Recruiting practices at for-profit colleges

I found this article to be pretty interesting.

With Goldman's Foray Into Higher Education, A Predatory Pursuit Of Students And Revenues - Huffington Post Business

 

This is reprehensible: "Management handed down revamped telemarketing scripts designed to prey on poor and uneducated consumers, honing in on their past mistakes in life as a ploy to convince them that college would solve all their problems" In many cases, going into debt for a degree of dubious utility is going to make their life worse.

 

Yep, but that is the world of some for-profits, and there's no doubt that some operations of some for-profits is plain scam, illegal and worth prosecuting, like Dr. Wagner used to say (even though many in this forum didn't want him to say it). They sell the degrees at a very expensive rate, and then they turn around and blame those who default. Do these schools not know that for example, selling internet PhDs, which have very limited utility, for $70k is probably going to result in negative ROIs? It's kind'a like the real estate mess.

When some of the so called "dead beats" were making mortgage payments the banks and no one was complaining that "homes were sole to poor people who didn't have any means to pay for them." When those very people couldn't continue to pay their mortgage due to loosing their jobs, everybody blamed them for buying the homes in the first while the banks who gave out bad loans get bailed out and the money used for bonuses.

I bet you'll see people in this forum defend schools (for-profit scams) that lie and operate unethically, but blame the real victims of the scam - the students who get sold degrees that are very sub-standard and not worth anything. Cut-throat capitalism at work for you!

 

This isn't anything new. Back in February, numerous real examples of "pain scripts" (from for-profits like ITT, Kaplan, and Corinthian) were presented on the floor of the US Senate by the Health, Education, Labor and Pensions Committee. For example, one Kaplan recruiting document stated:

Those here who have studied psychology might be interested in the following quote from a former for-profit admissions rep:

 

They do not "sell" them, you earn them. If they "sold" them it would be a mill and you would $495...add an extra $25 if you want to graduate with honors! By the way, do you really think every person that earn a Walden/UoP/Capella/NCU PhD paid $70K out of pocket? My NCU PhD cost about $25K when I was in the program and I paid about $3k out of pocket.

 

I absolutely deplore the tactics that EDMC are alleged in engaging in. However, it appears that Cyber's Internet PhD comparison is innacurate. It appears that the tactics were used to enroll student in the undergraduate programs of EDMC's colleges.

 

Anyone with Goldman Sachs on his resume belongs in jail.

 

Anyone with an education who makes broad brushed statements like that deserves a frontal lobotomy.

 

Certainly, I can see no way to defend a school (or any entity) that provides false or misleading information. There are laws that address and punish those who operations revolve around lying and operating unethically and those who do deserve what they get. I appreciate the fact that you recognize that, as with every industry (including non-profits), there are "some operations" that are run illegally (or at the very least unethcally) and should be investigated and punished. This makes you far more intellectually honest that the vast majority of those who have written on this subject, who tend to paint all 3,000+ for-profit (i.e. tax paying) institutions as all being equally guilty of the crimes of the large publicly-traded corporations that keep making the headlines.

Although I often seen the comparison made between the sub-prime mortgage bubble and for-profit education, one deliberate omission continues to puzzle me.


The person buys a home:

• --The person approaches a real estate firm that has a given house for sale.
• --The real estate firm provides the product (the home) at a particular price, conducts the transaction, and provides the product to the person.
• --The person, unable to pay the entire cost of the product up front, applies to a bank.
• --The bank (not the real estate firm) determines the eligibility of the person for a loan and determines the amount of money to loan to the person.
• --The person buys the home.

Now if, for whatever reason (job loss, health, misminagement of finances, family crisis, etc.), the person made the decision to stop making payments on the mortgage, who is to blame?

• --It is the person (who may have bought too much home or a home is a less desireable neighborhood that won't sell as fast) or did the person simply run on unanticipated hard times?
• --It is the realtor who may have sold the home for an inflated price or in an inferior neighborhood?
• --Is is the bank that gave a loan to someone who should not have received the loan in the first place and was a poor risk for default?

In most discussions that I have seen, the blame is placed either on the person or the bank. No one seems to blame the real estate firm. I have yet to hear any of our legislators suggesting that we go after the realtors who sold all those people the homes that are now in foreclosure or short sale.


The person pursues a college education:

• --The person approaches a school that offers a given degree.
• --The school provides the product (the education leading up to the degree) at a particular price, conducts the transaction, and provides the product to the person.
• --The person, unable to pay the entire cost of the product up front, applies to a bank.
• --The federal government (not the real estate firm) determines the eligibility of the person for a loan and determines the amount of money to loan to the person.
• The person pays tution to the school.

Critics of for-profit schools insist on equating home mortgages to college degree programs, but, conveniently, they leave out their own substanital role in the process. It is not the school, but the GOVERNMENT that determines a students's loan eligibility and decides how much money to loan to the student. The feds know exactly how much tution and fees the school will charge and still provides the money.

Now, let's jump a few years after graduation (when the school no longer has any direct influence over the graduate). The graduate determines (for whatever reason) to stop making payments on the government loan. Who is to blame? If you ask the feds, it is the school that charged too much for a degree that they deem (without any research and data to back it up) to be "worthless."

I am not suggesting that the fed go after realtors and that schools have no responsibility to be accruate and ethical about recuitment proactices, school costs, and salary ranges of graduates. I am merely suggesting that by blaming the banks for the housing crisis and not assigning the same blame to themselves for students who defualt on their loans (when their roles are the same), the feds (and those who deliberately ignore the feds role in determining and distributing federal loans) are engaging in hypocritical and unethical practices.

 

Although the author of the Huffington Post article seems enamored with the "consumer protection" of the 1992 "50% Rule," the truth is that this legislation (like so many) was done in reaction to a situation, without anticipating the collatoral effects.

Although targeted to correspondence diploma mills, the legislation deemed that ALL distance education, in which 50% or more of the program was delivered at a distance, was ineligible for federal student aid. This had a chilling effect for institutions (even non-profit) that wanted to offer online/distance degree programs and made higher education unavailable for students who were not able to take at least half of their classes in a traidtional classroom and at days and times designated by the college or university.

The 50% rule was hardly the utopia that the author made it out to be.

 

I apologize for the way that this post is formatted. I had assigned bullets using the text editor, but this post did not display as I had formatted it. There appears to be a bug in the HTML editor. If you compare the text in the quote to the post, you will be what I mean. It also appears to display differently in IE vs. Firefox.

 

Apparently some people don't recognize hyperbole. Oh well. Some of us have a sense of humor. Some don't.

 

How is it anyone but the students fault for not paying their bills? Doesn't personal responsibility mean anything? It doesn't matter if they are using telemarketing tactics to sell their service. The person who is applying for the loan is responsible for determining if they can pay their debt.

When I was 19 years old I ran up $40,000 in credit card debt. I knew that I didn't have the money to pay for all the junk I was buying, but I kept buying it anyway. Who's fault was it that I ended up in such debt? It was my own, and I eventually paid it all off. I feel the same way about those that defaulted on their student loans, and mortgages. At some point you have to say that people are responsible for their own decisions.

 

When something is funny, I find it funny. Unfortunately the forum conveys neither tone or delivery so when taken in the context of the rest of the posts on the forum, and knowing people that were at Sachs, you got addressed.

 

It does if the service is worth nowhere near the price paid.

 

That's the thing though. Something is only worth what someone is willing to pay for it. If you don't feel the service is worth the price asked then you don't have to pay for it. If someone is willing to pay 80k for what many consider a sub par education then that is their choice. They apparently felt it was worth it. If they later have regrets then hopefully they have learned their lesson about doing a little research before dropping that kind of money on something. There are some people that these schools have worked out for.

 

The problem is that federal dollars are going into this. I'm not even speaking of loans, which in theory should cover their own costs (of course we know about default rates....), but Pell Grants change the game. It's not Joe Smith blowing his cash. It's Joe Smith blowing the U.S. Gov't's cash.

 

Yet another reason to reduce federal grants for education. The constitution does not guarantee a college education for everyone "from each according to their ability, to each according to their need" is not listed in the US constitution.

 

We have a vested interest in having an educated populace, so I disagree. I do recognize, however, that we have different philosophical and political presuppositions.

 

If I could change one thing about Title IV financial aid, I would have the policy that students who earn F's or W's in courses paid for by Title IV would have to repay the money. This is the practice used by the military for TA, along with most private companies with tuition assistance programs.