It has been some time since our last post looking at the expansion of for-profit colleges and universities, when I promised to take up the question: "So what? Should we care about the particular set of circumstances that has led to this expansion?" My short answer is yes. The longer answer is after the jump.

Too many students at for-profit colleges--students who are often the neediest, both financially and educationally--end up saddled with crushing student loan debt to pay the high cost of for-profit institutions. According to the College Board, the average debt load of bachelor's degree recipients at for-profit institutions was $32,653 in 2007-08, as compared with $22,375 at private, not-for-profit institutions and $17,700 at public four-year institutions; for two-year degree recipients, the average debt load for those who attended for-profit institutions was $18,783, as compared with $7,125 at public two-year institutions. 

Now loan debt is a problem across the board, but there are two issues that appear more prominent in the for-profit sector. The first is the reliance on private loans to cover the more expensive tuition charged at for-profit schools. As Higher Ed Watch points out, while Congress is poised to make these loans safer with new regulations (in fact, just passed these regulations as I was writing), the bill it is considering should have included a provision to protect students against taking high-risk private loans when they don't need them. Without such a provision, the legislation still leaves the door open to predatory lending. Second, reports are all too common from students like Yasmine Issa (who testified before Congress), who are attracted to schools with promises of placement and employment, only to find out later that such opportunities either don't exist or don't pay a wage sufficient to manage the debt they incurred.

On top of this, the loan default rate at for-profit colleges far outpaces those rates in the nonprofit sector, as the Chronicle of Higher Ed points out this week. Ed Sector's call for better and more precise data is well taken, but high default rates in the for-profit sector have been an ongoing problem that also needs addressing, since we know that defaulting on education debt can be particularly horrific.

Finally, the high cost of these institutions also means that students attending them are using a disproportionate amount of Pell Grant money. In 2007-08, students at for-profit colleges and universities drew 21 percent of all Pell Grants, even though they only comprised 8 percent of undergraduate enrollments-although clearly the purchasing power of the Pell at these high-priced institutions doesn't mean students avoid loans.

And where is all this money going? Well, a large portion of it goes to recruiting more students, since bodies in the classroom mean more profit. This is why, in a recent speech, Sen. Dick Durbin suggested Congress needs to look more closely at this issue.

The big for-profit colleges spend more than a quarter of their revenue on advertising and marketing. To compare, McDonald's only spends 3 percent of its revenues on advertising.

One major for-profit education company spends more on advertising than on faculty.

Congress needs to take a serious look at whether federal financial aid dollars that are meant to provide students a chance at an education should be spent on billboards, television commercials, and advertisements on the sides of buses.

Then, there is top executive pay. The Chronicle recently published a chart of top CEO pay in the publicly traded for-profit sector. If you think the presidents at prestigious private colleges are doing all right, you should check out this chart. Hint: The top salary is in the $20 million range.

Ultimately, for me, what is most troubling is that, despite all of this, we seem to be giving up on affordable public higher education as something that all Americans should have access to, and have decided instead to contract public higher education out (literally), particularly for the most disadvantaged students. As Dean Dad points out, this is in part due to the fact that for-profit institutions are built to grow and expand, and our public sector institutions are not. 

But is that inevitable? And even if regulations are strengthened to protect students, what are the larger consequences of this (lack of) policy direction for higher education in this country? That large and complex question will be the one we seek to tackle next time around.