Colleges for Profit Are Growing, With Federal Help

http://www.nytimes.com/2012/05/25/business/us-subsidies-to-for-profit-colleges-keep-growing.html?ref=education

There are a lot of government subsidies, and in the current fiscal atmosphere many are shrinking by necessity. What appears to be lacking is any rational way of deciding which should shrink.

The volume of federally guaranteed student loans to students at so-called proprietary colleges — the ones that intend to operate at a profit and get nearly all their revenue from the government — continues to grow.

At the same time, state and local governments across the country are slashing spending on higher education, and community colleges — the ones most likely to offer alternatives to the students recruited by the far more expensive proprietary schools — are suffering some of the largest reductions.

That trend has been welcome news to the proprietary colleges. “The competitive landscape” is getting better, Kevin M. Modany, the chief executive of ITT Educational Services, one of the larger for-profit colleges, told analysts this year.