We should never forget that a substantial number of the people who are getting rich in this land of ever increasing inequality are doing so by sucking hard at the government teat. Among the worst offenders is the relatively new for-profit education industry. There was a time when even the rich kept their hands off of education, perhaps recognizing that there were some things that shouldn't be all about money, but of course those times are past. Right now, the big money is going to the for-profit universities, but that's only because the for profit secondary and primary education companies have not yet gotten a big enough share of the market to start siphoning off the truly big bucks. But there day will come, and in the case of the for profit universities we can see a bit of our future:
Many students who enroll in such colleges don’t realize that there is a difference between for-profit, public, and private non-profit institutions of higher learning. All three are concerned with generating revenue, but only the for-profit model exists primarily to enrich its owners. The largest of these institutions are often publicly traded, nationally franchised corporations legally beholden to maximize profit for their shareholders before maximizing education for their students. While commercial vocational programs have existed since the nineteenth century, for-profit colleges in their current form are a relatively new phenomenon that began to boom with a series of initial public offerings in the 1990s, followed quickly by deregulation of the sector as the millennium approached. Bush administration legislation then weakened government oversight of such schools, while expanding their access to federal financial aid, making the industry irresistible to Wall Street investors.
While the for-profit business model has generally served investors well, it has failed students. Retention rates are abysmal and tuitions sky-high. For-profit colleges can be up to twice as expensive as Ivy League universities, and routinely cost five or six times the price of a community college education. The Medical Assistant program at for-profit Heald College in Fresno, California, costs $22,275. A comparable program at Fresno City College costs $1,650. An associate degree in paralegal studies at Everest College in Ontario, California, costs $41,149, compared to $2,392 for the same degree at Santa Ana College, a mere 30-minute drive away.
Exorbitant tuition means students, who tend to come from poor backgrounds, have to borrow from both the government and private sources, including Sallie Mae (the country’s largest originator, servicer, and collector of student loans) and banks like Chase and Wells Fargo. A whopping 96% of students who manage to graduate from for-profits leave owing money, and they typically carry twice the debt load of students from more traditional schools.
Public funds in the form of federal student loans has been called the “lifeblood” of the for-profit system, providing on average 86% of revenues. Such schools now enroll around 10% of America’s college students, but take in more than a quarter of all federal financial aid — as much as $33 billion in a single year. By some estimates it would cost less than half that amount to directly fund free higher education at all currently existing two- and four-year public colleges. In other words, for-profit schools represent not a “market solution” to increasing demand for the college experience, but the equivalent of a taxpayer-subsidized subprime education.
via Naked Capitalism
Needless to say, not only is the government doing nothing to contain this scam, it is actively helping the industry while making life even harder for the exploited. From the same source, but a different post:
As a new story by Shahien Nasiripour in the Huffington Post tells us, the Administration is now giving student loan servicers the “too big to fail” kid gloves treatment. The apparent justification is that correcting the records of borrowers who may have gone into default through not fault of their own would lead schools with bad servicers to lose access to Federal student aid, which could prove to be crippling to them.
So understand what that means: the law was set up to inflict draconian punishments on schools that used servicers that screw up and/or cheat on a regular basis, presumably because the consequences to borrowers were so serious. But rather than enforce the law, which would have such dire consequences for bad actors as to serve as a wake-up call for everyone else, the Administration has thrown its weight fully behind the education-extraction complex.
The inevitable result of all this will be that we will be paying more for less education at every level. The amount of money being spent on primary and secondary education in this country is just too great for these leaches to ignore. They will get their share by hook or by crook. I'll say again, Jonathan Pelto may have his faults, and his drive to get Foley elected is surely one of them, but he's been absolutely right about the direction in which Malloy is trying to bring us so far as education is concerned. We are heading toward a no-longer-public educational system in which our taxes will be paid as tribute to a few mega corporations whose highly paid CEOs will flourish while our kids are taught by the primary and secondary school equivalents of the adjuncts that are starving while teaching college students.
At the post-secondary level the solution is obvious: if you want to run a for-profit institution your students will just have to do without federally guaranteed student loans. End of problem. Of course, we have long since abandoned the idea that we should impose simple efficacious solutions when Rube Goldbergian ineffective window dressing solutions are available, else we would have reenacted Glass-Steagall instead of the unworkable Dodd-Franks bill.
It should be noted that this dumbing down of our educational system suits the purposes of the .01% quite well. Yesterday I wrote about the student protestors in Colorado who were demonstrating against their school boards attempt to substitute propaganda for history. The Koch Brothers are behind the school board with both money and PR support. Nothing suits the purposes of the plutocrats more than a population of sheep too ill informed to even realize they are being regularly shorn.
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