If you have been reading this rant, you know that student tuition debt is now larger than all credit card debt in the U.S. And you also know that over 80% of that debt is owed to the U.S. Government, otherwise known as you and me.
Yesterday's Los Angeles Times carried a story of the results of a Democratic Senate staff investigation into just what students get for all the money which they owe to the government, and by extension, to us. And the answer is NOTHING, NADA!! Forget the Police Chief of Cincinnati and the Phoenix tv commercial. He would have had the job even if he had never heard of Phoenix.
But before we get to the Times story, let me include a little personal experience. About eight years ago, I thought distance learning via the Internet made a lot of sense, especially given the financial problems facing most universities. So I looked into and experimented with Phoenix, DeVry, American International, Baker, Maryland and a couple more that I forget, including one in Chicago that has since gone bankrupt. There was even a new graduate school in Singapore starting up to offer MBAs to Chinese students. Here is what I found at all of them.
1) Utterly incompetent staff
2) Utterly unqualified faculty
3) Devoid of intellectual content in the courses
4) Ridiculously under paid faculty
5) Staff driving top of the line Mercedes etc.
In short, utter and complete fraud!!
I did actually "teach" one MBA course for AEI. There were about a dozen students located as far away as the Caribbean. The whole thing was pretty "thin" on content. Students seemed to have great difficulty in getting assignments done on time, and even more difficulty showing up in chat rooms for discussion. But all in all, considering how early in the development of online schools, it at least was not as awful as Phoenix or DeVry.
So the semester is over and the grades are turned in, and then I get a message that they need a grade for a female student. This was somebody I did not know was in the class, turned in no assignments, participated no group work, and did not take the final exam. I told AIE all of this and that I could not give her a grade. AIE said I had to give her a grade or they couldn't get the money from the government for her tuition.
I told AIE that was their problem not mine. I guess I was wrong because I never heard from them again so it seemed that it really was my problem.
So here is my summary. For profit colleges are 99% fraud and a huge drain on the U.S. economy. This is one fiscal problem we can really do something about. So read this story about how badly for profit college students are getting screwed. And remember that this is billions of dollars that could be going to legitimate colleges and universities.
For-profit colleges slammed in Democratic Senate staff report
It says they are failing students and costing taxpayers too much. Republicans call the investigation biased.By Jamie Goldberg, Washington Bureau
7:19 PM PDT, July 30, 2012
WASHINGTON — For-profit colleges are failing their students and saddling taxpayers with an enormous bill, a two-year investigation by the Senate education panel's Democratic staff concluded.
The harsh report, released Monday by the committee's chairman, Sen. Tom Harkin (D-Iowa), found that federal taxpayers spent $32 billion on for-profit colleges in 2009-10, while more than half of the students who enrolled in them dropped out without degrees after about four months in 2008-09.
"In this report, you will find overwhelming documentation of exorbitant tuition, aggressive recruiting practices, abysmal student outcomes, taxpayer dollars spent on marketing and pocketed as profit, and regulatory evasion and manipulation," Harkin said. "These practices are not the exception — they are the norm."
But Steve Gunderson, president of the Assn. of Private Sector Colleges and Universities and a former Republican congressman, said the report "twists the facts to fit a narrative, proving that this is nothing more than continued political attacks on private sector colleges and universities."
Republicans on the Senate Health, Education, Labor and Pensions Committee, which is controlled by Democrats, also criticized the report, saying it used biased information and failed to include Republican input, raising "substantial doubt about the accuracy of the information."
The report linked the high dropout rates with a lack of money spent on instruction at for-profit colleges, finding that in 2010 the 30 for-profit colleges that were examined employed 35,202 recruiters compared with 3,512 career services staffers. The companies examined in the report spent 42.1% of their revenue on marketing, recruiting and profits, while spending 17.2% on instruction.
More than 80% of the revenue at for-profit colleges came from federal financial aid, Harkin said.
"It's plain common sense that taxpayer dollars should not be used for lobbying," he added.
Gunderson said for-profit colleges deal with a constituency — mainly working adults, parents and veterans — that can be reached only through marketing and recruiting. To ban the use of revenue for lobbying would "result in the end of private sector colleges and universities," he said.
But many recruiters mislead prospective students about the cost of the program, the availability of federal aid, the job placement rate and the transferability of credits, the report said.
The Education Department estimates that 96% of students at for-profit colleges take out loans, a much higher percentage than students at community colleges, four-year public universities and nonprofit private colleges. Students at for-profit colleges account for 13% of the nation's college enrollment but 47% of all federal student loan defaults.
The report concluded that significant reforms were needed to ensure that for-profit colleges succeeded financially only when students also succeeded and that taxpayer dollars were used for educational purposes.
In early July, attempts by the Education Department to penalize for-profit colleges whose graduates ended up with huge debts and low job prospects were struck down by a federal judge.
For-profit colleges can still lose federal student aid if more than 90% of their revenue comes from federal sources or their students have high loan default rates in the three years after graduation.
Democratic members of the committee called for legislation to better regulate for-profit colleges, including adding new rules to the Higher Education Act, which is scheduled to be reauthorized next year.
"If nothing else this report has put the nation on notice that there is a problem here," said Sen. Richard Blumenthal (D-Conn.).