Wednesday, May 14, 2014

Administrative Avarice is Unlimited

By Professor Doom

In earlier articles, I addressed the Pell Grant scam, wherein administrators use very poor record-keeping to illicitly rake in loot, “growing” the institution by getting fake students to sign up for classes. Admin gets the pay boost for running a large institution, and the fake students get a check for whatever is left over from the Pell Grant from tuition.
I want to point out: the Pell Grant was supposed to be a way for anyone to go to college, with enough money to both pay tuition, and to cover some living expenses. 

Libertarian theory, for what it’s worth, says that this system of grants will only increase the costs of college, but that’s just a kooky theory, completely at odds with Keynesian/government philosophy.

Anyway, this scam has been going around for years, and it’s obvious to anyone in the industry that it’s a huge, huge scam:

--25% is a very generous measure, this is the percent that, without any doubt whatsoever, are scammers. If we reduced the standard to “preponderance of the evidence,” it might be above 50%. I’ve taught many community college courses where over 30% of the students were obviously just there for the check.

Now, the above refers to community college, a place notorious for minimal difficulty, where I’ve shown before that less than 10% of the coursework is at the college level, and much of it is at the 7th grade level or lower. A student not making progress here is either not trying, or simply not capable…either way, the path of integrity would be to simply get rid of such students.

Registrar: “Due to a glitch in the system, a number of students were accidentally registered for courses of which they were unaware. 2/3rds of them got an F, so we got a flurry of complaints to fix grades.

Me: “What did the other students in courses they didn’t know they were in get?”
Registrar: “They got A’s. They still complained, because they didn’t want to pay tuition for the course. It cut into their refund.”

--seriously, it’s not that hard to get by in community college. I bet everyone with an unexpected “F” complained, but the other way around? I suspect some students, upon getting a free A, would not complain, so 33% would be a low estimate of the proportion of community college courses that are bogus. Imagine if accreditation checked to see if courses were legitimate…

Anyone can put minimal effort into the courses of community college and succeed. Outside of mental disability, it really isn’t possible for a legitimate student to be able to not pass here.

Admin: “If this school experiences a 10% drop in enrollment, we may have to close. Make every effort to keep your students in your courses!”

--Every institution I’ve been at has said something to this effect. If “only” 25% of students are bogus, then that means that much of the higher education industry is currently running strictly via fraud.

Even more amazing, scamming students, even if found to be scamming, can “appeal” to get aid for two, even three more semesters, more if the student puts effort into it. I can’t make this stuff up. After years of this, the Federal government has decided to stop it, limiting the scam to only three semesters:

“That will change July 1, when new Education Department rules go into effect requiring colleges to cut off aid after a third semester of failure with no more appeals.”

I can’t make this stuff up. They’re finally putting it into law to stop the scam at three semesters. Writing such a law could only be justified if there were a great number of students scamming for 4, 5, or more semesters. Why do you think administrators allowed the scam to continue past 3 semesters?

Now, passing a law to put a cap on scamming after three semesters is nice, I guess, but there are ways that a system with integrity could do something about the first three semesters of scamming:

First, I’ve mentioned before that these grants should be restricted to people that actually show an interest in education. Instead of doing no-background check signups, just give scholarship grants to people that can demonstrate an interest in scholarship. Demonstrations of knowledge, of skill, or maybe even waiting until after one semester of success would be easy things to try.

Second, a system run by people with integrity would simply get rid of scammers immediately, instead of knowingly let them run the scam for semester after semester after semester, while admin takes their cut.

Finally, integrity means holding the true criminals responsible. Make the administrators responsible for the fraud actually pay back the money they’re stealing (right now, the institution has to pay back the money admin steals, a big factor in why the scam is so huge, as the thieves get the loot, while the institution gets the bill). Send admin a bill for their thieving, and see just how many semesters they’ll steal.

The above are three easy paths that institutions run with integrity could take, to fix this scam. The regular reader of my blogs knows that none of these options are on the table.

Rather than take a course of integrity, administration will simply take a bigger cut of the loot:

I pause for laughter at the word “capture” being used here, openly showing how higher education has turned into a system of plunder. Would a thief willing to take $4,000 not settle for stealing capturing only $2000 instead? How about a bank, upon realizing thieves are stealing capturing customer accounts, deciding to just steal capture all the money for itself? Would that be as legitimate?

That’s the thinking here.

My guess is the student thieves will simply get a smaller cut, but now the admin thieves will get even more loot, incidentally screwing over all the legitimate students in the process—the legit students will be paying higher tuition, too, in this horribly misguided attempt to reduce the fraud. Realize that the majority of students in higher education could still be legitimate, but admin would much rather hurt legitimate students than engage in any action that would look like integrity. Would it be too much for me to say “I can’t make this stuff up” one more time?

Time and again, “expenses” is used as the reason to raise tuition. I’ve followed the money in higher education, and those expenses are primarily from a bloated and highly paid administrative caste. Alas, they’re not satisfied with creepy high pay, they want MOAR.  The next tuition raise will be justified because “we’re going to take more so that you get less.”

Could there be a larger, more glaring, sign of the lack of integrity in the system? Much like with my previous post, I ask: why would you want your children anywhere near a system run by monsters people like this?


  1. Seeing that there are students who are so easily obtaining money for their education and then not even taking their education seriously really hurts considering that back in the day I was unable to get financial aid legally. I have committed fraud but, on the contrary, it was in order to afford to stay in school. In fact, most of the fraud is simply the fact that I took classes while receiving a form of financial aid that did not allow me to do so. Had I just stayed home without finding a job or taking classes, that would have been perfectly legal.

    I must admit that at some point I did get a minimum wage job and did not declare it. Even then, I was still putting myself through university and not living in the lap of luxury, although it almost seemed that way compared to my previous income. I can say all this because the matter has been settled long ago. Fortunately, I just had to pay. I wasn't arrested or convicted of any crimes. I realize that could have easily happened in other jurisdictions or at a different point in time. This happened in Canada a long time ago. And guess why I had to become a fraudster? My parents had kicked me out of their home and nevertheless I was considered a dependent for student loan purposes. Or, although they were probably paying taxes, my parents would simply not help me with the student loan application, on which they had to report their own income in order for their contribution to be calculated. I would have still been expected to reimburse most of the money, but I would have had a perfectly legal status instead of being a fraudster, at least if I didn't pull the undeclared job trick in that case too. They didn't necessarily save money because, to their credit, they ended up helping me financially anyway, although only with tuition and a small amount once in a while, not by supporting me outright. And I could have become independent for student loan purposes by having a job for 2 years. Only, I think the job had to be full time and I was having trouble establishing such a work history. If the minimum wage job I got later would have been sufficient provided that I could keep it for 2 years (it was considered part time but I worked full time or nearly full time hours in reality most of the time), it came too late.

  2. Getting financial aid used to be a strange maze, I sure remember when it was more than just "check this box saying you're a degree seeking student." Thing is, as soon as the Federal government reduced the qualifications to "student can check a box", then other lenders had no choice to but likewise reduce their qualifications.

  3. My parents refused to fill in their part of the application, so I ended up not mailing mine either. I realize now that I probably should have sent mine anyway and explained what happened. If my parents had, or were suspected of having, a financial obligation, with obligation likely comes a certain responsibility to report the relevant information. I should have let them tell the government that they won't report anything. I don't know about loans and bursaries but I know that the local welfare program would, in fact, grant welfare benefits to people who are supposed to get a parental contribution or who are sponsored immigrants, if the individual insists a lot and claims abuse. In that case, the government would just recover the funds from the parents or sponsor. If there was no way to convince them, maybe I could have sued them (with what money, though?). Some paper could have decided to publish my story. But then, at that age, I wasn't even dreaming of fighting my parents. Aside from the fact that they are my parents after all, it wouldn't even have been worth doing it just to get a loan when, over the years, I could get more by having some kind of relationship with them (it ended up being true). Still, I don't think it's fair to have to fight one's own parents, get married, have a child or accomplish the very thing that was my problem (accumulating 2 years of continuous employment without being in school) just to become independent for loan purposes (I wasn't living with my parents).

    Ironically, having an undergraduate degree or the equivalent number of credits is one of the means to qualify. I have also established a work history since. I may even be able to self-finance a degree. It's a good thing I'm not the fraudster who ended up in jail for having tried to go to school and really complete the program.

  4. "Could there be a larger, more glaring, sign of the lack of integrity in the system? Much like with my previous post, I ask: why would you want your children anywhere near a system run by monsters people like this?"

    What's the choice, RD? Other than going to university abroad?

  5. I realize that many of those students are unprepared or the degrees are of questionable value. It is also true that only because a decision is unwise, that doesn't mean that nobody will make it. What I don't understand is why so many of the students who are basically trying to supplement their income while it lasts are not taking the courses for real. Getting some education is better than nothing and they are paying for the courses, so why not attend?

  6. RD? There aren't many options, and that assumes a college education is necessary (it generally isn't). If it isn't necessary, don't pick a random school down the road. Go to one with a reputation for quality and integrity. There are still a few such schools, but the key is to have a plan for all 4 years. If you go in with "oh, I'll just sign up and see what happens", you'll be screwed over in every way possible.

    Why not attend? I can only guess, but part of it cultural, not every subculture in America thinks education is a good idea. I know it sounds weird, but there's a huge asian subculture (100+ million) that refuses to learn to read; they're ungovernable, and thus free from taxation and other things. I think that's extreme, but I'm not one to cast judgement.

    1. But if the program is not very demanding, they could have fun with like-minded students, graduate with a degree in Monkey Business from the Joke University and have a somewhat normal situation on paper, although that may not necessarily impress too many employers. That's still better than just being a deadbeat with a history of failing many courses, sometimes at more than one school, without even a questionable degree to show for it. To some extent, even a lousy degree or job still helps by proving that the individual in question would at least show up and do the work on a regular basis and keep doing that for years.

  7. "Getting some education is better than nothing and they are paying for the courses, so why not attend?"

    Because they couldn't get through them even if they tried. They know it. And the colleges that take their money know it (as Prof RD has pointed out more than once). And what allows this to continue is the tacit premise unique to US culture: that you can make a silk purse out of a sow's ear. That anyone can go to college and should be able to if they so wish.

    1. They could do it for what little they might be able to accomplish or even just for the experience. There was some mentally handicapped woman who was allowed to attend a pottery class with her mother. She wouldn't have received credit for the course. I found out about her because, to her and her mother's chagrin, she was asked to leave because her presence was too disrupting (she wasn't making a scene, just being helpless). Why wouldn't students whose intelligence is more normal even try? Some of them may even find that, after working harder or finding a less demanding program, they can do it after all.

  8. Speaking of the SAT and other university entrance exams, I must share this interesting tidbit I heard Dr. E. Michael Jones share on a fairly recent radio show interview he did with John Friend of The Realist Report. Dr. Jones said there was a Jewish man named Kaplan in New York who started a test preparation business that is still thriving today, He apparently attracted some wealthy Jewish customers who could pay the high price of his courses. He gave a huge lavish party when they graduated from his course and passed the respective entrance test, however, he would tell each successful student that the entrance ticket to get in to the party was to bring to him one question that was on the test they took. The students did that for years and therefore it became his student/customers were able to do very very well on the entrance exams because they were trained on the specific questions that were on the exam and these young Jewish students would gain entrance to Harvard and other Ivey League universities with the highest entrance standards. And these students became the leaders of our government and our corporations.

    Are we disgusted or what?!

    1. That's actually a little clever. As luck would have it, I've a few essays on the new changes to the SAT coming up soon.