News Archives: Tagged for-profit colleges

How For-Profit College Lobbyists Are Ripping Off Veterans   

Photo credit: U.S. Census Bureau

On Veterans Day, we should remember the sacrifices that Americans veterans have made, and what we owe them as a society.

Last April, the Los Angeles Times reported that the “unemployment rate for veterans of Afghanistan and Iraq is 10.3%, according to the Bureau of Labor Statistics. For veterans age 24 and under, the rate is 29.1%, or 12 points higher than for civilians the same age. That compares with 8.2% unemployment nationally, and 7.5% for all veterans.”

One of Washington’s most powerful corporate lobbying groups, the U.S. Chamber of Commerce, says that it is stepping up to help these unemployed veterans. It  launched a “Hiring Our Heroes” program to work with its corporate members to hire these jobless vets.

But at the very same time the Chamber is calling on its members to hire veterans who badly need jobs, the organization is using its lobbying clout to side with powerful corporate interests whose practices are ruining the lives of veterans, active duty troops, and their families by burying them in debt from shoddy education programs.

The for-profit college industry — which includes big corporations like  University of Phoenix, DeVry, ITT, EDMC, Corinthian, and the Washington Post’s Kaplan University — has become notorious in recent months for ripping off veterans, with deceptive recruitment practices, l0w-quality instruction, sky-high prices, high dropout rates, and poor job placement. And the taxpayers have been on the hook for this rip-off, as “for-profit colleges received more than half of the $563-million in Department of Defense tuition assistance paid to active-duty service members in the 2011 fiscal year.” Many of the big for-profit college companies get more than 90 percent of their revenue from federal tax dollars.

The Obama administration has moved to try to curb the flow of federal money to the worst for-profit colleges, those that fail to give students the education they need to find meaningful jobs, by creating a new “gainful employment” rule.

The Chamber of Commerce has attacked this new rule, claiming it represents “intentional interference with market forces” — a baseless claim given the fact that they simply work to cut off the flow of public — not private — dollars to abusive institutions. The Chamber also lobbied to overturn separate Obama Administration rules that target deceptive marketing and manipulation of student credit hours and thereby provide tougher oversight over the industry. For this lobbying effort the Chamber hired Margaret Spellings, who was Secretary of Education under George W. Bush. Just this week, Spellings was named to the Board of Directors of the Apollo Group, which runs the University of Phoenix.

The Chamber wants to display its support for America’s veterans by urging corporations to hire them. But it undermines that support by pressing Congress to eliminate accountability for wealthy corporations that have been ripping off our men and women in uniform with subprime education programs.


Posted on November 12, 2012 at 9:17am by . Posted in , . Leave a response.

Senator Feigns Concern For Education Funding While Giving For-Profit Colleges Billions   

Sen. Lamar Alexander (R-TN)

Last week, the Senate Health Education Labor and Pensions Committee held a hearing on college affordability. During the hearing, Senator Lamar Alexander (R-TN) made the claimed that states are having a hard time affording aid to students because the costs of Medicaid are too high.

He then suggested that states simply drop responsibility for Medicaid altogether and just focus on funding education.

But Alexander is hardly one to complain that states don’t have money for education. After all, he is one of the Senate’s biggest proponents of sending billions of dollars to for-profit colleges that abuse students and veterans and rip off taxpayers.

Earlier this year I asked Alexander why colleges that fail to keep their promises to students and taxpayers should get up to $32 billion of federal aid. He responded with some platitudes about school choice and then refused to take follow up questions.

Unsurprisingly, for-profit colleges like DeVry, Corinthian, Westwood College and others are donors for the senator. Americans shouldn’t fall for Alexander’s choice to blame health care programs for poor people for the drying up of aid for students, especially not when he’s for subsidizing some of the top scam schools in the country.


Posted on September 17, 2012 at 9:00am by . Posted in . Leave a response.

Leading For-Profit Colleges Get 239,000% Return On Their Lobbying Investment   

A new report by Sen. Tom Harkin (D-IA) exposes abuses by the for-profit college industry. (Photo credit: Flickr user ryanjreilly)

The for-profit college industry is notorious for its abuses against students and veterans, and gets up to 85% of its funding from the federal government.

That’s roughly $32 billion these poor quality private schools get from taxpayers. How does the industry get access to this funding despite its poor performance? It spends millions of dollars on lobbying.

Sen. Tom Harkin (D-IA) just put out a report examining the abuses by for-profit colleges and the enormous amount of federal funding they receive through Title IV programs and military benefits.

Let’s look at some of these schools and the massive return on investment they got in 2010 from their lobbying dollars:

Capella: Capella Education runs the for-profit college Capella University. According to Harkin’s report, the school has a 60 percent withdrawal rate for students seeking a Bachelor’s Degree. Despite that horrible performance, it is generously rewarded by federal dollars. In 2010, it received $337,816,641 in federal funds. That same year, it spent $180,000 lobbying the federal government. That’s a 187,000 percent return on investment.

Bridgepoint: Bridgepoint Education Incorporated $546,964,541 in federal dollars during the 2010 fiscal year. At the same time, it spent $300,000 lobbying. That’s a 182,000 percent return on investment. Its Bridgepoint University has a whopping 63 percent withdrawal rate for students seeking their Bachelor’s.

DeVry: DeVry logged a 56 percent withdrawal rate for students pursuing Bachelor’s degrees. In 2010, it spent $520,000 lobbying the federal government. Meanwhile, it raked in $1,247,831,420 in federal funds. That’s a huge 239,867 percent return on investment.

It should be noted that these schools are getting these funds through aid disbursement given to students (most schools are getting little in direct federal subsidies). However, the Obama administration has made several attempts to disqualify schools that have particularly poor performance from getting these funds. These attempts have been defeated with the support of both Democrats and Republicans in Congress who are being swayed by the industry’s lobbyists and campaign cash.

If we want to stop this massive bailout of an industry that continues to poorly serve students, veterans, and taxpayers, we have to tackle the broken campaign finance and lobbying systems that let special interests run the government. Click here to help us do that by joining our campaign to Take Back Democracy.

 


Posted on August 25, 2012 at 11:30am by . Posted in . Leave a response.