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Low Graduation Rates at For-Profit Colleges

A new report on graduation rates at for-profit colleges by a nonprofit research and advocacy group charges that such colleges deliver “little more than crippling debt,” citing federal data that suggests only 9 percent of the first-time, full-time bachelor’s degree students at the University of Phoenix , the nation’s largest for-profit college, graduate within six years.

The report, “Subprime Opportunity,” by the Education Trust, found that in 2008, only 22 percent of the first-time, full-time bachelor’s degree students at for-profit colleges over all graduate within six years, compared with 55 percent at public institutions and 65 percent at private nonprofit colleges.

"In a separate study also released Tuesday, the Pew Research Center reported that almost one-quarter of those who received bachelor’s degrees at for-profit schools in 2008 borrowed more than $40,000."

Among Phoenix’s online students, only 5 percent graduated within six years, and at the campuses in Cleveland and Wichita, Kan., only 4 percent graduated within six years.

“For-profits proudly claim to be models of access in higher education because they willingly open their doors to disadvantaged, underprepared students.” said José L. Cruz, a vice president for the trust. “But we must ask the question, ‘Access to what?’ ”

Since the first-time, full-time students tracked in the federal statistics are the most likely to graduate, the report said, these figures may actually overstate the graduation rates.

The University of Phoenix said in a statement responding to the report that when all students are included, not just those in the federal data, 36 percent of its bachelor’s students graduate in six years.

“It is unreasonable to expect nontraditional college students to complete their studies within an arbitrary, predetermined timeframe, especially when we know those students take longer to finish their degrees because they have families and professional obligations,” the statement said.

The report acknowledges that for students seeking associate degrees, for-profit colleges’ three-year graduation rate of 60 percent is considerably higher than the 22 percent rate at public community colleges.

There is still cause for concern, the report said, because for-profit students graduate with so much more debt than community college students. Many either default on their loans, or struggle to make payments but find that their lives are taken over by debt.

In a separate study also released Tuesday, the Pew Research Center reported that almost one-quarter of those who received bachelor’s degrees at for-profit schools in 2008 borrowed more than $40,000, compared with 5 percent at public institutions and 14 percent at not-for-profit colleges. Over all, the Pew report found that students who earned a bachelor’s degree in 2008 borrowed 50 percent more, in inflation-adjusted dollars, than those who graduated in 1996. Those who earned an associate degree or certificate in 2008 borrowed more than twice as much as their 1996 counterparts.

The Education Trust is financed partly by the Bill and Melinda Gates Foundation. This month, Melinda Gates resigned from the board of the Washington Post Company , which gets most of its revenues from its for-profit higher-education unit, Kaplan Inc.

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