What this tells me, is that there is clearly a demand that is not being met by 'traditional' colleges/universities. These schools offer people a chance at a diploma that they can put on their resume. If you don't have that piece of paper on your resume, you are not even going to get an interview regardless of how knowledgeable you are in the field (unless you have a contact inside the company already).
The problem is many of these programs simply are designed to make money, not teach students and prepare them for a job. Employers know what degrees are basically worthless; resulting in people with student debt and still poor job prospects. Take away the loans that provide the revenue for non-performing schools will make them go away and help those that actually do provide value for the money.
These schools give people, who maybe got off to a bad start, a chance to go to classes in the evenings, it is a path for those students who were not necessarily 'good' at school and would score poorly on an ACT or SAT test. When more and more of the jobs those people used to get go overseas or to mexico, they have to have some way into the 'new' economy. Either that or they find a way to game the system with welfare/disability (or get stuck forever in working poverty). They have to live, they have to feed their families. These schools offer them a way to do that. (or more likely, the false hope that they can do that)
Given the statistics cited in TFA, false hope is exactly the problem. Their advertising is aimed at those desperate for a better job, they promise one and then don't deliver. There is nothing inherently wrong with a for profit school. I know someone who taught for years at an automotive trade school; one that actually placed their graduates in good jobs because they had the basic skills, could pass the ASE exam, and were competent basic mechanics. They used to offer just a high school dropout a path to a good job, one that would let them repay any debt and earn a living.
I think the traditional colleges need to take notice and start offering programs that mimic what these for-profit schools offer. Flexible schedules for adult students, shorter paths to a certificate or diploma, etc. Side note: aren't all colleges 'for profit'? I see the million dollar salaires of university presidents, massive coffers, and multi-billion dollar sport franchises and have to think that they are all 'for-profit'; the profit just goes in different directions.
Many colleges offer just that, especially community/junior colleges and regional schools. I agree that not for profit doesn't mean we can't make and spend boatloads of money.