For-profit colleges are scamming American students

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According to an investigation by Democratic Congressman Elijah Cumming – the ranking member on the House Committee on Oversight and Government Reform – for-profit colleges are paying executives massive salaries – not based on student achievement – but instead based solely on profitability.

Looking at 13 different for-profit schools – the investigation found, “the single most significant measure for determining executive compensation at these schools is corporate profitability…rather than student achievement.” For-profit colleges rely heavily on government funding, with many schools receiving as much as 90% of their revenue from federal student loan assistance programs. Yet, they’re not producing good results. A quarter of all students who attend for-profit schools default after three years, while the default rate at public institutions is a mere 10%.

Yet the for-profit school executives still get fat paychecks – like Strayer CEO Robert Silberman who made $41 million in 2009 alone. Educating the future American workforce used to be a part of the commons, because the economic security of the nation depends on well-educated workers. But now – money-changers are in control – leaving students in debt, unprepared, and jobless.

Thom Hartmann Administrator's picture
Thom Hartmann A...
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Dec. 29, 2009 9:59 am

Comments

It's funny how righties always complain about govt, but how often is it private business that is the one screwing govt and making it seem ineffective? The education and student loan program are programs created to aid the general welfare. Yet look at how private colleges and lenders have distorted and corrupted the system for their own gain and not for the general welfare it was intended for. Speaking of corporate welfare-up to 90% of their revenue from govt money! And what about the GI BIll scams we are starting to hear about?

DynoDon
Joined:
Jun. 29, 2012 9:24 am

As recruiters were instructed, if they had a pulse and a Pell, they were actively 'recruited' by Colleges. No one cared a whit after the kid was enrolled, in fact, it was better if they dropped out and failed to pay the loan.

The easiest way to defraud the Government is by corrupting their programs, especially programs involving social services.

This two-edged sword also makes the case that "Big Gummint" never works, even though it was working great before being used as bait for free tax money.

Subterfuge is not 'politics', it's subterfuge, but politics today is merely subterfuge.

anonymous green
Joined:
Jan. 5, 2012 10:47 am

Probably, government out to pre-qualify the private schools. or just say no to the rip-off artists.

Many years ago, i worked for a firm that recruited medical personnel.

The medical assistants who went to a public college and learned how to give vaccines to people under the supervision of a Dr. got the jobs.

Those who went to the private schools and learned how to give vaccines to oranges didn't.

Not a whole lot has changed since then. People are still paying to learn absolutely nothing and ending up flipping hamburgers.

They might as well just apply for a job at McDonald's without first incurring $20,000+ in student loans that they'll never be able to pay back.

Private colleges = destroyed hopes and destroyed lives..

Retired Monk - 'Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 3:01 pm

When higher education morphed from preparation for citizenship and public life into job training, it lost its belabored soul. Private colleges have not been a problem when they provided an alternative liberal arts or specialized art/technical focus. It is the credential mills that are the problem, along with the idea that diplomas have automatic earning authority.

Then there is the student loan scam. How ugly can it get? The banksters are now doing to student loans what they did to bad mortgages, knowing that whatever student debts are beyond collection will be made good by the government. They lent our money to our kids and took the interest as their entitlement. It would be the ugliest act of all except for the war crimes and denials of health care, or food. Such competition at the bottom of the barrel.

drc2
Joined:
Apr. 26, 2012 11:15 am

Everything that gets commodified gets corrupted and ruined. Pay more, get less, what you do get is tripe, but it did accomplish it's primary goal, profit. Like healthcare, the only thing it does well is make money. It doesn't heal as good as most, it cost more than most, it kills more than most. but it makes money.

A recent grad from Fort Lauderdale College of Arts was written up in a magazine or blog, she is in debt forever since these are the only loans not forgiven in bankruptcy, but she has her degree. Her nightly pole dancing and cocktail gig don't really utilize her education to much.

douglaslee's picture
douglaslee
Joined:
Jul. 31, 2007 3:01 pm

But pole dancing probably pays better than a job you can get with a Liberal Arts degree.

DynoDon
Joined:
Jun. 29, 2012 9:24 am

Plumbers and electricians get more work than mba engineers, too If a poledancer plumber came to fix your leak, or rotorouter your pipes you just might pass on her card.

I doubt that dreaded plumber's crack seen while under the sink would bring any comparable response either.

I bet some old retired guys might just find an epidemic of plumbing problems.

douglaslee's picture
douglaslee
Joined:
Jul. 31, 2007 3:01 pm
Quote douglaslee:

Plumbers and electricians get more work than mba engineers, too If a poledancer plumber came to fix your leak, or rotorouter your pipes you just might pass on her card.

Now there's a entrepreneural idea! Motto "We'll clean your pipes!"

Do to plumbing what Hooters did for casual sit-down restaurant/bars......

Or an idea for a bad porn flick.

al3's picture
al3
Joined:
Jul. 31, 2007 3:01 pm

Notice the righties are silent on this one. I guess you wouldn't want to show a need for regulation.

DynoDon
Joined:
Jun. 29, 2012 9:24 am

The undereducation foisted upon the public by public colleges is a shame.

rykpa's picture
rykpa
Joined:
Aug. 1, 2012 9:25 am

And her degreee is in what? And do not lie.

rykpa's picture
rykpa
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Aug. 1, 2012 9:25 am

There have been a few stories on tv news magazine shows about this problem that included segments on how veterans are returning from Iraq and / or Afghanistan, only to have these for-profit colleges rip them off. Sen Tom Harkin is one party that has been looking in to this issue. The schools should not get full payment from the government until the student successfully completes the courses they took. If the student does not complete the course or pass the test given by a third party, some of the money should be withheld for that student to try again later, or given to other students.

miksilvr
Joined:
Jul. 7, 2011 11:13 am

You would think the right would be screaming about the for profit schools ripoffs and wasting of govt money. Oh I forgot-govt bad, business good.

DynoDon
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Jun. 29, 2012 9:24 am

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