Why are people so easily exploited by for-profit colleges? Stealing America – s Future explains a veteran – s story of student loan debt #slate #plus, #united #states #of #debt, #debt, #student #loans, #veterans


Why For-Profit Colleges Are the Bottom Feeders of the College World

Why For-Profit Colleges Are the Bottom Feeders of the College World

This Army Veteran Wanted to Become a Video Game Animator

All those schools wanted, he concluded, was bodies in the classes.

But Mike soon learned that he couldn t sue. When he enrolled, the schools had required him to sign agreements that any dispute would have to go to an arbitrator, not a court; arbitrators, private referees of legal disputes, are famous for usually siding with the companies that insist on arbitration and that pay most of their fees. Mike had no idea he had signed his legal rights away.

His for-profit college course work did not get Mike a career in animation, or anywhere close. He did a series of short-term and temp jobs at Target and elsewhere. But he wasn t earning nearly enough to pay back his loans. Because after he dropped out, Mike learned the true damage of his experience: Between Gibbs and the Art Institute, he now owed at least $83,000 in student loan debt, perhaps as much as $95,000. I ve never been able to figure out the exact amount, he says.

Mike defaulted on his loans. Collection agencies went after him. His wages were garnished. Garnishments don t take into account need things you need to live on, like food, he says. The pressure of overwhelming debt makes you feel like scum.

Of the private loans the schools instructed him to take, Mike says, They knew these loans would go bad, that many students will default, never pay them back. But these companies need students to take out these private loans, because federal law prohibits for-profit colleges from obtaining more than 90 percent of their revenue from grants and loans provided by the U.S. Department of Education.

The principle behind this 90/10 rule is that if a school cannot convince students, employers, and private scholarship funds to cover even 10 percent of student costs, then the school must not be providing valuable services. But predatory for-profit colleges can t be bothered to strive to earn outside revenue through quality programs, so they simply raise their prices to be higher than the federal aid available and make students pay the rest through private loans.

Additionally, for-profit colleges need to sign up as many veterans as they can, because under federal law, Department of Defense and Veterans Affairs student grants, like the ones Mike received, don t count toward this 90 percent aid limit, either. As a result, wrote Holly Petraeus, who directs service member affairs at the federal Consumer Financial Protection Bureau, some for-profit colleges see service members as nothing more than dollar signs in uniform.

The persistent recruiting pays off: The top seven recipients of federal GI Bill education aid are all for-profit colleges in order of cash taken in, the University of Phoenix, EDMC, ITT Tech, DeVry, Career Education Corp. Strayer, and Corinthian, with Kaplan at No. 9. The University of Phoenix and others have outposts on or adjacent to military bases, like the one where Mike served, and their recruiters are an aggressive presence in the lives of our active-duty troops. Yet the results for many service members and vets are often disastrous.

“These aren’t colleges. They’re debt factories. They’re slumlords of the college world.”

In October 2013, the Federal Trade Commission, or FTC, warned veterans that some for-profit colleges manipulate the data or lie about how well their graduates fare. The FTC said it was advising servicemembers, veterans, and their families that some for-profit schools may be more interested in gaining access to their post 9/11 GI Bill benefits than helping them fulfill their education goals. Some for-profit schools may stretch the truth to encourage enrollment, either by exerting pressure on servicemembers to sign up for unnecessary courses or to take out loans that might be a challenge to pay off.

These aren t colleges, Mike says. They re debt factories. They re slumlords of the college world.

I have spoken with or read written complaints from hundreds of for-profit college students from across the nation, of all different ages and backgrounds. Some went to EDMC or Career Education Corporation schools, while others attended colleges and universities run by the University of Phoenix, DeVry, Kaplan, Corinthian, ITT Tech, Bridgepoint, or other companies.

Once they expressed any kind of interest online, in person, or on the phone in getting a degree, they were heavily recruited by for-profit colleges, sometimes receiving five or more phone calls in a single day. The recruiting pitches were coercive, preying on students fears, and deceptive, with the costs of a degree substantially understated and the prospects for a well-paying job dramatically overstated. Once the students were hooked, the schools pushed private student loans, without explaining that these loans are far more expensive than federal loans.

And as a result, these students are often left $20,000, $50,000, $100,000, $130,000, or more in debt, with no improvement in their career prospects. A remarkable number of the written student complaints I have reviewed conclude with an identical phrase: Please help.

The for-profit colleges are not the only ones responsible for this state of affairs. The flipside of their relentless, deceptive, and coercive pursuit of prospective students is that they are, for these students, often the only people who seem to care. For a broke single mom or anguished returning veteran, for-profit college recruiters are people listening to them, offering them a chance.

The local community college, facing year after year of tight budgets, is often in the business of turning students away, not welcoming them in. There just isn t enough room. They have few marketing and recruiting efforts. There are far too few evening classes to meet the meets of working adults. Moreover, community colleges frequently come up short in offering the kind of program that many of these students are seeking not Shakespeare, but hands-on training to be a nurse s aid or electrician. The whole system high schools, public colleges, private industry now fails to offer enough students, especially low-income students, a path to training for such careers. So the for-profit colleges have stepped into the breach. But many of the for-profit colleges, in the end, deliver the opposite: weak programs, astronomical prices. And that s how they destroy their own students lives.

David Halperin currently writes for the Republic Report . He is the author of Friends in High Places: Who Endorses America’s Troubled For-Profit Colleges? and Stealing America’s Future: How For-Profit Colleges Scam Taxpayers and Ruin Students’ Lives .

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