The students who attend for-profit institutions are disproportionately older, black and Hispanic, from low-income backgrounds, and with weak academic preparation. Students borrow much more to attend these schools than they would if they enrolled in public colleges. And completion rates are very low for students seeking associate or bachelor’s degrees.
During the great recession, there was very rapid growth in the for-profit sector. Much of it came from big companies—like the University of Phoenix—who signed up all kinds of students who had no idea what they were getting into. In 2000, New York University held the title of “highest-debt institution” with its students and former students owing $2.2 billion. In 2014, the University of Phoenix topped that list; its students and former students owe over $35.5 billion. In fact, all seven of the institutions with the highest levels of student debt are in the for-profits sector.
Two large for-profit institutions have recently gone out of business because of financial problems, leaving many students in the lurch. And a number of lawsuits highlight the questionable practices that are too common in this sector.