Announcement

Collapse
No announcement yet.

With hard times, the predators on the desperate emerge: For Profit Education

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • With hard times, the predators on the desperate emerge: For Profit Education

    http://www.nytimes.com/2010/03/14/bu...usiness&src=me

    Some excerpts:

    The Career Education Corporation, a publicly traded global giant, last year reported revenue of $1.84 billion. Roughly 80 percent came from federal loans and grants, according to BMO Capital Markets, a research and trading firm. That was up from 63 percent in 2007.

    The Apollo Group — which owns the for-profit University of Phoenix — derived 86 percent of its revenue from federal student aid last fiscal year, according to BMO. Two years earlier, it was 69 percent.

    For-profit schools have proved adept at capturing Pell grants, which are a centerpiece of the Obama administration’s efforts to make higher education more affordable. The administration increased financing for Pell grants by $17 billion for 2009 and 2010 as part of its $787 billion stimulus package.

    Two years ago, students at for-profit trade schools received $3.2 billion in Pell grants, according to the Department of Education, less than went to students at two-year public institutions. By the 2011-12 school year, the administration now estimates, students at for-profit schools should receive more than $10 billion in Pell grants, more than their public counterparts. (Those anticipated increases may shrink, depending on the outcome of wrangling in Congress over health care and student lending.)

    Enrollment at for-profit trade schools expanded about 20 percent a year the last two years, more than double the pace from 2001-7, according to the Career College Association.

    ...

    Jeffrey West was working at a pet store near Philadelphia, earning about $8 an hour, when he saw advertisements for training programs offered by WyoTech, a chain of trade schools owned by Corinthian Colleges Inc., a publicly traded company that last year reported revenue of $1.3 billion.

    After Mr. West called the school, an admissions representative drove to his house to sell him on classes in auto body refinishing and upholstering technology, a nine-month program that cost about $30,000.

    ...

    Some 14 months after he completed the program, Mr. West, 21, has failed to find an automotive job. He is working for $12 an hour weatherizing foreclosed houses.

    With loan payments reaching $600 a month, he is working six and seven days a week to keep up.

    “I’ve got $30,000 in student loans, and I really don’t have much to show for it,” he said. “It’s really frustrating when you’re trying to better yourself and you wind up back at Square One.”

    ...

    When Andrew Newburg called the Le Cordon Bleu College of Culinary Arts in Portland, Ore., to seek information, he was feeling pressure to start a new career. It was 2008, and his Florida mortgage business was a casualty of the housing bust. An associate degree in culinary arts from a school in the food-obsessed Pacific Northwest seemed like a portal to a new career.

    The tuition was daunting — $41,000 for a 15-month or 21-month program — but he said the admissions recruiter portrayed it as the entrance price to a stable life.

    ...

    Last summer, halfway through his program and already carrying debts of about $10,000, Mr. Newburg was alarmed to see many graduates taking jobs paying as little as $8 an hour washing dishes and busing tables, he said. He dropped out to avoid more debt.

    ...

    The job placement results that the school files with accrediting agencies suggest a different outcome. From July 2007 to June 2008, students who graduated from the culinary arts associate degree program landed jobs that paid an average of $21,000 a year, or about $10 an hour. Oregon’s minimum wage is $8.40 an hour.

    ...

    When TJ Williams arrived in Portland from his home in Utah to enroll at Le Cordon Bleu in 2007, he was shocked by the terms of the aid package the school had arranged for him: One loan, for nearly $14,000, carried a $7,327 “finance charge” and a 13 percent interest rate.
    FIRE, FIRE, everywhere...

  • #2
    Re: With hard times, the predators on the desperate emerge: For Profit Education

    Great article.....the only disappointing thing about it is the fact it's not a series which includes the same basic lack of a reasonable return on investment in regards to university education.

    The way I see it anecdotally is that the average starting salary for university graduates has moved little since I graduated 15+ years ago, but the cost of education has risen dramatically....reducing the return on investment to dangerously low or even negative numbers.

    How are these kids going to buy the baby boomer homes when they are drowning in education debt that cannot be discharged?

    Education debt has surely got to be one of the tinder boxes of social unrest to be sparked off in the coming years.

    I can easily see the indentured servants of student debt being stirred up and placed in opposition to senior citizens...both looking for entitlements or bailouts and willing to throw each other under the bus.

    Not exactly good times ahead.

    And profiting from them with pawn shops and other vile "opportunities" targeting the former and Soylent Green Sam's Club retirement home processing facilities targeting the latter isn't exactly "jump out of bed every morning" kinda stuff.

    Comment


    • #3
      Re: With hard times, the predators on the desperate emerge: For Profit Education

      Rather ironic to see a Devry University ad at the top of this page....

      Comment


      • #4
        Re: With hard times, the predators on the desperate emerge: For Profit Education

        http://www.businessweek.com/magazine...2036095366.htm


        Business Week did an article detailing how for profit colleges target the military and by extension the taxpayer who foots the bill.

        Comment


        • #5
          Re: With hard times, the predators on the desperate emerge: For Profit Education

          Originally posted by roxtar View Post
          Rather ironic to see a Devry University ad at the top of this page....
          A few months ago, my son (with me in tow) went to DeVry to sign up for some technical training courses, in hopes of increasing his worth in the labor market.

          One of the things they asked him to sign was an "application for a student card". My son, seeing that it looked more like a 20 page application for credit, handed the form to me to review before signing it. The nice (but not terribly bright) young lady kept saying it was "just a student card" and that "everyone" got one. This made it sound like a student ID card to get into the facilities. I read it. No, it was a credit application that would enable DeVry to post tens of thousands of dollars of debt to an account in my son's name that he would be responsible to pay off after leaving the school. The 20 pages of dense legalese was not intended to be readable by the typical DeVry student candidate.

          The form never got signed. The poor young lady probably needed a stiff drink after her hour with me. My son is not going to DeVry. Good.
          Most folks are good; a few aren't.

          Comment


          • #6
            Re: With hard times, the predators on the desperate emerge: For Profit Education

            Originally posted by ThePythonicCow View Post

            The form never got signed. The poor young lady probably needed a stiff drink after her hour with me. My son is not going to DeVry. Good.
            I would have paid the equivalent of the offered "student ID - hahumm- credit card limit" just to witness this (popcorn - sorry maple syrup popcorn at hand)

            Joking aside, stories like this make me realize how sick the system really is.

            Comment


            • #7
              Re: With hard times, the predators on the desperate emerge: For Profit Education

              I have been seeing ads for "Construction training" on TV! Who the heck would sign up for that in these times?

              My neighbor signed up for Phoenix University MBA program. He dropped out midway when he found out their MBA program wouldn't necessarily help his career. You'd think he would have figured that out BEFORE he started.

              Comment


              • #8
                Re: With hard times, the predators on the desperate emerge: For Profit Education

                Originally posted by ThePythonicCow View Post
                A few months ago, my son (with me in tow) went to DeVry to sign up for some technical training courses, in hopes of increasing his worth in the labor market.

                One of the things they asked him to sign was an "application for a student card". My son, seeing that it looked more like a 20 page application for credit, handed the form to me to review before signing it. The nice (but not terribly bright) young lady kept saying it was "just a student card" and that "everyone" got one. This made it sound like a student ID card to get into the facilities. I read it. No, it was a credit application that would enable DeVry to post tens of thousands of dollars of debt to an account in my son's name that he would be responsible to pay off after leaving the school. The 20 pages of dense legalese was not intended to be readable by the typical DeVry student candidate.

                The form never got signed. The poor young lady probably needed a stiff drink after her hour with me. My son is not going to DeVry. Good.
                Great job cow. Who will look after all the others?

                Comment


                • #9
                  Re: With hard times, the predators on the desperate emerge: For Profit Education

                  So what happens to the "higher" education industry in the US?

                  The foreign folks still seem to come to the US...and I GUESS they'll continue to do so as the US Dollar attrits...but enough of them to keep the doors open?

                  But since we seem to be running up against the "consumer laws of financial physics":

                  1.)The average debt for the average student attaining the average university degree in the average number of years is less than the average starting annual salary for the job "purchased".

                  2.)The long-term price of the average home needs to eventually mimic a sustainably low multiple of the average annual wage in that area.

                  If the average university graduate with the average salary is unable to pay down his/her average student debt, how the hell are they going to be able to buy the average house for the average price from the boomers?

                  I'm trying to think of an analogy for how unaffordable higher education debt that cannot be discharged in bankruptcy could become a catalyst to magnify the already massive real estate problem for longer than most think......the only thing that keeps popping into my mind is a question:

                  How many McMansions did slaves in the US purchase each year prior to 1865?

                  I can't help but think of words like indentured servitude, debt bondage, serfdom, and debt slavery.


                  ----------------------------------------

                  Any thoughts from iTulipers on the future of higher education in the US?

                  It's not an easy analysis......does the higher wage earned with a Harvard pedigree justify the premium cost?

                  Does the no-frills cost of Phoenix online achieve a higher return on investment, but is it matched with a lower wage "purchase"?

                  At the moment, I think I want my kids to either be Biotechnologists or plumbers.

                  I wonder if higher education in the US will survive what I think will be an inevitable slaughter without a massive bailout of higher education in the form of some Manhattan Project sized energy independence Apollo Project.

                  Not good........

                  Comment


                  • #10
                    Re: With hard times, the predators on the desperate emerge: For Profit Education

                    Based on the amount of SAT classes, tutoring schools, and college prep classes around I see absolutely nothign wrong with this except the fact that there is a sad mis-match between tuition and income from graduates of these programs. I typically don't hire technical school grads because of the lack of quality education they receive, and when I do, unfortunately it's usually for a lower paid position. Sadly I've owned businesses in two separate industries and hired from many very different technical schools but the quality of the graduates appear to be similar...

                    Comment


                    • #11
                      Re: With hard times, the predators on the desperate emerge: For Profit Education

                      Originally posted by flintlock View Post
                      I have been seeing ads for "Construction training" on TV! Who the heck would sign up for that in these times?

                      My neighbor signed up for Phoenix University MBA program. He dropped out midway when he found out their MBA program wouldn't necessarily help his career. You'd think he would have figured that out BEFORE he started.
                      The MBA is the most useless degree ever invented by mankind.

                      Comment


                      • #12
                        Re: With hard times, the predators on the desperate emerge: For Profit Education

                        Originally posted by cjppjc View Post
                        Great job cow. Who will look after all the others?
                        Amen. I'm sitting here stunned that it's gotten this bad. I have several nieces and nephews heading to college soon. I think I may shadow the early stages....

                        Comment


                        • #13
                          Re: With hard times, the predators on the desperate emerge: For Profit Education

                          At the moment, I think I want my kids to either be Biotechnologists or plumbers
                          Plumber would get my vote.

                          Yesterday while talking to a customer about having a bath finished in his basement, because I want to do the same thing in mine, I asked him what kind of quotes he was getting on the plumbing. $2400 was about the average! The Plumber said he could knock it out on a Saturday. Subtract $600 for the parts and pump needed, you have $1800 labor. Pay the helper $100 cash and a tidy $1700 profit for one day's work. :eek: Of course he'll have to come back and set the fixtures for a couple of hours. So call it a day and half.

                          I'm telling you, if you can deal with the lack of prestige, plumbing is not a bad profession. You'll just be putting up with shit literally instead of figuratively.

                          Comment


                          • #14
                            Re: With hard times, the predators on the desperate emerge: For Profit Education

                            Originally posted by hayekvindicated View Post
                            The MBA is the most useless degree ever invented by mankind.
                            I would much rather invest the time and money to:

                            a) Travel

                            or

                            b) Start a business

                            or

                            c) Both


                            Than "purchasing" an MBA.

                            Comment


                            • #15
                              Re: With hard times, the predators on the desperate emerge: For Profit Education

                              Originally posted by flintlock View Post
                              Pay the helper $100 cash and a tidy $1700 profit for one day's work. :eek: Of course he'll have to come back and set the fixtures for a couple of hours. So call it a day and half.
                              How long can this go on the way our economy is going?

                              As people get poorer, many will be inspired, or forced, to fix their own plumbing, or hire some cheap handyman to do the job. Yeah, the quality may not be as good . . . but things not so good is what happens when you're poor.

                              Plumbing isn't rocket science. Most of the stuff you could teach a sixth grader to do. Go on the internet and you can learn to do almost anything. 2nd-hand book stores usually have Fix-It books for cheap. Many experts operate on outdated info anyway. For example, most plumbers in my area don't use Pex.

                              Everyone is going down in this economy . . . sooner or later . . . except the Financial Elite and their Politician Enablers . . . unless we stop them.
                              raja
                              Boycott Big Banks • Vote Out Incumbents

                              Comment

                              Working...
                              X