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More For-Profit Colleges Closing, Leaving Students With Difficult Choices

Published: Tuesday, January 22, 2019 - 12:26pm
Updated: Tuesday, January 22, 2019 - 1:52pm
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MARK BRODIE: There have been some high profile closures recently of for-profit colleges — think ITT Technical InstituteArizona Summit Law School and Corinthian Colleges. But others are shutting their doors as well, which is leaving students in difficult positions. Rachel Leingang has written about this for The Arizona Republic, and she joins me to talk more about it. And Rachel, are we seeing more of these schools closing down in Arizona now than we have in the past?

RACHEL LEINGANG: From what we've heard from officials, we're seeing more nationwide and in Arizona, as well. The for-profit market, and really the private college market in general, is contracting right now. From some experts I've spoken with, there's sort of an opposite correlation to how well the economy's doing. So the economy is doing well, fewer people are seeking out college. So it sort of makes sense in one sense because we're coming out of the Great Recession now people are more employable. There are less people going to these colleges, and then the regulatory market during the final years of President Obama did get stronger against for-profit colleges.

BRODIE: And based on what you've reported, not all closures seem as though they are created equally, like students don't have sort of a universally similar experience.

LEINGANG: Definitely not. And there are things you're supposed to do. But if there's no money, if a college closes overnight because they can't pay the bills, all of those things that you're supposed to do kind of fly out the window, and then getting recourse because again there's no money is really difficult. You're having to navigate federal bureaucracy, local bureaucracy programs that you've never heard of and that aren't well publicized to try to figure out, can you get money back? Do your credits transfer? All sorts of big questions.

BRODIE: Is this generally a financial issue for these schools?

LEINGANG: Typically, yes. And sometimes accreditation will fall into that as well. But those sorts of things usually go hand in hand. If your accreditation lapses then you might have financial issues. If you have financial issues, you might run into trouble with accreditation. So those things are usually pretty aligned. But a school will stay open, especially a private for-profit school, will stay open if they have the money to stay open usually.

BRODIE: So what have you heard from students about some of the challenges of either getting money back, or transferring credits, or finishing their education, or getting a job — which is what a lot of these students would like to do? Why they're going to these particular schools, right?

LEINGANG: So all of those things become so much more difficult if you don't have a network. So the network that you're working with sort of goes away if your college closes. For a lot of people, part of why you're going to school is to gain a network, to gain alumni that you can work with. Then if the school closes, you're losing career services, you're losing the name recognition of that school, the reputation may be, you know, strongly harmed if the school does close. And then you have to make it sort of a strange calculus. You have to decide, should I transfer my credits to another school or should I try to get money back? Because you can't really do both. If you do transfer the credits then it looks to the federal government like you used your degree, your degree was useful. But if you, you know, try to get money back, then those credits, the time you spent basically to get those credits you can't use that, you have to go the route of getting money back. So, it's so difficult if you can imagine giving up either your time or your money. I don't know how you make that decision. It's very difficult.

BRODIE: You mentioned the issue of reputation that I'm wondering if students have found that when they are looking for jobs? If prospective employers look at their resume and say, “Oh, you went to college X. They closed. Boy, what's wrong with you? Like how did you, why didn't you know that was going to happen?”

LEINGANG: One expert I spoke to said that she knows the students that she works with have taken it off their resume. If a college has closed, because it's seen as disreputable or kind of laughable to people, which is really unfortunate because the things you learned, you learned them regardless. But it's not seen as that in the employment market always. And one student I talked with she had said that she didn't feel like she learned, so she wasn't planning to try to use that degree because she didn't think she had the skills frankly to try to go out into the job market at this point.

BRODIE: Do students find themselves in court ever, trying to either get their credit transferred or get their money back or some other issue?

LEINGANG: There have been some court cases recently in ITT Technical Institute. There is a bankruptcy court case that had a class action attached to it and they were successful. They will be getting some tuition and fees reimbursed. Getting all of your money back, that route is long. It would take years and potentially difficult. It's hard. Like I said, there's no money left. So it's hard to figure out where it should come from. But increasingly, that's been something that students are looking toward.

BRODIE: Have you found that students are seeing that this is happening and maybe taking a second look at whether or not they want to enroll in a for-profit college in the first place?

LEINGANG: I do think there's a lot more awareness now, especially in certain brands of schools. But it's tough. You know, the marketing tactics are very strong with a lot of these schools. And if you're a student looking for a career path, a lot of times these schools that they will prepare you very strongly for a certain career. So it does look very appealing. There are some experts that I spoke with who said that people who are giving them money, the federal government, the veterans administration for G.I. bill benefits, they should be a little bit more strongly advising their students on where to go.

BRODIE: All right. That's Rachel Leingang with The Arizona Republic. Rachel, thanks.

LEINGANG: Thank you.

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