Fly-by-night scam for-profit universities

Taken from point 3 here, regarding the 99% movement and veterans:
Five Reasons Why Veterans Are Part Of The 99 Percent | ThinkProgress

I wonder which Wall Street bank-owned universities they are referring to?

 

Lets not bash banks please. Some of us work for them and some of us have mortgages, student loans and other loans given to us by them. Without financial leverage, many things in this modern world would not be possible.

 

If I came from the banking industry, I would be worried about public images issues. How does the public view them? Is some of it warranted? I am not here to argue your points, but I will say this. If I was in the banking industry right now, I would be worried about the big movement taking place right now for people to jump from a B or A, to a credit union. More and more are crossing over. Perhaps you should look at your industry and revamp some of your policies and posturing in the publics eyes. There is a reason why big banks are going to extreme measures to avoid customers closing their accounts. Pay heed brother, pay heed!

After all, some of us are members of unions, and some us work for them. Even though I am with one of the biggest unions around, we constantly have to revamp and adapt admist changing and evolving times. Next year will be the time for some of us take out our brass knuckles so to speak. The only way to survive attacks from giants, is to become a giant. So I would rather listen to peoples criticisms of unions and store it in my bag or tricks: :smile: If you don't adapt, you perish. Simple as that. Business is business after all.

Abner

 

So... much like everyone else seemingly, I still have no idea to whom they are referring - "schools owned by Wall Street investment banks", which was the question and point of my OP. I have no other interest in banks and their mission, everything as such so far has been OT.

 

I think we're getting some confusion here on investment banks (SEC regulated) and consumer banks (FDIC, FRS, etc.). Investment banks as the name implies are involved in Wall St. activities whereas commercial banks make consumer loans, offer checking accounts, etc. Sometimes you have a larger bank here and there serve two functions but they are entirely different "businesses" if you will.

Either way I think the dig here is at some (if not all) for profit colleges, not necassarily investment banks. I think the "bank" thing comes into play as evil banks use "fake" colleges to victimize and fleece veterans out of their benefits (assuming I understand their schtick correctly).

That said the banking industry hasn't done a lot in the area of PR recently and these fees are starting to get people pissed. For example my mortgage bank (whom I did not choose) decided to raise their fees to $10 every time I pay my mortgage over the phone and $5 to process my payment any other way. This on a loan they are already profiting on through interest. How this is legal I have no idea but one thing is for sure, it pisses me off.

 

Yeah, nothing is free. Take this for example:

For Bank Of America, Debit Fees Extend To Unemployment Benefits

From the labor perspective, we have informed/urged Gov. Jerry Brown to switch this debit card system from B of A to a credit union. If B of A keeps playing games, they are going to end up being replaced. Things like this are why people opt switching to credit unions by the droves. I am a credit union member, and so is most of my family. I love it!

Gotta run,

Abner

 

You've hit an interesting button on my side. My wife grew up in Mexico, where there's a severe love-hate relationship with banks, and she just hates paying interest. I consider anything I pay interest on a service, and the banks have basically earned that interest by opening up their wallets plus they need to maintain an infrastructure for doing so-- as long as the interest is somewhat reasonable. I can't seem to sell my wife on my point of view, though.

 

I'm not sure that any for-profit school truly meets that exaggerated description. The one that might come closest is Trident, which is owned by Summit Partners, an investment firm (not a bank) headquartered in Boston (not New York). Trident is just one of dozens of firms in their "portfolio", which includes casinos, animal hospitals, fitness centers, and many other things.

It is fair to say that Trident is owned by an investment firm, that it targets veterans, and that it has had serious issues with its regional accreditation. But whether that makes Trident "fraudulent" or a "fly-by-night scam" is obviously more subjective.

 

Simple solution for the veteran targeting: make VA benefits count toward the 90% side of the 90/10 rule.

Military marketing would evaporate overnight.

 

Don't forget NCU, which is owned by Rockbridge Growth Equity LLC, had to certify its creditworthiness this past year. "In 2011, the US Department of Education determined Northcentral had failed its 2009-2010 financial responsibility test, and would be required to post a letter of credit. [9]" source: Wikipedia. It was the only for profit online university to do so. IMHO, NCU is really squeezing the margins to generate ever increasing high profits. NCU also build two new edifices in Phonix this past year.

 

NCU got a Financial Responsibility Composite Score of 0.2, where "a school with a score less than 1.0 is considered not financially responsible."

However, they may not have been the "only for profit online university" in that situation. For example, Trident also got a 0.2 score.

 

I'm sorry Steve but you paid for the lollipop too.

 

Rockbridge, like Summit Partners, is highly diversified. Their portfolio includes not only Northcentral University, but also the Cleveland Cavaliers NBA franchise, ProtectAmerica home security systems, Quicken Loans, Xenith sports helmets, One Reverse Mortgage, Fathead sports decals, and One on One Marketing ("a premier provider of high-quality sales leads to online for-profit educational institutions").

I'm sure they extract the maximum possible revenue from all of their investments. For example, Dan Gilbert of Rockbridge is considered one of the "hardline" owners in the current NBA lockout.

 

What I do not understand is the move from Prescott and the spending on the two new buildings in Phoenix - I guess that is why NCU is rated "not financially responsible." As stated by NCU, these facilities were built to house additional administrative staff since they are now at 10K students. However, since it is an online university, additional staff could have worked from home as part of a telework arrangement. Doh???

Perhaps they were signalling to UOP on their home turf that they were an emerging competitor....

 

One possible answer is that the current arrangement could be designed primarily for the financial benefit of Rockbridge, rather than that of NCU. For example, it may be that the new "NCU" facilities are actually owned by Rockbridge, and that this arrangement ensures that NCU makes handsome rent payments to Rockbridge every month. Just a possibility.

 

What i'm getting from this discussion and the extent to which for-profit schools are tied-in with the stock market (which is sad in and of itself, that an educational institution is operating based on market forces instead of for the interest of student) is that some of the schools may close at anytime. The schools are not run well,; decisions are erratic, and are made solely for short term profits, instead of for long term profit and steady and sustained student growth. We can see this from the sudden policy changes aimed at extracting more money from students already enrolled, unending name changes, changes to the school websites and logos (logos, which have become corporate logos far from what a school logo should look like), moving to new locations every couple of years, etc. Among the for-profits, APU/AMU seems a lot more stable than the TUIs/Tridents, and the NCUs, if you ask me.

Now, back to the original point. I think the crux of the article is that investment banks and other wall street financiers are financing or supporting these for-profit schools - some of which target military monies as well as government provided loans, as their main source of income or motive for existence. Trident fits this description, for example, because their marketing is 90% aimed at the military. In that light, it is fair to say or agree (with the original article) that some for-profit schools, which are heavily supported and financed by wall street firms and banks (hence, their relationship with investment banks), are targeting veterans with low-value and sub-standard programs that only require the writing of papers, as well as reading of what is freely available on the internet.

 

I have experience with Aspen, CCU, NCU, and UOP and I can honestly say that none of these schools "targeted" the military students, but most online schools have a military section - even the Big Three aggregators do that. The Big Three even have different site locations for Army, Navy, etc. AMU is a different case, because it was started by military for military needs and has since branched out to the civilian sector. I can vouch for the stability of Aspen and AMU, but my UOP and CCU experience is not recent.

 

Some readers may not understand what the "90/10 rule" is, or why it makes veterans so attractive to for-profit schools.

Most of the students at most for-profit schools pay for college via Federal government financial aid programs. At most for-profits, the vast majority of revenue therefore comes from the government.

The Feds, however, feel that schools should show some evidence that they can exist independently of government aid. So they insist that schools get at least 10% of their revenue from non-government sources. So a school can get up to 90% of its revenue from the government, but the other 10% has to come from elsewhere.

For-profit schools commonly operate at or near that 90% threshold. This is a problem for them, because it means that they can't enroll any more students who are supported by government aid. Of course, they can still enroll students who pay with their own money, or who are supported by their employers or by private scholarships, but those students are much harder to find.

This is where veterans come in. Even though vets get government educational assistance, they represent a special case: they count towards the 10% side, rather than the 90% side. So a veteran is huge jackpot. For example, if a school enrolls one veteran and charges him $10,000 tuition, then they can *also* enroll nine more civilians with government aid and charge each of them $10,000 tuition as well. And they will technically be in compliance with the 90/10 rule -- even though 100% of revenue will come from the government.

One expert describes the situation as follows:

(If her name sounds familiar, it's because Holly Petraeus is married to General David Petraeus, the former commander of US and multinational operations in Iraq and Afghanistan, and the current director of the CIA.)

 

Both CCU and Aspen are growing and expanding. CCU purchased a very nice large building in the historic district of Santa Ana California. They are awaiting approval for signage that will be accepted by the city's historical board, not an easy or quick task in California. Once the signage is approved, extensive photos will be displayed on the website to show the human side of the school. Aspen is growing and now has the added monetary power of an entity that is not lacking money or business savy, they are based out of New York. Kudos to Dr. Lady!!! He basically put Aspen in the forefront, and this caused investors to take notice.

And now to pat myself on the back. Abner, you know how to pick em dude! :smile: (note to self) Many thanks to this forum.

Abner :smile: