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A word on the for-profits

Oct. 31, 2011 - 03:48PM   |   Last Updated: Oct. 31, 2011 - 03:48PM  |  
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For-profit colleges are under siege for their receipt of GI Bill dollars, taking fire from television news programs such as "Frontline" and "60 Minutes," all the while getting grilled by Congress. Eager to attract veterans, the schools say they're committed to delivering a quality product, and some scored well on our survey of vet-friendliness.

University of Phoenix has been the largest beneficiary of Post-9/11 GI Bill money, followed by other for-profits such as ITT Educational Services Inc., Education Management Corp. (parent company of Art Institutes and Argosy University) and DeVry University. A Senate analysis released in September concluded that about half of a typical for-profit college's revenue goes to marketing and profits; that most for-profits had low year-to-year retention rates; and that the average for-profit school costs the Post-9/11 GI Bill program more than public or private schools.

Accounting for differences

ECPI University, which scored highest on our list of nontraditional colleges, is a for-profit school with locations in Virginia, North Carolina and South Carolina, as well as offering entire degree programs online. Bob Larned, ECPI's executive director of military education, said it's unfair that some for-profits are giving schools such as ECPI a bad reputation.

"Let me try to separate ECPI from other for-profit colleges, because we've been around for 45 years in this community," Larned said in an interview. "We're headquartered here in the Virginia Beach area, and because of our proximity to the military, we obviously, over the years, have had a lot of military students."

Larned said many of the for-profit schools that have come under fire are online schools, some of which also made our list of top schools for vets.

But at least one such organization, American Public University System parent company of American Military University has the highest one-year retention rate for first-time students out of the 10 largest online schools at 92 percent for first-time full-time students. In fact, APUS's first-year retention rate is significantly higher than the national average of 77 percent for full-time students and 46 percent for part-time students.

Further complicating the comparison between traditional and for-profit colleges, APUS does not report a graduation rate to the Education Department. The National Center for Education Statistics bases graduation rates on the number of first-time students who graduate within 150 percent of the standard time required for a typical degree three years for an associate degree and six years for a bachelor's.

The typical four-year graduation rate at for-profit schools is 13 percent, according to NCES.

APUS's vice president of military programs and former Air Force voluntary education chief Jim Sweizer said the school primarily courts transfer students, making it difficult to use NCES's standard metric of first-time students.

Sweizer argues that it would be misleading to measure graduation rates on a six-year timeline.

"The average military person only takes three courses a year," he said. "Students do drop out [and] they come back in because of military deployments, so it is very difficult to look at an adult learner as a cohort as they look at 18-year-olds."

By the numbers

APUS's associate vice president for investor relations, Chris Symanoskie, said the company spends less than 20 percent of its revenue on marketing. Strayer University spends 18 percent of revenue on marketing, and ITT spends 19 percent, according to the Senate report. Among other findings:

* APUS took in $2,900 in Veterans Affairs Department benefits per veteran during the 2009-2010 school year. ECPI took in about $8,600, while University of Phoenix received $5,200.

* APUS also funneled less of its revenue into profits. According to Symanoskie, 15 percent of APUS's revenue was counted as profit in 2010. The Senate committee reported that ITT dedicated 37 percent of its revenue to profit and Strayer University dedicated 34 percent.

For-profits ECPI, AMU, University of Phoenix, Columbia Southern University, Columbia College and Grantham University not only scored well by our standards but also received mostly positive feedback from students who took Military Times' student survey.

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