Later On

A blog written for those whose interests more or less match mine.

Reining in the for-profit colleges that are, in effect, scams—and the opposition

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Congress demonstrates again its abysmal state of corruption. This sort of thing is what makes it difficult to be hopeful. Jeff Bryant writes a good article at Campaign for America’s Future on the opposition to stopping the scams:

The good news coming from the U.S. Department of Education recently is the effort to put tougher restrictions on for-profit scam colleges that rip off students, families and the taxpayers.

The bad news is that not all Democrats are behind this effort and pushing for the tighter restrictions.

Think Progress last week passed along a report from The Wall Street Journal that Big Ed has drafted a rewrite of regulations to rein in “for-profit schools whose students end up deep in debt or default on their student loans at exceptionally high rates.”

The colleges that would be most heavily affected include the University of Phoenix (owned by Apollo Education Group), Kaplan Higher Education, Devry Inc., The Art Institute (owned by Education Management Corporation), and Corinthian Colleges, among others.

The guidelines provide the teeth for what is referred to in wonk-speak as a “gainful employment” plan. The new regulations could go into effect as early as 2015 and could cause, according to the WSJ report, “as many as 20 percent of programs at for-profit colleges” to lose revenue. Public and nonprofit colleges four-year colleges would be exempted.

Writers at Think Progress provided some useful backstory:

“For-profit schools have come under scrutiny for burdening students with debt without giving them degrees or skills that help them get jobs to pay them off. Many for-profit schools and community colleges have higher rates of students defaulting on their loans than who actually graduate. More than three-quarters of the students at for-profit collegesfail to earn a degree within six years.”

Further, low-income students are particularly vulnerable to the predatory nature of these for-profit schools, because these students “attend for-profit colleges at a rate four times higherthan other students.”

Veterans returning from Iraq and Afghanistan are also at risk of being scammed by the for-profit higher ed sector.

As Mother Jones reported back in 2011, “at 8 of the 10 for-profits that take in the most GI Bill cash, more than half of students drop out within a year of matriculation. Many students find that prospective employers and graduate schools won’t take their coursework seriously,” and “some for-profits have cleaned out students’ military benefits while also signing them up for thousands of dollars in loans without their knowledge.”

But, back to The Wall Street Journal report, “for-profit schools say they are being unfairly targeted, given that some of the highest student-debt burdens fall on those who attend public and nonprofit graduate schools, such as law and medical school. They say they serve many students – such as single mothers and many low-income students who don’t live near a community college – who otherwise would have few, if any, options for attending postsecondary schools.”

Whichever side you take in this debate, clearly big money is involved. According to report filed by David Halperin, when he wrote for the Republic Report, the for-profit higher education industry generates a $35 billion annual revenue, of which the vast majority – “about $32 billion” – comes from federal financial aid. . .

Continue reading. In other words, the for-profit colleges, like charter schools, are another mechanism for private companies to scoop up money from the public till. The key paragraph:

As the intrepid Lee Fang again reported, this time in The Nation, “a small group of House Democrats, led by Representatives Rob Andrews of New Jersey and Alcee Hastings of Florida, are organizing an effort within the caucus to protect the for-profit career college industry from any meaningful regulation.

“The two congressmen are among the largest recipients of campaign cash from the industry.Campaign finance data compiled by TheNation.com show Hastings has received $54,500, and Andrews $78,547, from for-profit college executives and political committees.”

Andrews and Hastings circulated a “Dear Colleague” letter asking, according to Fang, “other House Democrats to sign a document asking the administration to back down.”

The amount of money donated to the Representatives is pocket change to the industry, but it was certainly enough to buy the two Representatives. So long as our Representatives and Senators are, in effect, up on eBay, so long will our government continue to be at the beck and call of the wealthy.

We desperately need public financing of campaigns, with no private money involved. That would put an end to the bribes campaign donations.

Written by Leisureguy

31 December 2013 at 1:14 pm

Posted in Business, Congress, Election

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