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Death of a Tax Syphon

K-12 and university online for-profit education – always an incredibly trashy business model – is collapsing left and right as people and states begin to realize that their education taxes are going to the schools’ CEOs and advertising budgets, while the dupes the schools talk into enrolling are dropping out (“these [K-12] cyber schools might as well have a turnstile as their logo for the volume of withdrawals they experience”). Cyber university students get the added benefit of dropping out burdened with huge loan repayments.

Kaplan’s closing a Florida campus “that opened to great fanfare two years ago, but quickly lost students after a federal investigation raised questions about its admissions practices.”

Boohoo! But see that’s the business model there – you take in anyone with a pulse and syphon off all the tax dollars they come with and then … fuck them! You got their money. They can twist slowly in the wind.

You want to understand this business model? Read Glengarry Glen Ross.

Now investors are pissed because word’s out about the utterly shitty education on offer and how all the students are dropping out and all.


But why are people so obtuse when it comes to understanding how markets work? You set up a tax-syphoning enterprise. You take most of the money that pours in for yourself and your investors, and you set aside some dollars for blitz advertising (you need a steady flow of money-bodies). Oh, and you devote a bit to greasing the hands of politicians.

With the seventy five cents or so left over you hire a teacher to handle hundreds of students per class… Maybe some faceless unqualified drudge in India… Much cheaper to outsource…

Oh, but here come headlines like EDUCATION ON THE CHEAP and articles predicting that “these companies probably won’t have much luck if they continue to offer shoddy educations while raking in profits.”

So now you’re kind of tinkering with the business model. Your basic philosophy – take the money and run – hasn’t altered, but there are many things you can do around the edges to look respectable enough to continue to attract investors and student dupes.

UD has confidence in you. This is only a temporary setback.

Margaret Soltan, March 1, 2012 1:38AM
Posted in: hoax

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One Response to “Death of a Tax Syphon”

  1. GTWMA Says:

    And don’t forget that Pennsylvania’s budget secretary, the man helping Tom Corbett gut public funding for K-12 and higher education in the state is none other than Charles Zogby! Who’s he?

    “Prior to his nomination, Zogby served as the Senior Vice President of Education and Policy for K12 Inc., an online school curriculum developer and provider.”

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