I was buying popcorn and soda at the Cameo when I asked the young cashier about his educational plans — something I do from habit as a longtime academic advisor. He responded that he was planning to enroll at a university whose name was wholly unfamiliar to me, adding that he was getting a scholarship to pursue a program in diesel mechanics. I asked him what the tuition was and he couldn’t remember. So, I decided to do a little research before my next visit.
I returned to the Cameo a week later and engaged the young man in an extended conversation about the school, his goals, and we explored the website on his iPhone. Try as we might, however, we couldn’t locate the tuition for the program. As we talked more, it became evident that the promised “scholarship” was actually a loan for $20,000 per year for a program that would take about two years to complete. We then Googled the Santa Rosa Junior College website where a similar program was available for less than $1,300 per year.
The university in question was a subsidiarity of Corinthian College Incorporated, the country’s second largest chain of for-profit colleges before it collapsed into bankruptcy last year amid accusations of deceptive marketing to recruit students to programs that provided little or no benefit upon completion.
According to public records, Corinthian took as much as $1.76 BILLION annually in funds paid for by taxpayers. Just 12 days after President Obama’s Education Department imposed stringent new regulatory restrictions on ITT Tech, that chain of campuses shut down, leaving taxpayers on the hook for nearly $500 million in federal loans that ITT students are eligible to have forgiven.
Trump University became a target during the recent presidential campaign, as former students claimed the school fraudulently misrepresented what they would be taught and falsely claimed that instructors were handpicked by Donald Trump. The University settled the suit for $25 million that will be divided among 6,000 students.
A Senate Committee on Health, Education, Labor, and Pensions found that for-profit colleges receive the largest share of military educational benefit programs: 37 percent of post-9/11 GI bill benefits and 50 percent of Department of Defense Tuition Assistance benefits went to for-profit colleges in the most recent period.
Surprisingly, Armed Services Committee chairman and war hero John McCain recently held hearings that attacked the Defense Department’s 2015 decision to temporarily ban a for-profit university from recruiting U.S. military service members. The Pentagon’s actions were based on significant evidence that the university had engaged in serious recruiting violations on military bases and was deceiving veterans.
For-profit institutions support both sides of the political street, as Laureate Education hired Bill Clinton to be “honorary chancellor” of its international division and paid him $16.5 million between 2010 and 2014. Former Obama Secretary of Defense Leon Panetta joined Corinthian’s board of directors in June 2013 — long after it was clear that the company had engaged in troubling behavior. Facing public criticism, Panetta quit.
Many of these colleges prey on single mothers, veterans, first-generation and other low- and middle income people looking for the promise of a better future. An internal document from Corinthian identified their target demographic as, “isolated,” “impatient” individuals with “low self-esteem,” who have “few people in their lives who care about them,” and who are “stuck” and “unable to see and plan well for the future.” A Department of Education report found that 72 percent of graduates of for-profit colleges they analyzed earned less than high school dropouts.
The aforementioned Senate report revealed that U.S. taxpayers are investing billions of dollars each year in companies that operate for-profit colleges. These schools are driving a national student debt crisis that has reached $1.3 trillion in borrowing. The report concluded that without reforms the for-profit sector will continue to turn out hundreds of thousands of students who walk away from their debt with taxpayers paying the price and seeing little or no return on their investment.
As traditional colleges were unable to meet increased demand for higher education, for-profit colleges were founded to address the needs of non-traditional students whose busy lives prevented them from attending on-campus classes between 8 and 5. They offered the convenience of structured online courses and enabled countless working adults to achieve college certificates and degrees that might have otherwise been unavailable.
Eric Hoffer, the American social and moral philosopher, once observed, “Every great cause begins as a movement, becomes a business, and eventually degenerates into a racket.”