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.
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.