Aug 2, 2010
A Senate report showed that, since 1995, students who got federal student loans to attend four-year “for-profit colleges” have defaulted at twice the rate as among graduates of public four-year colleges.
Students pay more for these for-profit colleges, and get less – if anything. Graduates have testified that they can’t get jobs because the schools are not even accredited. The government has never required the for-profit colleges to meet the same educational standards as public colleges.
Yet the for-profit education business has been booming – thanks to rising unemployment, and states cutting back on public education. In many states enrollment at for-profit colleges increased by 20%.
Profits increased even more. The average profit of the higher education companies, which sell their stocks on Wall Street, was almost twice as high in 2009 as the year before.
How do the workers, who turn to these schools, pay the high tuition they charge? From student loans, which the government guarantees.
That way, the banks make their profits, and the schools make theirs. Last year, 86% of the income of the University of Phoenix came from federal loans. Phoenix is owned by the Apollo Group, a big Wall Street investment firm.
It’s another profit-making machine for Wall Street and banks. Taxpayers – that is, the same workers who are cheated of an education – pay the bill.