Associated Press – Sen. Tom Harkin (D-Iowa) is leading the charge to clamp down on the way for-profit colleges use federal money to advertise. Financial aid can make up 90% of a for-profit college’s revenue, while their advertising costs routinely make up more than 10% of their total budget. This means that the federal government is indirectly paying for-profit marketing expenses since the money is not being used to educate students or cover tuition costs. A recent Senate report shows that financial aid totals 86% of revenue at 15 of the nation’s highest-grossing for-profit colleges. In response, Sen. Harkin has teamed with North Carolina’s Sen. Kay Hagan to introduce a bill that prevents any college from using federal dollars, including funds garnered from the GI Bill, to advertise to or recruit future students. Advertising at non-profit colleges, while increasing, typically makes up less than 1% of a university’s budget. The bill is expected to fail, however, as for-profit and traditional universities will likely line up to oppose the bill on the grounds that it imposes additional federal regulation on the education sector. For more, read Recruitment Ads for For-Profit Colleges Targeted.

RSC continues to advise our students to avoid, if at all possible, for-profit colleges. Such schools are often overpriced without degrees respected by employers. At worst, they encourage students to take on excess debt and loans to pay for their education. They have a student-loan default rate twice as high as non-profit colleges and account for 44% of all defaults despite having only 10% of the nation's college students. We strongly urge students to attend a traditional non-profit college which rewards students with good gift aid.