Big piles of cash have been getting sucked up into the for-profit college scam — con artists figured out ways to tap into federal student aid money by providing a crappy, cheap ‘education’ to poor but ambitious students. It’s been exploitation all around: there are lots of desperate academics willing to take any job, the economy has been poor and young people see education as a way out, and you just knew someone would see a way to bring those two together and make a buck off it.
It looks like the gravy train might be ending, though. Corinthian Colleges are in collapse.
Under an agreement with the U.S. Department of Education, Corinthian Colleges will put 85 of its U.S. campuses up for sale and close the remaining dozen. The for-profit college chain operates campuses under the names Heald, Everest and WyoTech. It has more than 70,000 students across North America. It’s the largest-ever college, by enrollment, to be shut down in this way.
It’s about time. These places offer a substandard education, with extremely low retention rates, doing little more than offering a diploma in exchange for cash. And now the government is casting a skeptical eye on the University of Phoenix.
This week the U.S. Department of Education announced that it will review how federal student aid is administered at one of the country’s largest for-profit colleges, the University of Phoenix. Owned by the publicly traded Apollo Group, the University of Phoenix enrolls over 200,000 students, rivaling the size of the nation’s largest public university system.
Honestly, I despise these places. They take advantage of students, offering them an education while giving them nothing, all in return for taking a long ride on a roller coaster of student loan debt. At least when real universities put you on that roller coaster ride, you get a good education.
So how did these pseudo-universities thrive for so long? Government corruption.
Blame Republicans.
The filing doesn’t list amounts, but shows that Corinthian made payments to Crossroads G.P.S., a group co-founded by Karl Rove that has raised over $300 million to elect Republican members of Congress through campaign advertising. Crossroads G.P.S., a 501(c)(4) nonprofit, does not disclose any of its donors.
Crossroads G.P.S. spent over $700,000 to help elect Sen. Marco Rubio, R-Fla., during his 2010 election. As Bloomberg News revealed, Rubio later filed a letter with the Department of Education, requesting that the agency “demonstrate leniency” with Corinthian.
Blame conservative think-tanks.
The American Legislative Exchange Council, a nonprofit that helps corporate interests draft model legislation, is listed as a creditor. As Republic Report reported, although for-profit colleges are far more expensive for programs offered by community colleges and other public institutions, ALEC drafted a resolution calling for state officials to “recognize the value of for-profit providers.”
Another gainful employment regulation opponent, the American Enterprise Institute, is listed as a Corinthian creditor. AEI scholars have repeatedly attacked the rules, calling them an example of the Obama administration’s “crusade against for-profit colleges.” Last October, Andrew Kelly, AEI’s resident scholar on higher education reform, specifically defended Corinthian and criticized the “Obama administration’s bloodlust for such schools.”
Get that? It costs more to attend these little places with a bad reputation: they seduce potential students by offering part-time participation, flexible hours, and a fast track to credentials, but more often turns into a long slow squeeze for more loans.
The numbers don’t lie. These ‘colleges’ are a bad deal.
The for-profit college industry has long been a favorite target of the Obama administration as the White House attempts to harness mounting student debt. Eighty-eight percent of students at for-profit colleges held student loans in 2012, compared to 66% of public college students, and 75% of students who attended private colleges, according to The Institute for College Access and Success. The average for-profit school student took on $39,950 in education loans. Their public and private university counterparts took out $25,550 and $32,300 on average, respectively.
Here’s where the money goes.
“This is public money that’s going into a for-profit college, that then is used to fund organizations that do lobbying work and other PR work on behalf of this company,” says Ann Larson, an organizer with the Debt Collective, a group pushing for loan forgiveness for Corinthian students who say they were defrauded. “In the end, Corinthian can file for bankruptcy while tens of thousands of students, most of them low-income, are stuck with this debt.”
If you can’t afford a full-time, four-year institution, we have these wonderful places in the United States called community colleges. They are accredited. They hire serious instructors. They do a good job. Go there, if you want to learn something.
The for-profit colleges are pure poison.
Unless community colleges are different in other places in the country, you can’t get a 4 year degree there. All the community colleges in my (reasonably large for the suburban Midwest) area only get you associate’s degrees or certificates.
I am pleased to learn this, and I hope the trend continues. I pray (well, hope) that the ties to republicans are communicated broadly and effectively during the looming campaign season. The more poo thrown in their general direction the better.
Another reason why this trend is a good thing, in addition to the reasons you described, is that there is this little expanding financial bubble called the student loan crisis which is a debt cumulatively on the backs of our young people. That debt is currently at $1.3 TRILLION dollars — larger than the current holdings of credit card debt. A huge chunk of this is thanks to the for-profit college treadmill. Just more frequent discussion of their scam can hurt their enrollment and help the average Jennifer or Joe to invest more wisely in their education.
@Matrim, that’s true, but two years at a community college will allow a person to take required classes not in one’s major so that going to a 4-year college becomes less expensive. My spouse and I both attended a community college for two years and got many required classes–including some required for our majors–out of the way for less money. Both of us were admitted into a fairly prestigious university for grad school later in our educational pursuits, so the community college was a very good deal all around.
Yes, they’re two year places that typically graduate you with an AA degree. But that’s a plus!
1. If you learn that more schooling is not for you, you get out with something, and you aren’t as deeply in debt.
2. Community colleges often offer vocational tech classes — two years to learn welding or auto repair is reasonable.
3. They are a stepping stone to other colleges, and are consciously geared for that, so if you do decide you like higher ed and want more, you can move on to a four year. UMM, for instance, is happy to accept transfer students.
I agree with the story, but by gum that’s one awful infographic.
Actually, on second look it’s not that bad — just poorly laid out.
Profit u akbar
I worked for Heald College briefly – after my first term (I only worked three), I started recommending community college to every student. By the third, I couldn’t even justify doing that (none ever took me up on it).
I will never teach nor recommend anyone else teach for those places – similarly, I always point students interested in that type of program to our local community colleges.
Another community college alum here. I couldn’t appreciate it right out of high school, but the ability to take gen ed classes at a lower cost (other than books, but I don’t think CCs have much control over that) in a school with smaller class sizes is highly underrated. My brief experience with the University of Phoenix only reinforced that belief.
How do community colleges go about reclaiming the ground lost to for-profit colleges? The ones with whom I’ve dealt – admittedly a small sample size – don’t have the advertising budget to compete with the likes of U. of Phoenix, and the steady stream of bad PR doesn’t seem to be hurting for-profit colleges. Part of the problem might also be the image of community colleges as a lesser option. Some don’t offer the facets of the “college experience” Americans have come to expect – dormitories, sports teams, campus culture, etc. – and students in the rural areas many of these community colleges serve may be more interested in escaping their hometowns than taking the budget-conscious route to higher education.
My daughter once checked out one of these scams. I pointed out to her that expecting a decent education from a place where the booklet on how to apply for a loan to attend was exponentially larger than the size of the one with the class lists and teacher credentials was probably not a good idea. The fine print was especially horrifying. They expected the student to pay for *all* the classes in a particular specialty up front – usually with a large loan – and if they changed their mind on continuing after taking a class or couldn’t pass the first time around, too bad. They were out of the program but still on the hook for repaying the loan for the entire program. It was impossible to pay per semester or per class. She decided against them. Good call.
Same thing here with the proliferation of private colleges (I joked long ago that we would run out of three-letter combinations starting with F [from our word for “college”] because of all those new institutions springing all over the place). One of them became notorious as a blatant diploma mill, with “campuses” even inside a mall.
@Gwynnyd 10
How is that in any way shape or form legal and ethical?
It is about bloody time. I went to one of these “schools,” Muir Technical College in Tucson in 1987. I took out a big student loan with the promise of becoming a computer programmer and job placement: a month after I graduated, the three schools in Arizona shut down, leaving me unemployed and saddled with a debt it would take 10 years to pay off. There was a lawsuit, but I was excluded from the class action as I had already completed the course of study.
Community college courses can also be taken whilst still in high school. Several of the advanced maths students at my high school (including me) did that, taking second year calculus at the local community college (our high school was a rarity(? for the time?) and had a first year calculus course). My recollection is that other than the textbook, it was free (or perhaps the high school paid the fee?).
That same community college also gave a slightly different group of high school students (again including me), interested in computing, accounts and time on their system. Again, no fees, it was a friendly agreement between the high school’s “computer club” (hastily formed for the purpose as I now recall) and people at the community college.
If you want to be a real atheist +, what about starting free online courses? Of course, you couldn’t give personalized attention, but it seems to me that a bright but poor student could get a real leg up for free. For the basic courses, the rote drill of programmed learning seems more appropriate anyway. And think what a great poke in the eye of the republicans if we could make the profits of their ripoff buddies disappear. My sense is that there are plenty of people associated with the movement who could write such courses and also plenty of people in the movement who would support such an endeavor financially. You could probably even get the Humanists & Unitarians to pitch in.
@matrim #1 – I’m currently attending Seattle Central, which offers Bachelors of Applied Science in both Allied Health and Applied Behavioral Sciences, which are pretty solid vocations at the moment. That comes from a change the Washington state legislature made a few years ago, in response to the outrageous cost of four year institutions (which they have adamantly refused to rein in.)
@pedz #15 – Unfortunately, the issue is not getting the education but having it accepted by potential employers. Which is another huge problem with a lot of for-profit schools: employers know that they are little more than money churns, and will be much more likely to reject someone whose only education and experience come from a place like Phoenix or Corinthian.
something uniquely evil about people who prey on poor or otherwise disadvantaged people who are trying only to improve their lot.
One of my foster kids (from Sudan) got sucked into one of these. Fortunately, Massachusetts has a 72 hour “Lemon Law” where he could back out with no financial penalty–and fortunately, we happened to know someone who happened to know this. So he did just that.
He said they put enormous psychological pressure on him to stay, including sitting him in a small room with two women who kept asking him questions like, “Why are you afraid of education?” Despicable.
Another example of why one of the highest ROI forms of volunteerism you can do is help a new immigrant or refugee. Part of the problem is that, due to language and other barriers, immigrants tend to rely on each other for information, and therefore are especially vulnerable to crooks of all kinds. If you mentor or otherwise support a new immigrant or refugee, particularly with education, your assistance can often help a whole group, including the people back home.
And all states should have these lemon laws, and they should be publicized a lot more.
Thank you for saying this. As a community college instructor (with a Ph.D. in my field), I am often treated by the public as if I were the equivalent of a kindergarten teacher.
And our school has an arrangement with the local private 4-year college that our students get half price tuition if they graduate with us and then go on. So that means the education is more affordable for a lot of students. I suspect these sorts of arrangements aren’t that unusual.
@blf: Yes, I taught at a community college and had several high school students who took writing classes there. And when high school turned out to be unendurable for my son, he took several classes at the community college in his final year of high school, with homeschooling making up the rest of his education. He got admitted to University of Michigan so it couldn’t have been too bad a deal!
Just adding to the “yay, community colleges!” pile —
In my mid-20s, I realized that I wasn’t going to be happy in academia and likely will never make a living as a writer, and that I should probably switch to something STEM for a day-career. This meant filling in all the lower-division coursework in math and science that I’d missed — I had some credit from AP math and physics in high school, but that was all in terms of STEM-major-level preparation. Since I’m in California, instead of spending thousands of dollars to take lower-division math, physics, chem, and biology in 300-student lecture halls, I went to a local community college and paid under $30 a credit for classes of under 50 students with professors who made teaching their focus. When I moved to a UC as a concurrent enrollment student for upper-division work, I had a good handle on the basic material and was already used to the level of interaction with the professor that is available in smaller classes.
Of course, our community colleges don’t get enough funding, so the classes which transfer to a 4-year college in particular are always overcrowded. And this is one of the most affordable routes to a high-quality college degree (since both the UC and CSU systems take a significant number of transfers from the community colleges who’ve finished their general-ed and major prep work); 2 years at a community college and 2 years at a UC is one of the most accessible routes to a degree from one of the best public university systems around. A much better use of public education funds than lining the pockets of scam artists and pushing people into crushing debt…
Lots of greed and exploitation in higher ed. Standardized testing, content management, and textbook companies can go to the same hell as these for-profit colleges. Scumbags with no thought or care for the students.
@chrislawson
(Disclaimer: I’ve only skimmed some of this, so take this post for what it’s worth)
The infographic does have one flaw, which is that it understates the problem of defaulting on the loans. Someone might reasonably think that the default rates for each type are as a percentage of the total students in that category, but it’s a percentage of the whole. So when you read the graph, you have to keep in mind that private-for-profit schools have only 9% of the students, but account for 43% of the defaults, whereas public schools account for only 44% of the total while having 72% of students.
Thus, a student in a private-for-profit school is almost eight times as likely to default on their loans as a student in public school and almost seven times as likely as a student enrolled in a private not-for-profit school.
Community colleges are awesome. I think more kids should be encouraged to look there before heading to a big four-year college.
The daughters both started at the local community college. Elder transferred to state college, found her real calling, graduated with honors and a double major (English and linguistics) and is just finishing up her Master’s degree. Younger will be starting at the state college this fall; she’s already changed her major from math to computer science. Both of them were able to try different subjects at the community college until they found the right field.
Full disclosure, both sets of grandparents helped with their college funds, a lot, or we’d still have college debt. Elder is looking at a PhD, so we will be applying for loans at some point. But they could never have gotten this far without the community college.
I’m not posting this to be smug, but rather to talk about what your country *could* be like. I work at a university in Sweden and all tuition is free, both for Swedes and for other EU citizens. We don’t have private universities at all and Swedish students get grants and loans which don’t start having to be paid back until their income exceeds the minimum wage level and are written off when they retire (the interest rate is kept very low). The grant part of the system is about $500 per month and several of my cannier students have worked out that they can live quite comfortably in a place like Thailand on that kind of money. So they push off to Thailand in the Swedish winter and study my courses on line from one of the Swedish study centres in Thailand (yes, such places exist!), studying (or working on their tans) during the day and linking up with me during my day and their evening.
Davidrichardson@#25
I’m not posting this to be smug, but rather to talk about what your country *could* be like
Yeah? Well, we have the F-35 program and the littoral fighting vessel program, both of which cost more than your whole educational system. Uh… Wait a minute!
Also, they are incredibly inexpensive. I’m starting at a community college this fall. 14 credit-hours for the semester cost me a grand total of $1,751 in tuition and fees. The Pell grant alone covered that with plenty to spare. Knocking the first two years down that far is something very beneficial long-term.
Leo T. @ 27:
That is a HUGE plus. I did my first couple of years in my biology program at a community college, got a very good education from extremely dedicated teachers, and could afford to finish the rest of my program!
But that is also what a lot of people think makes them bad. They cost less? Must be inferior. My students are often treated like they are “dumb” by the students at the private college in our town. I tell them: You are getting two years at an incredibly low rate, all your classes will be accepted by that college (thereby acknowledging that they are equal in quality), and you will get tuition at [college name] for half the price of the students who started there. Now who’s the “dumb” one?
I have taught at a four year university, and the classes I teach at the community college are taught at the same level – college freshman level. It is not “inferior” or “lesser”, just less expensive, which gives my students an opportunity to get a college education, often the very first in their family.
One advantage that for-profits have is offering credit for “real-world experience”. One of them advertising on one of our cable stations announces that you can get credit for real-world experience on their finance degree, while showing kids playing Monopoly. That’s the kind of credit I want while working for a degree.
You mean promising them education.
Davidrichardson@#25 Sounds socialist. Must be bad :)
@MHiggo #9:
I see sports teams themselves as part of the problem of higher education funding–considering the combined salaries (base + bonuses for wins) top coaches earn at public schools. Even when accounting for athletic foundations that pay a majority of a coach’s salary, they can still hoover up a six figure base salary courtesy of the state.
Am I the only one who finds it absurd that public schools can pay out big salaries to coaches while simultaneously requiring students to go into debt to earn a degree? (Of course this is the same country that views universal healthcare as evil and socialist but gargantuan budgets as just and patriotic, so I shouldn’t be that surprised.)
At least in Illinois, there is a move towards allowing community colleges to offer 4-year degrees. The school I teach at cooperates with several 4-year universities, allowing students to enroll in those schools and take classes from them on our campus.
I like the attention that is currently being shined on these scams, but there a lot of “legitimate” schools that do pretty scammy things as well and deserve more scrutiny. For instance, a lot of colleges and universities offer a very attractive aid package to first-year students that gets snatched away without warning in the second year. Either that or they massage jobs numbers to make it look like everyone is getting jobs in their chosen fields when the real percentage of students who can find jobs right now is very low (this is especially a problem in law schools, I’ve noticed).
For my money, we either scrap the entire system or we make it completely public. No one should feel compelled to take on a house-worth of debt for a degree that will get them nowhere, but society is constantly putting pressure on kids to waste money on negative-ROI degrees. At the very least, current and former students should join a debt strike.
I have to point out, if we’re talking about the pluses of community colleges, that there’s a really unfortunate caveat; one of the biggest defining factors to getting your first job, in some cases more than your actual skills or level of education, is who you know. I know the level of this varies incredibly from industry to industry, but I work in a commercial art field, and about 95% of the people at my current studio went to one of three private non-profits. This was also on my mind because of that article about the horror of frat-culture, and how many of our bosses and leaders disproportionately came out of the Greek system. Going to an expensive school, regardless of the quality of education, gets you friends more likely to have the resources or connections to get THEIR first job, which helps you a LOT.
It’s not an endorsement of the for-profit schools, because those are way worse than community colleges in terms of networking (I know one person at work that went to a for-profit, and her career benefitted more from dropping out and getting a job than staying on with it). It’s just unfortunate that, regardless of the quality of education, community colleges lose out in that way to private non-profits due entirely to the fault of classism and wealth inequality rather than anything they’ve actually failed at.
Community Colleges are great. The one I attended (and worked for) was not only much cheaper than the local state university, but much more merciful as well – they had better payment arrangements and didn’t drop-kick you out of classes if you missed the payment deadline.
In general, it’s appalling that US support for post-secondary education went down the route of providing direct subsidies for students and student loans (via grants and subsidized loans), rather than directly supporting existing state-level systems of post-secondary education (like how primary and secondary education got funding directly from the federal government).
Long overdue, but don’t forget that a lot of the regulatory backwash from this is going to hit all colleges, as it usually does.
If you’re wondering why college costs have climbed so much, you really wouldn’t believe how much regulatory burden has been placed on higher ed in the past few decades. The Dean I report to has done essentially nothing for the last two years but reports to regulatory bodies, which is why we’re going to get dinged on curricular development at the site visit this month–she’s been doing nothing but compliance since the last visit.
That whole thing about placement? Let’s put aside a moment the toxic notion that college is about getting a job instead of getting an education and learning how to learn, do you have any idea how cost intensive it is to collect that data and then compile it into anything meaningful? And a large part of the reason the big schools are crapping their regalia about the upcoming federal reporting on completion and job placement (to say nothing of the incredibly stupid federal school ranking system) is that all of a sudden they’re going to be in what amounts to Yelp! for higher ed.
I wish I had a place to even start looking for a solution, but this is going to be the defining political issue in either 2020 or 2024. (Actually, I do have a place to start: reduce interest on all outstanding students loans to Prime and cancel half of all outstanding debt outright.)
I love community colleges, but one thing to be careful of (which also applies to 4-years): I see advice around all the time to just take all of your general education classes the first two years, and then decide on a major, and that it’s no big deal to do so. In certain fields, it is a very big deal to do so. If you’re thinking about any STEM field, the classes are sequential and there’s nothing that can e done about it. So, if you even think you might major in one particular thing, you need to start out at the community college taking classes for that major also, not just general education. Too often, especially with transfer students, I see students who have all of their general ed and distribution requirements met, but have none of the classes in the major, and that means they’re a) still on the hook for at least 3 years because we have a 3 year long sequence that can’t be doubled up, and b) they have a lot of trouble finding enough classes each semester to meet the full-time requirement for financial aid.
I started in Community College and decided after a couple years that I didn’t really want to pursue my chosen major, and switched to something else, and finished alot of GE and prep courses. If I had started in a regular college I would’ve wasted alot of money.
<blockquoteBut that is also what a lot of people think makes them bad. They cost less? Must be inferior. My students are often treated like they are “dumb” by the students at the private college in our town. I tell them: You are getting two years at an incredibly low rate, all your classes will be accepted by that college (thereby acknowledging that they are equal in quality), and you will get tuition at [college name] for half the price of the students who started there. Now who’s the “dumb” one?
I will say that when I graduated from community college and went on to a four year, there was a marked and initially striking increase in the extent to which most of my classmates seemed to actually give a shit about the content of the classes we shared. (Even in the classes I shared with Civil Engineering majors).
There wasn’t, despite my father’s insistent prejudice, a measurable difference in the quality of the instructors or instruction. There was a marked difference in the quality of the other students. :/
My Number Two Son didn’t graduate high school. In his mid twenties he suddenly decided to go to a community college and did so well there that he is now at Cornell with all sorts of money provided* and is considering a PhD!
Yay community colleges!!!!
____________________________________
*I need a bumper sticker that says “My son goes to Cornell but my money doesn’t” :-)
Outstanding. These clowns were amongst the internet’s first, most prolific, and unapologetic spammers to the point they were block-on-sight anywhere I had root. I’ll smile while they die a death of a thousand cuts.
Awhile back, the Arizona Board of Regents told our state universities that University of Phoenix should be our model.
I can’t comment on the alleged problems of transfer from from a community college to a 4-year institution, since my own experience (as commented above) was as a high school student. However, I am of the opinion (unsubstantiated) that those two “extracurricular” experiences — plus a summer at an NSF-sponsored programme (and, possibly, winning some fairly routine scholarships) — helped me gain admission to a highly rated & ranked University. This was during the late 1970s in California, before the pre-Univeristy education system was destroyed, so the situation could be a bit different now. Nonetheless, despite the passage of time and elections of anti-education bigots, I enthusiastically support the community college system.
I attended a community college to get the schooling to get my license as a vet tech. The program and the education I received are great. We have a 99% pass rate for the state boards.
Then there is Carington (formerly Western Career) college that also offers a vet tech program that is 18 months long. When last I looked, they had a pass rate around 40%… after most of the students dropped out. We started with 50 students my year and graduated 45 of them. WC would start with 30 students, and graduate 5. You had to basically teach yourself as the teachers are horrible, and all to the tune of $30k or more.
It’s a fucking travesty.
I teach at a community college. Here in Virginia, we have a law that, if you get a degree from a community college with a sufficiently high GPA (3.2 to 3.5, depending on where you want to go, I think), then the four year institutions are REQUIRED to accept you.
In other words, you can graduate from the University of Virginia, and for the first two years, you get to take classes that are much cheaper, AND you get taught by (mostly) Ph.D.s who have specialized in teaching, rather than (what you usually get at 4-year colleges for the first few years) grad students.
Here’s another plug for community colleges – if you’re doing anything that could be considered “vocational” training (auto repair, cosmetology, welding, construction, health care – community colleges are a great place to go and get your certificate/associates. Some of the best nursing schools in the country are housed at community colleges. All in all, community colleges have a proven track record of cranking out people who are well-prepared to do well in a given field, while charging them a non-extortionist sum. Community colleges are also great for your stereotypical “has a job/is a full-time parent and wants to take a class or two towards their dream of eventually doing ___” student, who might someday take their community college transcript to a 4-year college.
And yet another plug for the community college system…
A few years back we found an intern for our design business who was studying art at the the local community college. She since went on to get her bachelors degree at Pratt and her masters at Yale. Not too shabby I would say.
Not that you have to go on to an advanced degree at the Ivy League. As others have said an associates degree is all that’s needed for many good careers. I mention it because it can also be a path to higher degrees.
37 % profit?!? That’s up there in science publisher territory.
…Take a look beyond the rim of your dinnerplate (or in this case your country).
College costs don’t somehow need to exist at all.