For-profit colleges target vulnerable communities

Nikka Ewing logs onto the Uber Eats app most mornings after she gets her 4- and 6-year-olds off to school. She has a few hours to make some money.

“You turn on the app, and they’re giving you $2 orders and $3 orders,” says Ewing, 34, who lives in Country Club Hills. “I'm not even making gas with that.”

Her life is much different than what she envisioned when she enrolled at DeVry University in 2019. She had tried college before, dropping out after the death of a close family member. But this time she was determined to achieve her childhood dream of working in robotics.

DeVry seemed to offer her a way forward, with advantages over a nonprofit private college or public university like those most college students in the United States attend. A television commercial for the for-profit college chain promised a bachelor’s degree in three years instead of four and job placement within six months of graduation.

Now, five years and $60,000 of federal student loans later, she still hasn’t finished Devry’s bachelor of software engineering program. She has gotten enough credits for two associate’s degrees and has applied for jobs but has yet to get an offer.

“I’m, like, ‘DeVry, something's got to come,’ ” Ewing says. “Because I can't keep living like this.”

Ewing, it turns out, might have been better off had she stopped her education with a high school diploma. A WBEZ analysis of federal data and a WBEZ survey of more than 250 current and former students found that for-profit education programs in Illinois often leave students worse off than if they hadn’t gone to college at all — struggling to pay off mountains of student debt while working jobs that pay as little as what a typical high school graduate makes.

Those who are affected most are Black students and low-income students like Ewing, who enroll at for-profit colleges at much higher rates than they do at nonprofit and public colleges or universities.

“The for-profit playbook is to meet these communities where they are, capitalize on the lack of infrastructure, lack of funding, lack of opportunities and then dangle that promise of economic security, economic stability, economic mobility, to these same folks,” says Aissa Canchola Bañez, policy director for the not-for-profit Student Borrower Protection Center. “And the results are catastrophic.”

WBEZ compared median earnings of students 10 years after enrolling at each Illinois college with those of high school graduates in the state who are 25 or older. Just one-third of about 90 for-profit schools in Illinois reported students’ median earnings were higher than those of high school graduates. By comparison, more than 80% of public and nonprofit colleges and universities in Illinois reported median earnings greater than those of a typical high school grad.

The wages are so low compared to the debt that students typically take on that a new federal rule, which goes into effect on Monday, could result in a cutoff of federal funding for about 60% of Illinois’ for-profit schools, a WBEZ analysis of federal data shows — slightly higher than the national average of 55%.

Most of the schools with the worst outcomes focus on cosmetology.

DeVry is among the better-performing for-profits in Illinois in student earnings and falls into the one-third whose typical students make more than students who topped out at a GED. Still, 10 years after enrolling, the median pay for DeVry students is $45,200 — about $10,000 higher than the median income of a typical high school graduate.

Representatives of DeVry didn't respond to a request for comment.

Incentive is to bring in more students

Unlike public and nonprofit colleges, for-profit colleges answer to their owners and investors aim to maximize profits. According to federal data, they get nearly all of their revenue from tuition and fees. As a result, experts and advocates say, they have a big incentive to spend a lot to get students in the door, more than they do to educate them.

In contrast, at nonprofit institutions, tuition revenue is "funneled into things like instruction and helping to sort of craft and improve what's happening in the learning environment,” says Dominique Baker, a higher education researcher at the University of Delaware. “At for-profit institutions, more of that money is just going back to trying to get more students to enroll.”

For every dollar they get from tuition, nonprofit colleges spend an average of 79 cents and public institutions an average of $1.13 on educating students, according to The Century Foundation, a Washington think tank. They can do that because they also rely on other sources for revenue, including public funding, grants and endowments.

For-profit colleges, the think tank's research has found, spend an average of 26 cents on education per tuition dollar.

That means for-profit colleges often lack support for students who are low-income and first-generation, researchers say, including tutoring and regular appointments with student advisers.

Researchers say a lack of support is reflected in lower graduation rates at for-profit schools. In 2019, the graduation rate for low-income students at for-profit schools was 25% — compared to 50% at public schools and 53% at nonprofit institutions, according to the Illinois Board of Higher Education.

Geneva Wright says she chose Chamberlain University, a for-profit nursing education chain, because she could start on her bachelor’s degree there right away and not have to wait for the traditional fall or spring semester.

“Chamberlain was the fastest and could get me in quicker, and now I kind of see why,” says Wright, who was solo parenting and working as a nursing assistant.

Wright says she finished school with roughly $50,000 in debt but had it canceled under a federal settlement for people defrauded by their colleges. Chamberlain, DeVry and more than 100 other mostly for-profit schools were implicated.

Chamberlain officials declined to comment on Wright's experience or on the settlement, saying in a written statement: “At Adtalem Global Education, the parent company of Chamberlain University, our primary goal is to equip our students with the knowledge, skills and experiences they need to pass required licensure exams and enter the healthcare workforce.”

More debt, less money to pay it off

Of the for-profit college students surveyed by WBEZ, about 40% say they still have more than $30,000 in student debt even though many have been out of school for a decade or more.

Unlike graduates of traditional nonprofit colleges and universities who borrow to go to school, for-profit graduates tend more often to not make enough money to pay off that debt. Graduates of for-profit schools borrow more and default on their loans at much higher rates than students from other institutions, according to the Federal Reserve of New York.

Stephanie Vega took out $7,000 in loans and paid $3,000 out of pocket to attend the Bridgeview campus of the for-profit cosmetology school Tricoci University of Beauty Culture. The program’s median earnings are nearly $10,000 less than that of high school graduates.

Vega had been working as a bartender but wanted a career change so she could spend evenings with her kids. She graduated this year but has yet to find a new job after getting what she calls a lackluster education from Tricoci that she says didn't adequately prepare her for the state board esthetician licensing exam.

“All they did was hand you a book," Vega says. "They don't care what you do as long as you finish [filling in] that book."

Tricoci representatives didn't respond to a request for comment.

Despite outcomes like these, for-profit colleges continue to enroll students, in part, by spending heavily on marketing, including commercials on YouTube, TikTok and local television and signs on public transportation.

Targeting vulnerable people

In 2022, 26% of students at Illinois’ for-profit colleges were Black, compared to 9% of students at the state’s nonprofit colleges.

The disparity is especially stark for women, who comprise the majority of Black students enrolled at for-profit colleges. In 2022, Black women made up 6% to 7% of students at Illinois’ nonprofit and public colleges and more than 20% of students enrolled at Illinois' for-profit schools, WBEZ’s analysis found.

The schools target these groups in part by where they locate. A Student Borrower Protection Center analysis found that 41% of Chicago ZIP codes with the highest concentrations of Black residents and 53% of those with the highest concentration of Latino residents are home to a for-profit college — compared to 6% of the city’s communities with the highest concentrations of white residents.

Jennifer Lezan, 38, says she didn't grow up with enough family money to pay for college. She was raised in Humboldt Park and the west suburbs by her mother, who had moved from Puerto Rico and worked as a housekeeper. Lezan says she couldn't afford tutoring to prepare for the ACT, a standardized test that most public and nonprofit colleges used to require for admission, didn't score well and couldn't afford the fee to retake the test.

That left community colleges and for-profit institutions as Lezan’s options for getting a degree. Her mother didn't go to college or know the difference between the two types of schools. But she knew her daughter was interested in design. So, when a recruiter from the Illinois Institute of Art visited Lezan’s high school, she encouraged her daughter to apply.

Lezan attended the Schaumburg campus of the for-profit chain from 2004 to 2008, a decade before it abruptly closed in 2018 after losing its accreditation.

“I just knew I needed to go to college,” Lezan says. “Because you're telling me, ‘This is how I'm gonna break the cycle of poverty in my family. ’”

Today, Lezan wishes she had gone to a nonprofit or public college because she thinks it would have provided a better education at a more affordable price.

Nationally, at schools that primarily offer bachelor’s degree programs, students pay an average of about $5,000 more per year at for-profit schools than they do at public schools, WBEZ found.

“That school, at the end of my four-year program with my bachelor's, cost $80,000 plus interest, which is bananas,” says Lezan, now working as a freelance illustrator and graphic designer.

Failed attempts at reform

U.S. Sen. Dick Durbin, D-Ill., who most recently introduced the Proprietary Education Oversight Task Force Act, says efforts to curb the for-profit industry took a hit during the Trump administration under then-Secretary of Education Betsy DeVos, an ally of the for-profit industry.

“She enlisted so many people from the industry to serve as watchdogs,” Durbin says. “No surprise they found nothing wrong with for-profit institutions.”

This summer, Biden administration education officials are launching an updated version of the gainful employment rule, an accountability requirement scrapped by the Trump administration in 2019. This means that, starting Monday, career-training programs will have to prove their graduates can afford their monthly loan payments and that they make more money than adults in their state who have only a high school diploma. If schools fail either of those tests, students in those programs will get a warning before they can take out federal loans. If schools fail the same tests two out of three years, they could lose their access to federal financial aid.

It’s too late for Ewing, the DeVry student who dreams of working in robotics. She hopes to graduate later this year and will have to start paying back her loans six months after that. She estimates she will owe more than $60,000 in federal loans for her classes at DeVry.

“They tell you, 'Oh, in order to get a better job, you need to get an education,’ ” Ewing says. “You get an education, and that still ain't enough.”

Contributing: Al Keefe, Steven Arroyo, Stephanie Cellini, Peter Granville, Tia Caldwell