Rising Debt at For-Profit Medical and Health Care Career Schools
Pepperdine University, a nonprofit Christian school in California, showed a 24 percent increase in loan volume, largely associated with growth in graduate student loans. The school contracts with the for-profit 2U, Inc. to run its online MBA program. The University of California, Davis, disbursed 20 percent more in student loan funds, with paydayloanstennessee.com/cities/trezevant/ an 30 percent increase in the number of graduate student loans (and a 12 percent increase in parent loans). A year ago the school launched an online MBA program, managed by 2U, Inc.
The federal student loan data are showing some large increases in graduate student loans at public and nonprofit universities that are known to be contracting with OPM companies to run their online masters programs
Baylor University, a nonprofit Christian school in Waco, Texas, had a 16 percent increase in student loans in the latest federal data. The number of loans to graduate students is 69 percent higher than in the same period the prior year, while the number of undergraduate loans is 7 percent lower and the number of parent loans is 5 percent lower. Baylor’s online graduate programs are managed by 2U, Inc. The public Lamar University of Beaumont, Texas, had a 27 percent increase in graduate student loans as of company Academic Partnerships runs the school’s online programs and is paid a higher share of tuition for graduate students, according to the contract obtained by TCF. Loan volume overall at Lamar increased by 14 percent even as undergraduate volume declined.
The beleaguered University of Southern California had a 13 percent drop in student loan volume. Despite the Varsity Blues scandal, however, the number of undergraduate loans was stable. Instead, the data suggest graduate student loans account for the decline, possibly associated with a 2U-operated online Masters of Social Work program that “went terribly wrong,” according to the Los Angeles Times.
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Some of the largest increases in student loans were at for-profit medical and allied health training schools. Rocky Vista University, a new for-profit osteopathic medical school in Colorado, grew its student loan volume by 23 percent. The school’s cloaked ownership structure was among those featured in TCF’s recent report on for-profit medical schools, which revealed weak oversight by medical school accreditors. Ponce Health Sciences University, also discussed in the TCF report, increased student borrowing by 13 percent.
Ross University School of Medicine’s student loan borrowing increased 36 percent, while borrowing at its sister Ross University School of Veterinary Medicine rose by 40 percent. Located offshore in Barbados and the West Indies, respectively, the schools are owned by Atdalem Global Education, Inc. (the publicly traded company that previously owned DeVry University). While most offshore medical schools must maintain an enrollment that has a majority of non-U.S. citizens and meet minimum medical exam passage rates to be eligible to use federal student loans, Ross is one of five schools that Congress has exempted from those quality checks.
Student loan volume at another of the exempt offshore medical schools, St. George’s University, increased by a modest 5 percent. However, in early 2019, the private equity firm that owns St. George’s purchased the University of St. Augustine for Health Sciences north of San Diego. Student loans at that school, which offered masters and doctoral degrees in physical therapy and nursing, have spiked by 24 percent. Compared to family-owned and publicly traded companies, private equity firms have a much worse record of consumer abuses, because the firms notoriously seek very high returns on their investments.
The owner of another California allied health training school, San Joaquin Valley College, purchased another health training chain, Carrington College, at the end of 2018. The company’s colleges, combined, increased new student debt by 33 percent through – 20 academic year.