I posted this report during the Obama administration. It remains timely since the for-profit higher education sector is having a renaissance under the leadership of Betsy DeVos, who is the best friend the predatory, for-profit higher education sector ever had.
As a private citizen, she invested in this squalid sector. As Secretary of Education, she has protected predatory for-profit institutions and even put one of their champions in charge of monitoring their behavior. A fox in charge of the henhouse. She has also cut back on federal efforts to help students who were defrauded by these institutions and left with a mountain of debt and a worthless diploma (think Trump U).
Here’s the lowdown: When your company is raking in profits, it can afford to hire top lobbyists. When you are operating in the public sector, you have to squeeze out the money to pay for any lobbyist.
I urge you to read this fascinating report on the predatory for-profit higher education sector, written before the Trump administration came into being by D.C. lawyer David Halperin. It is carefully researched and sourced. It is long, but has the interest level of a detective story. You will find villains in both political parties. You will find distinguished academics who sold their reputation to bolster a predatory for-profit institution. Behind most of the political squalor is one unifying theme: the power of greed.
It opens like this. I invite you to read the entire report to find out who is protecting the for-profit colleges that rip off American students:
Timothy J. Hatch and Ronald L. Olson are two of the most prominent and successful lawyers in Los Angeles. Hatch is a partner at the national litigation powerhouse firm Gibson Dunn. Olson, a name partner at Munger, Tolles & Olson, has represented some of America’s biggest corporations. He is a former chair of the American Bar Association’s Litigation Section, and today he serves on the boards of directors of Warren Buffett’s Berkshire Hathaway, the RAND Corporation, the Mayo Clinic, and the California Institute of Technology.
Both Hatch and Olson also have been for years key parts of the protective infrastructure that has shielded predatory for-profit colleges, institutions that have deceived and abused U.S. students and taxpayers. Hatch has represented the giant publiclytraded forprofit college businesses Education Management Corporation (EDMC), Kaplan, and ITT Tech against charges of fraud, and he has sued the U.S. Department of Education to halt regulations that would hold poorlyperforming colleges accountable. Olson is on the board of directors of Graham Holdings Company, which owns Kaplan, and his law firm has represented Corinthian in major fraud litigation which is fitting, as the Graham company owned a significant stake in Corinthian until its 2015 collapse. In the fraud case where Olson’s firm represented Corinthian, the other party that whistleblowers were suing was Corinthian’s auditor, giant accounting firm Ernst & Young. Their lawyer in the case was Timothy Hatch.
Although the notorious Corinthian Colleges is gone (sort of), many bad actors remain in business. Seven of America’s ten biggest for-profit college companies, which collectively received about $8 billion dollars in taxpayer money last year, have in recent months and years been under investigation or sued by federal and state law enforcement agencies for deceptive business practices. Despite the mounting evidence that these seven companies Apollo/ University of Phoenix, EDMC, ITT Tech, Kaplan, Career Education Corporation, DeVry, and Bridgepoint Education have engaged in predatory behavior against their own students, they continue to market themselves as affordable places to build successful careers, and they continue to enroll new students and deposit their federal grants and loan checks. These companies also have continued to fight reform measures by government to hold bad schools accountable for abuses.
A key reason why such predatory for-profit colleges have been able to continue receiving billions annually in taxpayer dollars while ruining the financial futures of students across the country is that national power players politicians, lawyers, academic leaders, celebrities have been willing to vouch for these companies, serving as their paid lobbyists, board members, investors, and endorsers. It’s not just Donald Trump who has made big money off a deceptive college operation.
Read on to learn who these power players are. You may be shocked. I was. After reading this, I felt that the whole political system is rigged to protect the predators. I went to wash my hands. Why is the “money all gone,” as reformers like to say when they explain why budget cuts are necessary? Because it is lining the pockets of the rich and connected.
Imagine if that $8 billion dollars were used to make community college free for all those who wanted higher education at a reputable university?
Hear are a few tidbits from this report:
● Department of Education data has shown that the University of Phoenix’s graduation rate for firsttime, fulltime students is about 16 percent, and that graduation rate for the school’s online programs is about 4 percent.
● A 2012 comprehensive investigative report on forprofit colleges by then Senator Tom Harkin (D-Iowa) found that the University of Phoenix spent $892 on instruction in 2009, compared to $2,225 per student on marketing, and $2,535 per student on profit. “This,” the report found “is one of the lowest amounts spent on instruction per student of any company analyzed.”
● Around 25 percent of University of Phoenix students default on their loans within three years of leaving school.
Read and gasp. And weep that students will continue to be defrauded by predatory corporations peddling online for-profit junk.
Diane Ravitch's blog 