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The University System of Georgia put a program in place, the African-American Male Initiative, 10 years ago and now, according to The Chronicle of Higher Education, enrollment from black men is up 80 percent. The program was held up at a recent meeting of the American Council on Education as an example of something that has worked to get Black men in college.

Another area of higher education where the number of Black men is on the right is for-profit universities. An article published last summer on The Root says The University of Phoenix had the largest population of Black male students in the United States. I was surprised but that quickly gave way to apprehension as I began to wonder how many African Americans attended for-profit universities without fully knowing what they are and how they operate. Then, I stopped and thought, “Do I really know how for-profit universities operate?”

College education has become almost expected for any kind of success (which could be a problem in an of itself) but unfortunately, college counseling can be ineffective or non-existent, especially in the African-American community. It’s important to recognize that not all college educations are created equal.

For-profit education has existed in this country for over a century mostly for K-12 students. However, as the importance of a college degree rose in the job market, so did the market for more flexible post-secondary education options. For-profit universities generally target non-traditional students; those that are older, working, and a very large amount of low-income and first-generation college students, or in a position where a traditional four-year college experience is either impractical or undesirable. For this, for-profit universities should be applauded. They serve students that are traditionally ignored and oftentimes offer a second chance to people from marginalized and troubled backgrounds.

Unfortunately, the model several of these universities use is troubling at best and criminal at worst. Unlike public and private universities the majority of the money made at for-profit universities isn’t invested back into the school. When focusing on the bottom line, counseling professionals are the first people cut. What you end up with is a school of marginalized students, paying exorbitant prices, for an education they will more than likely never complete.

According to The Washington Post, about 16 percent of undergraduate students graduate from The University of Phoenix in six years. The American average is 55.5%.  More than half of the students enrolled at for-profit universities make less than $40,000 a year and support one or more family members. These populations are less likely to graduate on time no matter what school they attend. So let’s focus on African Americans. Thirty-nine percent of African Americans attending public and private universities, on average, graduate within six years. That is more than double the rate for for-profit universities.

William Gray, PA Democrat lobbying for For-Profits

by R. Asmerom

We’ve all seen the ads and flyers for the University of Phoenix – an online school which has apparently captivated the attention of many minority students. In the last decade, that institution and many others like it, have exploded onto the education scene and aggressively marketed to students looking for more accessible degree programs.

The difference between schools like the University of Phoenix and other more recognizable colleges is the profit structure. “For profit” schools like Everest College and University of Phoenix costs more in fees to students but provides less credibility to its degree holders. The US Department of Education is now looking to curb funding for these for-profit institutions (meaning less financial aid options for students attending these schools), arguing that these institutions are not preparing enough of their graduates for “gainful employment.”

“I think the regulations are justified and should be highly executed to discourage these expensive paper mills,” said S.E. Day, an author, consumer advocate and radio host of The Legally Steal Show. “Anyone can start a school without accreditation and issue degrees. Education should remain in the non-profit category and it should be socialized since the government ends up footing the bill.”

Interestingly enough, Black leaders like Jesse Jackson and members of the Black Caucus are opposed to these new regulations. William Gray, a Pennsylvania Democrat and former Black Caucus member, has been tapped to lobby on the behalf of the for-profit schools.

According to the Career College Association, 43 percent of students attending these for-profit schools and 39 percent of their graduates are minorities. Many critics believe that first generation college students and minorities are most victimized by the high costs of these programs. Furthermore, graduates risk the chance that potential employers will look down on their alma mater.

“Sadly, for-profits are becoming the norm in the landscape of education because of the ignorance of the students as to how schools operate and the effectiveness of their education received from these schools,” said Day. “I also think these schools prey upon the fact that most Americans are lazy and want the convenient way out to achieve.”

The government’s aggressive stance against these schools relates to the fact that between 2006 and 2009, the annual default rate for student loans went up from 5.2 percent to 7.2 percent, with for-profit attendees being responsible for a substantial amount of the claims.

Out of the numerous for-profit schools out there, however, exceptions can be made and positive facts can be found.

“Are for-profit universities a ripoff? No,” said Dr. Carol Stewart, management professor and author of “Looking for Scholarships. “Just like any other nonprofit or state university, they serve a purpose.”

Wall Street Journal columnist Al From calls the targeting of for-profit schools “puzzling,” explaining that these schools are picking up the slack left behind by community colleges which are experiencing cutbacks. He wrote: “For-profit graduation rates at two-year institutions exceed 55%, more than twice the rate at community colleges. Because they pay taxes on their profits and don’t receive big subsidies, for-profit colleges cost the taxpayer less per student than do heavily subsidized community colleges.”

Despite these statistics, it’s questionable whether the black leaders challenging the Department of Education’s attempts are inspired by lobbying duties or genuine conviction. The for-profit industry is spending a lot of money to fight these proposed regulations and lobbying politicians constitutes a legal way of buying favors. According to Bloomberg, ten education companies have increased their spending on lobbying by $1.3 million over the last year. All that influx of money makes it difficult to discern why William Gray and Jesse Jackson are defending these schools

“While the regulations may prevent some black students from qualifying or attending for profit universities – that is not the real problem,” said Dr. Stewart. “The problem is the for-profit universities are not providing the tools and resources to black students so they can be successful.”

Maybe the focus should be on marketing the thousands of non-profit schools, which are able and willing to offer a lower-cost education to African-American students, rather than fighting for the preservation of these educational corporations.  A cost-benefit analysis would reveal that would be a more effective way to go, although we can be sure that profit motives would resist it.

by Candi Sparks

On June 15, the Department of Education responded to complaints from consumer advocacy groups by proposing regulations which would force for-profit schools (like DeVry) to change their policies, or lose student funding. The regulations are aimed at getting for-profit schools to accurately report two statistics to student candidates, namely, the school’s graduation rates and post graduation job placement rates, before accepting a student‘s enrollment. In addition, a school could lose student funding if more than 45% of graduating students fail to pay off the principal on their federal school loans.

A group of more than 1,400 (or 95%) of for-profit schools known as the Career College Association, challenged the government’s position. Jonathan Guryan, an economist at Northwestern University said on behalf of the Association that the regulation would have unintended consequences that disproportionately affect poor, black and Hispanic students, who attend for-profits at higher rates. Schools may be tempted to turn away students with high debt, he said. “I’m concerned it would create an incentive for schools to discriminate.”

The for-profit schools rely on higher tuition to cover operating costs and turn a profit. Accordingly, students of for-profit schools typically incur higher student debt. Their students receive about 24 percent of Stafford federal loans to attend for-profit schools.

Defaults on federal student loans put taxpayers on the hook for 97 to 100 percent of the losses, depending on whether the default is on a direct or guaranteed loan. Hypothetically if a student defaulted on a $30,000 loan without making a single payment, taxpayers would be responsible for $29,100 to all of it. Although statistics show that many borrowers pay down a portion of their loan before defaulting, the government collects the remainder.

According to the Department of Education, these regulations have been put into place to protect the low-income and minority students who are often targeted by for-profit schools and either drop out, default on loans and/or cannot find jobs in their area of study at the for-profit school. Defaulting on a loan would harm a student’s ability to find housing, employment and gain further access to credit. Many students turn to 2-year programs at community college to avoid the high cost of the for-profit school while continuing their education.  The cost of a for-proft may not ultimately be worth the price of admission.

The final rules will be published by November 1, 2010 before they take effect next July.

Candi Sparks is the author of the “Can I Have Some Money?” books series.

(Smart Money) — The Department of Education last week proposed new rules for for-profit colleges that would require schools to minimize their students” debt load and demonstrate an effort to prepare them for jobs with salaries sufficient to repay that debt. Schools that don”t meet these rules — which, once finalized, would go into effect next July — would lose their eligibility for federal student aid, meaning that their students wouldn”t be able to receive federal student loans or grants.

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