Beginning in the late 1990s, WallStreet was looking for the next high profit, low risk venture. That’s when they set their eyes on for-profit colleges, which at the time were relatively small enterprises focused largely on vocational training. Today, 76% of students find themselves attending a for-profit college that is traded on a major stock exchange or owned by a private equity firm.

Ultimately, these schools answer to investors, not the students they claim to serve. In 2010, after an extensive two-year investigation by the Senate Committee on Health, Education, Labor, and Pensions uncovered extensive fraud and deception by at least 15 major for-profit colleges. This nightmare scenario is on par with the subprime mortgage crisis.

We’re all familiar with the for-profit promise of flexible course hours, affordability, and at the end of it all—a better paying job. These colleges claim to solve all of your current problems, all you have to do is make a phone call, click a button—it couldn’t be easier to take control of your future.

The only problem is, it’s all a lie.

This lie attracts more than four-million students each year to the for-profit education industry. An industry that is almost entirely supported by tax dollars in the form of Federal Student Aid—to the tune of $32 Billion per year.

This money isn’t going to bettering student programming or keeping tuition costs low, most of it goes towards financing executive pay, marketing, and predatory recruiting efforts. These colleges prey on the vulnerable. Don’t believe me? Here’s an excerpt from Vatterott’s training manual for student recruiters:

“Welfare Mom w/ Kids. Pregnant Ladies. Recent Divorce. Low Self-Esteem. Low Income Jobs. Experienced a Recent Death. Physically/Mentally Abused. Recent Incarceration. Drug Rehabilitation. Dead-End Jobs-No-future.”

This isn’t some bad apple—as for-profit spokespeople would have you believe—this is an industry-wide standard of identifying and exploiting pain and hardship. Individuals are made to feel as if the choice to attend a for-profit college is the only choice they have to better their lives.

Students sign contracts to attend for-profit colleges with the assurance that their future is now safeguarded, that their financial woes will soon be over and that the path to the American dream will be smoothly paved before them.

But here’s what those schools don’t tell you

You are a means to an end.
During the ten years between 1998 and 2008 profits increased for these institutions by 225 percent. During 2009, the profits at these education companies often exceeded that of Coca-Cola Inc. and The Walt-Disney Company.

You won’t get an education.
At least, not the one you were expecting, certainly not the one you were promised. The classes won’t be challenging, and the teachers won’t care, that is if they even bother to show up for class.

You will probably drop out.
Research shows that more than half of the students who enroll in for-profit colleges will drop out without receiving any degree or certificate within 4 months of enrollment.

You will pay much more than you originally thought.
It’s unlikely that you will ever be able to obtain verbally or in writing, the actual cost of your degree. That’s because for-profits discourage (or downright forbid) that recruiters disclose the full cost of tuition. Even if you are able to ascertain an estimate, unexpected fees and charges will be billed to you. For instance, Ashford Universities (owned by Bridgepoint Inc.) charged students a $1,290 technology fee six weeks into their course. This is a common practice.

You should expect at least a 4% in tuition increases per year.
No, this money isn’t going to student or educational needs, it’s going straight into the CEOs pockets. Why? Because for-profit schools discovered that they could continue to increase tuition rates with little fear of reprisal from students.

Did I mention you will pay a LOT for your degree?
Four times as much as traditional associate degree seeking programs, or twenty-percent more than bachelor’s degree programs. For-profit colleges charge the maximum amount of tuition to ensure they can get the most money from the government. That’s why they have started their own institutional loan programs where they lend money at astronomical interest rates at 11-18%. Don’t worry, they don’t expect you to repay it. It’s better for them if you don’t.

Your assistance ended the moment you enrolled.
All that help you received before you were a student, those attentive counselors and staff, well it end well it ends once you enroll in school. A growing number of for-profit schools offer on-line programs exclusively since restrictions were eased in 2006. These restrictions would have ensured that physical programming were as available in at least 50-percent of programs.

Your certificate or degree will likely mean nothing.
It won’t translate into a job and it won’t even transfer to other colleges. Many for-profit institutions lie or distort their claims of accreditation to get students to enroll.

You will (probably) default on your loan.
That is if your college hasn’t hired a private investigator to come knock on your door. In 2009, for-profits like Kaplan and Rasmussen, both paid private investigators fees for each signature they collected from students. Once a loan enters into forbearance or is deferred the loan can be considered “cured” in the for-profits reporting to the government.

Your debt will follow you.
It will impact your ability to rent an apartment, buy a house, a car, and even attend school in the future. These companies don’t care about informing you of the risks and costs of signing a loan, forbearance or deferment letter. All they care about is getting the Federal money into their pockets—what happens to you after matter’s little.

We are all impacted by this.
The high cost of for-profit schools coupled with students limited financial resources has translated into around 96% of for-profit students taking out loans to finance their schooling.

Even though for-profit students only make up 13% of America’s total student population, they account for more than half of all student loan defaults.

These defaults are at the epicenter of the student loan crisis.

Why Regulation is Such a Problem

Accrediting agencies rely on for-profit colleges for their continued survival, it’s a symbiotic relationship. There is no universal standard for approving a college, which is why for-profits cherry-pick which accrediting agency they wish to use.

States don’t have the time, money, or inclination to stand in the way of free Federal dollars flowing into their states. Lobbying efforts by for-profits have found success in getting States and the Federal government to step aside in the regulatory process.

The Department of Education (DoE) had some more stringent regulations on the books in the 1990s (when for-profits were incredibly small and narrow in the scope of services they provided) but in the 2000’s, those regulations were either rolled back or eliminated completely.

This meant that for-profits no longer risked losing their Federal Student Aid financing when they failed to meet or comply with DoE regulations. Now, couple this with the sheer explosion of for-profits coming into existence, and you have a perfect storm. One that benefits and broadens the financial reach and power of for-profit institutions while they provide little-to-no proof of their benefit to students or taxpayers.

There have been attempts by the Obama Administration and the Department of Education to crack down on fraud within the for-profit sector. These efforts have been met with extreme controversy and anger by the for-profit industry. One of the key provisions of the DOEs new rules targeting for-profits access to financial aid was blocked by the courts.