“[A Senate investigation found] in 2012 that an online degree from the University of Phoenix cost six times more than a comparable degree from the Maricopa Community College system and that the university’s founder, John Sperling, was paid $8.6 million in 2009, 13 times more than the president of the University of Arizona. That year, Apollo spent $892 per student on instruction, $2,225 per student on marketing, and $2,535 per student went to company profit, a Senate report found. Even as his university foundered, Sperling retired as chairman of Apollo’s board of directors in December with a $5 million bonus and a $70,000 monthly annuity. Since July, other top executives with the company have acquired more than 300,000 additional shares of Apollo stock, but they have also sold about $1.3 million worth in that time, according to SEC records. Last month, for example, Apollo’s CEO, Greg Cappelli, sold $223,000 worth of stock, a small fraction of his disclosed holdings.”

If you can work up any tears over Phoenix cutting thousands of jobs you’ll cry at anything.

The proper response is good riddance.

UD‘s faith in scams remains strong; she’s sure some other outfit will figure out how to take billions of our tax dollars in order not to educate Americans. Perhaps Phoenix itself will regroup to scam another day. But for the moment, what good news.

Two former professors who are suing the for-profit Phoenix School of Law claim that administrators “propos[ed] curriculum changes that would make it more difficult for students to transfer to another law school and retain their credits, a change that …

Dean Shirley Mays allegedly described as ‘building a better mousetrap.'”

Wow. If true, Dean Mays certainly has a way with words.

Chilean students have done a better job than American students of noticing how cheesy for-profit universities…

… 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”.

It little profiteth…

… a scummy industry to have Obama in the White House again.

“[As] the truth catches up with the major for-profit colleges, it appears these companies are doubling down on a Mitt Romney victory as their last best hope to retain unquestioned access to a torrent of taxpayer money.”

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.

Gawker Gawks at the Collapse of the For-Profit College Scam…

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.

A comic strip reduces America’s for-profit-education tax-syphon …

… to its most basic moving parts.

****************

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.


****************

UD thanks Dirk.

‘Television-rights fees have exploded into the billions—the NCAA currently has an $11 billion TV contract for its March Madness basketball tournament and reports have suggested the upcoming major-college football playoff could earn as much as $5 billion. Sponsorships, ticket sales and licensing deals bring more. A big-time football program can generate tens of millions per season, and though profits are hardly guaranteed—a stunning proportion of athletic departments run at a deficit—this pursuit can be used to justify a program’s excessive power on campus.’

Yes, well said, and this we all know.

The writer insists that cold hard cash, rather than any “abstraction,” accounts for college football’s disgusting culture:

Culture sounds like an abstraction, but it’s really not. Money is driving the culture.

Yet UD would argue that culture is driving the money. Indeed, when the writer tries to get at the culture, he’s vague, clearly inadequate:

College sports remain an intoxicating spectacle, rich with custom and a young, loyal, emotional audience. It sweeps us into the moment, thrills us, suspends our common sense. The forces behind college sports know we won’t turn away, even as coaches skip out on teams and superstar athletes (quite understandably) depart school early. They know we are hooked, and they can count on our cognitive dissonance.

This descriptive language fails to distinguish the sick giant (compellingly embodied by hulking affectless Sandusky) of big-time university football and basketball from amateur campus athletics – from all good sports spectacles, for that matter. The writer is also wrong about the nature of the audience. It is neither particularly young nor particularly loyal. The moneyed fans (and they’re all that count for the purposes of the money argument) are older guys – forties, fifties, sixties… T. Boone Pickens is around 500… And the reason so many big programs are in deep financial shit is because fans abandon teams in droves when they start on a losing streak. Some fans are loyal, sure. Many fans flee the stadium when the team sucks. Plus when the economy’s in the dumpster they abandon their season tickets and luxury boxes. In response, the university ups the price of everyone’s ticket (gotta pay for the 300 million stadium upgrade and the new incredibly expensive coach who will turn the team around and the incredibly expensive severance pay for the exiting coach who by the way is also talking about suing the school), making matters worse.

And why are so many universities dominated by a culture that “sweeps us into the moment, thrills us, suspends our common sense”? Do these sounds like intellectual values? I mean, thrills us, okay. The rest of it?

No, the writer needs to disentangle some of what he’s written and think about sports factories as places where people have eagerly betrayed the life of the mind.

“The American Psychiatric Association just reported a surprisingly large yearly deficit of $350,000. This was caused by reduced publishing profits, poor attendance at its annual meeting…”

What? You mean thousands of people aren’t attracted to meetings featuring Charles Nemeroff and Alan Schatzberg?

Allen Frances goes on to say that “Psychiatric diagnosis has become too important to be left in the hands of a small, withering, cash-strapped, incompetent association that feels compelled to regard its bottom line as a higher priority than having a safe, scientifically sound, and widely accepted diagnostic system.”

For-profit online universities. Why are there so many?

Because anyone can do it!

“A look at the company’s operations, based on interviews and a review of school finances and performance records, raises serious questions about whether K12 schools — and full-time online schools in general — benefit children or taxpayers, particularly as state education budgets are being slashed. Instead, a portrait emerges of a company that tries to squeeze profits from public school dollars by raising enrollment, increasing teacher workload and lowering standards.”

Lo-o-o-ong article about the cynical online for-profits in the New York Times. The writer can’t say enough bad about them.

The beauty of this money-maker is that you can “use education as a source of government-financed business, much as military contractors have capitalized on Pentagon spending.” You can be pious as hell about education, about how you’re educating young people, even as you’re taking all the money for yourself and leaving your heavily recruited marks ignorant and in debt. You pay your underqualified cyberteachers shit and give them virtual classrooms of two hundred students. You keep students enrolled even if they never even log in, because each of those students comes trailing federal funds for you and your partners. Nobody learns anything, but your investors make millions.

At a For-Profit College, a Reward…

… for a job well done.

“… $83 million value attached to the Sooners… $40 million in profit last year. Head coach Bob Stoops is the second-highest paid coach in the Big 12 conference and the fifth highest overall, earning a yearly salary of $3.8 million …”

That was written in 2010. Add the billion-dollar tv deals, much, much more money for the coach, etc.

My point is that the University of Oklahoma football program is rolling in it. The University of Texas and the University of Oklahoma are the “two richest, most powerful programs” in their conference.

And yet like many rich and powerful sports universities, Oklahoma has become visibly microcephalic, bearing on its enormous body a shrinkingly small brain. Oklahoma, with its pathetic academic budget, its hopeless struggle to have anything to do with education, is what you look like when you graft, as George Will says, “a 109,901-seat entertainment venue [onto] an institution of higher education.”

You get a manic depressive university president who spends Monday slobbering over the team’s amazing amazing victories OH MY GAWD I CAN’T BELIEVE IT COACH STOOPS WE’RE NOT WORTHY!!!! and Tuesday sobbing into his beer about no money for, well, the school: “You have to keep the lights on. You have to keep health insurance,” Boren wailed to the student newspaper the other day.

Forget classes and professors. We can barely put food on the fucking table! What kind of a world are we living in when you can have a trillion dollar football team and no lights in the library? If we can put a man on the moon, why can’t we run our little school?

“It would be a tragedy if we lost the humanities, the social sciences, the arts and the rest,” Boren stated. “That’s one of the real dangers: universities will think, ‘Ah, quick solution. Do away with all that.’”

Being president of a school like Oklahoma is sort of like being one of the generals who run Myanmar. You preside over a resource-rich campus which should be able to sustain itself at a pretty high level. But because of greed and corruption, your job is essentially to oversee a few people making a lot of money while pacifying a starving population. What a tragedy if we lost the humanities! Message: I care.

“If a student does not make payments on their federal loans and the loans default, the federal government and taxpayers pick up the tab, meaning that the taxpayers essentially subsidize the private equity funds and investors who own the college. According to the GAO, four years after borrowers started to repay their federal loans, 23.3 percent at for-profit schools defaulted, compared to 9.5 percent at public schools.”

What a system!

You need to look at the nuts and bolts of free enterprise here in the States to fully appreciate it.

A discussion of for-profit colleges…

… 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.

**********************************

UD thanks Dirk for the heads-up.

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