By Professor Doom
I’m generally pro-capitalism—it’s no utopia, but never promises as much, unlike socialism which does, although typically ends in mass murder, and usually begins and operates on mass murder as well…a utopian corpse-filled desert at best.
Anyway, capitalism is usually better, but higher education stands in stark contrast to such a claim. “For-profit” colleges are quite often rip-offs, while schools not blatantly trying to get a profit are less often scams.
The reason for this is the student loan scam, which pays for accredited “college credits” without any concern for education. So, for-profits are really all about extracting student loan money; in this regard they are vastly more efficient than the not-for-profit schools.
Still, the justified vile reputation of “for profit” schools has been cutting into the plundering of student loan money, and so these schools have been steadily hiding themselves as non-profits.
I discussed this before, but the article was so anti-Trump that it distracted from the information. The Huffington Post, another CTRL-Left hate media source (not being judgmental here, just considering the source), further discusses the phenomenon of for-profits disguising themselves, and amazingly enough does a good job…so good that I’ll have to reconsider Trump’s hand in all this.
Today, the country’s best colleges are an overpriced gated community whose benefits accrue mostly to the wealthy. At 38 colleges, including Yale, Princeton, Brown and Penn, there are more students from the top 1 percent than the bottom 60 percent.
Before going further, I’ll point out, this one time, the obvious slants in the article, such as the above. Yes, certain schools are “for the rich,” and so will have more students from wealthy families than from poor families.
HuffPo will often try to make something out of this, but it’s utterly irrelevant. Amongst Lamborghini owners, there are more from the top 1% than the bottom 60%, right? Amongst multi-million-dollar mansion owners, there are more from the top 1% than the bottom 60%, right? Amongst drinkers of $1,000 bottles of wine, there are more from the top 1% than the bottom 60%, right?
All of those are bleeding obvious, right? But driving cars, living in houses, and drinking alcoholic beverages are all things nearly everyone does. There will always, always, be things the rich can buy which the poor cannot…it’s rather the definition of being rich. Anyway, HuffPo has a slant, and I’ll try to avoid much of their class hatred—they’re called a “hate site” for a reason--while getting to the relevant things.
The U.S. now has more student loan debt than credit card debt—upward of $1.5 trillion. Nearly 40 percent of borrowers who entered college in the 2003 academic year could default on their loans by 2023, the Brookings Institution predicts.
The above are perfectly reasonable numbers, and I quote them here just for reference and emphasis. The default rate is almost certainly understated—there are many “loan deferment programs” which are de-facto defaults, but technically not so.
It also doesn’t explain why colleges have failed to take advantage of the best opportunity to radically drop the price of a good degree that I’ve seen in 15 years of watching and reporting on the industry. This opportunity doesn’t have the daunting price tag of worthy proposals like “free college.” It doesn’t require any action from Congress at all.
The opportunity referenced above is “online education,” and the article spends some time discussing it. I actually was one the first to help a scammy state university offer online courses (in 1999), and I apologize for it (again). HuffPo is correct, online classes really should be much cheaper than traditional, “brick and mortar,” courses, because there’s minimal overhead once the course is developed (takes 3 months, tops, to do so—I’ve done it at least half a dozen times now).
The courses should also be cheaper because they aren’t worth a damn thing. Sorry, the level of cheating and fraud in most online courses (I’ll say “most,” but my eyeballs put it at near 100%) is staggering, and employers have long since learned not to give much credit for such courses, even if the college will.
While traditional courses are limited by the size of a lecture hall, online courses can accommodate thousands of people at a time.
While HuffPo misses it, of course, the above is the core of why these courses are worthless. The professor with 1,000 students can’t possibly assign papers, can only give multiple choice tests…and has absolutely no idea if the person taking the test is his student, or didn’t just buy the answers to the test in advance (sites sell such for just a few dollars). But HuffPo looks at this as a benefit of online education!
So far, colleges have been more aggressive in launching online graduate programs.
The reason for the above is the student loan scam has basically no limit to what the school can rake in on graduate programs…massive profit margin there, I assure you, and a big part of why, when we see people with huge debts ($50,000+), they usually bought themselves an online graduate degree.
This is because many colleges don’t actually run online programs themselves. They outsource much of the work to an obscure species of for-profit company that has figured out how to gouge students in new and creative ways.
The above is key for how for-profit schools can hide. They associate themselves with state/non-profit schools (where regulation/oversight is lax), and then rip off students who get to say they have credits from a prestigious school, even though all they have is a crummy online course of dubious value, taken from a sub-contractor raking in profits.
The article discusses in detail a particular entrepreneur, who was only too happy to discuss how he made millions capitalizing on Princeton’s prestige (the admin there, like everywhere else, are primarily involved in selling such prestige in exchange for more money in their pockets):
…decided to get Princeton itself, or an equally prestigious institution, to lend its name to online degrees instead. He would focus on graduate schools, where admissions standards are opaque. He would provide all of the upfront capital. He’d do the digital marketing and hire course designers and produce the videos of lectures and the software that allowed students and faculty to interact live online, with worldwide 24/7 support. In return, the colleges had to give him 60 percent of the tuition. This was still a good deal for them, since 40 percent of something was better than 100 percent of the nothing they had before.
I’ve been involved in things like the above, taking a few hundred bucks, flat fee, in exchange for producing a product which they’ll turn around and sell endlessly for tens of thousands of dollars. Yeah, I screwed up, although it pales next to the mistake I made when I was a teenager, trusting a doctor’s advice which eventually and directly is responsible for my cancer. I do envy people who can honestly say they have no regrets…
Like any good businessman, the guy is utterly ruthless:
“The key insight was to take the systems from for-profits that were actually good ... married to the goodwill and good quality of the best traditional schools,” he says. “That is virgin snow.”
If the “leaders” running our schools had any integrity and guarded that “virgin snow” instead of pimping it out the better to stuff their own pockets, this whole scam could have been shut down immediately.
Yeah, that’s a quite unreasonable “if.” More next time…
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