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Basically the for-profit schools (Univeristy of Pheonix, Devry, ITT Tech, Kaplan etc.) have been scamming students into attending their overpriced schools. The way this works is that the students get federally backed student loans to attend the schools. The school then gives them a subpar education (basically, everyone passes as long as you pay the tuition). The ultimate result is that students graduate with terrible employment prospects and end up defaulting on their loans. Ultimately the taxpayer picks up the bill. Some of these for-profits generate 80%+ of their revenue from the federal government.
This fact started to get the attention of lawmakers so they wanted to start cracking down. To stop this issue they wanted schools to pass one of three tests: at least 35% of former students are paying down their loan balances by at least $1, or a typical graduate's loan payment doesn't exceed 30% of his or her discretionary income or 12% of total earnings.
Basically, this would mean DISASTER for most for-profits. When wall street heard of this the stocks started selling off fast.
Originally these rules were to go into effect in 2012, however, after extensive lobbying by the for-profits the deadline has been moved to 2015. As a result, most for-profit stocks jumped 10-20% in a single day! I am sure by 2015 the for-profits will have lobbied enough to make sure their big profits stay on track. I have no problem with making profits but when 80% of your revenue comes from the federal government and your flat out scamming your customers its a whole new issue. Meanwhile, these schools are getting in bed with people from the education department, just great!
Thanks alot education dept for selling out. Thats the reason we have so many problems in this country, Washington willing to sell out everything to the highest bidder.
US Education Dept Softens Final Rule On Vocational Programs - WSJ.com (http://online.wsj.com/article/BT-CO-20110602-700017.html - broken link)
Basically the for-profit schools (Univeristy of Pheonix, Devry, ITT Tech, Kaplan etc.) have been scamming students into attending their overpriced schools. The way this works is that the students get federally backed student loans to attend the schools. The school then gives them a subpar education (basically, everyone passes as long as you pay the tuition). The ultimate result is that students graduate with terrible employment prospects and end up defaulting on their loans. Ultimately the taxpayer picks up the bill. Some of these for-profits generate 80%+ of their revenue from the federal government.
This fact started to get the attention of lawmakers so they wanted to start cracking down. To stop this issue they wanted schools to pass one of three tests: at least 35% of former students are paying down their loan balances by at least $1, or a typical graduate's loan payment doesn't exceed 30% of his or her discretionary income or 12% of total earnings.
Basically, this would mean DISASTER for most for-profits. When wall street heard of this the stocks started selling off fast.
Originally these rules were to go into effect in 2012, however, after extensive lobbying by the for-profits the deadline has been moved to 2015. As a result, most for-profit stocks jumped 10-20% in a single day! I am sure by 2015 the for-profits will have lobbied enough to make sure their big profits stay on track. I have no problem with making profits but when 80% of your revenue comes from the federal government and your flat out scamming your customers its a whole new issue. Meanwhile, these schools are getting in bed with people from the education department, just great!
Thanks alot education dept for selling out. Thats the reason we have so many problems in this country, Washington willing to sell out everything to the highest bidder.
US Education Dept Softens Final Rule On Vocational Programs - WSJ.com (http://online.wsj.com/article/BT-CO-20110602-700017.html - broken link)
You are making some bold accusations about for-profits. What evidence do you have the for-profits have been "scamming" students? This would imply that employees who work at these campuses are deliberately lying to potential students.
Also, what evidence do you have that for-profits are delivering "sub-par" education?
Yes there are some bad apples in this sector, but don't lump them all together. If so, then we need to lump all colleges and universities who participate in the NCAA organization as fradulent in light of the recent USC and Ohio State scams?
One last note, grade inflation occurs in the more traditional colleges and universities. About a decade ago Harvard was scrutinized for its grade inflation. Once you were in, you pretty much passed.
Some people are very happy with their degrees and make them work for them. For-profits certainly rely on numbers and take advantage of the stupid and naive, but some people find them valuable. I think they do need more accountability, but you are making some pretty sweeping generalizations.
True, you can get a degree from a for profit and make it work, but by and large, what you get is no where NEAR what you pay, or what the tax payer pays, and what the student owes.
Basically the for-profit schools (Univeristy of Pheonix, Devry, ITT Tech, Kaplan etc.) have been scamming students into attending their overpriced schools. The way this works is that the students get federally backed student loans to attend the schools. The school then gives them a subpar education (basically, everyone passes as long as you pay the tuition). The ultimate result is that students graduate with terrible employment prospects and end up defaulting on their loans. Ultimately the taxpayer picks up the bill. Some of these for-profits generate 80%+ of their revenue from the federal government.
This fact started to get the attention of lawmakers so they wanted to start cracking down. To stop this issue they wanted schools to pass one of three tests: at least 35% of former students are paying down their loan balances by at least $1, or a typical graduate's loan payment doesn't exceed 30% of his or her discretionary income or 12% of total earnings.
Basically, this would mean DISASTER for most for-profits. When wall street heard of this the stocks started selling off fast.
Originally these rules were to go into effect in 2012, however, after extensive lobbying by the for-profits the deadline has been moved to 2015. As a result, most for-profit stocks jumped 10-20% in a single day! I am sure by 2015 the for-profits will have lobbied enough to make sure their big profits stay on track. I have no problem with making profits but when 80% of your revenue comes from the federal government and your flat out scamming your customers its a whole new issue. Meanwhile, these schools are getting in bed with people from the education department, just great!
Thanks alot education dept for selling out. Thats the reason we have so many problems in this country, Washington willing to sell out everything to the highest bidder.
US Education Dept Softens Final Rule On Vocational Programs - WSJ.com (http://online.wsj.com/article/BT-CO-20110602-700017.html - broken link)
Quote:
Originally Posted by Megadell
True, you can get a degree from a for profit and make it work, but by and large, what you get is no where NEAR what you pay, or what the tax payer pays, and what the student owes.
The same can be said about private institutions that charge inflated tuition costs to attend. The best deal are the state funded colleges/universities...however, with budget restraints and an outdated model of delivering education, I see online as the way of the future. Right now, for profits lead the way in providing online education.
Private Institutions don't get the majority of there money from the tax payers and then dump people with useless unrespected degrees that won't provide a job that can pay back the insane debt.
They don't employ tactics that make used car salesman look like saints to get people to sign up.
Believe it or not, Private institutions do get the majority of their money (>50%) from some form of federal, state, and other aid.
Check out the numbers from Duke for the 2008 school year. 54% of their undergraduate body utilized some form of aid...with an average amount per award equal to 27k.
The answer is to end all student aid and loans at the federal level.
Two things will happen.
1. People who shouldn't go to college won't.
2. The price of college will instantly drop by 50% with some professors taking a well deserved 75% cut in pay.
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