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bucheon bum
Joined: 16 Jan 2003
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 Posted: Wed Nov 10, 2010 11:46 am Post subject: For-profit colleges: what a scam |
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Depressing article in the NY Times
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| According to 2009 data released this summer by the Department of Education, only 28 percent of Kaplan�s students were repaying their student loans. That figure is well below the 45 percent threshold that most programs will need to remain fully eligible for the federal aid on which they rely. By comparison, 44 percent of students at the largest for-profit, the University of Phoenix, were repaying their loans. |
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| All these schools get most of their revenue from federal student aid. Kaplan Higher Education, for example, gets 91.5 percent of its revenue from the federal government, through Pell grants, Stafford loans, military and veterans benefits and other aid. |
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Lawmakers and Department of Education officials have become increasingly concerned that too much of the $26.5 billion in federal student aid that went to for-profit colleges last year enriched shareholders and company executives, rather than helping students.
Such schools enroll about 11 percent of the nation�s college students, and get a quarter of all federal student aid. But their students account for 43 percent of those defaulting on student loans. |
Hmm, cutting out financial aid to for-profit colleges couldn't be yet another way to cut government spending could it? Naw, that's too sensical. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Wed Nov 10, 2010 12:26 pm Post subject: |
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Yeah, it's a terrible scam. There's Keiser, Uni of Phoenix, etc. And this one, owned by Goldman:
http://www.bloomberg.com/video/62044940/
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| Aug. 6 (Bloomberg) -- Carrianne Howard dreamed of designing video games, so she enrolled in a program at the Art Institute of Fort Lauderdale, a for-profit college part-owned by Goldman Sachs Group Inc. These days, the 26-year-old makes her living in a way that doesn't require a college diploma -- by stripping at a topless club. Like many investors, Goldman, owner of 38 percent of the Art Institute's parent, Education Management Corp., was drawn to for-profit colleges by their rapid growth and soaring stock prices. Bloomberg's Cali Carlin reports. (Source: Bloomberg) |
Frontline did a great piece on this topic:
http://www.pbs.org/wgbh/pages/frontline/collegeinc/view/?utm_campaign=viewpage&utm_medium=grid&utm_source=grid |
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Madigan
Joined: 15 Oct 2010
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| Posted: Wed Nov 10, 2010 8:56 pm Post subject: |
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The Frontline Vid is heartbreaking! I really feel students should be able to discharge their student loans in bankruptcy courts.
The amount of coercion the government puts on student debtors is disgusting. It really has got to end. |
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young_clinton
Joined: 09 Sep 2009
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| Posted: Wed Nov 10, 2010 10:20 pm Post subject: |
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| Madigan wrote: |
The Frontline Vid is heartbreaking! I really feel students should be able to discharge their student loans in bankruptcy courts.
The amount of coercion the government puts on student debtors is disgusting. It really has got to end. |
If the loan becomes a black hole with no hope of reasonably paying it off the amount of money to pay back should be made less.
Also if the individual can show that he has been disadvantaged in getting a job. It should be discharged completely. The fickle cold blooded manner of hiring and the way individuals are not hired through personal like and personal dislike is a disgrace to America and humanity. |
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comm
Joined: 22 Jun 2010
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| Posted: Thu Nov 11, 2010 4:19 am Post subject: Re: For-profit colleges: what a scam |
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| Lawmakers and Department of Education officials have become increasingly concerned that too much of the $26.5 billion in federal student aid that went to for-profit colleges last year enriched shareholders and company executives, rather than helping students. |
Here's a crazy idea. Stop taxing citizens to pay for things that aren't clearly and directly for the benefit of those citizens. If it's deemed to be very much in the national interest to promote college educations, put the money in the pockets of perspective students and let them do the math on which institutions deserve their tuition. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Thu Nov 11, 2010 9:43 am Post subject: |
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| If the loan becomes a black hole with no hope of reasonably paying it off the amount of money to pay back should be made less. |
http://en.wikipedia.org/wiki/Fraudulent_conveyance
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| There are two kinds of fraudulent transfer. The archetypal example is the intentional fraudulent transfer. This is a transfer of property made by a debtor with intent to defraud, hinder, or delay his or her creditors.[7] The second is a constructive fraudulent transfer. Generally, this occurs when a debtor transfers property without receiving "reasonably equivalent value" in exchange for the transfer if the debtor is insolvent[8] at the time of the transfer or becomes insolvent or is left with unreasonably small capital to continue in business as a result of the transfer.[9] Unlike the intentional fraudulent transfer, no intention to defraud is necessary. |
http://www.caddenfuller.com/CM/Articles/Articles38.asp
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| Constructive fraud also requires two conditions: 1) in exchange for the transfer, the debtor received less than �reasonably equivalent value�, and; 2) the debtor is unable to pay debts either at the time the transfer was made or as a result of the transfer itself. In this case, intent need not be proven rather the focus of the inquiry rests on whether the debtor received reasonably equivalent value. Of course, reasonably equivalent value can be in the eye of the beholder. When there is nothing of value exchanged for the transfer of the debtor�s property, the answer is an easy one. Not infrequently, however, something of value is given and the question becomes whether the value was really adequate compensation for the property. |
If you blow 70k to study at the Art Institute of Ft Lauderdale and end up a stripper, have you received 70k in reasonably equivalent value? Now I'm no legal expert but this sure looks like mass theft to me. |
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toadkillerdog
Joined: 11 Nov 2009
Location: Daejeon. ROK
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| Posted: Thu Nov 11, 2010 2:51 pm Post subject: |
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| Students can avoid the whole student loan trap by doing what I did. Work your way through school. I worked full time and went to school full time for 5 1/2 years (BA and MA). With effective time management it is not so difficult. |
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Hugo85
Joined: 27 Aug 2010
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| Posted: Thu Nov 11, 2010 3:31 pm Post subject: |
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The real scam is lending 70k to these kids. Is there no career counseling in the US? Doesn't anyone tell the kids, the banks and the schools that the best outcome from some programs is being a stripper or a truck driver?
Art Institute of Ft Lauderdale, what a joke. |
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TheUrbanMyth
Joined: 28 Jan 2003
Location: Retired
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| Posted: Thu Nov 11, 2010 5:04 pm Post subject: |
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| Madigan wrote: |
The Frontline Vid is heartbreaking! I really feel students should be able to discharge their student loans in bankruptcy courts.
The amount of coercion the government puts on student debtors is disgusting. It really has got to end. |
So the government gives you money it collects from taxpayers, and then expects it back? I mean what an outrageous concept! |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Thu Nov 11, 2010 8:00 pm Post subject: |
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| TheUrbanMyth wrote: |
| Madigan wrote: |
The Frontline Vid is heartbreaking! I really feel students should be able to discharge their student loans in bankruptcy courts.
The amount of coercion the government puts on student debtors is disgusting. It really has got to end. |
So the government gives you money it collects from taxpayers, and then expects it back? I mean what an outrageous concept! |
I agree with you in principle but a) the government is charging 6.8% in interest, which is a load of crap given the current interest rates out there b) the government shouldn't be loaning out money to those "students" to begin with. |
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mises
Joined: 05 Nov 2007
Location: retired
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sat Nov 13, 2010 9:29 am Post subject: |
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| TheUrbanMyth wrote: |
| Madigan wrote: |
The Frontline Vid is heartbreaking! I really feel students should be able to discharge their student loans in bankruptcy courts.
The amount of coercion the government puts on student debtors is disgusting. It really has got to end. |
So the government gives you money it collects from taxpayers, and then expects it back? I mean what an outrageous concept! |
This is a dishonest description.
These fake school market themselves to the lower end of the intellectual spectrum. You only go to Kieser University if you can't get into tier 4 state schools (that will allow anybody in). Already we're dealing with the low end of the IQ spectrum. These schools use advanced marketing techniques (pioneered and perfected by psychologists) to lure people into consuming their product at an absurd cost. The government pays for the whole thing. The student earns 20k or so a year and pays a 30k+ loan that is non-dischargeable. This is so vile.
CEO of Strayer earned 41million last year selling fake degrees to debt-slaves. The government facilitates this all. The state does not deserve a cent in repayment of loans that were made to people with no hope of ever paying back.
This is feudalism. It is an advanced, tecno-feudalism. |
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comm
Joined: 22 Jun 2010
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| Posted: Sat Nov 13, 2010 11:50 am Post subject: |
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| mises wrote: |
CEO of Strayer earned 41million last year selling fake degrees to debt-slaves. |
Who decides if a degree is "fake" or not?
In my opinion, it's the student and (for some) the employer, who requires a "real" degree of its employees.
The only valid solution then is to allow the students to determine what a "real" degree is for themselves and maybe do a little research on what employers like to see. As a small example, I personally didn't even consider an online TEFL course because I did the basic research to know that it's worthless to employers. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sat Nov 13, 2010 12:44 pm Post subject: |
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| Who decides if a degree is "fake" or not? |
The labor market. These for-profit colleges like Keiser are complete jokes.
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The only valid solution then is to allow the students to determine what a "real" degree is for themselves and maybe do a little research on what employers like to see. As a small example, I personally didn't even consider an online TEFL course because I did the basic research to know that it's worthless to employers.
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Most of these students think they have done the research. The schools present all kinds of factoids about the labor market and the vocational outcomes. In fact, this happens at good law schools too. The numbers can not be trusted. |
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Madigan
Joined: 15 Oct 2010
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| Posted: Sat Nov 13, 2010 12:55 pm Post subject: |
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| TheUrbanMyth wrote: |
| Madigan wrote: |
The Frontline Vid is heartbreaking! I really feel students should be able to discharge their student loans in bankruptcy courts.
The amount of coercion the government puts on student debtors is disgusting. It really has got to end. |
So the government gives you money it collects from taxpayers, and then expects it back? I mean what an outrageous concept! |
The problem is: Easy Money + Sallie Mae = Disastrous Consequences.
A lot of the loose credit is flowing into education through Sallie Mae as a conduit. In other words, there is an education bubble that continues to grow.
To digress a little, wrt to the students, yes they should be able to discharge their loans in bankruptcy court if need be. Seemingly, everyone else can discharge debts in BK court; even people who blow all their money on gambling can discharge those debts in BK court, but not students. Indebting young people, possibly for the rest of their lives, all on the speculative worth of a degree cannot possibly be moral. |
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