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Federal regulators have taken more interest in for-profit colleges since GW Bush left office. Until recently, regulations have been lax or poorly enforced. Meanwhile, a growing number of these for-profit institutions of higher learning have served as giant conduits for sucking federal financial aid money out of the public trust and into the hands of the private investors who own the colleges. Most of the money is student loan  dollars, which are non-dischargeable debt owed by the student.

Until this week, the highest profile action against a for-profit school was the U.S. Department of Education's lawsuit against the University of Phoenix, which settled in 2007 for $9.8 million. Now the New York Times reports that:

The Department of Justice and four states on Monday filed a multibillion-dollar fraud suit against the Education Management Corporation, the nation’s second-largest for-profit college company, charging that it was not eligible for the $11 billion in state and federal financial aid it had received from July 2003 through June 2011.

The most interesting thing about this lawsuit (aside from the potential $33 billion in damages) is that the ownership of Education Management Corporation includes some names you might recognize: Goldman Sachs, and Maine senator Olympia Snowe.

I have some personal knowledge of how the higher education financial aid system works, having taught at an open enrollment, private, non-profit college in the past. My students were extremely diverse, but they had one thing in common: very few of them had a good educational background. Many had GEDs, or did poorly in high school. Most of them were poor. The school's open enrollment policy allowed them the opportunity to try. Financial aid was primarily in the form of loans. Some of them stayed in school. Some of them didn't make it and were on the hook for their loans. Either way, the school collected their tuition money, directly from the fed, and passed along the overage to the student for living expenses and books. Tuition per credit hour at private schools is four to five times as expensive as a state university. The overage checks are a big motivator for cash-strapped students to enroll.

According to the USDOJ complaint, Education Management wasn't very picky about who they enrolled:

The complaint said the company had a “boiler-room style sales culture” in which recruiters were instructed to use high-pressure sales techniques and inflated claims about career placement to increase student enrollment, regardless of applicants’ qualifications. Recruiters were encouraged to enroll even applicants who were unable to write coherently, who appeared to be under the influence of drugs or who sought to enroll in an online program but had no computer.

Federal rules prohibit schools that receive federal financial aid from using enrollments as their only metric for determining compensation of recruiters. Education Management denies that enrollments were their only metric.

The lawsuit would never have been filed if not for two former Education Management employees who acted as whistleblowers to the fed. Under the False Claims Act, which penalizes individuals and companies that obtain federal funds under false pretenses, defendants are subject to treble damages. Since Education Management received $11 billion in financial aid money between 2003 and 2010 (federal money accounted for 89.3 percent of its revenues in 2010), damages could add up to $33 billion.

Private, for-profit colleges have grown in numbers between 2000 and 2011, probably because they're so lucrative. According to another New York Times article, they now enroll 12 percent of all students in the United States, but those students account for half of all student loan defaults. The Department of Education has attempted to regulate the for-profit school industry, but has met with strong opposition from the regulated community:

The new default rates are only one point of dispute in a larger battle over the department’s efforts to impose new rules on the commercial colleges, which enroll about 12 percent of the nation’s college students...At the heart of the fight is the department’s new “gainful employment” rule, which would cut off federal financial aid to programs whose graduates have big student loans, low income and low loan-repayment rates
.
The colleges have fought back by suing the government:
On Wednesday, a group representing commercial colleges sued the G.A.O., accusing it of negligence and malpractice over what the suit called an “erroneous and completely biased” report criticizing commercial colleges.

I give the Obama administration and Senator Tom Harkin credit for attempting to regulate this bunch, who aren't going to go down without a fight. An Associated Press article says:

A committee led by Sen. Tom Harkin, D-Iowa, has held multiple hearings on for-profit colleges over the past year — most recently in early July, after the Obama administration issued its new "gainful employment" rules. Those rules require schools to meet at least one of three conditions to continue receiving Pell Grants and other federal paid-tuition: a loan repayment rate by former students of least 35 percent; annual loan payments of no more than 30 percent of an average student's discretionary income; or annual loan payments that don't exceed 12 percent of a typical graduate's salary.

What's interesting is how deep the entanglements go. According to the New York Times, Wall Street is involved with Education Management in a big way:
Education Management, which is based in Pittsburgh and is 41 percent owned by Goldman Sachs, enrolls about 150,000 students in 105 schools operating under four names: Art Institute, Argosy University, Brown Mackie College and South University.

And Congress has its hand in the Education Management pie as well:

In 2003, Education Management’s chief executive was Jock McKernan, a former governor of Maine who now serves as chairman of the board. Mr. McKernan is married to Senator Olympia J. Snowe, a Maine Republican whose 2010 financial disclosure form lists Education Management stock and options worth $2 million to $10 million.

Another for-profit school, Kaplan University, is owned by none other than the Washington Post and has been a major profit center for the paper, which has experienced declining revenues in its news operation for several years. On July 26, the Florida Sun-Sentinel reported that Kaplan settled a False Claims Act lawsuit, also brought by whistleblowers, for $1.6 million.

What about nonprofit schools? Are their hands clean? Not exactly. Although they don't have private investors or shareholders to enrich with federal money, they work around  the edges of their nonprofit status by hiring armies of administrators and compensating them well. Very well. The president's salary at my school is rumored to be over $500,000. Board members don't serve for free, either.

They say that if you teach, eventually everything will happen to you. I agree, but the most bizarre moment of my teaching career didn't happen in the classroom. It happened at a social event between faculty members and senior administration at my school. With a fatuously sincere look that only a republican could summon for the occasion, one administrator told me that our school is superior to the state universities because "we don't depend on the government for handouts."

I needed my job at the time, so I didn't laugh in his face. But now I wish I had.

Originally posted to loretta on Mon Aug 08, 2011 at 08:12 PM PDT.

Also republished by Community Spotlight.

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  •  Tip Jar (233+ / 0-)
    Recommended by:
    Deward Hastings, ogre, HiKa, Maggie Pax, jennybravo, gchaucer2, white blitz, kerflooey, absolute beginner, amk for obama, antirove, surelyujest, 207wickedgood, cville townie, bythesea, MsGrin, anyname, JVolvo, True North, Rosaura, farlefty, Dave925, DiegoUK, Blue Tex, Gustogirl, blue jersey mom, phonegery, kurt, Actbriniel, indybend, vets74, majcmb1, J M F, YaNevaNo, GMFORD, jcrit, most peculiar mama, JC from IA, concernedamerican, BYw, bigrivergal, Little Flower, worldlotus, ER Doc, merrily1000, Lovo, angstall, jnhobbs, coppercelt, mamamedusa, Babsnc, Proud Mom and Grandma, PBen, tobendaro, gloriana, MKSinSA, JanetT in MD, mconvente, gundyj, alisonc, Thinking Fella, davehouck, lilypew, emal, falina, GeorgeXVIII, sc kitty, Empower Ink, Jake Williams, Razorblade, psnyder, Miggles, Ohiodem1, badscience, Ken in MN, copymark, Steve In DC, CA Nana, wader, JTinDC, Dr Colossus, science nerd, Iberian, 4Freedom, TXdem, marleycat, Clive all hat no horse Rodeo, Preston S, kfred, JDog42, LivesInAShoe, ExStr8, tomjones, dmhlt 66, snackdoodle, TomP, myboo, Shotput8, kathny, Ivan, dansk47, Tea and Strumpets, buckstop, Lawrence, milkbone, profh, noemie maxwell, virginislandsguy, Brooke In Seattle, Jagger, Pennsylvanian, profewalt, Adept2u, Its a New Day, Satya1, ewmorr, cotterperson, Oh Mary Oh, fiddler crabby, bnasley, Cronesense, Mimikatz, eve, sethtriggs, Arahahex, Andrew M, donnajanew, MartyM, dewtx, Anthony Page aka SecondComing, Tinfoil Hat, BruceMcF, squarewheel, MKinTN, Neon Mama, Spaghetti Western, orangecurtainlib, TheZeu, humphrey, DBunn, Beet, dewey of the desert, DEMonrat ankle biter, trumpeter, Dexter, millwood, Janeo, emeraldmaiden, cassandraX, dagnome, The Hindsight Times, Lujane, Heiuan, Gowrie Gal, Egg, TexDem, bleeding blue, esquimaux, pileta, strangedemocracy, roystah, KayCeSF, Kamakhya, DC Scott, shanay, SnyperKitty, Imhotepsings, duckhunter, Lorikeet, Chaddiwicker, Loge, zerelda, Sister Havana, Time Waits for no Woman, dRefractor, Fiona West, Nulwee, UncleCharlie, Lily O Lady, OldDragon, dotsright, ColoTim, zane, Escamillo, PhilJD, cybersaur, Wino, Fish in Illinois, CA ridebalanced, pixxer, Msinformed, subtropolis, MizC, wilderness voice, roses, zapus, JuliaAnn, Shakludanto, OhioNatureMom, OIL GUY, The 1n Only Leoni, SarekOfVulcan, FarWestGirl, dnta, doc2, riverlover, Kinak, Dreaming of Better Days, Seamus D, Clytemnestra, Angie in WA State, IdaMena2, mcronan, wa ma, Statusquomustgo, StrayCat, perro amarillo, Larsstephens, lzachary, Arthurkc, Eric0125, chimpy, bronte17, mikejay611, frisbee, greenomanic, linkage, Simplify, operculum, Trotskyrepublican, nonnie9999, dadadata, Floja Roja
    •  Yes, the giant conduit (42+ / 0-)

      is operating everywhere. Start with the Bush tax cuts. The TARP bailout of Wall Street's "too big to fail" institutions. Agricultural subsidies going to huge agribiz companies instead of family farmers.I continue to be shocked at how easy it is for the rich to get their hands on the public trust if they can afford to lobby for it.

      I wish I had some solutions. As you can see, the regulated community is aggressively fighting back against the regulators.

    •  As much as I bitch about the Obama Adm (33+ / 0-)

      This is on the list of "good stuff that he has done."

      I must admit, it is not an insignificant list.

      “ Obama plays a dangerous game. The chessboard has taken on unforseen dimensions. ”

      by ozsea1 on Tue Aug 09, 2011 at 12:12:17 AM PDT

      [ Parent ]

    •  This is not new. Commercial activity (6+ / 0-)

      has always been a special governmental interest, going all the way back to the granting of charters and exclusive territories to traders and explorers by the crowned heads of Europe.  After all, the old world exploitation of the new was a public/private partnership.
      Indeed, the fundamental purpose of "regulation" is to make the commercial/industrial enterprise regular, as opposed to the randomness of nature.  So, regulatory agencies were set up to facilitate commerce.  Serving the general public and providing for the welfare of the environment was never a  governmental mission, regardless of what the Constitution proclaims. Regulatory reform that's NOT aimed at facilitating enterprise is a radical notion and naturally resisted. Compare it to children being thrown out of the house and expected to start providing for the parents.
      Most governmental bodies, when they aren't dealing with malefactors, were set up to dole out and distribute natural resources (in the form of rights of exploitation) to favored supporters.  So, when humans are perceived as a natural resource, then their exploitation follows.  I call it human husbandry -- the exploitation by humans of their own kind to their detriment.  Think of a hundred queen bees sitting in a hive doing nothing but being fed.
      The only problem with calling a halt to the exploitation (a kinder/gentler response than the Sons of Cain direct towards people of whom they are jealous) is that these freeloaders may well have nothing to contribute and lack the talents necessary to sustain themselves.  Talking a good game may be all of which they are capable.

      Finally, triangulation makes it possible to be a once-removed agent.  Collecting money in the name of the children does validate the claim not to be receiving a government hand-out. Being a middleman makes it possible to deny all connections, like Pontius Pilate washing his hands.

      The human brain likes to be in charge and hates to be wrong.  So, it's developed the habit of giving orders that are carried out by someone else, on whom the consequences can't be blamed either because obedience is a virtue. Having evolved consciousness, the human brain struggles to find how responsibility can best be denied.  Why?  Because making mistakes is intimidating and stultifying.  So, since humans have to act to survive, being timid/inactive is a threat to survival and has to be rejected/denied.  Humans that aren't self-conscious don't have that problem. "Personal responsibility" is a generic term.  It says that some person acts (rather than nature or God), but leaves it at that.  Which person is irrelevant.  For people who don't self-direct that's evident. Thus the conundrum presented by the knowledge of good and evil is resolved by not knowing. All that's required is to substitute faith for knowledge.

      http://www.youtube.com/cyprespond

      by hannah on Tue Aug 09, 2011 at 01:07:28 AM PDT

      [ Parent ]

      •  Private sector has its place (6+ / 0-)

        but if they accept public money in exchange for providing services to an otherwise unattractive market, they should willingly be regulated. That's the way the system has always been designed to work - try getting a government contract and read through the regulations.

        The real process works more like this:
        1. Lobby for more privatization
        2. When you get it, lobby for no regulation of the privatized service

        Seems to be working - for the private sector. Just not for the taxpayer, or for the people who buy the service.

        •  What's sad and infuriating and disgusting about (5+ / 0-)

          these schools is that so often they promise young people they are being trained for job opportunities, when in fact the "education" is useless in the job market.

          So young people who have little to begin with saddle themselves with loans, and end up in exactly the same situation, only more in debt, and more cyncial and hopeless.

          I used to do first review of resumes for programmer jobs.  There would be dozens of resumes from young people who thought they were qualified to get a job as a programmer, when in fact we knew the schools and knew the training was extremely superficial and essentially worthless.  THey had sat in big classes and written some text-book programs, but had no idea how to appraoch a real-world programming task.  We'd have to train them essentially from scratch if we hired them, which we would not.

          What a rip-off.  

      •  Thats all well and good but (1+ / 0-)
        Recommended by:
        wave of change

        what matters is what you are proposing to change the current situation.  I don't see anything in what you wrote that even hints at a solution. Simply complaining about the way too large number who are either unable or unwilling to thinks about the consequences of their actions/non-actions is relatively useless.

        It seems to me, here is a great opportunity to wrap the mess of education being created by these private colleges around Olympia Snow's neck and sink her.  Highlighting her and her husband's dipping into the public till for self enrichment is a strong issue.  Even if democrats don't respond to this kind of thing, it may be enough to keep Tea Party ideologues from voting for her in the general.

    •  When a coop could ... (3+ / 0-)
      Recommended by:
      loretta, FarWestGirl, bronte17

      ... provide a more effective chance at college at lower cost.

      When the teacher is paid less than what one student is charged, there is an opportunity there to have both better pay and more secure working conditions for teachers and much lower charges to students.

      It would need to be beating them at their own game ~ the same ongoing enrolment efforts, only slightly higher threshold scores on pre-enrolment proficiency exams than the private schools ... but, eg, the recruitment staff on cooperative shares and bonuses on successful completion of the first term, first half of a program, and graduation ~ return on recruited student success, rather than return on recruited student showing up as an account payable.

      Support Lesbian Creative Works with Yuri anime and manga from ALC Publishing

      by BruceMcF on Tue Aug 09, 2011 at 08:26:14 AM PDT

      [ Parent ]

  •  Kaplan (31+ / 0-)

    Revenue brought in by the Kaplan for-profit college business, largely through payments from student loans, vastly outstrips that earned by the Washington Post for journalism.

    One way to look at the Washington Post company is this:

    It's largely a scheme for funneling student loan dollars into the hands of shareholders, with a small newspaper business operated as a sort of hobby.

    Find me fast on Daily Kos by following me.

    by bink on Tue Aug 09, 2011 at 12:15:47 AM PDT

  •  Great diary (18+ / 0-)

    I'm curious about whether Sen. Snowe abstains from voting on anything that affects the profitability of hubby's business, one way or the other?

    •  I wonder if she has highly successful investments (8+ / 0-)

      somewhere in the health care sector, too.  She was one of the Baucus committee of six that developed the health care bill.

      June 17, 2009 Three Democratic and three Republican Finance Committee Members hold the first of 31 bipartisan meetings to discuss the development of a health care reform bill.  Over the course of the next three months, this group, Baucus, Grassley, Kent Conrad (D-N.D.), Olympia Snowe (R-Maine), Jeff Bingaman (D-N.M.), and Mike Enzi (R-Wyo.), met for more than 60 hours and the bipartisan principles they discussed became the foundation of the health care reform law.

      http://finance.senate.gov/...

      Democrats - We represent America!

      by phonegery on Tue Aug 09, 2011 at 02:45:14 AM PDT

      [ Parent ]

      •  Not so far as I could tell (0+ / 0-)

        I was intrigued by your question, and so looked up her financial disclosure statements.  She doesn't appear to have any significant investments in heath care sector, other than what appear to be some state-issued revenue bonds.

        PROUD to be a Democrat!

        by leevank on Tue Aug 09, 2011 at 02:54:51 PM PDT

        [ Parent ]

    •  Bwahahahahahahahahahahahahaha.......... uh.... (4+ / 0-)
      Recommended by:
      BYw, True North, mconvente, sethtriggs

      hahahahahahahahahahahahahahahahahahahahahahahaha.....

      Funny.

      She's shlepping around lobbying for him.

      Angry White Males + Crooks + Personality Disorder psychos + KKKwannabes + "Unborn Child" church folk =EQ= The Republicans

      by vets74 on Tue Aug 09, 2011 at 04:03:53 AM PDT

      [ Parent ]

  •  $33 billion here, $33 billion there... (21+ / 0-)

    ...and pretty soon you've got your 1.5 trillion bucks, right?

    How many of these private schools are there, anyway?

  •  It's always about follow the money (6+ / 0-)

    If there is any reason to shrink the federal government down the bathtub drain this is but another example.

    The easiest money to spend is other people's money. And as long as the feds throw it around you may as well get on the receiving end and open a for profit school. Who can  begrudge that? It's the American way, right? Some might call it low hanging fruit.

    Did it myself with Section 8 rentals when Clinton was doling out rents that basically doubled in his tenure (but of course Bush took it all back and then some). And therein lies a problem. The feds have too much taxpayer money on their hands and too many hands trying to grab it--mine included. Funny thing is I didn't 'axe' (Midwest slang for 'ask') for it --they just sent it.

    Earth first, without her there is no religion.

    by PlanetTreasures on Tue Aug 09, 2011 at 12:52:19 AM PDT

    •  It's how the Tea Party wins (2+ / 0-)
      Recommended by:
      FarWestGirl, lzachary

      The federal money conduit into the hands of private enterprise is a way for Norquist and the Tea Party to plausibly tell people, "See - government can't accomplish anything." And although the TP's populist position is just  window dressing, in a twisted way, they're still right on this one issue. When corporations are so rich and powerful that the fed's attempts to regulate them are like firing a peashooter at a wall, it's understable that the low-information voter would start to think of those who govern us as a bunch of buffoons.

      Particularly when those buffoons are on the receiving end of the conduit.

    •  The scheme is similar to one (5+ / 0-)

      used by health clubs. In their case, they try to sign up as many people as possible, knowing that many will rarely come to the gym, if at all. Always selling memberships, and the most profitable ones are those that do not get used.

      For for-profit colleges, the scheme is to have the student take on ever more loans, and the best students are the ones that drop out. The company pockets the money, and the taxpayers repay the banks. It's a win-win, except for the Treasury. Privatize the profits, socialize the risk.

      Form follows function -- Louis Sullivan

      by Spud1 on Tue Aug 09, 2011 at 08:07:40 AM PDT

      [ Parent ]

  •  The Art Institutes... (9+ / 0-)

    are bad in this respect.

    I used to be near one (Ft. Lauderdale) and it was notorious for this stuff (and not such great teaching).

    The Art Institutes are mentioned in the diary body, tied into the Vampire Squid.

    •  Want a partial scholarship ? (0+ / 0-)

      Angry White Males + Crooks + Personality Disorder psychos + KKKwannabes + "Unborn Child" church folk =EQ= The Republicans

      by vets74 on Tue Aug 09, 2011 at 04:04:48 AM PDT

      [ Parent ]

    •  How can people stupidly (5+ / 0-)

      fall for anything about the AI?  Youngest son applied and was accepted to the culinary school in Pgh.  It was to cost $52,000.00 for the 2 year program and housing.  Not food.  So he could graduate and make minimum wage.  And students are fighting to get into these schools.  The fed loan scam explains why.  They chased him hard for a year after the application.

      And she's good at appearing sane, I just want you to know. Winwood/Capaldi

      by tobendaro on Tue Aug 09, 2011 at 05:35:25 AM PDT

      [ Parent ]

      •  I think they don't "fall" for it as much as they (9+ / 0-)

        don't understand what it is.

        What they do understand is that the private not-for-profit and the public not-for-profit institutions have entrance standards that the students might not meet, they often don't have evening/weekend/online/low-residency programs, they require other academic coursework to get the degree ("hard stuff" like English, math and foreign languages), and they are less inclined to do an unrealistic "hard sell" of the program's potential to get them a job (or to soft-pedal the students' likelihood of completing the program). So the for-profit has some appeal because they can get in, don't have to do courses they don't want, and can do it in the evening/weekends (and they are offered crazy amounts of money with a very hard sell).

        I teach in a popular Graphic Design program at a state university. Our competition is a local private not-for-profit art school (very expensive), the local 2-year public technical college, and a local AI. Our program is excellent and affordable (relatively). Our program is competitive; not everyone makes it through the review process after the second of four years in the curriculum. Our program is a BFA and requires a lot of work in academic courses. Our students are often in the 20 and 30 percentiles of their high school, but the ones that make it do extremely well and are very talented.

        However, that leaves a lot of students out of the picture.

        Most of our students, when they come to our program, don't know the difference between a liberal arts college, and art school, a university, a technical college and a for-profit "college." We have to educate them and steer them in the right direction. Our students are very job-focused, and if they don't want the rigorous academic, conceptual, formal and research-focused curriculum we have, the technical college might be a better fit: both are public and affordable.

        I educate students about the problems with for-profit institutes.

        •  Falling for (6+ / 0-)

          $52,000.00 for a degree that will net you a $10.00 job is what I am surprised at.  The school is sleek and the sell was sleeker.  I can definitely see how a student who hated academic high school would want to try it.  But $52,000.00?  At some point a person has to see how ridiculous that is.  I almost fell out of the chair when the seller told us the costs.
               Having it be reasonable cost wise would be a huge help to kids who can't do a 4 year degree.  Maybe some of the education kossaks without jobs should look into starting a business that helps students navigate the post high school world.  There is a community college 2 hrs away from here in the other direction from Pgh that has the same culinary program for 5 grand.  If those people only knew.

          And she's good at appearing sane, I just want you to know. Winwood/Capaldi

          by tobendaro on Tue Aug 09, 2011 at 07:02:56 AM PDT

          [ Parent ]

          •  Community college is great (7+ / 0-)

            and the for-profits were set up to steal their market share. Fine, have at it, but don't use my tax dollars to do it.

            Most of my students are young, poor, and not very sophisticated. All they know is what the recruiter tells them: if you sign on this dotted line, it won't cost you a cent (now) and you'll get an overage check of at least $1,000 three weeks after you attend your first class. (You'll have to pay it back, though.)

            Translate all material in parentheses into very fine print.

            My students mark that overage check date on the calendar, believe me. More than one has told me they were delaying medical treatment for a child until the check came. Between desperation, and the unreality of future obligations that usually goes with being young, I can understand the $50,000 perfectly.

            •  It is hard for me (1+ / 0-)
              Recommended by:
              FarWestGirl

              to understand why our government would allow such a scam.  To give them a thousand that has to be paid back just begins the cycle of owing and sinking further down.  Desperate people being scammed is not what the gov should be doing.  Where do I write to rant, state reps or federal?

              And she's good at appearing sane, I just want you to know. Winwood/Capaldi

              by tobendaro on Tue Aug 09, 2011 at 08:28:34 AM PDT

              [ Parent ]

            •  I agree with what you are saying. (2+ / 0-)
              Recommended by:
              loretta, FarWestGirl

              These are people who haven't done well in school, don't have a lot of financial experience, and live hand-to-mouth. They want a better life - hence the laudable desire for a degree, usually a jobs-focused one - and the hard sell downplays the financial burden and focuses on the cash-in-hand.

              I think they see it, in part, as getting money to be in school. They are not a population that has long-term financial planning. They just want to get through the month. These are the same people who "fall" for the payday loan shops. They just don't have options.

              It is the worst kind of exploitation.

              You might wonder why the technical schools and community colleges can't bring these people in, and there are a lot of reasons. One of the reasons is that a not-for-profit public institution doesn't use its funding to employ recruiters and financial aid people simply to get students on the hook for money. They aren't banging on people's doors, luring them into the loan-noose.

              •  Exploitation to the point of predation. As I noted (0+ / 0-)

                above- Predatory 'education' = Predatory lending. It's a subset. With the side effect of devaluing education overall. "I spent all this money going to school and it didn't do me any good.', is how they come away from it. And how they'll talk about it to family, friends and their kids. ::grrr::

                Information is abundant, wisdom is scarce. The Druid

                by FarWestGirl on Tue Aug 09, 2011 at 12:54:49 PM PDT

                [ Parent ]

            •  there's also not a bigger advocate (3+ / 0-)
              Recommended by:
              Sister Havana, loretta, FarWestGirl

              for community college in Washington than Dr. Jill Biden.  That the administration is taking this seriously isn't all that surprising.

              "This world demands the qualities of youth: not a time of life but a state of mind[.]" -- Robert F. Kennedy

              by Loge on Tue Aug 09, 2011 at 10:02:11 AM PDT

              [ Parent ]

          •  What's really sad (2+ / 0-)
            Recommended by:
            loretta, FarWestGirl

            Many times these are kids who have graduated HS with no real career direction or much of a concept of interest and aptitude.  Their parents are begging them to DO SOMETHING - and when the silver-tongued salesman shows up the stage is already set.

            The kid shows interest - which makes the parent ecstatic - and next thing you know the contracts are signed.  Never mind that the last thing the kid wants is to be a chef or nurse or IT professional.  He just wants Mom and Dad happy and off his case and maybe it won't be so bad.

            All of the real pain happens later.  I've watched this happen twice.

            Power isn't something you are given. Power is something you TAKE.

            by lonelyutahdem15 on Tue Aug 09, 2011 at 10:17:47 AM PDT

            [ Parent ]

          •  One might think (0+ / 0-)

            One might think that with so many educators out of work and the sheer number of charlatan "educators" in this business that there might actually be a place in the market for a collective of progressive educators, together with the progressive community to actually create an online private college that can provide credible, reputable educational services and put many folks back to work and also put Olympia Snowjob out of business permanently.

            Can progressives really be progressive enough to get that organized?

        •  "Only what I want to learn" a selling point (6+ / 0-)

          The for-profit universities in the Chicago area make a big deal about how you can attend them and only take courses that are "relevant" to their careers.  The community college where I teach, on the other hand, has established minimum requirements for their associate's degree that include one math course and one English course;  both courses are transferrable to the state's public universities.  

          For some reason, employers and boards that administer qualification exams approve.

          "Politics should be the part-time profession of every citizen who would protect the rights and privileges of free people and who would preserve what is good and fruitful in our national heritage." -- Lucille Ball

          by Yamaneko2 on Tue Aug 09, 2011 at 08:05:51 AM PDT

          [ Parent ]

          •  Indeed. (2+ / 0-)
            Recommended by:
            loretta, FarWestGirl

            All the commercials for the for-profit schools emphasize how you don't have to waste time with those pesky general education requirements and can start taking courses right in your field.

            They don't mention that credits from those courses are not transferrable to other schools much of the time.

            Yes we can! Yes we did! Yes we will!

            by Sister Havana on Tue Aug 09, 2011 at 10:41:40 AM PDT

            [ Parent ]

  •  I suspect that they are involved with other (9+ / 0-)

    universities and vocational schools besides the 4 listed in the clip.  Reason is some work-schools keep on changing their names but keep on popping up. teaching astronaut training one year and rock star or brain surgeon the next.

    Also I hope they are going to review some of these universities which have admission rates of 95%+ and graduation rates of less than 20% and whose history depts teach Southern Christian Reconstructionist history and ID and YE in their science depts and require professors to sign statements of belief in exchange for a faculty position  

  •  The ethical dilemma of the teacher (6+ / 0-)

    You are no doubt familiar with the nagging guilt, then, of such positions. I cannot and will not say anything specific, but one feels, "Gosh, isn't this a false promise? Isn't this mania for student bodies and 'retain retain retain,' when half are going into remedial immediately, tantamount to fraud against the student?" It isn't that there aren't successes. There are a few, a vanishingly small few, but these few shine against a background of impenetrable night.

    One asks, in such a situation, "Is this virtuous, after all? Are we giving students a chance, or are we hungry for their loans?"

    You see, I have experience at a religiously affiliated school with effectively open admissions. It refuses to take money from Mammon, if not the Anti-Christ, of the federal government. But they live on those loans.

    I, too, cheer congressional action. The numbers in the for-profits testify to the under-funding and abandonment of our community college system, though, and that has been a feature of the GOP on the state level.

    We do not flourish, but we persist.

    by The Geogre on Tue Aug 09, 2011 at 04:15:56 AM PDT

    •  Scam (8+ / 0-)

      A sister of a friend of mine went to one of those private court reporter schools.  She is actually very intelligent but she thought she would never graduate.  She finally transferred to another school out of state to graduate.  She now has a career but huge loans.  According to her, many, many never graduate.

      The school had little to no incentive to graduate students and by using extreme standards was able to strech out school hours to the maximum.  Just keep them in school as the debt grows and grows and grows.

      It is a scam.  It seems a typical scam of today's unregulated capitalism.

    •  "Right to try" (5+ / 0-)

      The for-profits always scream that the government is taking opportunities away from poor students when any regulation is introduced. It's a red herring argument - community colleges provide fantastic opportunities to poor students, and do so affordably.

      It's Orwellian - sort of like republicans saying democrats are practicing class warfare when we point out that their policies inevitably favor the rich.

      Sheesh, reading what I wrote just now makes my head want to explode.

      •  The commie colleges, alas! (3+ / 0-)
        Recommended by:
        Brownmansburden, loretta, leevank

        The community college system was developed precisely to act as a gateway or as an endpoint. The faculty teaching there have degrees, these days especially, from the very same schools that the fancy pants schools do. They frequently have as many Ph.D.'s v. MA's/MS's as well.

        They were supposed to be the place where the undiscovered and unserved and unprepared could refine and hone and, if appropriate, jump up or simply gain access to a good, steady college.

        Funny thing!

        1. They got a bad name as "community college ha ha."
        2. The degree was supposed to be meaningless.
        3. States never could seem to get around to funding them! Funny how that happens.
        4. The class loads for those faculty got to be 6/6 and worse, and the faculty pay got lower, and so the quality became harried and burned out and disgusted.

        Now, compare that to South University or the University of Phoenix. Phoenix is a place where there is a football team. These aren't colleges. They're uuuuuuniversities.

        Get a university degree... "in your PJ's!"

        No work, all play, high pass rate, and you'll make millions more than people who didn't go!

        This is a bed of vomit of long making.

        We do not flourish, but we persist.

        by The Geogre on Tue Aug 09, 2011 at 01:25:53 PM PDT

        [ Parent ]

  •  I used to teach at a for-profit (13+ / 0-)

    And I KNOW that 90% of the students in my classes have no hope at getting a job after they get out. They flatly did not belong in college. They did not have the smarts nor the discipline to be in higher learning. But apparently their loan application went through, so there they were.

    Sometimes there is so much writing, you need a bigger wall.

    by pucklady on Tue Aug 09, 2011 at 05:36:13 AM PDT

  •  Once again, money for students' needs (7+ / 0-)

    is put in the pocket of corporations. For profit education does not work.

    "There must be more to life than having everything" -Maurice Sendak

    by lilypew on Tue Aug 09, 2011 at 05:54:11 AM PDT

    •  Actually, as someone said above, (7+ / 0-)

      it can work for a small number. But these people would also do great at a non-profit, and have less debt coming out. If the loans and grants gifted to the for-profits were available to the nons, it would be much better for the country.

      Out in the west Texas town of El Paso...

      by falina on Tue Aug 09, 2011 at 06:01:11 AM PDT

      [ Parent ]

      •  What I can't figure out (0+ / 0-)

        is why my students get five times as much financial aid because my school costs five times as much. I think it's to level the playing field between public colleges and private nonprofit colleges, which is at least somewhat justifiable (although as I mentioned in my diary, nonprofits are pocketing money too).

      •  Seems to Me (1+ / 0-)
        Recommended by:
        loretta

        It seems to me that the solution to this is for educational professionals to band together and set up non-profit, private schools that work closely with local junior and state colleges and take the profit out of the for-profit school market.

        It wouldn't take a lot of advertising and a focused, small measure of success to get the larger progressive community to push the better start-up not-for-profit, private schools that could actually supplement the efforts of public universities and colleges and vocational schools, without both costing the taxpayer much of an expense and providing actual value.  Given the internet the word would get around.

        I think it would be best to start on-line, lay out a clearly stated non-profit oriented goals that would allow the school to grow from a narrowly targeted focus to a broader enterprise that could compete, both in quality but especially on price, to provide additional education options for students.

  •  I also worked briefly for a for-profit school (6+ / 0-)

    as a sales rep in the the late 70's.  (I think we were called something else, but we were sales reps).  I was "recruiting"  students from inner-city Philadelphia and Camden, NJ high schools to learn to be court reporters.  Granted, court reporting was (and I assume still is) a solid, high-paying job, but I think we were lucky to graduate 1 out of 100 from the program.

    I felt slimy the whole time I worked there, and left after about 5 months.  

    "I'll be more enthusiastic about encouraging thinking outside the box when there's evidence of any thinking going on inside it." Terry Pratchett

    by kiwiheart on Tue Aug 09, 2011 at 06:38:11 AM PDT

  •  Absolutely superb diary. (2+ / 0-)
    Recommended by:
    mconvente, FarWestGirl

    Thank you very much.

    Stonewall was a RIOT!

    by ExStr8 on Tue Aug 09, 2011 at 06:38:40 AM PDT

  •  i actually know someone (1+ / 0-)
    Recommended by:
    Neon Mama

    who got caught up in this very situation.  this person wants to sue.  how would they begin?  who would they contact?  

    •  There have been several class actions.. (4+ / 0-)

      ...against various for profit schools and they have always been able to foist the blame upon the students, in effect saying that their promises were in general and not to specific students, implying that perhaps they just didn't apply themselves or the like.  

      The eligibility for Title IV funds if they are manipulating default rates, placement rates, crime statistics, degree or admissions requirements is a different thing though.  I have no doubt that if they delve into their practices, they will find some interesting and creative techniques used to get their numbers.

      I seem to recall some discussion that Jock McKernan was recruited to the company specifically for his political clout, which I am sure they will be working furiously to thwart this investigation.

      "When people show you who they really are, believe them." - Maya Angelou

      by Pennsylvanian on Tue Aug 09, 2011 at 08:15:21 AM PDT

      [ Parent ]

      •  i do not want to go into detail here (2+ / 0-)
        Recommended by:
        BruceMcF, Pennsylvanian

        but i hear you.  in painful detail, i hear you.   i know a person who is currently caught up in this situation.  they want to sue.  would they contact their state attorney general?  how do they begin to pursue legal recourse?

        •  I'm not a lawyer, but state attorney general... (2+ / 0-)
          Recommended by:
          LivesInAShoe, FarWestGirl

          ...would at least be somewhere to start.  

          If the government deems that they were not qualified for Title IV funds during the time your friend attended though, that has got to be grounds for some lawsuits, because then it would seem they took money on behalf of students for programs that were not qualified for government loans.  But that is all speculation on my part.  

          Maybe some DK lawyers could weigh in with more educated responses.

          "When people show you who they really are, believe them." - Maya Angelou

          by Pennsylvanian on Tue Aug 09, 2011 at 08:52:39 AM PDT

          [ Parent ]

  •  Very good diary. (1+ / 0-)
    Recommended by:
    FarWestGirl

    Happy to know that the D.O.J. is on this.

    Tipped and recced.

    "A candle loses nothing by lighting another candle" - Mohammed Nabbous, R.I.P.

    by Lawrence on Tue Aug 09, 2011 at 06:55:47 AM PDT

  •  Student loan debt should be dischargeable. (18+ / 0-)

    And the entire bankruptcy law needs to be rewritten in favor of the citizen, not the corporations holding the citizen's debts.

    Especially in this day and age, when so many people took out loans to try and get better jobs, but when the schooling or training is finished, the jobs aren't there.

    That's not the fault of the student. That's the fault of this merry-go-round we currently call society in the USA. Civilized societies educate their children cheerfully and well, because they know that their future citizens are among those in need of an education.

    Someone here yesterday had a fabulous suggestion for the money that nobody wanted to put in the stimulus bill because they were afraid they didn't know what to spend it on: They should have paid off all the outstanding student loan debt. Yes, yes, moral hazard blah, blah, for all you good people who paid off your loans years ago. So what? This would be a step forward in our society, and you should be a big enough person to see that and support it.

    "The difference between the right word and the almost-right word is like the difference between lightning and the lightning bug." -- Mark Twain

    by Brooke In Seattle on Tue Aug 09, 2011 at 07:04:41 AM PDT

    •  From your lips to God's ears (3+ / 0-)

      I'm loathing taking out another loan to buy books this semester. Gah.

    •  Amen 3x (4+ / 0-)

      The root of the problem is the student loan system, which I forgot to include on my "conduit" list above. The fed guarantees loans written by quasi-government agencies like Fannie Mae (or whatever her name is now - Daisy Mae?) with private investor money, and the investors vacuum up the interest risk free, while Fannie foots the bill when students inevitably default.

      •  the guaranteed loan system is done (4+ / 0-)
        Recommended by:
        Loge, loretta, FarWestGirl, wave of change

        it's all Direct Lending now...of course, that just means that the Department of Education contracts with the big players (Sallie Mae, Nelnet, AES/PHEAA, etc.) to provide origination, servicing, collection and post-default services as a fee-based service.

        But there are no longer any private investor funds at play, except for the existing portfolios, which run in the 10s of billions. I heard talk that one of the ideas kicked around during negotations over deficit-reduction was to open up the Direct Loan portfolio for sale to private investors, who would absorb a fraction of the risk. I think that went nowhere.

        I think the root of the problem is demand for loan proceeds. If the schools (for-profit and non-profit, public and private) are all outpacing inflation and income growth by alarming amounts (and doing so for many, many years) AND states continue to cut funding to education FIRST...debt will follow. The only reason the private student loan market even exists is because the demand was there...many years ago, most kids could afford to go to school with scholarships and grants and federal loans. Now, those hardly ever cut it.

        How many times have we seen education come up as one of the first priorities for the chopping block in state and local budget rangling? We allow it to happen.

        Eagles may soar, but at least weasels don't get sucked into jet engines

        by SnyperKitty on Tue Aug 09, 2011 at 09:31:42 AM PDT

        [ Parent ]

    •  Didn't it used to be? (0+ / 0-)

      I could be wrong but I thought it used to be dischargeable.

      There also used to be pretty strict limits - no more than $2500 per school year, and no more than $5000 additional.

      That's still a good bit - but you also didn't always need to borrow all that.

      I think the limits are more now, or non-existent.

      If there aren't limits, the loans definitely need to be dischargable in bankruptcy. Or reduced considerably.

      •  private student loans (3+ / 0-)
        Recommended by:
        loretta, FarWestGirl, Floja Roja

        used to be dischargeable, but that changed a few years back. Before 2010, both the Senate and House proposed legislation to allow private student loans to be discharged in bankruptcy again. But those versions differed and never went anywhere. Don't expect anything much out of this House though. Boehner, in particular, is in the industry's pocket.

        The only way to discharge student loan debt today (federal or private) is via an adversary hardship lawsuit in conjunction with the bankruptcy filing. Not many are successful, unless the plaintiff is able to prove that he/she really will never be able to reasonably pay for the loan.

        There are still limits on the amount of money students can take out on their own via federal law, but nothing preventing them from taking out loans under private loan programs. Most (not sure if all) private loans are now "certified" by the school, which is a far-cry better than the free for all of a few years ago...remember those advertisements for student loans? Haven't seen any in a long time. But students can still get money that way.

        If parents/guardians have reasonably good credit, the PLUS loan is unlimited. This is a bubble for another day, but sadly something many parents don't know about. I know my kids will not have a dime of private debt while I can qualify for PLUS.

        Eagles may soar, but at least weasels don't get sucked into jet engines

        by SnyperKitty on Tue Aug 09, 2011 at 09:44:03 AM PDT

        [ Parent ]

      •  Changed in 2005 (2+ / 0-)
        Recommended by:
        SnyperKitty, FarWestGirl

        With the bankruptcy "reform" act.

        The lobbyists on both sides of the aisle were thick as flies for that debacle.

      •  Yes it was and people were taking advantage of it (0+ / 0-)

        I worked with a woman who filed for bankruptcy immediately upon graduation. She was working a part time seasonal job and had no assets. She wanted to apply for bankruptcy before she got a good job or acquired assets. This had been her plan all along. She thought higher education should be free so was doing what she could to make it free for her. I assume enough people were doing this that they needed to put some limits on discharging student loans.

        Cutting off bankruptcy right after graduation makes sense, but years later? Do you know if they can ever be discharged?

    •  The Unintended Consequences Would Be Bad... (0+ / 0-)

      Overall student enrollment in all school types would drop worse than the DOW Jones Average.

      Professors, teachers, and all types of employees would be laid off by the 10,000's.

      Why would any legitimate bank loan money to an 18 year old that could file for bankruptcy after they graduate or drop out and discharge their loan?

      Why have so many parents and community leaders abdicated their responsibility to educate our youth about such things as basic finance?

    •  the downside risk (1+ / 0-)
      Recommended by:
      FarWestGirl

      is that student loans become scarcer and therefore carry higher interest.  yet, that's a solvable problem by having the federal government play a greater role in making direct loans, or better yet, subsidizing schools directly so they can lower tuition or offer grants.  to the extent the loans themselves are predatory, making people less likely to take them out isn't a bad thing.  maybe make student loan debt for for-profit colleges dischargeable, but let Carnegie-Mellon get paid.

      "This world demands the qualities of youth: not a time of life but a state of mind[.]" -- Robert F. Kennedy

      by Loge on Tue Aug 09, 2011 at 10:06:28 AM PDT

      [ Parent ]

    •  It is ironic (1+ / 0-)
      Recommended by:
      leevank

      It is ironic that repubs and tea baggers seem to have no problem demanding "accountability" from teachers and educators in public schools, to make political hay, but are quick to disappear when "educators" at private colleges are called upon to be accountable.

      Seems to me this is yet another angle to wrap this issue around the neck of Olympia Snowjob.  Let the tea-party patriots see the kind of hypocrisy that makes her comfortable.

    •  No need to make it dischargeable in this day and (1+ / 0-)
      Recommended by:
      leevank

      age with IBR.

      Your payment is tied to your ability to pay. If you don't make much, you don't pay much.

      And if you take a public sector job, your entire loan is dischargeable in 10 years.

      This is good.

      There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

      by upstate NY on Tue Aug 09, 2011 at 01:59:58 PM PDT

      [ Parent ]

  •  I am really glad to see this being investigated. (5+ / 0-)

    I am very familiar with the internal practices of Education Management Corporation.  I hope that they are fully investigated and their suspect and predatory practices are exposed and stopped.

    "When people show you who they really are, believe them." - Maya Angelou

    by Pennsylvanian on Tue Aug 09, 2011 at 07:27:41 AM PDT

  •  Fantastic news. (4+ / 0-)
    Recommended by:
    loretta, mmacdDE, Neon Mama, FarWestGirl

    This sort of nonsense has gone on far enough. IMO, they need to ban for-profit colleges again. The government gave them their shot, and the only thing they've been successful at is perpetrating massive fraud against the public they supposedly serve. Time to stop the music.

    Also, this should underscore the need for the administration to crack down on predatory lending in all forms. That, more than anything, has caused these crises to unfold.

    Of course, I could wish in one hand and shit in the other, and I think I know which one will be filled up first...

    With the first link, the chain is forged. The first speech censured, the first thought forbidden, the first freedom denied - chains us all, irrevocably.

    by Andrew M on Tue Aug 09, 2011 at 08:00:39 AM PDT

  •  Jock McKernan and Sen. Olympia Snowe (3+ / 0-)
    Recommended by:
    loretta, badscience, FarWestGirl

    In May, Maine Public Radio had this 10 minute interview with Harry Litman, the attorney for the whistleblowers that filed the lawsuit.

    Litman was kind enough to send me a copy of the actual complaint, as well as a PowerPoint presentation used to train recruiters.

    More? In December 2009, a smaller for-profit college system, Apollo Group, settled with the Feds for $78.5 million on a similar complaint. EDMC, the company where Jock McKernan had been CEO, hired eight top executives from Apollo.

    Form follows function -- Louis Sullivan

    by Spud1 on Tue Aug 09, 2011 at 08:02:00 AM PDT

    •  Wow (2+ / 0-)
      Recommended by:
      Spud1, FarWestGirl

      so glad your state public radio station is doing some investigative reporting. Our state public radio affiliate does great work too.

      I'm kind of not surprised when both parties in Congress look the other way when the republicans introduce bills to defund the public radio system.

  •  cost of doing business, nothing's going to change (0+ / 0-)

    unless people start going to jail.

    big badda boom : GRB 080913

    by squarewheel on Tue Aug 09, 2011 at 08:20:29 AM PDT

  •  I used to work in this industry... (5+ / 0-)

    ... and am so relieved to be out of it.   Many of my former colleagues really were there to make a difference and educate people to help them improve their lives. Unfortunately, the corporate masters clearly have a different agenda.

    The worst part of this whole situation is that the students are the ones getting hurt the most, usually without even realizing it.

    •  It's an employer's market (1+ / 0-)
      Recommended by:
      FarWestGirl

      There's a glut of people with advanced degrees who got into teaching to make a difference. With more applicants than available jobs, the schools can call the shots on working conditions, what gets taught, and whether speaking up will cost you your job.

      For all its faults, the tenure system provided some quality control. It's no accident that the schools want to get rid of it.

  •  Thanks to the Obama administration (2+ / 0-)
    Recommended by:
    badscience, FarWestGirl

    which is doing all kinds of good stuff that doesn't get noticed.  This is an example.  Just like the defense industry, oil companies etc these for profit colleges have bought off Congress but the administration is forging ahead. I am proud of them.

  •  So in Florida the republicants in power (1+ / 0-)
    Recommended by:
    FarWestGirl

    cut funding to public radio.  Can't have them broadcasting truth to power.

    Also sent all the money for building upkeep to piratized schools claiming the public ones didn't need it.  

    De fund + de bunk = de EXIT--->>>>>

    by Neon Mama on Tue Aug 09, 2011 at 09:06:33 AM PDT

  •  I SURE HOPE THERE IS A COMPETENT DOJ ATTY! (3+ / 0-)
    Recommended by:
    Lily O Lady, OldDragon, FarWestGirl

    The Bushies spent a whole lot of time spreading incompetence throughout the DOJ by appointing political hacks and graduates from ORAL ROBERTS UNIVERSITY to positions of power among the states. Just yesterday, a big case against illegal labor practices for farm immigrant labor was dropped because the prosecutor was incompetent. It is time, that the DOJ weed out the unqualified and replace them.

    An EGG is not a person, A corporation is not a person!

    by CarmanK on Tue Aug 09, 2011 at 09:09:40 AM PDT

  •  I went to a for profit college (11+ / 0-)

    for nursing school...it was a horrible experience. I need to write a diary about it but it's still a sore subject...some of the things I saw and went through there were just unreal.

    I'll share one of the worst parts- they helped students cheat on the entrance exam. I saw it with my own eyes. People who were functionally illiterate and did not know how to add and subtract were admitted, knowing full well they would never make it through- it didn't matter because once they were enrolled, they had their money anyways. I saw people get robbed of tens of thousands of dollars right in front of my eyes- a lot of them were immigrants, fresh off the boat and trying to make a new life for themselves. They were not offered any help, and when they asked for assistance they were told that nursing is a tough field and nobody was going to hold their hand...I tried to help people, I held study groups and tutored every day but most of them ended up failing out the first module, with nothing to show for it but a $20,000 debt. Most of them never had a chance.

    Oh, I have so many stories...it makes my blood pressure rise just thinking about it. I hope these fuckers reap the whirlwind very soon.

    Will work for food
    Will die for oil
    Will kill for power and to us the spoils
    The billionaires get to pay less tax
    The working poor get to fall through the cracks
    -James McMurtry

    -9.75/-8.26

    by SwedishJewfish on Tue Aug 09, 2011 at 09:22:40 AM PDT

    •  When you're ready to write that diary, (2+ / 0-)
      Recommended by:
      OldDragon, FarWestGirl

      I'll read it.

      Perhaps you want to write a letter Tom Harkin.

    •  Sounds Like The Public Scools In Atlanta... (1+ / 0-)
      Recommended by:
      FarWestGirl

      Whether you attend public or private schools; primary or secondary schools; the parent and student need to pay attention and be responsible for the students education.  In every school situation the student has the most at stake, much more than a teacher, sales rep, or principal.

      I was fortunate to have a mother that watched out for me in grades 1-12, public school.  More than once she stood up to school authority. And it wasn't to make my life easier like so many parents do today.  It was to make my adult life better regardless of how tough it was on me at the present.  I wish everyone had a mother like mine.

    •  Write it and send a copy to Jill Biden. n/t (0+ / 0-)

      Information is abundant, wisdom is scarce. The Druid

      by FarWestGirl on Tue Aug 09, 2011 at 01:06:35 PM PDT

      [ Parent ]

  •  i attended a for profit college (4+ / 0-)

    about 30 years ago.

    the speed with which the enrollment specialist signed me up for a student loan was breath taking.

    never got a single ounce of employment despite all the course hours and money spent and their boasts about "85% employment rate from our graduates."

    i was to learn, later on, that they based their employment figures on whether or not a graduate had any sort of job at all-regardless of whether it was in the field studied or if the graduate found the job on his/her own or with their in-house career assistance.

    i must say, however, that these for-profit institutions have come quite a long way since the 70s & 80s when they were mostly fly-by-night entities that often tended to open and close with amazing speed.

    university of phoenix has managed to defy all odds with its longevity.

    hope springs eternal and DAMN is she getting tired!

    by alguien on Tue Aug 09, 2011 at 09:43:15 AM PDT

    •  I also went to one in the early 90's. (3+ / 0-)
      Recommended by:
      alguien, loretta, FarWestGirl

      They were very quick to sign us up for student loans; I finally finished paying mine off six years ago.   I had been a stay at home mom with a thin work history, so I was fodder for them.

      Some of the classes had no teachers until we got a city businessman to complain for us.  All of the job interviews they got for me had two of my resumes; the interviews were for jobs listed in the newspaper and I had applied on my own.  So much for their exclusive deals with employers.

      Eventually I did get a job using the diploma I got from them, but not with their help.  For some reason, they contacted me, and finished the conversation with "Let us know if we can help you with anything else."  

      Probably the best thing to do is to contact graduates from the school you are considering; a number of them, if possible.  The businesses my husband and I contacted did not give a realistic description of the usefulness of the school.

      •  at some point, a little over a year after (2+ / 0-)
        Recommended by:
        OldDragon, FarWestGirl

        i'd finished with that school, the chick in career development (she was a "chick," trust) called me to find out if i'd found a job.  knowing how they used statistics, i told her that whether i had or hadn't was none of her business and that unless i found employment through their auspices, they'd know absolutely nothing more about my life.

        truth was, by then i'd decided to return to college to complete my bachelors' and had no use for them anyhow.

        the student loans showed up to haunt me a few months later.

        hope springs eternal and DAMN is she getting tired!

        by alguien on Tue Aug 09, 2011 at 11:11:37 AM PDT

        [ Parent ]

  •  Giving the for-profit higher education industry... (3+ / 0-)
    Recommended by:
    OldDragon, FarWestGirl, leevank

    access to federal student aid dollars was an invitation to graft.  Within weeks of Bush opening up that floodgate for-profits were under investigation for recruiting and then saddling students with huge loan obligations when they had no hope of completing a degree.

    This shit needs to stop.  It's been a total fucking disaster for the DOE and hopeful students.

    I'll need some room for this...

    by duckhunter on Tue Aug 09, 2011 at 09:52:42 AM PDT

  •  good for Holder (1+ / 0-)
    Recommended by:
    loretta

    and not for nothing, I have never heard of anyone suing the GAO.  

    How can they sue for negligence, when the GAO owes its duty of care to Congress?  i could imagine suing private parties for commercial disparagement, but to imagine them winning requires engaging the same part of my brain that imagines unicorns.

    "This world demands the qualities of youth: not a time of life but a state of mind[.]" -- Robert F. Kennedy

    by Loge on Tue Aug 09, 2011 at 09:58:41 AM PDT

  •  Frontline did a program, "Colleg Inc.", on this... (6+ / 0-)

    $400-billion industry.  It's definitely worth viewing if you have any interest in this cess pool W and Margaret Spellings created.

    I'll need some room for this...

    by duckhunter on Tue Aug 09, 2011 at 10:01:54 AM PDT

  •  Colorado Institute of Art (4+ / 0-)

    I have a friend who is currently enrolled in the Photography program at CIA (now known as Art Institute of Colorado).  I taught one semester there many years ago, where subject matter that could have been taught in a week was stretched out over an entire semester.  

    I tried to warn her that her degree would be worthless; even the four year program only stresses assistant jobs as a result of graduation.  I looked up the syllabus of the school for the photography program.  Sixty percent of the classes had nothing to do with photography.  Students were required to take Spanish, Western Civilization, Psychology, in a program which was essentially a trade school.  Many of the students already had college or junior college degrees.  They signed up to learn photography, not get a liberal arts education (which many already had).

    Twenty five percent of the remaining courses, which were related to photography, were obsolete.  Developing your own film, wet darkroom work, enlarging in the darkroom, etc.  The remaining courses were simply introductions to different types of photography.  There was only one course on shooting digital images and one course on using a computer to edit them (the primary way photography is now done).  There were no courses on business, ethics, copyright laws, how to get customers.

    I personally have hired some people from this school in the past, and they were absolutely worthless.  Their degree was a total sham.  The school's claims that they could get jobs as "assistants" was a joke.  Anyone with some photographic experience (like knowing the difference between shutter speeds and f:stops) could get a job as a photographer's assistant without going to two to four years of classes at an Art Institute.

    I no longer live in Colorado, but here in Arizona I live withing three blocks of two for profit schools, Carrington College (formerly Apollo) and the University of Phoenix.  We have at least five schools here that are for profit, while the community colleges and universities have had their funding slashed by over $600m, and k-12 programs have been all but eliminated.  

  •  Tons of truth here (3+ / 0-)
    Recommended by:
    OldDragon, loretta, FarWestGirl

    I can't comment specifically on my employer but for-profit education does have a lot of bad actors.  Not all though.  And there is a natural extra expense that factors into tuition prices (no, it doesn't nearly justify the absurd rates they charge).  For many, classes are only taught in the evening so that working adults can attend.  This essentially means no classroom, facility, faculty can be used for more than one class per day.  This does raise expenses because you need a lot more rooms, etc.

    Nevertheless, while I think there is a place for these institutions, I very much welcome the enhanced government regulation.  It is sorely needed.

    •  My school has great computer labs (1+ / 0-)
      Recommended by:
      FarWestGirl

      And maintains its own building.

      But the HVAC dates back to 1987 and the temp control is almost unbearable in weather extremes. I'd like to take it out of the president's half million dollar salary.

      And the school has multiple "satellite" campuses where it rents space from high schools, community organizations, etc., so it can vacuum up even more students with fewer overheads.

      There may be a few good actors in the for-profit sector. They won't mind being regulated.

  •  This part stuck with me. (2+ / 0-)
    Recommended by:
    loretta, FarWestGirl

    From the Huffington Post article:

    For those who did not comply with a rigid performance matrix that tracked the number of enrollments per recruiter, the consequences were made clear.

    The complaint cites an e-mail from Gregg Schneider, a director of admissions at EDMC’s Art Institute Online, that chided admissions employees for not meeting recruitment goals in October 2006.

    “Each of you knows your plan for November,” the e-mail read. “This number is not a casual level that I want you to be at but rather a number that you must hit to have a good review, get promoted or keep your position here. This number is set by the VP of Admissions and the Director of Admissions.”

    Somehow I think that people who work in the admissions office at your local state university or community college get emails like that.

    I have a friend who temped as an admissions rep for CTU Online. (different company, same thing) I sent her a copy of the story and asked if any of this sounded familiar to her.

    Yes we can! Yes we did! Yes we will!

    by Sister Havana on Tue Aug 09, 2011 at 10:46:32 AM PDT

  •  The for-profit college racket is the (1+ / 0-)
    Recommended by:
    loretta

    new subprime IMO. Except this time, the victims aren't greedy homebuyers but young people doing what everyone has told them they should be doing - getting an education. It is despicable, and I am disappointed that some elements of the Democratic Party in Congress actually run interference for these crooks.

    I'm in the I-fucking-love-this-guy wing of the Democratic Party!

    by doc2 on Tue Aug 09, 2011 at 12:41:02 PM PDT

  •  I Do Notice.... (0+ / 0-)

    ....that the new series of commercials for ITT Tech (and the students are paying for all those ads, I guess) stress that the cost is worth it.

    Clue 1: that education can be had for 1/3 of the price at a local community college.

  •  Almost 90% of revenues (1+ / 0-)
    Recommended by:
    loretta

    come from federal money??  Unbelievable that these are the same people bitching about government handouts...

    Well, not so unbelievable.  But the hypocrisy really does kill me.

    "Mediocrity cannot know excellence." -- Sherlock Holmes

    by La Gitane on Tue Aug 09, 2011 at 12:54:05 PM PDT

  •  Snowe comments (2+ / 0-)
    Recommended by:
    Trotskyrepublican, loretta

    The AP reports that Sen. Olympia Snowe's husband is frustrated with the lawsuit.

    Form follows function -- Louis Sullivan

    by Spud1 on Tue Aug 09, 2011 at 01:06:43 PM PDT

  •  I would not be so hard on the non-profits (1+ / 0-)
    Recommended by:
    loretta

    Is there fat in admin? No doubt.

    But once you start down that road, you're going to sweep out the highly paid profs with them.

    It should be lost on no one that our government has abrogated its responsibility to fund higher education. Look at PSU, 4% of its budget comes from taxpayers, and now they are trying to cut it by 50%. So where does PSU get its operating income? Research funds, and most of that money is being pulled in by highly paid officials.

    In a perfect world, public education would be funded by taxpayers, but once public institutions go quasi-private, then what are you going to do?

    There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

    by upstate NY on Tue Aug 09, 2011 at 01:55:21 PM PDT

    •  Private nonprofit schools (0+ / 0-)

      The term covers a lot of ground - everything from the Ivy League schools, to 100 year old small liberal arts colleges, to "business colleges" (they used to be called secretarial schools) that decided to expand. So it's hard to evaluate them as one category.

      And private law schools.

      I've been following the law school scam blogging movement closely since well before the New York Times had the guts to confront the American Bar Association on the hard sell the law schools are doing:

      In the Wonderland of these statistics, a remarkable number of law school grads are not just busy — they are raking it in. Many schools, even those that have failed to break into the U.S. News top 40, state that the median starting salary of graduates in the private sector is $160,000. That seems highly unlikely, given that Harvard and Yale, at the top of the pile, list the exact same figure.

      How do law schools depict a feast amid so much famine?

      “Enron-type accounting standards have become the norm,” says William Henderson of Indiana University, one of many exasperated law professors who are asking the American Bar Association to overhaul the way law schools assess themselves. “Every time I look at this data, I feel dirty.”


      I'm thinking of doing this as a second diary in a series. Only thing stopping me is that generally people don't have a lot of sympathy for lawyers.
  •  $11 billion is the lifetime earnings (0+ / 0-)

    of 5-10,000 adult human beings.

    Who is going to go to jail?

    The two things Teabaggers hate most are: being called racists; and black people.

    by Punditus Maximus on Tue Aug 09, 2011 at 03:04:16 PM PDT

  •  Even for the students who graduate, these ... (0+ / 0-)

    degrees are typically worthless.  I've got a relative by a couple of marriages who had an undergraduate degree from a real university, but wanted to get an MBA.  Somehow, he got talked into the University of Phoenix MBA program because scheduling classes was so flexible.  Tens of thousands of dollars of debt later, he hasn't been able to get a better job and has found that employers don't regard the degree as a real one, but still has the debt hanging over his head.  He would have been FAR better off if he'd never heard of the place.

    PROUD to be a Democrat!

    by leevank on Tue Aug 09, 2011 at 03:55:28 PM PDT

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