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Sat Mar 05, 2011 by Joan McCarter for Daily Kos
A handful of extremely right-wing Senators are trying to block implementation of rules designed to curtail deceptive marketing and recruiting by for-profit colleges. Senators Jim Risch (ID), Tom Coburn (OK), Jim DeMint (SC), Ron Johnson (WI), and Mike Lee (UT) are all seemingly fine with taxpayer dollars, in the form of federal student loans, lining the pockets of these profiting colleges that aren't delivering on education. For example:
Bridgepoint Education Inc., a publicly-traded for-profit company based in San Diego, with online and traditional programs that have grown quickly in recent years.
Bridgepoint . . . experienced a 167 percent increase in profit in 2009, from $81 million in 2008 to $216 million in 2009, according to HELP Committee data. But between 2008 and 2009, more than 60 percent of its bachelor’s degree students withdrew by the summer of 2010....
On Feb. 4, the Education Department released new data showing that for-profit students account for nearly half of all student loan defaults, even though they account for less than 15 percent of students nationwide. The department has also published data showing that some for-profit schools overcharge students and offer inadequate training, leaving them burdened with heavy debt and unable to get jobs after graduation.
Here's what that looks like:
And here's what it means, from James Kwak at The Baseline Scenario.
Though increased enrollment appears to imply increased opportunity, many students are in higher risk of drop-out and loan default when choosing a for-profit college. The for-profit education sector is in large part to blame for the sharp rise in student loan defaults, accounting for almost half of total defaulters. In the graph [above], the Department of Education has concluded that despite only having 12% of total enrollments, for-profit schools disproportionally account for 48% of total student debt defaults. Since for-profits are so effective in securing Federal loans and grants for their students, this means that the schools are in essence receiving an indirect subsidy from the government and taxpayers, while leaving students in the red.
While an increasing number of students enroll in for-profits and take on large amounts of student debt, they also increase their risk of drop-out. A report published last year by the Education Trust shows how devastating dropout rates are, with only 22% of students enrolled at for-profit four-year universities graduating within six years, as compared to 55% and 65% at public and private non-profit universities, respectively. Many students enrolling in these institutions are left without credentials and burdened with debt, yet the schools are able to retain their profits made from students’ tuition.
The high rates of both drop-outs and defaults in these colleges should be enough for responsible lawmakers to demand some accountability—as the Department of Education has done with these rules. Responsible lawmakers, obviously, are not part of the teahadist wing of the GOP, which doesn't want to pay public school teachers, but has no problem with public money subsidizing the ripping off of millions of American college students for the private good of a few. Same old GOP story.
