Thursday, September 18, 2014

A Known For Profit Ripoff College Still Gets $1.4 Billion A Year in Loans

By Professor Doom

     Despite the fact that much of higher education, (barely) especially for-profit, is a fraud, I still eagerly await mainstream news to finally connect the dots regarding how the scam works.

      A recent title from a CNN article raised my hopes that, at last, people would have a better way of learning about the scam than my obscure blog:

How for-profit colleges rip off students

     That’s a great title for an article, but, alas, it’s just an opinion piece (heavily disclaimered by CNN). Still, I could hope that the author will detail how accreditation and institutions of higher education are both controlled by the same avaricious administrators, eager to plunder the system in exchange for phenomenal amounts of loot.

      Like most every mainstream media article, it disappoints, deeply. It says nothing of the sort, although there are a few things worth repeating:

“…The devious practices of one of the country's largest for-profit colleges finally caught up with it in June after years of accusations of inflated job placement rates, abysmally low graduation rates, high loan default rates and more when Corinthian Colleges reached a deal with the Department of Education to shut down its operations… Corinthian…agreed to sell off or close its more than 100 campuses across the country, while at the same time denying the allegations.”

      The basic protocol for for-profit colleges (and many public institutions) is alluded to in the above paragraphs. Suckers are lured in via a sales pitch of “our degree will get you a job, don’t worry about the tuition, we’ll help you with the loans, we won’t even check your credit!”  The suckers take the classes, but the sad fact is many of them are only there for the checks, and so graduation rates are minimal. Naturally, the people that are willing to take checks and not ask questions about it are poor credit risks, and tend to default. Because the school caters to suckers, what few graduates there are, are merely “the best suckers we could find”, and thus the degrees are worthless in the real world, leading to poor job placement.

Despite taking $1.4 billion from the federal government in 2012 alone, Corinthian can't keep its doors open.

     Isn’t it neat that the for-profit can rake in that kind of money, and yet can’t be bothered to do some decent work with it? I promise you, the executive officers and higher administrators were paid very, very well. The taxpayer, of course, is screwed. What of the students?

     The 72,000 students trapped on Corinthian's sinking ship are some of our nation's neediest. Like many for-profit schools, Corinthian targeted students who are overwhelmingly minority, female and low income. They are veterans back from Iraq and Afghanistan -- Corinthian received $186 million in post-9/11 GI bill funds in 2012 -- blue-collar workers seeking to improve their skill sets, and single mothers who hope more education will help them provide for their children.

     Alas, there is no plan to help the students. Hmm, taxpayers screwed, administration gets a fortune, and the students are on the hook for massive loans. This problem is hardly restricted to for profit institutions, any number of public institutions work the same way…student loan debt is over 1.2 trillion dollars now, it’s not just this Corinthian.

     Hey, remember last year, when I said student loan debt was “only” a trillion dollars? Honest, the problem isn’t getting smaller.

On average, tuition at for-profit colleges is four to six times higher than at a comparable public school. A two-year Senate investigation found a medical assistant diploma cost $22,275 at Corinthian's Heald College in Fresno, California, while the same program at Fresno City College costs $1,650. An undergraduate certificate in paralegal studies at the Anaheim campus of Everest Colleges costs more than $43,000. At the Anaheim area community college, an associate's degree in paralegal studies costs less than $3,000.

     For profits charge more, because they’re in a better position to charge whatever they feel like, and get first dibs on the money. Many public institutions can’t raise tuition without first appealing to the local government…it’s a slower process in public institutions, but “raise tuition to capture all the loan money” (and yes, “capture” is the word they use for this sort of plunder) is still the goal.

     And students at for-profit colleges generally cannot transfer credits because the schools lack the accreditation recognized by traditional community and four-year colleges. Without a job or the ability to transfer credits, students at for-profit colleges all too often find themselves unable to repay their loans.

     The author is a bit off here. Yes, those transfer credits will be lost…but it’s the same way at other schools. Outside of special situations, students can only transfer a year or so (24 hours) of credits, and many schools only allow 12 hours. Seriously, inability to transfer credits is a real problem, because so many schools sell so much crap that even fake schools won’t accept it.

     Again, this problem isn’t restricted to for-profit institutions, lots of schools are ripoffs in this regard.

      The whole point of accreditation, when it started over a century ago, was to create standards to facilitate transfer students. Accreditation today is simply a fraud, and happily accredits schools (for a hefty fee) that offer huge amounts of utterly worthless coursework.

      This would have been a great time for the author to point out that, if accreditation weren’t a fraud, it would have stopped Corinthian long before it started ripping off students.

     This is certainly true. It’s quite damning of for-profit schools that 50% of loan defaulters are from for-profits.

     Um, the quoted statement implies 50% of loan defaulters are from non-profits, the vast majority of which are publicly supported schools. Yes, for-profits are over-represented, but it’s still extremely damning that public schools are indebting people for coursework that is so worthless that people can’t possibly pay for it.
     Again, the problems cited here are hardly restricted to for-profits.

Most unbelievably, the Department of Education continues to allow some Corinthian college locations to enroll students—without meaningfully disclosing that the school is in the process of being sold off.

     This is pretty amazing, the school is a scam, the Federal Government knows it’s a scam, they’re shutting it down because it’s a scam, Corinthian is going along with a shutdown because they agree they’re a scam…and they’re not even going to bother telling the students still trapped in the system, who will pay a fortune for coursework known to be bogus. I. Can’t. Make. This. Up.

     Maybe there’s a chance that the school is only a little bit of a scam? Doesn’t seem like it:

     Corinthian has a long record as one of the worst players in the for-profit education industry. In 2012, when the Department of Education released the first metrics to determine the success of career college programs, 44 of Corinthian's programs failed outright. In fact, Corinthian Colleges performed worse than any other for-profit chain. But because a lawsuit prevented those metrics from being enforced, Corinthian's practices and programs continued unabated.

      When it comes to for-profit, being “one of the worst” is an impressive achievement…it’s like being “one of the worst” child molesters, you have to sink pretty low to be that notable. Even though the school is this horrifically bad, it STILL managed to rake in 1.4 effin’ BILLION dollars in federal loan money in 2012. 
    Yowza. You think the students will be off the hook for that money? Heck no.
     Again, this would have been a great time for the author to point out that only accredited schools can get that money; legitimate accreditation would have stopped this years ago.

     Corinthian and other similar colleges have made a profit for decades off the backs of students. As a nation, we must say "enough."
     I certainly agree, enough is enough…but it’s not just the for-profits, and really if the author of this essay had spent just a bit more time satisfying the title of her article, How for-profit colleges rip off students, the general public could learn what’s really going on in higher education: bogus accreditation legitimizes bogus schools, which then suck up huge amounts of money in the student loan scheme. There’s not even a comments section so that readers of CNN (are there any left?) can add some useful information. Oh well, maybe someday CNN will ask me about it. 

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