Criticism of Higher Education

There has been rapid growth in recent years and for-profit school, of which the University of Phoenix is the largest with an enrollment over 400,000 nationwide. Other large institutions, with numerous branch campuses and online programs include Devry and Kaplan University. Altogether, they enroll 9% of the students. They have aggressively recruited among military veterans, and in 2010 received 36% percent of all the tuition aid paid by the federal government. The University of Phoenix received 88% of its income from federal aid to students; the maximum allowed is 90%. In 2001 the University of Phoenix opened a two-year online program oriented toward lower-income students who receive federal financial aid; in 2010 it had over 200,000 students seeking two-year degrees. Critics have pointed to the heavy dependence on federal loans and grants to students, the low student completion rate, and the inability of the majority of graduates to pay their student loans because they failed to secure high-paying jobs. The University of Phoenix reports that in 2009, 23% of its students completed an associate degree within three years of enrolling, and for bachelor’s degree students, its six-year completion rate was 34%.

The amount of debt that students have after graduation has become an issue of concern, especially given the weak job market after 2008. Some loans are financed by the federal government, but students sometimes obtain private loans (which generally have higher interest rates and start accumulating interest immediately). In 2010, the U.S. Department of Education announced stricter eligibility rules for federal financing of loans to student at for-profit schools, which were experiencing higher default rates.