who graduated with that level of debt at private colleges (24 percent) and more than four times as many who did at public four-year colleges (12 percent).
Much of that debt came in the form of high-risk private loans. The report found that nearly two-thirds of bachelor’s degree recipients graduated with private loan debt at for-profit colleges in 2007-08, compared to 42 percent at private colleges, and 28 percent at public colleges and universities.
The news wasn’t much better for students who earned associate degrees at career colleges in 2007-08. Overall, nearly all associate degree recipients at for-profit colleges graduated with student loan debt that year, and 60 percent had private loans. The median debt load for these graduates was $18,783. In comparison, only 38 percent of associate degree recipients at community colleges graduated with debt, and only 15 percent had private loans. The median debt load for those students was $7,125.
In terms of repayment, Education Department data shows that for-profit college students default on their federal student loans at rates that are extremely disproportionate to their numbers. While only 13 percent of students attend career colleges, they make up a whopping 47 percent of all defaulters. Meanwhile, the Education Department projects that nearly 50 percent of all federal student loan dollars going to students at two-year for-profit schools will ultimately end up in default. That’s compared to about 17 percent for college students overall.
So while for-profit colleges may compare favorable to traditional colleges in some areas (offering more flexible class schedules for working adults, for instance), keeping students out of debt is certainly not one of them.
Romney’s statements show that he still has a lot to learn about the for-profit college sector – lessons that the co-chairman of his fundraising team in Florida, Full Sail University chief executive Bill Heavener (yes, chief executive of the very same for-profit college company Romney has been touting), probably neglected to give him.