New York Governor Andrew Cuomo has won nationwide accolades for his bold plan to give the state’s college students “no cost” degrees from its state university system. But in the background to the dramatic push to expand public higher-education funding, known as the Excelsior program—offering tuition-free state college to households with incomes of up to $110,000—much of the same student aid pool has been siphoned off by for-profit colleges and vocational schools.
Though the industry has in recent years suffered a regulatory drubbing from federal and state officials over systemic fraud and financial abuse, the scrutiny has evaporated under the Trump administration, and corporate higher education is looking to make a comeback. In an extensive analysis of New York’s higher-education system, The Century Foundation (TCF) warns that without tighter oversight, the state’s upcoming budget may become the primary financier of an industry better known for exploiting rather than educating its students.
TCF’s analysis reveals a direct channel between the for-profit college sector, which has expanded with the help of both federal and state student loans and grants—and about $300 million in annual state tuition subsidies. Based on 2015–16 data, “New York State provides more state scholarship funds to private colleges than does any other state,” directing about one in five public dollars from the state’s Tuition Assistance Program (TAP) into private, for-profit schools.
In Albany, the Association of Proprietary Colleges (APC), an industry association, has pushed for access to a new tuition program that parallels traditional TAP grants, the Enhanced Tuition Award (ETA) Program. While non-profit private college students are currently eligible, opening the fund to for-profits would offer comparable financing to an estimated 8,500 of their students statewide. Although Cuomo previously vetoed a measure to include for-profits in ETA, the proposal was just approved in the latest budget plan.
All of this is a problem because the state may be getting less for its money when the students it aids attend for-profits compared to traditional public and private institutions. New York is dotted with for-profit programs that amount to little more than hyped-up diploma mills, often taught with substandard instruction and half-baked online-instruction modules. The industry—led by franchises like Corinthian and ITT—is also notorious for recruiting heavily among poorer students, students of color, and first-generation college students, who are more financially vulnerable to the debt that their courses typically pile up as graduation prospects sink.