The latest news in the for-profit college scandals is, the U.S. government is planning to forgive federal loans owed by tens of thousands of students who used the money to pay for a nonexistent education at Corinthian Colleges. Secretary of Education Arne Duncan said the college’s approach had “the ethics of payday lending.” Remember the payday lending comparison for later.
This scam run by for-profit colleges to steal, generally from low income students who want to better themselves, isn’t new news. It’s old news. And if the problems were dealt with earlier and more diligently, and solutions weren’t opposed so vigorously by the industry’s lobbyists and their right wing enablers, the U.S. government might not be on the hook for debt relief that could be as high as $3.5 billion, and fewer ex-students would be on the hook for student loans they paid to waste their time with substandard, often worthless, education.
I started covering this issue in 2009 with a post titled, For profit colleges need oversight as well. I’m not bragging about how prescient I was. My post cited two articles which opened my eyes to the problem, one in Pro Publica about the University of Phoenix, and the other in the Washington Monthly about the for-profit college industry in general, titled, The Subprime Student Loan Racket. Remember the subprime loan comparison for later.
This is from the opening of the Washington Monthly article. Remember, this was in 2009.
At the age of forty-three, Martine Leveque . . . decided to pursue a career in nursing, a high-demand field where she could also do some good.
While researching her options online, Leveque stumbled on the Web site for Everest College, part of the Corinthian Colleges chain, which pictured students in lab coats and scrubs probing a replica of a human heart and a string of glowing testimonials from graduates. . . . When Leveque contacted the admissions office, she was told she would receive hands-on training from experienced nurses in state-of-the-art labs with the most modern equipment—including a recently purchased $30,000 mannequin that could simulate the birthing process. She also says recruiters told her that she would be able to do rotations at the University of California, Los Angeles Medical Center, one of the nation’s best hospitals.
[snip]
The instructors had little recent medical experience. Instead of really teaching, she says, they usually just read textbooks aloud in class and sometimes offered students the answers on tests ahead of time. On the rare occasions when Leveque and her class were given time in the lab, she found that the equipment was broken down and shoddy—except for the expensive new mannequin, which no one knew how to use.
Corinthian colleges got prime billing in a story six years ago.
As for the University of Phoenix, the Pro Publica article says the university paid out $10 million to resolve “systematic enrollment abuses” which occurred in 2004.
But some of the school’s recruiters have continued to use high-pressure, deceptive tactics, according to a dozen current and former students and two former recruiters who spoke to ProPublica and Marketplace as part of a joint investigation.
The students said Phoenix counselors misled them about whether credits would transfer to other schools, pretended to befriend them and lied about financial aid. The recruiters said they were told to rope students in with phony claims that classes were filling fast, or by suggesting that federal grants would cover costs, even if that was uncertain.
I continued to write about stories of abuses by for-profit colleges. Kaplan tutoring began running a string of for-profit colleges, and lobbied hard against the government cracking down on abuses by the industry. Kaplan, by the way, is owned by the same people who own The Washington Post (2010). University of Phoenix was getting 88 percent of its revenue from U.S. student grants and loans. Total government aid to for-profit colleges was $26.5 billion a year (2010). The default rate on student loans at for-profit colleges was twice as high as at public colleges and three times as high as at nonprofit colleges (2011). Then-Attorney General Tom Horne refused to join with other states to investigate for-profit colleges in spite of—or maybe because of—the fact we have University of Phoenix, which at the time had 400,000 students across the country (2011). ALEC put together draft legislation supporting for-profit colleges, which turned into an Arizona Senate Concurrent Resolution, courtesy of Sen. Nancy Barto, who was named ALEC Legislator of the Year (2011). A bill sponsored by Arizona Republicans offered a tax break for the University of Phoenix.The bill was so bad, Gov. Brewer vetoed it (2012).
Remember the comparisons to payday lending and subprime loans I mentioned earlier? Those two schemes were horrible, and both preyed mostly on people with low incomes, just like the abuses perpetrated by for-profit colleges. And all three were defended by their greedy supporters as ways to help the very people who were actually being preyed upon. They asked with concerned faces, “How will the poor get money if we don’t let them take advantage of these wonderful, helpful payday loans?” They criticized people who opposed subprime mortgages by asking, “How will people be able to attain the American Dream of owning a home if we don’t offer them subprime loans?” The same argument was used to defend for-profit colleges against their detractors. “You want college only to be for the rich who can get into those fancy state and private, nonprofit colleges. How can low income people who want to improve themselves do it without these for-profit colleges that take everyone and give them the skills they need to succeed?”
This article appears in Jun 4-10, 2015.
Maybe they should rename themselves Tucson Daily, because every day David Safier attacks all education.
Except for public education. It reads more like an assault by a union boss.
Why not try improving what you do support rather than tearing everyone else down?
Thank you David S. for continually shining light on for-profit education. When we start electing pro-education people, hopefully these horrible situations will be stopped sooner. I do not like that the debt is falling on the feds (us) however I have read story after story about what lies these students were told and that now they have no choices because of the debts and no degree or if they do it is worthless. If they don’t get help many will be in the street. You cannot go bankrupt (as I understood one article) with these debts. They stay with you forever. You prove over and over again how valuable public ed. is with its continual oversight.
I think people are waking up to what a scam the for profit education is Keep it up.
Do you think the payday and title loan folks are looking out for their customers, too, Rat?
Dave, I think you’re on Google alert for Mr Ratty.
I don’t know anything about their businesses. If banks won’t loan them money, should they not borrow elsewhere? Bad credit risk? With high risk comes high reward. On some. Total loss on others. That is the difference between a supply sider and a deny sider. Deny them being able to do something you wouldn’t do?
If we are a customer of government services, do you think the government is looking out for us?
Ask a veteran in need how the VA is doing.
Mrs Ratty. No google alert for anybody.
This is the news that Tucsonans ought to be caring about:
At the end of his contract, which was renewed Tuesday night, TUSD’s Superintendent H.T. Sanchez will earn approximately $260,000 as base salary next year, plus a bonus, which equals $390,000 for next year, with expense allowances. As a result, he will be making over $400,000 next year.
Board members Michael Hicks and Mark Stegeman were not allowed to see the contract before they were asked to vote on it. Juarez admitted in the meeting that he had received the contract by email weeks ago.
Next year, Sanchez will make the $390,000 plus $28,000 in expense allowances and maximum bonus of $15,600 with 8 weeks of paid leave. That amounts to a raise of $75,000 plus one more week of paid leave. AZ Daily Independent
How can this happen when you folks all care so much for education? The money never gets near the classroom. I can not support giving you more because now we all see what happens to the money.
TUSD Superintendent is only making less than $100,000 than the Dean of the University of Arizona at $500,000.
These salaries are out of control.
For Profit Colleges and Vocational Centers are out of control.
David, OUTSTANDING ARTICLE!!!!! Something that needs greater hounding than your regular diatribes about the governor. There is a special place in hell for these people though one member of my family has been constantly employed as a RN she would be considered the exception.
Az can regulate how these colleges function and right here is where the rally AGAINST these companies can begin. Don’t use the “corrupt politicians” dodge, that is only an excuse to continue doing nothing more than banging away at the keyboard. You, David have multiple media avenues you could use to make these schools completely about the student.
On this issue, David, you have my wholehearted support.
And Natty Ratty, use another example instead of the VA because you are going down the same road as the screaming populists and it is the WRONG road.
The next rotten apples to fall from the tree will be ITT Tech followed by the University of Phoenix, both are under investigation with the stock price of each nearing junk status. Even the tone deaf Arne Duncan places the “educational institutions” in the same category as payday lenders.
While I empathize with those students cheated and mistreated that empathy only goes so far. If you are ready to enter post secondary education, you should have the math skills to determine that the costs for attending these institutions are roughly three to four times the cost of attending a decent community college offering the same courses and financial assistance.
Duncan wants to bail out the students who attended the now defunct Corinthian Colleges to the tune of billions in forgiven loans in a blanket amnesty. Those figures will be sure to swell as other for profits go belly up and tens of thousands more students seek relief. A more reasonable approach would be to suspend payments on those loans until civil penalties are levied on the owners of the for profits and as much money recovered as possible. Bankruptcy protection, not available for student debt, should also be extended to the victims of these fraudulent institutions. It is not the taxpayers’ responsibility to reward irresponsible and foolish decisions in light of other opprtunities offered by accredited colleges and universities.
I would like to know more about for profit colleges in Tucson. Are their enrollments up, or are they down like Pima Community College’s enrollment is down? Are the poor preyed upon by these for profits in part because PCC has questionable access and commitment to open admissions for poor people and people in need of developmental education?
David W, your comment about Sanchez’s salary is completely off topic, the kind of thing I’ve warned I would remove (and I’m pleased to say, I haven’t felt any need to use that power lately, since people, agree or disagree, have remained pretty much on topic). However, my next post, going up soon, is about the Sanchez contract issue, so I’ll give you a pass this time. Just don’t go on that post and comment about for-profit colleges, right?
Is there a problem with for profit colleges? While you’re at it David, I see 7 other violations. You’re going to be talking to yourself soon.
You already are aren’t you?
David G. watch the commercials, the slick ones with the everyday, workaday single Mother as a dental tech or a returned vet in a well named position such as “manager”. Look for the commercial that talks about having a real campus and a history of helping students. Basically look for ANY school with an advertisement. Normally, PCC, UofA and our other public schools don’t advertise. Remember, if it looks too good, if it’s seductive then steer well clear. That includes the truck driving schools or ANY school advertising on the inside of a matchbook cover or comic book ;-}
David W, if you were pointing the finger of blame at me for your “gang of 7” violators you can try again. David and I have a truce. I have family that taught in Portland with him.
Rat t, this is the first I’ve heard of a truce, or that a relative of yours taught with me in the Portland area (Actually, in North Clackamas School District, southeast of Portland). Is that for real?
And as for a truce, I’m not at war with the commenters here, so I see no need for a truce. I mostly limit my comments to times when I think someone is being factually inaccurate or has misrepresented what I said. Instead of thinking to myself when I see a negative comment, “Haters gonna hate,” I’d rather think “Disagreers are gonna disagree.” Sometimes disagreeably, sometimes not.
They have been in SE Portland for 30 years. I thought David W was blaming me. We’re almost on the same side now.