… are taking their money and leaving them uneducated and unemployable. Chile’s totally filthy for-profit university sector has now been outed; and though I’m sure – as with all diploma mills – the owners will lie low for a bit and come back again filthier than ever, the forced resignation of Chile’s justice minister is certainly good news.
The resignation of Teodoro Ribera on Monday was the latest in an unfolding saga that has prompted massive street demonstrations, criminal investigations and the jailing of a dean suspected of money laundering and a former government official accused of selling university accreditations.
Same deal as in the States: Pay bribes to get your website accredited as a school and instantly start stashing away state cash. If you have a physical campus:
[Structure] deals with property developers who … build the educational institutions then rent them back to the university. The monthly rent – often paid to members of the same university management team – [is] used to strip money from the institution.
And – hey look! It’s the guys who own the University of Phoenix!
Further revelations … led the Chilean government to announce on Tuesday an investigation into possible violations of regulations by two more universities including UNIACC University, owned by Apollo Global, which according to the company website is “a $1bn joint venture formed in 2007, 80.1% owned by Apollo Group Inc and 19.9% owned by a private equity firm, the Carlyle Group”.
To be sure, a few cynical Democratic lawmakers still support the government-funded for-profit college scam (put for-profit in my search engine for background). But as the industry’s greed, and criminal neglect of students’ educations, becomes common knowledge, it’s mainly Republicans – famously contemptuous of financial dependency on the government – who continue to whomp themselves up for an industry almost wholly bankrolled by federal dollars.
As David Halperin notes, a Republican victory in November is probably the industry’s last chance to salvage its basic model (enroll everyone; use their federal education money for your executives’ salaries; watch everyone drop out and spend the rest of their lives trying to pay back loans; find new suckers). Even with Republicans running the country, the for-profits may be unable to reverse the collapse of their sickening sector, one of the few surviving instances of pure exploitation of the weak by the strong, the masses by the elites.
… and so does UD. As Phoenix falls from its ashes, and as even scuzzier outfits make their way through the courts, it truly begins to look as though Americans have figured out how the tax-syphons work, and refused to play along.
… to its most basic moving parts.
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Transcript:
Two academic men in suits chat. Looks like Harvard Yard in the background.
So the for-profits mop up $32 billion in taxpayer money a year, even though a majority of students quickly drop out!
And for presiding over these empires of failure, the average for-profit CEO is paid over $7 million!
— 7 million? Seriously?
Seriously.
— Does it come with balloons and a 4-foot check?
No, I imagine it’s a discreet transfer of wealth.
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UD thanks Dirk.
… will take place today on WBUR.
Christopher Beha’s adventures at Click-Thru U will be featured.
You need a subscription to Harper’s magazine to read what I just linked to; but here is the same author reflecting on what he’s learned.
[I]n broad social terms good educational outcomes follow from equality and not the other way around… [Thus,] the current prominence of Phoenix and other for-profit schools paints an even sadder picture than Phoenix’s critics might have thought. A society that can’t increase its roll of college graduates without sending billions of dollars in grants and loans to proprietary schools has problems that will not be fixed by the classroom.
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UD thanks Dirk for the heads-up.
There’s a beautiful synergy in play at Click-Thru U. Keep elementary, secondary, and then of course university students in front of computers and expensive software all the days of their lives, until they don’t even know that education used to mean human teachers and classrooms full of human beings discussing, questioning, scoffing, yawning, laughing… The jostle of real life, real encounters; the unscripted moments when, prompted or provoked by a brilliant lecture or an intense verbal exchange, you perceive something you never perceived before… when you come to knowledge as it lives its life, as it restlessly evolves, in a classroom with a passionate lecturer and focused students…
This is what the Click-Thrus will never know. All they will know is a continuation into schooling of the screen life they live outside the classroom. Theirs is all one seamless daily experience – Facebook, Gchat, texting, algebra, history, Facebook, Gchat, texting. No change of scene. No talking out loud. You want to say something, hit the keyboard. Feel something? Tap an emoticon.
The synergy in this post’s headline should surprise no one – the process by which the parent of for-profit Click-Thru U scoops up all the software and makes it possible for every American student to experience an entirely digitalized education is well underway. As the Powerpointed, laptopped, clickered classroom becomes intolerably pointless for everyone, the software will be there waiting.
Of course the software isn’t teaching anyone anything much, as the New York Times, reviewing the studies, reports. But the United States is such a rich county, with such a booming economy, that it doesn’t really need educated people.
Online education programs at community colleges and for-profit schools have “serious” vulnerability to financial-aid fraud rings, which have become a growing problem, according to letter by a government watchdog agency made public on Thursday.
… Usually a fraud operation’s ringleader will enroll one or two “straw” students in a distance-education program in exchange for a portion of the financial-aid award.
We’ve had years to examine for-profit education results at the higher education level. Companies like University of Phoenix and others cost taxpayers money, provide subpar education, serve as diploma mills, and prey on students who may never be able to pay back the tens of thousands of dollars in student loans they take on. They even prey on military veterans and active-duty service members.
We should be terrified of this happening to our public schools. Yet here it is happening nonetheless, all across the country.
Todd Nelson heads for-profit colleges. As head of the University of Phoenix, he “signed a $9.8 million settlement with the Department of Education, which had found that Phoenix had ‘systematically and intentionally’ violated federal rules against paying recruiters for students.”
Competitor Education Management Corporation snapped Nelson right up, and now he’s overseeing a similar federal and state lawsuit which, one amazed observer notes, “spans the entire company — from the ground level in over 100 separate institutions up to the most senior management — and accounts for nearly all the revenues the company has realized since 2003.” The suit wants $11 billion in state and federal financial aid back from Nelson’s ed biz. Wow.
What’s next for this financial genius? He led Phoenix through a loss of almost ten million dollars; Education Management will certainly settle for around… let’s say one billion. Time to jump to Kaplan, where he can maybe work his magic on even bigger numbers.
UD says: More! More!
I know Goldman Sachs (which owns a big chunk of this lovely industry) is a fatter target, but we’re about universities here at University Diaries, and college stories don’t get any bigger, or more vomit-worthy, than the for-profit college story, with its CEOs taking tens of millions of dollars a year from our tax money and from poor people.
The New York Times and other newspapers have editorialized. But public radio is hitting the hardest, featuring not only a long interview on the Kojo Nnamdi Show about this national scandal, but also an interview with Daniel Golden (UD thanks Dirk for the link) on Fresh Air. A highlight:
I visited homeless shelters where for-profit colleges were seeking students… Often you’re dealing with people whose families do not include college graduates and do not have a lot of sophistication about the system and may just have seen an ad on a website or a late-night television program, called up on a whim and got themselves signed up for federal student loans almost before they knew what happened.