Andrea Hanks/White House
First lady Melania Trump speaks at Liberty University in Lynchburg, Virginia, November 28, 2018.
Liberty University’s decision to reopen campus in the midst of a pandemic was widely criticized. But what was once seen as a health risk has now turned into an advertising opportunity. Just weeks after a student tested positive for the virus, Liberty has begun advertising virtual campus tours and video admissions interviews. “Don’t let today’s circumstances impact tomorrow’s decisions,” one ad read, in an apparent reference to the COVID-19 outbreak. “Explore Liberty’s campus from the safety and comfort of your home,” read another.
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Liberty is just one example of how some schools are poised to benefit from social-distancing policies and surging unemployment rates that have accompanied the coronavirus. As public universities face budget cuts and uncertain futures, for-profit colleges and nonprofits that behave like for-profits are entering a time when, historically, they see increased enrollments as Americans turn to education in an attempt to acquire the skills they need to get back to work.
According to screenshots, multiple for-profit schools have begun running Facebook ads referencing the pandemic. Ads from Colorado Technical University suggested that students use its programs to “make the most of your time at home.” Walden University ran ads telling students that “At Walden, we’ve been serving our students for 50 years. In a time of so much uncertainty, you can continue to count on us.” And American Public University ran ads asking, “Did the pandemic disrupt your undergrad college studies?”
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Liberty University responded to a request for comment with a list of articles from its website.
Advocates suggested that the pandemic could lead to a repeat of the enrollment surge for-profits saw in 2008, when they took advantage of a depressed economy to enroll students who were unable to find work. “The for-profit college sector is definitely on a boom-and-bust cycle,” said Beth Stein, a senior adviser at the Institute for College Access & Success. “There was actually a congressional investigation in 1992 following the recession, where we saw a similar boom … the 2008 one was particularly big.” By 2010, Stein notes that the popular for-profit University of Phoenix had over 400,000 enrollees.
But Stein suggested that 2020’s one-two punch of a weak economy and uncertainty around whether classes can return in the fall could create unique conditions for for-profit education. “If you’re not sure what you’re going to do next year, I think there’s a lot of unknowns,” Stein said. “And I think that they are as a sector well positioned to take advantage of that and with some pretty significant advertising.”
The last for-profit boom was marked by thousands of students sucked into a cycle of indebtedness, receiving worthless diplomas that failed to help them find a decent job. For-profit colleges make almost their entire revenue through federally issued student loans, and they have been accused of deceiving students into running up debt loads and lying about job placement.
The for-profit industry came under scrutiny after its post-2008 surge in enrollments, including from the Obama administration. Several schools, including the Corinthian Colleges network, were forced out of business. But for-profits now have a powerful ally in Trump Education Secretary Betsy DeVos, who has rescinded Obama-era regulations of the industry, such as the “gainful employment” rule, which cut colleges off from federal funding if their students graduated with large debts and few job prospects. DeVos has hired numerous top officials of the Education Department directly from the for-profit college industry.
Some advocates are already sounding the alarm on a repeat of the worst practices from for-profit colleges. “As the pandemic creates financial strain for many institutions of higher education, we see some schools, especially for-profit institutions, ramping up marketing and recruiting to capitalize on the crisis,” said Tariq Habash from the Student Borrower Protection Center. “Borrowers should beware of schools aggressively pushing them to take on new debt to enroll in programs during the pandemic.”
The period between 2008 and 2020 has given rise to new practices that some advocates find concerning. Habash is particularly concerned about the rise of income share agreements—unregulated loans where borrowers pledge to repay a certain percentage of their income. Often, advocates claim, students pay significantly more under an income share agreement than they would under a conventional student loan. According to the Student Borrower Protection Center, the pandemic has led to an uptick in PR and advertising around income share agreements, as providers seek to portray them as a lower-risk option for students who graduate but don’t find employment.
Increasingly, the for-profit sector has blurred the lines between for-profits and nonprofits. Liberty University is one example of an institution that technically is a nonprofit but shares many of the features of for-profits, such as aggressive advertising, low instructional expenditures, reliance on federal funding, and large profit margins. While Liberty’s in-person campus has become a center of conservative politics, including hosting visits from President Donald Trump, its online degrees have become a profit center, taking advantage of the low costs of online education.
Increasingly, the for-profit sector has blurred the lines between for-profits and nonprofits.
Liberty University in particular has been at the center of corona-related controversy, first because it reopened its campus during the pandemic, and then after it received a class action lawsuit accusing it of “profiting from the COVID-19 pandemic” by using its reopened campus to avoid giving students refunds. In response, Liberty University claimed that its “response to COVID-19 puts us in pretty good company” and had its police department issue warrants against individual reporters for trespassing. The trespassing charges have since been dropped.
Recently, Education Secretary DeVos allowed for-profits to access coronavirus relief funds from the CARES Act, despite objections from four democratic senators including Sen. Elizabeth Warren (D-MA).
Florida Career College is one of the for-profit recipients of CARES Act funding, receiving $17 million. It also received a class action lawsuit, alleging that the school was “a sham” and that it used “high pressure sales tactics to enroll as many students as possible in order to profit from their federal student loans and grants.” For its part, the college described the lawsuit as “baseless legally and factually” and claimed it would use the CARES Act funding to provide grants to students.
At a time when the need for oversight of for-profit colleges has never been greater, the example of Florida Career College suggests that, under the Trump administration, oversight will be hard to come by.
