Sunday, March 14, 2010

"The majority of our students graduate"

The majority of our students graduate. Most see an increase in wages.

That's the ringing endorsement of for-profit schools by a spokeswomen for Corinthian Colleges, Inc, a publicly traded company with $1.4 billion in revenues. An outstanding NYT article calls into question what return on investment students are really getting at these schools, which derive 70-90% of their revenue from federal student aid, could collect $10 billion in federal Pell grants in 2011-2012 under Obama's "college and career" readiness initiatives, yet have 3-year student loan default rates of ~12% and questionable placement success.

Industry advocates argue that they shouldn't be held responsible for the defaults because their recruiters are barred from making promises about future income. To me, that's exactly why they should be held responsible. If taxpayers are going to finance 80% of their revenue, we deserve to know what's going on through readily available data on actual placement rates and future earnings. Right now, I'm making my own decision on whether to seek more schooling. This type of information is essential to informing my decision, and I couldn't imagine choosing a graduate program without it.

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