The University of Phoenix has reached a settlement in a False Claims Act lawsuit, in which it was charged with violating Federal law by paying admissions recruiters based on how many students they recruited. It had set aside slightly over $80 million for a settlement, and came in slightly below that. In the Chronicle piece about it, DeVry and Grand Canyon Education are alleged to have set aside about $5 million each to settle similar suits.
To my mind, a settlement makes perfect sense in this case, since in a meaningful sense, both sides are right. And the stock going up makes sense, too.
A college professor repored that having worked at a proprietary, she could attest that the Admissions side was a sales force, and was unapologetic about it. Admissions reps did what they had to do to close the sale. On the bright side, that meant that students got terrific help in navigating the bureaucracy of financial aid and registration. On the dark side, and it was much more dark than bright, students frequently came in with wildly absurd expectations that they got from somewhere.
And that is the bane of the proprietary for profit schools. Something which congress has never addressed.
These lawsuits are nothing new. We hear about them all the time. Yet again congress does nothing, and the students get the shaft.
Wednesday, December 16, 2009
Tuesday, December 15, 2009
Same ole STUPIDITY, is now NEW NEWS!
Yes once again, those people in WDC seem to have had a momentary spark of intellegence.
USA Today and the Chicago Chronical have reported that 1 in 5 students that attend for profit colleges are defaulting with in the first 3 years. This is nothing new.
Mary Beth Marklein, USA TODAY, reports that The Education Department is releasing data today on the percentage of students at more than 5,000 colleges and universities who defaulted on student loans over a three-year period.
The data, which are preliminary, appear consistent with a congressional report out in August showing that students who took out federal loans to attend for-profit colleges have higher default rates than those who attended public or private non-profit schools.
A number of studies show that low-income students and those from families who lack higher education are more likely to default on their loans. Student-loan defaulters "can tarnish their credit reports, make it difficult for them to obtain employment, and jeopardize their long-term financial well-being," says an August report by the U.S. Government Accountability Office, the investigative arm of Congress.
And once again the government failes to address the real problem. The problem of these schools selling worthless educations or 2nd rate ones at best. During economic times, employers will prefer to hire students from traditional colleges, not from the for profit schools.
Mean while the Chicago Tribune reports it in a different way.
More than 1 in 5 borrowers of federal student loans who attend for-profit colleges default within three years of starting repayment, new figures made available by the U.S. Department of Education on Monday show.
Historically, the government has reported such figures in terms of how many students default within two years -- a figure that stands at 6.7 percent of student borrowers overall and about 11 percent at for-profit schools.
Nearly 12 percent of borrowers who began repayment in fiscal 2007 defaulted within three years -- up from 9.2 percent for 2006, the latest year for which figures are available. But at for-profit colleges, the rate was 21.2 percent within three years. That was up from 18.8 percent for fiscal 2006.
This is NOT new news. It is OLD news. It is the same news we had in 1988. Now it is victimizing another generation.
Maybe now they will offer us some kind of relief, but I doubt it.
USA Today and the Chicago Chronical have reported that 1 in 5 students that attend for profit colleges are defaulting with in the first 3 years. This is nothing new.
Mary Beth Marklein, USA TODAY, reports that The Education Department is releasing data today on the percentage of students at more than 5,000 colleges and universities who defaulted on student loans over a three-year period.
The data, which are preliminary, appear consistent with a congressional report out in August showing that students who took out federal loans to attend for-profit colleges have higher default rates than those who attended public or private non-profit schools.
A number of studies show that low-income students and those from families who lack higher education are more likely to default on their loans. Student-loan defaulters "can tarnish their credit reports, make it difficult for them to obtain employment, and jeopardize their long-term financial well-being," says an August report by the U.S. Government Accountability Office, the investigative arm of Congress.
And once again the government failes to address the real problem. The problem of these schools selling worthless educations or 2nd rate ones at best. During economic times, employers will prefer to hire students from traditional colleges, not from the for profit schools.
Mean while the Chicago Tribune reports it in a different way.
More than 1 in 5 borrowers of federal student loans who attend for-profit colleges default within three years of starting repayment, new figures made available by the U.S. Department of Education on Monday show.
Historically, the government has reported such figures in terms of how many students default within two years -- a figure that stands at 6.7 percent of student borrowers overall and about 11 percent at for-profit schools.
Nearly 12 percent of borrowers who began repayment in fiscal 2007 defaulted within three years -- up from 9.2 percent for 2006, the latest year for which figures are available. But at for-profit colleges, the rate was 21.2 percent within three years. That was up from 18.8 percent for fiscal 2006.
This is NOT new news. It is OLD news. It is the same news we had in 1988. Now it is victimizing another generation.
Maybe now they will offer us some kind of relief, but I doubt it.
Wednesday, December 9, 2009
Government not dealing with real issue, still exploiting students
http://www.thenation.com/doc/20091221/de_la_torre
Reports that Student loan Giant Sallie Mae corp, spending thousands on lobbying efforts in congress is actually adding jobs instead of loosing them.
Sallie Mae, the student loan giant, has had no shortage of work lately. It has spent $125,500 on campaign contributions, at least $3,052,000 this year on lobbying and at least a quarter- million more on advertising against a bill in Congress, the Student Aid and Fiscal Responsibility Act (SAFRA), which would cut wasteful government subsidies to student loan companies
Lately, Sallie Mae executives have been paying visits to Capitol Hill to make their case against SAFRA, claiming it will mean thousands of jobs lost. But there is something objectionable about a company manipulating data and its own workers to preserve the corporate welfare on which it has long thrived. According to Sallie Mae's own numbers, even if SAFRA becomes law and the subsidized Family Federal Educational Loan (FFEL) program is abolished, the company may actually end next year with nearly the same number of employees in the United States as it has now, and possibly even more.
Sallie Mae's dubious calculations are not the only funny numbers being bandied about the halls of Congress. Lenders have also been claiming that passage of SAFRA would cost the country between 30,000 and 35,000 jobs. These numbers are frightening at first glance; but if one digs a little deeper, they mean almost nothing.
With all the fearmongering coming from the lenders, it is easy to lose sight of what this debate should really be about: making sure that every child has the chance to get a good and affordable education, from kindergarten to college.
While this is a goal that cannot be accomplished with one bill, or solely by acts of Congress, the Student Aid and Fiscal Responsibility Act would take a major step in the right direction. It would do this not by increasing taxes or growing the deficit but by making the federal financial aid system work for students rather than just for student loan companies. Most of what it would eliminate from the student loan industry is not the jobs of everyday workers but the enormous windfall profits and top executive salaries taken in by Sallie Mae and a handful of other companies--privileges reaped while taxpayers have borne the actual risk of lending, and privileges maintained through years of aggressive Capitol Hill lobbying.
ALSO,
http://abcnews.go.com/Business/wireStory?id=9293199
ABC news is reporting that a student loan companies bottom line has resulted in its stock price going up. News that not as many students have defaulted, has resulted in the prices of its stock to go up by 86 cents per share. If this is not exploiting students, I don't know of a better example.
This is NOT what the original Higher education act was supposed to accomplish!
So the exploitation of students continues because congress is not dealing with the real issues.
They MUST remove the profitiablity by 3rd parties, on student loans. If companies want to profit from student loans, it should be by the result of hiring students with college degrees who are highly trained, not by investing in student loans and causing the students to end up paying 3-5 times what their education actually cost.
Reports that Student loan Giant Sallie Mae corp, spending thousands on lobbying efforts in congress is actually adding jobs instead of loosing them.
Sallie Mae, the student loan giant, has had no shortage of work lately. It has spent $125,500 on campaign contributions, at least $3,052,000 this year on lobbying and at least a quarter- million more on advertising against a bill in Congress, the Student Aid and Fiscal Responsibility Act (SAFRA), which would cut wasteful government subsidies to student loan companies
Lately, Sallie Mae executives have been paying visits to Capitol Hill to make their case against SAFRA, claiming it will mean thousands of jobs lost. But there is something objectionable about a company manipulating data and its own workers to preserve the corporate welfare on which it has long thrived. According to Sallie Mae's own numbers, even if SAFRA becomes law and the subsidized Family Federal Educational Loan (FFEL) program is abolished, the company may actually end next year with nearly the same number of employees in the United States as it has now, and possibly even more.
Sallie Mae's dubious calculations are not the only funny numbers being bandied about the halls of Congress. Lenders have also been claiming that passage of SAFRA would cost the country between 30,000 and 35,000 jobs. These numbers are frightening at first glance; but if one digs a little deeper, they mean almost nothing.
With all the fearmongering coming from the lenders, it is easy to lose sight of what this debate should really be about: making sure that every child has the chance to get a good and affordable education, from kindergarten to college.
While this is a goal that cannot be accomplished with one bill, or solely by acts of Congress, the Student Aid and Fiscal Responsibility Act would take a major step in the right direction. It would do this not by increasing taxes or growing the deficit but by making the federal financial aid system work for students rather than just for student loan companies. Most of what it would eliminate from the student loan industry is not the jobs of everyday workers but the enormous windfall profits and top executive salaries taken in by Sallie Mae and a handful of other companies--privileges reaped while taxpayers have borne the actual risk of lending, and privileges maintained through years of aggressive Capitol Hill lobbying.
ALSO,
http://abcnews.go.com/Business/wireStory?id=9293199
ABC news is reporting that a student loan companies bottom line has resulted in its stock price going up. News that not as many students have defaulted, has resulted in the prices of its stock to go up by 86 cents per share. If this is not exploiting students, I don't know of a better example.
This is NOT what the original Higher education act was supposed to accomplish!
So the exploitation of students continues because congress is not dealing with the real issues.
They MUST remove the profitiablity by 3rd parties, on student loans. If companies want to profit from student loans, it should be by the result of hiring students with college degrees who are highly trained, not by investing in student loans and causing the students to end up paying 3-5 times what their education actually cost.
Time line reminder
For those who want to see the time line of legal changes to the Student Loan laws, Go to the July 2009 postings. It is the very first post in this blog. I update that one from time to time.
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