9 ms·

Inside the sordid world of America's for-profit colleges

139 points by SmkyMt 8y ago

hprotagonist 8y ago
On its face, some entities just oughtn't be for-profit. The evidence for, and obvious risk of, perverse incentives going totally bananas is just too high. - Educational institutions - Hospitals - Fire departments (i don't think these exist, at least not yet, but the idea comes up in Discworld)
- Kalium 8y ago
  > - Fire departments (i don't think these exist, at least not yet, but the idea comes up in Discworld) These have existed. (Reference: https://www.smithsonianmag.com/smithsonian-institution/early-19-century-firefighters-fought-fires-each-other-180960391/ https://www.smithsonianmag.com/smithsonian-institution/early...)
  - rhcom2 8y ago
    And in Rome, where famously Marcus Licinius Crassus' private fire fighters would arrive to a fire but first haggle over the price before attempting to put it out.
    - Kalium 8y ago
      If memory serves, "fire fighting" as we know it now didn't really exist at the time. He would negotiate to buy the land. Once he did, his slaves would basically tear down the building and potentially any nearby ones to contain the fire.
- izzydata 8y ago
  I can't say that I've ever seen the word "oughtn't" before. I get that it is a contraction of "ought" and "not", but it seems more difficult to say and the same amount of characters.
  - jfk13 8y ago
    Seems familiar enough to me (as a UK reader). Some dictionaries suggest it has become rare in North America, however.
  - stordoff 8y ago
    I can't say I see it in text much, but it is fairly common in spoken UK English (though in my particular dialect it often gets further shortened to something approximating ough'n't).
- FireBeyond 8y ago
  > Fire departments (i don't think these exist, at least not yet, but the idea comes up in Discworld) Can and do. Check out Grant's Pass, OR. Three competing private fire companies, one of which was dubbed "the worst fire department in America" and after repeated excursions into infamy/incompetence, was yanked by the Oregon State Fire Marshal: * https://www.youtube.com/watch?v=RhD_5T4F7aw&t=255s https://www.youtube.com/watch?v=RhD_5T4F7aw&t=255s * https://www.youtube.com/watch?v=PaG6fYBKXg8 https://www.youtube.com/watch?v=PaG6fYBKXg8
- bwanab 8y ago
  - police forces - military - prisons
  - dsfyu404ed 8y ago
    I think we'd be fine with private security for many cases where one can possibly hire private security today. Events or locations where lots of people are present (concerts, train stations) or places where service is so terrible you need a cop on hand to scare people into not flipping out(city hall, DMV) should probably use private security. Having a security company to sue or to not hire next time corrects the lack of incentive to not be jerks that a lot of police departments seem to lack. The publicly funded police should do more investigating and less patrolling/standing around.
- SomeHacker44 8y ago
  Prisons. Especially prisons.
- travisoneill1 8y ago
  It's not so much that it's for profit, but who pays. For most things we don't care if not everyone gets it so free market works best. Things that we require everybody to have are best paid for by taxation. And hybrid systems are a disaster. I can't think of any exceptions. But if the government pays $100 to put a cast on a broken arm and a hospital figures out how to do it for $50 and profits, I don't see a problem.
- lemming 8y ago
  - pharmaceutical companies
- hatmatrix 8y ago
  Health insurance industry. To maximize profit for shareholders, they minimize payout to clients.
  - kgwgk 8y ago
    The minimum payout is fixed by law. Of course this create the incentive to increase costs rather than reduce them, given that their margins are capped.
seibelj 8y ago
The for-profit education model would work much better if there were no special class of “student” loans, and instead the loans offered were normally dischargeable in bankruptcy. This would cause colleges to charge manageable tuition and bankrupt the colleges that produced graduates unable to pay. The current situation of student loans is a racket, and for-profit universities like Corinthian exist specifically to fleece the government. Destroying the lives of their students is a byproduct.
- theobon 8y ago
  Wouldn't that require that the school provide the loan? If the debt is not held by the school then they are not impacted by bankruptcy. I like the theory of what you are saying but I'm not sure I want schools to become creditors.
  - seibelj 8y ago
    If you have to get a loan from a private company, and all of these students default, then the private company will not longer offer loans for education from the bad institution. If the college’s students can’t get loans, they either shutdown or charge tuition that can be paid out of pocket. The root cause of the entire problem is outrageously large loans, provided by the government, that can never be discharged. Until we solve this problem, tuition rates will continue to rise inline with the maximum the government will allow.
    - elliekelly 8y ago
      >The root cause of the entire problem is outrageously large loans, provided by the government, that can never be discharged. And given without any regard for the value of the investment. We don't allow banks to lend people $200,000 to buy a house we know is only worth $20,000 so why is it okay for Sallie Mae* to? edit: Sallie Mae, not Fannie Mae
  - superseeplus 8y ago
    If student loans granted to students studying in for-profit schools became dischargeable in bankruptcy, then lenders would be incentivized to consider their graduation rates and employability of their graduates before granting loans.
JPKab 8y ago
I can't begin to describe how corrupt these institutions are. A few years ago, I had to (for stupid work reasons) take an official test to get a Cloudera certification. I went to a for-profit university testing location to do so. It was one of the big chains. While I waited and waited for the grossly incompetent staff to get the testing machine working, I sat and listened to students coming in to an office concerned with payment. The door was wide open, and I could hear the conversations clearly. People who weren't equipped to a level of waking up on time, let alone getting to class, were trying to stop attending classes and leave. They were repeatedly goaded and told that they should stick with school, despite the fact that there was zero chance these folks were going to be able to get jobs with these bullshit degrees. All financed by US taxpayer subsidized loans that aren't covered by bankruptcy. Truly depressing and made me sad.
skh 8y ago
When I first started teaching in higher education the implied client was society at large. It was my duty to ensure that those who passed knew the material sufficiently well. This was when a student's tuition paid for 1/3 of the cost and the government funded the other 2/3. Now it's the other way around. Now the student is the client. Now I no longer think it's my duty to ensure that those who pass know the material. It's my duty to keep enrollment up because we need the tuition dollars. I'm constantly hounded to increase my passing rate. No one who matters to our funding cares about people knowing the material they are supposed to be learning. In the last assignment for the algebra course I'm teaching a student changed all fractions in a weird inconsistent way. For instance they changed 3/4 to 34 but then changed 5/7 to 75. No apparent rhyme or reason. This is the type of person we recruit and the type of person I'm supposed to pass. The for profits are bad but we aren't much further behind.
- moorhosj 8y ago
  I would be interested to see how the school has changed over that time period. Specifically, the administrator to student ratio, the number of new deans or other fundraisers, and the number of new buildings erected. It seems like every school has a brand new student union and student workout facility.
  - skh 8y ago
    At my college not much. We are a public institution and cater to urban students who mostly are working adults.
  - travisoneill1 8y ago
    This. A major reason that college is so expensive is that they aren't really schools, but mini cities within a city. Don't see why they can't just offer classes and let the students live the rest of their lives like everybody else. Works fine in Europe.
    - weberc2 8y ago
      Well, the federal government decided to extend a $70K line of credit to 18 year olds, and university administrators aren’t going to miss a chance to exploit the naïveté of these vulnerable young people. So it’s not a matter of whether or not we should fleece our students, but how long will we allow university administrators to get away with it (Note that none of this is particular to private universities, public universities are every bit as bad).
internet555 8y ago
As a former employee of one of these (quite famous), the curricula are oftentimes relatively good, with an emphasis on practical skills. But it’s difficult for me to see them as a good thing given the issues marked out. Many of them take lots of government money (through GI bill etc) as well
olivermarks 8y ago
I'm also highly aware of how much UK higher education has changed. Warwick University for example has grown enormously and advertises heavily, relying on attracting overseas students and research grants. The bigger question in my mind is whether this is inherently 'bad'. The Academy of Art University in San Francisco was founded as the Academy of Advertising Art by Richard S. Stephens in 1929 as a vocational training. Like Warwick in the UK AofA Uni is now enormous (biggest property owner in San Francisco) and attracting foreign and out of state students. There seems to be pretty low barriers to entry (except high prices) to attend AofA and be taught about the arts. Whether this is a good use of time and will lead to a career is highly debatable. I wonder about the regulatory aspects as these giant institutions become an important part of local economies and seasonal housing, and whether the money gets in the way of the academic realities
- spacejunk 8y ago
  I feel like the difference lies in that Warwick (and some other UK universities who do the same thing, including my own) do still have a relatively high barrier to entry that sets them apart from the American for-profits. Not to say that Warwick & other institutions aren't as for-profit as places like Corinthians, but they definitely manage to get away with it by still maintaining academic excellence.
  - olivermarks 8y ago
    You could make the argument that the ivy league is 'for profit' but their qualifications will typically get you a career to pay off your massive student loans...it's the quality of what's being sold that is the interesting element here, I'd suggest.
- mistrial9 8y ago
  Academy of Art University SF has been controversial for decades, however amazing locations .. it might be great fun .. Art schooling is non-linear anyway.. this may not be your best example to refute the integrity of a private college.. there are other for-profit colleges in the greater US that certainly do fit the "diploma mill" stereotypes, but not this one.
martythemaniak 8y ago
Is this really a problem? America seems to place far more importance on the freedom of an individual to scam or fleece other people, rather than on protecting people from their own weaknesses. Scammy for-profit colleges seem like one of dozes of byproducts of this mentality and there's no reason to think Americans would like to have it any other way. In fact, it often seems to me as if Americans reserve extra respect for these scammers for being so good that they're able to convince and con so many people.
- dopamean 8y ago
  You're right that we seem to have extra respect for these scammers. After all we did elect one President.
  - garysahota93 8y ago
    Haha good one!
    - dopamean 8y ago
      I wasn't even trying to make a joke. The guy literally had to pay a $20 million settlement for the fraud around "Trump University."
  - IWeldMelons 8y ago
    Most of your presidents were scams. Obama, for example extended the surveillance state much more than even Bush did.
apo 8y ago
In the middle of this entire mess sits the federal government with its interest payments, payment deferments, and loan guarantees. Loans are made to people who not only have no business going to college, but have no business taking out a life-altering loan as their first step into adulthood. Everyone is affected by this problem, as the flood of easy money has contributed to the steep rise in tuitions across the country. The result is a vicious cycle of inflationary bubble economics. Here's hoping the documentary covers this angle.
advertising 8y ago
I worked at a call center for a random online for profit uni as one of my first jobs. Quickly saw we were calling random leads generated by click bait ads like “become a swat expert” or enter to win type stuff. We would call people who had no idea they had signed up to get called and push them to “further their education and future”. First priority was to check to see that they could get a loan. Then aggressively get them to sign up for school. I had access to the online courses and they were absolute trash. Complete racket based on federal funding.
jancsika 8y ago
Couldn't you start a small for-profit uni that uses all the tactics described in the article to recruit students, but then pay teachers to deliver a high quality, practical education? You'd get all the benefits of the loan lock-in. Your grads would have a higher likelihood of getting a decent paying job that would pay back the loan in a shorter time. Then you could aim your collections aholes at your dropouts and use the loan lock-in as leverage-- either they keep getting their part-time wage garnished or they finish the program so they can get a higher paying job.
- rleigh 8y ago
  The main problem as I see it is the dynamic that "if you pay, you pass". I've seen first hand the unwillingness to fail students who have done no work and have zero aptitude or willingness to learn. And that's just the lazy ones. I'm not even including the students who tried but will do poorly. They all get passed! I've only seen one person be failed, and it took several months of investigation before it happened. They didn't attend any sessions or lab project work for months, but they didn't want to kick them out because they were a rich foreign student. This clearly devalues a university education for those who do work hard and succeed. And it also devalues the institution for its lack of intellectual rigour and enforcement of strict standards. I would be more than happy for paying students to be held to strict and high standards, but having money be a big part of the equation seems to have corrupted even well regarded universities. (My perspective is from the UK universities; when the courses were completely funded by the government through local education authorities, they didn't have a problem with giving mediocre or bad students the boot, but today it's nearly impossible.)
exabrial 8y ago
"For profit" College is fine. No one is making you give your money to them. Especially when you could attend a much cheaper community college in the middle of nowhere for a 1/50th of the price. "Government subsidized loans" given to people which no creditor would rationally give you money are the problem. Who would honestly lend you $175k to receive a music therapy degree and hope for a return on their investment? I'm not to say that such degrees could not be a satisfying career path for an individual, but the "fund everyone" program in the USA is the root issue.
deleted 8y ago
[deleted]

139 points by SmkyMt 8y ago

On its face, some entities just oughtn't be for-profit. The evidence for, and obvious risk of, perverse incentives going totally bananas is just too high. - Educational institutions - Hospitals - Fire departments (i don't think these exist, at least not yet, but the idea comes up in Discworld)

Kalium 8y ago
> - Fire departments (i don't think these exist, at least not yet, but the idea comes up in Discworld) These have existed. (Reference: https://www.smithsonianmag.com/smithsonian-institution/early-19-century-firefighters-fought-fires-each-other-180960391/ https://www.smithsonianmag.com/smithsonian-institution/early...)
- rhcom2 8y ago
  And in Rome, where famously Marcus Licinius Crassus' private fire fighters would arrive to a fire but first haggle over the price before attempting to put it out.
  - Kalium 8y ago
    If memory serves, "fire fighting" as we know it now didn't really exist at the time. He would negotiate to buy the land. Once he did, his slaves would basically tear down the building and potentially any nearby ones to contain the fire.
izzydata 8y ago
I can't say that I've ever seen the word "oughtn't" before. I get that it is a contraction of "ought" and "not", but it seems more difficult to say and the same amount of characters.
- jfk13 8y ago
  Seems familiar enough to me (as a UK reader). Some dictionaries suggest it has become rare in North America, however.
- stordoff 8y ago
  I can't say I see it in text much, but it is fairly common in spoken UK English (though in my particular dialect it often gets further shortened to something approximating ough'n't).
FireBeyond 8y ago
> Fire departments (i don't think these exist, at least not yet, but the idea comes up in Discworld) Can and do. Check out Grant's Pass, OR. Three competing private fire companies, one of which was dubbed "the worst fire department in America" and after repeated excursions into infamy/incompetence, was yanked by the Oregon State Fire Marshal: * https://www.youtube.com/watch?v=RhD_5T4F7aw&t=255s https://www.youtube.com/watch?v=RhD_5T4F7aw&t=255s * https://www.youtube.com/watch?v=PaG6fYBKXg8 https://www.youtube.com/watch?v=PaG6fYBKXg8
bwanab 8y ago
- police forces - military - prisons
- dsfyu404ed 8y ago
  I think we'd be fine with private security for many cases where one can possibly hire private security today. Events or locations where lots of people are present (concerts, train stations) or places where service is so terrible you need a cop on hand to scare people into not flipping out(city hall, DMV) should probably use private security. Having a security company to sue or to not hire next time corrects the lack of incentive to not be jerks that a lot of police departments seem to lack. The publicly funded police should do more investigating and less patrolling/standing around.
SomeHacker44 8y ago
Prisons. Especially prisons.
travisoneill1 8y ago
It's not so much that it's for profit, but who pays. For most things we don't care if not everyone gets it so free market works best. Things that we require everybody to have are best paid for by taxation. And hybrid systems are a disaster. I can't think of any exceptions. But if the government pays $100 to put a cast on a broken arm and a hospital figures out how to do it for $50 and profits, I don't see a problem.
lemming 8y ago
- pharmaceutical companies
hatmatrix 8y ago
Health insurance industry. To maximize profit for shareholders, they minimize payout to clients.
- kgwgk 8y ago
  The minimum payout is fixed by law. Of course this create the incentive to increase costs rather than reduce them, given that their margins are capped.

seibelj 8y ago

The for-profit education model would work much better if there were no special class of “student” loans, and instead the loans offered were normally dischargeable in bankruptcy. This would cause colleges to charge manageable tuition and bankrupt the colleges that produced graduates unable to pay. The current situation of student loans is a racket, and for-profit universities like Corinthian exist specifically to fleece the government. Destroying the lives of their students is a byproduct.

theobon 8y ago
Wouldn't that require that the school provide the loan? If the debt is not held by the school then they are not impacted by bankruptcy. I like the theory of what you are saying but I'm not sure I want schools to become creditors.
- seibelj 8y ago
  If you have to get a loan from a private company, and all of these students default, then the private company will not longer offer loans for education from the bad institution. If the college’s students can’t get loans, they either shutdown or charge tuition that can be paid out of pocket. The root cause of the entire problem is outrageously large loans, provided by the government, that can never be discharged. Until we solve this problem, tuition rates will continue to rise inline with the maximum the government will allow.
  - elliekelly 8y ago
    >The root cause of the entire problem is outrageously large loans, provided by the government, that can never be discharged. And given without any regard for the value of the investment. We don't allow banks to lend people $200,000 to buy a house we know is only worth $20,000 so why is it okay for Sallie Mae* to? edit: Sallie Mae, not Fannie Mae
- superseeplus 8y ago
  If student loans granted to students studying in for-profit schools became dischargeable in bankruptcy, then lenders would be incentivized to consider their graduation rates and employability of their graduates before granting loans.

JPKab 8y ago

I can't begin to describe how corrupt these institutions are. A few years ago, I had to (for stupid work reasons) take an official test to get a Cloudera certification. I went to a for-profit university testing location to do so. It was one of the big chains. While I waited and waited for the grossly incompetent staff to get the testing machine working, I sat and listened to students coming in to an office concerned with payment. The door was wide open, and I could hear the conversations clearly. People who weren't equipped to a level of waking up on time, let alone getting to class, were trying to stop attending classes and leave. They were repeatedly goaded and told that they should stick with school, despite the fact that there was zero chance these folks were going to be able to get jobs with these bullshit degrees. All financed by US taxpayer subsidized loans that aren't covered by bankruptcy. Truly depressing and made me sad.

skh 8y ago

When I first started teaching in higher education the implied client was society at large. It was my duty to ensure that those who passed knew the material sufficiently well. This was when a student's tuition paid for 1/3 of the cost and the government funded the other 2/3. Now it's the other way around. Now the student is the client. Now I no longer think it's my duty to ensure that those who pass know the material. It's my duty to keep enrollment up because we need the tuition dollars. I'm constantly hounded to increase my passing rate. No one who matters to our funding cares about people knowing the material they are supposed to be learning. In the last assignment for the algebra course I'm teaching a student changed all fractions in a weird inconsistent way. For instance they changed 3/4 to 34 but then changed 5/7 to 75. No apparent rhyme or reason. This is the type of person we recruit and the type of person I'm supposed to pass. The for profits are bad but we aren't much further behind.

moorhosj 8y ago
I would be interested to see how the school has changed over that time period. Specifically, the administrator to student ratio, the number of new deans or other fundraisers, and the number of new buildings erected. It seems like every school has a brand new student union and student workout facility.
- skh 8y ago
  At my college not much. We are a public institution and cater to urban students who mostly are working adults.
- travisoneill1 8y ago
  This. A major reason that college is so expensive is that they aren't really schools, but mini cities within a city. Don't see why they can't just offer classes and let the students live the rest of their lives like everybody else. Works fine in Europe.
  - weberc2 8y ago
    Well, the federal government decided to extend a $70K line of credit to 18 year olds, and university administrators aren’t going to miss a chance to exploit the naïveté of these vulnerable young people. So it’s not a matter of whether or not we should fleece our students, but how long will we allow university administrators to get away with it (Note that none of this is particular to private universities, public universities are every bit as bad).

internet555 8y ago

As a former employee of one of these (quite famous), the curricula are oftentimes relatively good, with an emphasis on practical skills. But it’s difficult for me to see them as a good thing given the issues marked out. Many of them take lots of government money (through GI bill etc) as well

olivermarks 8y ago

I'm also highly aware of how much UK higher education has changed. Warwick University for example has grown enormously and advertises heavily, relying on attracting overseas students and research grants. The bigger question in my mind is whether this is inherently 'bad'. The Academy of Art University in San Francisco was founded as the Academy of Advertising Art by Richard S. Stephens in 1929 as a vocational training. Like Warwick in the UK AofA Uni is now enormous (biggest property owner in San Francisco) and attracting foreign and out of state students. There seems to be pretty low barriers to entry (except high prices) to attend AofA and be taught about the arts. Whether this is a good use of time and will lead to a career is highly debatable. I wonder about the regulatory aspects as these giant institutions become an important part of local economies and seasonal housing, and whether the money gets in the way of the academic realities

spacejunk 8y ago
I feel like the difference lies in that Warwick (and some other UK universities who do the same thing, including my own) do still have a relatively high barrier to entry that sets them apart from the American for-profits. Not to say that Warwick & other institutions aren't as for-profit as places like Corinthians, but they definitely manage to get away with it by still maintaining academic excellence.
- olivermarks 8y ago
  You could make the argument that the ivy league is 'for profit' but their qualifications will typically get you a career to pay off your massive student loans...it's the quality of what's being sold that is the interesting element here, I'd suggest.
mistrial9 8y ago
Academy of Art University SF has been controversial for decades, however amazing locations .. it might be great fun .. Art schooling is non-linear anyway.. this may not be your best example to refute the integrity of a private college.. there are other for-profit colleges in the greater US that certainly do fit the "diploma mill" stereotypes, but not this one.

martythemaniak 8y ago

Is this really a problem? America seems to place far more importance on the freedom of an individual to scam or fleece other people, rather than on protecting people from their own weaknesses. Scammy for-profit colleges seem like one of dozes of byproducts of this mentality and there's no reason to think Americans would like to have it any other way. In fact, it often seems to me as if Americans reserve extra respect for these scammers for being so good that they're able to convince and con so many people.

dopamean 8y ago
You're right that we seem to have extra respect for these scammers. After all we did elect one President.
- garysahota93 8y ago
  Haha good one!
  - dopamean 8y ago
    I wasn't even trying to make a joke. The guy literally had to pay a $20 million settlement for the fraud around "Trump University."
- IWeldMelons 8y ago
  Most of your presidents were scams. Obama, for example extended the surveillance state much more than even Bush did.

apo 8y ago

In the middle of this entire mess sits the federal government with its interest payments, payment deferments, and loan guarantees. Loans are made to people who not only have no business going to college, but have no business taking out a life-altering loan as their first step into adulthood. Everyone is affected by this problem, as the flood of easy money has contributed to the steep rise in tuitions across the country. The result is a vicious cycle of inflationary bubble economics. Here's hoping the documentary covers this angle.

advertising 8y ago

I worked at a call center for a random online for profit uni as one of my first jobs. Quickly saw we were calling random leads generated by click bait ads like “become a swat expert” or enter to win type stuff. We would call people who had no idea they had signed up to get called and push them to “further their education and future”. First priority was to check to see that they could get a loan. Then aggressively get them to sign up for school. I had access to the online courses and they were absolute trash. Complete racket based on federal funding.

jancsika 8y ago

Couldn't you start a small for-profit uni that uses all the tactics described in the article to recruit students, but then pay teachers to deliver a high quality, practical education? You'd get all the benefits of the loan lock-in. Your grads would have a higher likelihood of getting a decent paying job that would pay back the loan in a shorter time. Then you could aim your collections aholes at your dropouts and use the loan lock-in as leverage-- either they keep getting their part-time wage garnished or they finish the program so they can get a higher paying job.

rleigh 8y ago
The main problem as I see it is the dynamic that "if you pay, you pass". I've seen first hand the unwillingness to fail students who have done no work and have zero aptitude or willingness to learn. And that's just the lazy ones. I'm not even including the students who tried but will do poorly. They all get passed! I've only seen one person be failed, and it took several months of investigation before it happened. They didn't attend any sessions or lab project work for months, but they didn't want to kick them out because they were a rich foreign student. This clearly devalues a university education for those who do work hard and succeed. And it also devalues the institution for its lack of intellectual rigour and enforcement of strict standards. I would be more than happy for paying students to be held to strict and high standards, but having money be a big part of the equation seems to have corrupted even well regarded universities. (My perspective is from the UK universities; when the courses were completely funded by the government through local education authorities, they didn't have a problem with giving mediocre or bad students the boot, but today it's nearly impossible.)

exabrial 8y ago

"For profit" College is fine. No one is making you give your money to them. Especially when you could attend a much cheaper community college in the middle of nowhere for a 1/50th of the price. "Government subsidized loans" given to people which no creditor would rationally give you money are the problem. Who would honestly lend you $175k to receive a music therapy degree and hope for a return on their investment? I'm not to say that such degrees could not be a satisfying career path for an individual, but the "fund everyone" program in the USA is the root issue.

deleted 8y ago

[deleted]