For-profit schools are a bad deal for students, who often end up heavily in debt, and with poor job prospects. Young people are finally waking up to this fact; Phoenix University, the nation’s largest for-profit education company, reported its enrollments are down by half, and for-profit school stocks plunged on Wall Street today.
“Once a cash cow industry, for-profit education companies have struggled to overcome criticism of the quality of its education and the costs. They’re the sore spot in the national debate about value of higher education,” a CNN story says. “For-profit colleges only enroll roughly 12% of the country’s students, but students at for-profit colleges accounted for about half of student loan defaults in 2013, according to federal data.”
This high default rate prompted the Obama administration to curtail federal aid to the for-profit education industry a year ago, and President Obama proposed free community college education — for-profit schools’ primary competition — in his State of the Union address this year, although that proposal has no chance of passing in a Republican Congress.