Wednesday, July 16, 2014

Corinthian's demise and the future of for-profit higher education...

Seal of the United States Department of Education
Seal of the United States Department of Education (Photo credit: Wikipedia)
NPR reported this morning that the sale of some 85 Corinthian "campuses" is about to begin.  The Department of Education pulled the plug on student loans when it became suspicious of the giant for-profit "educator's" finances.  The company was soon broke.  How could that be?

As I've noted in this space several times before, the business model of many of the for-profits is simple:

1.  Advertise hard and attract unsuspecting customers.

2.  Admit them, regardless of qualifications, and induce them to take out student loans.  These are your and my tax dollars from Uncle Sam.

3.  Sell the student some high priced courses.  Whether s/he completes or drops out, you --- the company --- have pocketed the loan money and called it profits.

4.  The student drops out or completes and either way fails to find a good job. S/he defaults on the loans.

5.  The execs and owners of the for-profit company have pocketed the tuition dollars… our tax dollars, awarding themselves handsomely.

Why, when this nation has thousands of public universities, private non-profit colleges and universities, and community colleges, have our governments ---federal and state --- even allowed for-profit providers to compete?  My argument is, as ever, that profits and education simply do not mix.

What other sins is Corinthian guilty of?  One physician assistant wannabe in Boston was interviewed by NPR and reported that the "school" she was attending didn't have the proper equipment and what it did have didn't work.  She predicts her degree, if she gets one, will be worthless.

Now, the billion buck question: how many more Corinthians are out there?

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