Essay On Emergence Of For-Profit Education

The Emergence of the For-Profit Education Industry:

According Bennett, Lucchesi, and Vedder (2010), the conceptual framework for the modern for- profit college industry can be traced to the 19th century when for-profit business and manufacturing schools began providing secondary education. However, following the passage of the Servicemen’s Readjustment Act of 1944 (the G.I. Bill), which allowed students to use their tuition grants at for-profit schools, and the reauthorization of the Higher Education Act of 1965 in 1972, which allowed tuition subsidies to be used by students enrolled at for-profit colleges, the industry blossomed; students attending for-profit institutions were now financially supported (Bennett et al., 2010). As a result of the increased availability of funding for students, the first scandal of the industry, the “diploma mills”

The expensive nature of for-profit schools becomes clear when the cost of education is analyzed based on the student’s cost to attain a certain degree; an associate’s degree in business administration would cost approximately $33,000 for a student attending the for-profit Kaplan University, however same degree earned from a community college, based on the national average, costs $8,500 (Morgan, 2010). In addition to the higher cost of education at for-profit institutions, students who attend such institutions tend to come from backgrounds with higher rates of default when repaying student loan debt (Government Accountability Office, 2009). The Government Accounting Office identified three student sub-groups with an increased risk of defaulting on student loans: lower-income students, students whose parents have a lower level of education, and older students; for-profit colleges have proportionally more students from these three sub-groups (Government Accountability Office,