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For-profit Higher Education
For-profit colleges can’t get no respect, at least not from employers. Which suggests that maybe they should be getting less generous taxpayer subsidies, too. For-profit schools — ranging from monolithic online chains like the University of Phoenix to smaller, fly-by-night operations that advertise on the subway — enroll about 12 percent of college students nationally. Yet they account for nearly four times that share of student-loan defaults, according to newly released federal data.
The official federal student-loan default rate fell a percentage point this year, with the largest dip occurring in the for-profit sector, data released on Wednesday by the U.S. Department of Education show. But the talk among advocates, reporters, and policy wonks on Wednesday was less about the drop than about the Education Department’s last-minute tweak of its own numbers. That "adjustment," which spared some colleges whose high rates would have cost them their ability to award federal aid, has reanimated the debate over default rates, long derided as a poor measure of institutional quality.
The University of Phoenix, a for-profit company and the nation’s largest higher education system, with 242,000 students, accounted for more than 45,000 of the defaulters in the most recent three-year group. That represented 19% of all of the Phoenix students whose bills started coming due in 2011.
Since November 2012, Rolling Jubilee has purchased and eradicated about $15 million worth of debt arising from unpaid medical bills. Today, the group announced that it has erased $3.9 million in private student loans, including Courtney Brown's and those of almost 3,000 other students of the for-profit Everest College.
It’s a pretty safe bet that the Consumer Financial Protection Bureau won’t see much of the half-billion-plus dollars it demanded from Corinthian Colleges Inc., in a lawsuit the bureau filed on Tuesday that accused the company of predatory lending and illegal collection tactics.
Liberal comedian Bill Maher announced on his show last week that he would work to unseat Representative John Kline, the Minnesota Republican who chairs the House education committee. The host of the HBO series "Real Time with Bill Maher" cited Kline's support of for-profit colleges -- and the industry's donations to his campaign -- as one of the reasons why he chose to target Kline as part of his "Flip a District" campaign.
John Oliver grabbed the mic last weekend to call out private, for-profit (PFP or proprietary) colleges as the rip-offs that they are, but he only addressed the student debt inflicted by these scammers. For-profits not only rob students of money and education; these proprietary institutions’ damage to society is convoluting data about college graduates, causing misrepresentation of higher education as a whole.
Student and consumer groups, worried that the Education Department is considering softening its proposed "gainful employment" rule, are challenging a study that suggests that demographics drive student outcomes. In a brief published on Wednesday, the group Young Invincibles argues that the study, which was commissioned by the Association of Proprietary Colleges and published in May, suffers from methodological flaws and a "biased framing of the results."
As college students head back to campus, John Oliver has some bad news for them: "Essentially, student debt is like HPV. If you go to college, you're almost certainly going to get it. And if you do, it will follow you for the rest of your life." Most of the segment focuses on for-profit colleges, which enroll about 13 percent of all college students but a much larger percentage of student loan borrowing and defaults.
As online course products have improved, more and more schools have plugged them into their curricula. The result is a creeping homogenization of basic classes throughout many U.S. universities. That’s raising some uncomfortable questions, starting with: Why should I pick one school over another if they offer the exact same classes? And: Why are universities buying ready-made frozen meals instead of cooking up their own educational fare?