Saturday, April 6, 2019

Another College Dies, Stranding Students And Enriching Admin

By Professor Doom

     Before the days of the student loan scam, universities were renowned for their endurance. The oldest university in the world is over a thousand years old, and even “abandoned” universities like in Timbuktu still endure, because they were collections of scholars…not institutions devoted to siphoning off student loan money.

     Despite the money pouring into higher ed, we’re starting to see school closings, either due to fraud, or horrific plundering and “mismanagement” by a caste of looters far more interested in personal gains than building an institution to withstand the test of time.

      At some point, we need to ask questions, and a recent article comes close:

--yeah, it’s the New York Times…just because they print much fake news, doesn’t mean it’s all fake, though I’ll be dissecting this piece.

     It’s funny that the title says the student loan cash “disappears,” as we all know that’s impossible. Every dollar is tracked, when I was reimbursed for a tank of gas at the community college, I assure the gentle reader the forms were filed and signed off in quintuplicate. So there’s a question here in the title, but does the NYT bother to answer it?

     So what happened at this school?

When the Education Department approved a proposal by Dream Center, a Christian nonprofit with no experience in higher education, to buy a troubled chain of for-profit colleges, skeptics warned that the charity was unlikely to pull off the turnaround it promised.

…Barely a year after the takeover, dozens of Dream Center campuses are nearly out of money and may close as soon as Friday. More than a dozen others have been sold in the hope they can survive.

     Great, more questions. So, the sleazy for-profit sold out to the non-profit. Was there really no expertise left at the school? One of the reasons “old” universities survived is because the leadership and the faculty were the same people—the only way to kill the school was to eliminate all the scholars (hi Chairman Mao!), but past that it was basically impossible. That’s not the case at many schools, especially the for-profits, where the people running the schools have no education or interest in such, and so all the faculty are just temp workers. You get rid of the “leadership” at these types of schools and you indeed do have nothing.

      So when Dream Center bought this school, they had nothing but a name (besmirched by being for-profit), and no expertise. They couldn’t really hire anyone, either, because all they could get would be more plunderers.

     This is no one room schoolhouse, either:

The affected schools…have about 26,000 students in programs spanning associate degrees in dental hygiene and doctoral programs in law and psychology. Fourteen campuses, mostly Art Institute locations, have a new owner after a hastily arranged transfer involving private equity executives. More than 40 others are under the control of a court-appointed receiver who has accused school officials of trying to keep the doors open by taking millions of dollars earmarked for students.


     So they’re already ripping it into smaller pieces and selling the most profitable bits off. You can bet the teachers at those profitable bits will get absolutely nothing for their work.

Now its students — many with credits that cannot be easily transferred — are stuck in a meltdown.

      One of the main original purposes of accreditation was to facilitate transfer students. The schools got together and decided what kind of education a student should receive, so that a student moving from one school to another could do so without “losing” years of credit for education at the former school.

      Accreditation has been debased into a pure money-sucking scheme of no relevance to education whatsoever, as my line-by-line analysis of accreditation regulation reveals.

     Similarly, higher education was never supposed to be supported by a massive student loan scam, though that’s mostly what it is today. Schools are now massive endeavors filled with students loaded up with irrelevant coursework.

     Even if a school collapsed in the time before the student loan scam, you didn’t have thousands of students stranded with nothing to show for it, and you didn’t have billions of dollars supposedly “vanishing.”

 On Wednesday, members of the faculty at Argosy’s Chicago and Northern Virginia campuses told students that they had been fired and instructed to remove their belongings. In Phoenix, an unpaid landlord locked students out of their classrooms.

      The students were fired? I suspect a typo in the article here (it is the NYT, after all). Anyway, about that money?

The fall accelerated last week when the Education Department cut off federal student loan funds to Argosy after the court-appointed receiver said school officials had taken about $13 million owed to students at 22 campuses and used it for expenses like payroll.

     Most students never see their student loan money—it goes directly to the school, and anything left over after tuition goes to the student. Tuition is now so high that it only takes a few students to pay for the teacher of the course, the rest just flows into administrative pockets.

      Think about what the above says: the people running the school stole the tuition money and paid themselves off first. The people running the schools are clearly not educators.

      Note also, “the fall accelerated” when the student loan money runs dry. Most schools are so bloated with plundering administrators they simply cannot survive without all that cash flowing in.

     For-profits have a vile reputation for good reason. They clearly cooked the books to facilitate the purchase:

Almost immediately, the organization discovered the schools were in worse shape than expected, with aging facilities and outdated technology. The universities “were, on the whole, failing without hope for redemption,” the receiver wrote in a court filing last month.

Dream Center had anticipated a $30 million profit in its first year, Mr. Barton wrote in a recent legal filing. Instead, it was facing a $38 million loss.

     “Aging facilities and outdated technology” is hardly a unique description, many schools fit that mark. I remember when I was at a state school in the late 90s, and my computer was a bit, well, dated. When I asked for one with a CD-ROM drive, the department head could only give me a blank look: she had no idea what one of those was.

      Still, isn’t anyone curious what the $38 million was spent on? That’s quite the loss. The NYT isn’t curious, but I am. About 300 admin could burn through that much on their salaries in the first year, and one admin per 100 students is quite a low ratio (1 admin per 6 students is not unheard of).  Such an easy question, too bad the article doesn’t ask it…but I really think there was plundering here.

     While Argosy students have little hope of getting back money they paid out of pocket, the Education Department said the federal loan debt of affected students would be forgiven for this semester. If the schools close, students can seek help under a program covering school shutdowns.

      It’s good that there’s a program for helping students trapped in a school shutdown…but none of this was necessary before the student loan scam. Shut it down already.


  1. How typical of present superficial society: all appearance, no substance; all palliation, no basic treatment. All players but administrators means to others' ends. Stuck pupils who enrolled in good faith financially obliged despite having been plainly duped. Such victims later likely to be dis-ingaged citizens made irreversibly cynical & flinty by their adverse experience & nigh certain to be starkly dis-counted by political players avid to court far more affluent voters any how, a scene sure to perpetuate & worsen the problem. If any thing proves the validity of the late John Taylor Gatto's magnum opus The Underground History of American Education this sure does!

    1. That's a fine book, and I strongly recommend everyone with children read it. That said, it's more about the deliberate enstupidation of our kids...perhaps I'll write on that next.