Colleges Scramble to Avoid Violating Federal-Aid Limit - Administration - The Chronicle of Higher Education
If I ran a big school that depended on Title IV, I'd funnel 15% of each term's revenue into a "scholarship fund" that then "helps" the next term's students with a grant. Wouldn't that keep things at an 85/15 ratio? Problem solved. (I'm no lawyer, though, so I suppose the regulations may be written well enough to preclude this?) -=Steve=-
As far as I know, this would work. The problem is that investors likely wouldn't tolerate it. It's much more profitable simply to jack up the tuition.
Greedy investors, then -- since it would be tax deductible, it wouldn't be as expensive as it looks. Say 10% instead of fifteen, after taxes that's more like 7%. Ah, well. -=Steve=-
Of course it's greedy investors, but what can we expect? Shareholders aren't necessarily in it for the long-term.
Fortunately for me, I happen to work for a school that offers over 45 different scholarship programs, including scholarships for Eagle Scouts, those academically proficient in high school, those scoring high on their GED, home schooled students, and for those pursuing specific disciplines. Our ratio is currently about 70/30 and our tuition is significantly lower than our city's two private non-profit universities and is only $15/unit more expensive than our local state university. So not all "for-profits" operate like the big publicly-traded ones that occupy the headlines (and Tom Harkin & Dick Durbin's every waking hour). I like working for a small, family-established, non-publicly traded, private sector school. I doubt that I could ever go back to the bureaucratic, wasteful and fossilized world of public non-profit education where I spent the first 21 years of my career. Of course, I certainly cannot see myself working for one of the "bad actor" for-profits either. I have had a glimpse of that world, too...no thanks.
The bold above is what makes all the difference. IMO, public trading changes the character of the school. Schools like yours are the examples of how for-profit education can be a valuable part of our educational system. Schools like the ones in the OP are a disgrace.
Before you guys stark harping on "greedy investors" you might want to take a look at your 401K portfolio more carefully. You might be surprised at what you own stock in, especially if your retirement fund, like almost everyone's is managed.
I know because I don't have any at the moment, for a variety of reasons. This is one of the reasons I am looking for greater income possibilities. I had some medical issues, and I had to change jobs last year (due to those medical issues), at which time I took a significant pay cut and had to burn what little retirement savings I had left in the transition. Fortunately, I am in my twenties, so I do have some time to recover.
Great point! I used a similar tactic on one of my co-workers who is to the point of being violently ant-WalMart. When I showed him that our pension fund had WalMart holdings, he about cried. Taking a stand is great, but you best be assured that you are going all the way with it.
I was surprised to find that I owned some Apollo Group stock. But given their performance I'd be an idiot to dump it (not like it's my decision anyway since it's a managed account). I do plan on putting a few bucks into Bridgepoint Education once Harkin and Eisman have devalued the stock artificially. I fully intend to buy up as much as I can afford when it hits that low because I expect a strong, fast growth afterwards (market speculation at work here) Is that greedy of me? Honestly I am an unapologetic, free market capitalist with a family to provide for. I would, have and will own stock in a for profit school and sleep like a baby. Oh, and I like Wal-Mart too. I won't get into specifics but if it wasn't for Wal-Mart cracking down on producers forcing them to either innovate or eat cost in the fuel price increases, we'd be paying a heck of a lot more for a basket of goodies than we do now. But being from a small town I understand the anti-big-box store sentiment which is why paradoxically I refuse to buy made in China tools whenever possible (which is getting harder by the day)…it’s my cross, I’ll bear it.
I've brought up this issue before. Many in this forum disdain for-profit schools like UoP, Capella, etc., but the same folks are making money from the same schools working as adjuncts.
Both for-profit-haters and for-profit-adjuncts are represented here, but are you sure there's that much overlap? -=Steve=-