This is really welcome news.
For-profit higher ed behemoth Kaplan, which is owned by the Washington Post, announced last week that it is closing thirteen of its seventy campuses nationwide. Nine will shut down completely, and another four will be folded into nearby locations.
Even better news is the reason for the shutdowns — three of the campuses were apparently just stripped of their accreditation, and thus their students’ eligibility for federal loans.
Loan defaults at for-profit colleges are ridiculously common, with three-year defaults standing at 22.7% in newly-released figures, more than twice the rate of public colleges.
Put another way, for-profit students represented a bit more than a tenth of the students in the cohort, a quarter of the borrowers, and half the defaults. And this is public money — as the Post itself acknowledges, nearly 90% of Kaplan higher ed revenue comes from federally guaranteed student loans.
For-profit colleges are a huge fraud on the nation’s students and taxpayers, but because of their parent companies’ lobbying clout regulation has been slow and lax. New rules implemented during the Obama administration have been far less aggressive than I’d like, but even in their weakened form they’re proving sharp enough to have an effect. As the Chronicle of Higher Education notes, “of the colleges that would not meet the new standards, 160 are for-profit, 35 are public, and 23 are private.”
In its most recent annual report Kaplan’s higher ed division showed a $500 million decline in revenue, a 74% drop in profits, and a loss of 25,000 students. Here’s to more of the same, and better, in coming years.