College Inc: Scamming Poorer, Older, and Dumber Students

[Prometheus]

PBS recently produced a disturbing documentary called College Inc that ennumerates the problems and disadvantages which hamper students who enroll in fake, for-profit schools like Devry, University of Phoenix, and various fast-food restaurants-like institutions. I personally know a few Somalis who have wasted money on such schools. Normally,most of the students who matriculate in such schools have a history of academic failure, barring them for attending traditional colleges and universities.

 

For-Profit Colleges: Educators or Predators?

 

TIME Magazine

When Yasmine Issa found herself, at 24, unemployed and a recently divorced mother of twins, she turned to the Sanford-Brown Institute, a for-profit, or proprietary, college in White Plains, N.Y., that offered an ultrasound sonography program and promised her job-placement opportunities. But a completed program and $15,000 in federal loans later, Issa missed the catch: the program was not accredited. "I was somebody no one wanted to hire," she says.

 

Issa testified on Thursday before the Senate Health, Education, Labor and Pensions Committee as part of a new investigation into federal investment in higher education. Congress last instituted reforms in the for-profit education sector two decades ago, but federal aid to students at for-profit schools has rapidly increased, approaching $24 billion last year, with an additional $36 billion Pell Grant boost approved in March. A report released late last week by chairman Senator Tom Harkin found that up to 90% of for-profit schools' revenue comes from Washington and that for-profit students are graduating with more debt than students at public or private nonprofit universities. With 96% of proprietary students taking out loans, and nearly half of them defaulting, taxpayers foot the bill.

(See pictures of the college dorm's evolution.)

 

At current increasing enrollment and loan rates, testified Steve Eisman (famous for waging war against the subprime-mortgage market in 2008), there could be $330 billion in defaults in the coming decade. "The taxpayers are being taken for a ride on this," Senator Harkin told TIME. "Taxpayers, I think rightfully, are saying, 'Yes, you can take my tax dollars to help educate kids; that's good for us and our country.' But I don't know that the taxpayers want their money to go to institutions to pay the shareholders huge profits."

 

Government money, lightly supervised institutions, unchecked supervising bodies and debt-trapped students — it all sounds similar to the subprime-mortgage collapse that is still fresh in America's mind. "The analogies are unbelievable," said Barmak Nassirian of the American Association of Collegiate Registrars and Admissions Officers, linking the for-profit education boom to the savings-and-loan crisis of the 1980s, the dotcom boom of the '90s and the recent mortgage bubble, which was helped along by lax credit-rating agencies and loose regulation.

(Comment on this story.)

 

For-profit school leaders deny the parallel. "It's silly and simplistic," responds Harris Miller, CEO and president of the Career College Association. "The analogy between the [for-profit college] accrediting bodies and the [credit] rating service is absolute nonsense." Corinthian Colleges Inc. downplays default numbers and cites an Office of Management and Budget figure showing that loan-repayment rates have actually risen in the past decade.

 

Apollo Group, the University of Phoenix umbrella, cautions that federal student and default data itself is unreliable and can't be used in its current state to guide regulation. "The federal government's Integrated Postsecondary Education Data System does a poor job of capturing the nation's next-generation learners, who comprise the majority of the university's student body," Apollo Group spokesman Manny Rivera said.

(See TIME's special report on paying for college.)

 

The House's proposed accountability rules only start to address limited Department of Education graduation data and unreliable self-reported school figures. Moreover, Harkin's findings indicate that there is no information available on how private schools spend Higher Education Act student-assistance dollars. Congress is seeking to create a Consumer Financial Protection Bureau (CFPB) to oversee private student loans.

 

Other for-profit industry ties to Washington remain murky. Last month, House Republicans nominated the only for-profit members — Keiser University chancellor Arthur Keiser and University of Phoenix president William Pepicello — to the Secretary of Education's accreditation advisory committee, the National Advisory Committee on Institutional Quality and Integrity. While direct political contributions from the Career College Association, Apollo Group and Corinthian Colleges Inc. have totaled only $923,000 since 2006, their lobby maintains a strong presence.

 

Issa's story parallels hundreds of others that Senator Harkin's office received recently. The refrain is usually the same: after being lured by aggressive recruitment and advertising strategies, low-income students leave proprietary schools unemployed and trapped in debt. Deanne Loonin, director of the National Consumer Law Center's Student Loan Borrower Assistance Project, has seen for-profit student clients seeking help with loan defaults for nearly 20 years. Not one client, she claims, got a job in his or her anticipated field. "The schools are playing the role of the brokers who are pushing the products on the vulnerable population," Loonin remarked.

 

The Health, Education, Labor and Pensions Committee appears divided on the next steps as it awaits July's for-profit-education hearing. Ranking member Senator Michael Enzi disavowed the partisan nature of Harkin's report. But for Senator Al Franken the solution is simple: "Well, we have a job here," he said at the committee hearings, "and part of it is to look out for Ms. Issa, look out for the taxpayer, and I'll be damned if I'm going to be a Senator and not do that job." For-profit education may again face tougher regulations and oversight from Washington.

 

— With reporting by Katy Steinmetz

[Che -Guevara]

Devry and Phoenix are accredited as far as I know, and so called traditional schools including state community collages and universities are not any cheaper.Unless your parents are wealthy enough to fit the bill, you will be burdened with loans.

[Chocolate and Honey]

I didnt know Devry and Phoenix are accredited. All I know is Phoenix is aggressively recruiting and investing billions of dollars in ads. I would be suspicious of any university that doesnt have an actual compus.

[Che -Guevara]

^They both satellite campuses all over-of course nothing like traditional schools.

[Libaax-Sankataabte]

Sad indeed.

 

I thought these comments from Time Magazine posters were interesting

 

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Daniel

I ahve been of the opinion that education was nothing more than a money making scam ever since junior high school. There are many people with education, certificates and degrees right now that are unable to find work. Mearly having the piece of paper does not ensure that you will be making any more than the person that does not or that you will be able to find a job in that field. When money is involved even educators tend to look out ofr their own self interests. Always remember these schools do not care how much debt they put you in. They only care that they are getting theirs now just like the companies of the 90's and the real estate managers of the 2000's. They will squeeze every last penny they can out of you and throw you away when ther is no money left in you.

Yesterday, 19:20:53

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ProfBob

There are a number, a large number, of phony schools out there. In California, for example, anyone can open University if they just put down a $10,000 bond. Without bond they can then have this genius apply for federal loans, they can give PhD degrees that may qualify for state licensing in psychology and other counseling areas. Of course the people with legitimate degrees have been able to develop examinations that weed out many of these incompetents before that and hang out their shingle.

Even accreditation by the major agencies does not guarantee a high level of education. You may have seen the recent US Department of Education study showing that one in seven Americans are illiterate and only about 15% can read and understand at the lower division level of college. But 27% of our population has already graduated from college. What does that say about many of our college degrees.

B.S. And graduate degrees have been cheapened by many of these for-profit higher education institutions. There are some very good ones, but they seem to be in the minority. Many make the coursework very easy so that students will pass. The problem is that their knowledge is limited from such courses. Not every school can be a Harvard or UCLA but we do need some minimum to what is acceptable for an accredited college degree.

Yesterday, 02:58:33

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Sandra Hines

I too, attended a for profit school in Colorado. One female student, an African- American, seldom came to class and never turned in her homework. The teachers told her they would fail her. The student complained to the administration. The teachers were informed that they had to pass this student, or the school would be in trouble with the Federal government. Several of the teachers quit over this mess.

Yesterday, 02:53:51

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Liked byGuest

 

Daddy Bud

I was and still am a victim of a small trade school in AR "loaning me funds for a class that they knew( I found out later) would never give me a career or even a job offer.

At the time and ever since I have told them that I would pay the original funds back but they have constantly refused that offer and have managed to extract about 1800 of the original 2500 from me thru tax seasures and stealing stimulus checks.

I now file a zero tax return and they still say I owe them but I will never pay them more than the opriginal 2500.

I'm now currently unemployed and wish I could go back to school but at 59 and not getting any offers for employment I see little hope of that happening.

The congress should give amnestee to those of us that were tricked into taking out loans that lead to nothing.

2 days ago, 20:46:05

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deborah

If the government only allowed loans to students in certified programs, seems like that would fix the problem. And of course it wouldn't hurt if these students would research the program they are interested in attending. I'll bet if they were paying out of pocket, they would know everything about the school, its programs, sucess of hire rate, faculty etc. before they spent a dime.

2 days ago, 17:16:37

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lifeforsarah

I taught at a technical college a few years ago and it was a joke. I was not allowed to fail any students and if a student complained about the grade they earned I was told to raise the grade no matter what. Most of the students were not prepared for the computer courses I was supposed to teach and only a few of them actually did enough work to truly pass the classes. I quit after a year.

 

Many state run community colleges offer great technical programs that can be completed in one or two years. These are also usually a lot cheaper than for profit schools.

2 days ago, 14:47:50

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UNIX Engineer

Karl... I very much agree with your observations. I've tried to help many students in Des Moines who were being prepared for jobs as a "PC Tech" with trade books you could buy at a bookstore. It seems that many of these schools are simply preying on students who are desperate for employable skills and we're all paying the bill through loans that can't be repaid... Not to mention the life of the student is effectively ruined in the process (endless debt issues, etc).

 

Time to reign in these unaccredited, for-profit schools!

2 days ago, 14:06:24

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Joshua Steele

That useless degree will still get you hired by companies that require a 4 year degree. There are lots of them. That $50K is worth every penny if used correctly. Oh, and I forgot to mention the education itself. Invaluable.

2 days ago, 14:01:37

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Kirk Smith

Really? sounds like a lot of state and private schools, people go into $50,000 of debt for a useless liberal arts degree.

2 days ago, 10:50:37

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karl

I taught at a for-profit career "college" for 3 years (Southwestern College in Cincinnati, owned by Lincoln Educational Services). Academic standards were non-existent and the quality of instruction was laughable. It was strictly a profit-generating enterprise. The product could have been anything - used cars, appliances, or telemarketing. It just happened to be educational services.

 

Instructors were treated like crap, while the sales staff (also called admissions counselors) were treated like royalty, even though they were, by far, the least educated among the staff. Most students were completely unprepared for education of any kind. The "school" was making a killing on the public dole - fedral grants and loans extended to students with no hope of ever repaying the loans.

 

The most important priority was bringing bodies in the door and hooking them with promises of jobs, for which most graduates are woefully unprepared. Students were passed along regardless of academic progress. Anything to keep the revenues coming in. The time for much stricter oversight of the industry is long overdue

 

 

Read more: http://www.time.com/time/business/article/0,8599,2000160,00.html#ixzz0sTYiXmVt

[STOIC]

This is Sad story.I think you have to be blind to fall for this sort of scums.You can always go to any state accreditation website and verify your school.There are plenty of opportunities for Somalis in the states to attend the finest institutions of higher learning in America.

 

Today I took a cousin of mine who is a rising senior in high school for his college tour.I took him to places like Columbia, UPEN and Princeton.I was really surprised to find out that schools like Princeton gave a free ride for both boarding and tuition if your family income is below 60,000 dollars.This is a pure need based financial aid.I hope many of the young Somali kids in the States visit more of this schools and do their own research.There is plenty of opportunities in this country!

[grasshopper]

Time to reign in these unaccredited, for-profit schools!

agreed! they should start with Everest.

[Libaax-Sankataabte]

^^ love the parodies on youtube.