The nation’s for-profit, private college industry is a study in horribles.
Start with the fact that it actually calls itself an “industry” – excuse me, but education is not an industrial product. Next, this so-called “private” industry depends almost wholly on receiving government money, generating practically none of its revenue from the free enterprise market. And “for-profit” colleges are just that, maintaining that their obligation is not to serve students or our society, but to deliver profits to their corporate shareholders.
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These things are scandal machines, as proven by the latest for-profit college conglomerate to be exposed as a fraud. Education Management Corporation operates four college systems, offering courses online and in office buildings in 32 states. EDMC’s recruiters have been given extravagant financial incentives to pressure low-income people into taking-out huge federal education loans in order to pay for courses at the corporation’s colleges.
EDMC has been getting more than a billion dollars a year from these students – some 90 percent of its revenue. But its courses are mediocre-to-worthless, leaving graduates in unbearable debt, since they’re unable to get jobs with salaries high enough to pay off their loans. Bear in mind that this sleazy fraud is not the work of some fly-by-night hucksters – EDMC is largely owned by Wall Street giant Goldman Sachs.
Thanks to some former students and a couple of corporate whistleblowers, EDMC has now been exposed and is paying a price for its horribles. Its stock price has fallen from $22 a share to – get this – 8 cents! And it’s also been hit with a $90 million federal penalty for fraud. But it – and the whole system of corrupt for-profit colleges – ought to be put out of business. Learn more by going to: www.DebtCollective.org.
“For-Profit College System Expected to Pay Millions,” The New York Times, November 16, 2015.