payday loans 12th st northern phoenix

For-Profit Kaplan University Pays Executives a Quarter Billion Dollars ...

The for-profit college and university business is a $30-billion-dollar industry in the United States. According to investigative journalist Daniel Golden, in the last decade, the for-profit colleges and universities have tripled enrollment and recorded profits of $26 billion. (1)

For-profit colleges have been paying lavish and grotesquely huge compensation to executives, both former and current, using money from student loans and government grants for decades. For-profit college executive compensation is currently under scrutiny by Congress because nearly all revenues that constitute the exorbitant and scurrilous executive pay packages come from federal grants, such as Pell Grants and loans, and such as Stafford Loans under the Title IV program. These grants and loans are tax monies collected by the government; they are then turned into subsidies for the for-profit educational industry. Double-digit annual growth in revenues and excessive executive compensation coupled with deceptive marketing, high tuition, low graduation rates and high loan default rates have driven a climate and culture of student exploitation, misappropriation of public monies and political corruption.

The average three-year default rate has been estimated at 22.4 percent for for-profit colleges, 6.7 percent at private nonprofit colleges and 9.7 percent at public colleges. (2) ProPublica, an online journalistic source, reported that the Department of Education (DOE) indicated that over 40 percent of the money lent to students at for-profit institutions would be in default at some point over the life of the loans. The DOE did not say how much of this money would ultimately be lost to the Treasury. (3) Borrowers in default can and often do end up repaying what is owed, but students themselves will tell you this is harder and harder to do as the economy gets worse and worse and job opportunities dry up faster.

The for-profit educational complex commodifies education as one would any product. They repackage predatory business practices, similar to those found in the subprime mortgage fiasco, and sell the educational product to students in what they claim is "a service" to "the low income constituencies" and thus as a benefit to society as a whole. Vulnerable populations, such as veterans, minorities and single working mothers with children, are targeted and lured into the for-profits with promises of a bright, rosy future containing decent jobs, higher pay, the ability to buy more "stuff" and a better life through government-financed and subsidized education provided by for-profit providers. Nothing could be further from the truth.

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