Virginia — U.S. for-profit colleges are like subprime mortgage lenders, targeting low-income and minority students by “peddling access to the American dream but delivering little more than crippling debt,” a report said.
Low-income students make up half of the enrollment at for- profit colleges and minorities comprise 37 percent, the Washington-based Education Trust said, citing federal data. The nonprofit research and advocacy group, funded partly by the Bill & Melinda Gates Foundation and the Lumina Foundation for Education, said Apollo Group Inc. and other for-profit colleges have higher dropout rates and student-debt loads than traditional universities.
The report follows the proposal of regulations by President Barack Obama’s administration that would restrict the flow of taxpayer money to for-profit colleges, which get up to 90 percent of their revenue from federal grants and loans and received $26.5 billion last year in U.S. student aid.
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