Barbarians in the Ivory Tower

America's for-profit colleges offer education only a con man (or a congressman) could love.

Bridgepoint, which also owns the University of the Rockies, grew from just 12,623 students in 2007 to 77,892 in 2010. Its profits also exploded, going from just $4 million to over $216 million annually. About 85 percent of its revenue comes directly from the federal treasury.

But if Bridgeport and Warburg Pincus are billing top dollar, they're unrepentant misers when it comes to educating kids. In 2009, Bridgepoint spent less than $700 per student on actual instruction. By comparison, the nearby University of Iowa spends 17 times that figure.

What Bridgeport doesn't short is its marketing, spending $2,714 per student to keep the turnstiles spinning. Overall, the 15 largest for-profit colleges spend nearly $13 billion a year on recruiting and marketing.

Rick Kriseman, a Florida State Representative, represented Mary in her suit against Argosy University: “When the school did not have those [internship] slots, they found reasons to either dismiss the students or to make it so uncomfortable for them that they left on their own accord."
courtesy Rick Kriseman
Rick Kriseman, a Florida State Representative, represented Mary in her suit against Argosy University: “When the school did not have those [internship] slots, they found reasons to either dismiss the students or to make it so uncomfortable for them that they left on their own accord."

Needless to say, it's a terrific business if you don't have to worry about educating kids. Nearly 80 percent won't complete their program within six years — almost double the failure rate at traditional schools.

The tactics have become so brazen that even accreditors are taking notice. Last month, Ashford conceded that the Western Association of Schools & Colleges had denied its accreditation renewal, noting that the school had just 50 full-time faculty members to teach 90,000 online students. Within a week, Bridgepoint's stock price had plunged 50 percent.

"It's basically consumer fraud rendered to a business model," says Nassirian. "Over-advertise, oversell, overcharge and under-deliver. They found a system where the pitch goes to one guy and the bill to someone else."

We've Got Your Money. Now Beat It.

Mary had been a good student all her life, earning a master's in psychology from William & Mary University in Virginia. When the military transferred her husband to Tampa, she chose Argosy University, the only area school offering a psychology doctorate geared toward clinicians rather than researchers.

Mary, who doesn't want her real named disclosed, figured it was legit. Argosy was accredited by the American Psychological Association.

She aced her studies with a 3.7 GPA. All she needed was an internship to graduate. That's where her problems began.

Argosy University, with 19 campuses, is owned by Education Management Corporation [EDMC], whose investors include Goldman Sachs and Providence Equity Partners, a Rhode Island private equity firm. To wring out more profit, Argosy began taking on more students than it could handle, says Mary's lawyer, Florida state Representative Rick Kriseman.

But Argosy didn't have the professional connections to supply enough internships. So, like air traffic controllers, it decided to place students into holding patterns.

Mary was asked to accept a practicum instead. It's like a lesser form of internship that wouldn't bring her any closer to her doctorate.

She was upset but went along, spending the next eight months volunteering at a mental health facility. But by the time she was finished, Argosy still didn't have enough internships. Her instructors ordered her to take a second practicum.

She didn't have much choice. Mary had already invested four years and over $100,000. She spent another five months volunteering. By then, her instructors had begun to question her intellectual rigor.

They not only flunked her out of the program, but refused to let her defend her work before a board of teachers and peers, then denied her a chance to address administrators before they rejected her appeal. (EDMC refused repeated requests for comment.)

Mary was shocked. "I was an A student," she says. "It was baffling to me how this could happen at the last minute. You have to understand the shame of going to school and being an A student and becoming a flunked-out person. It's so foreign and confusing."

Yet Kriseman would discover a pattern at play, finding three more students who'd suffered a fate similar to Mary's. "When the school did not have those [internship] slots, they found reasons to either dismiss the students or to make it so uncomfortable for them that they left on their own accord," he says.

Argosy's problems seemed to be nationwide. Across the country, in the psychology program at Argosy-Seattle, the school had assured its doctoral candidates that accreditation was moments away — since without certification, their degrees would be all but worthless. It wouldn't be till later that administrators confessed that their application had failed — and they were closing the entire program.

Failure at a Luxury Price

For-profit colleges like to place their alarming failure rates in charitable terms. They claim to disproportionately serve low income students who struggle in school.

But if they're serving people of lesser means, why are they charging so much money?

On average, a four-year degree from a for-profit runs twice what in-state tuition costs at a public school. When it comes to two-year programs, the disparity widens: For-profits charge three to four times the rates of their public counterparts. Yet they've still managed to lull the political class into believing their competition is driving down tuition.

During the Republican primary, Mitt Romney praised a major donor and co-chairman of his Florida fundraising team — Bill Heavener, owner of Full Sail University — for helping to "hold down the cost of education." What Romney failed to mention is that a 21-month degree in video game art at Full Sail costs over $80,000. And that's not unusual.

A four-year bachelor's degree in business from Indiana-based ITT Tech costs almost $89,000. That's more than twice the in-state tuition at more venerated Indiana University.

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14 comments
calhouncounty
calhouncounty

Bobby is a National Collegiate Scholar who uses baby-talk: "I'm like" and "she's like" when he speaks? How is Eastern Michigan any better than Ashford?

jesskalinowsky
jesskalinowsky

Could be we do not have the complete story, maybe they were sued?  I certainly hope so, as it is disgusting that people want to take advantage of a minor child like that!

counsel
counsel

The "Whatever" Press

 

Seriously?  You couldn't find a lead story that even mentions Texas, much less Houston?  At least it wasn't another rapper piece.

jesskalinowsky
jesskalinowsky

This is SO infuriating!!!! Someone should sue Ashford socks off, if they are still in business. A minor cannot sign a contract like that, and if there was forgery involved send the whole bunch to prison.  The University of Phoenix does the exact same thing, and have gotten away with it for years.  They tell you your credits are transferable, they are NOT transferable. They tell you an Associate Degree is transferable , it is NOT.  They advertise people getting advanced degrees, most employers scoff at a degree from University of Phoenix.  It is a serious FOR BIG PROFIT SCHOOL will to twist words and put a spin on them that makes them sound legit, THE ARE NOT legit!  Their classes are a joke!  Their teachers are a joke.  I took some of their classes, but thankfully my employer was footing the bill, and I did not lose a penny. The classes/courses I took were a total waste of time! NOT one was transferrable.. The University of Phoenix LIES to the potential student. They LIE to Vets!  It is a SCAM OF A UNIVERSITY!    

Hanabi-chan
Hanabi-chan topcommenter

Hey counsel? Just because the story does not mention Texas in a particular instance does not mean that the issue has no bearing on our state. The problem of for-profit "colleges" is nationwide.  We have offices for some of them here in Houston. The commercials play here.  Are you not paying attention?

 

 

Hanabi-chan
Hanabi-chan topcommenter

 @jesskalinowsky I was surprised that no one has sued Ashford for that. I am not a lawyer, so anyone who is knowledgable can answer that question. I was under the impression that if a contract signed by a minor is not valid.

jbottoms
jbottoms

 @Carlos I am so glad to see this article and to hear from you, Carlos, I was almost (thankfully, not) taken in by the smoke and sugar blown in my face by Ashford's salespeople (er, umm, ahem!) i mean <making air-quote> "academic advisors" ... real slick bunch, hard to resist with noses that would make Pinoccio jealous.

counsel
counsel

 @Hanabi-chan It's a local free press.  You pretty much proved my point exactly. 1) It's old news, 2) that it has some tenuous "bearing" on the state might have been worth mentioning in the article and you still didn't understand you were validating my comments each time you went to outside sources to come up with that.  The could have made the effort to come up with one of the local dupes for one of their many anecdotes just to make the effort to tie it in locally. Didn't.  The author, of course, has no ties to Houston other than the Press fobbing off their writing to him.

 

Turn the paper over to Downing, Spivak, and Malisow.

smoothopr_2
smoothopr_2

The Strayer,PHoenix are along the Beltway 8

clarice.jovan
clarice.jovan

 @Hanabi-chan I agree. This can definitely be disputed in court. I wish the family the best of luck. 

Hanabi-chan
Hanabi-chan topcommenter

There..not their damnit! Stupid Mondays!

Hanabi-chan
Hanabi-chan topcommenter

I just saw an ad for Ashford over the weekend. First time, aside from this article, that I heard of this place. 

 

I think their is a  Phoenix building on Space Center Blvd near Bay Area in Clear Lake. Or they are just the major tenant.

 
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