Several years of public scrutiny have exposed that many of America's for-profit colleges are playing a cruel joke on students and taxpayers -- high-priced, low-quality programs, sold through deceptive recruiting practices, that often leave students without good jobs and deep in debt. This scam has cost taxpayers as much as $33 billion in a single year. Worse, it has ruined the lives of students -- veterans, single mothers, and others struggling to build a better future. For-profit colleges have 12 percent of U.S. college students but a shocking 47 percent of student loan defaults.
When the Obama administration sought to implement common-sense reforms to halt the worst abuses, the for-profit college companies -- owned by Goldman Sachs, the Washington Post Company, and private equity firms, among others -- unleashed a lobbying and public relations blitz -- backed by campaign contributions to Capitol Hill. But if they managed to get irresponsible Members of Congress to stymie progress in Washington, they couldn't conceal the hard truths about their cynical industry. Many potential students are now wary of their come ons, and the brakes have been applied to their shameless joy ride. Enrollments are way down, as are stock prices, and companies are closing campuses or shutting down entirely.
Instead of taking this opportunity to reform, to consider whether they could save their businesses by moving to a model that actually helps students train for good jobs, the industry's big players appear to be digging in, and continuing to use their revenues -- about 86 percent of which come from taxpayers -- to engage in lobbying and propaganda aimed at convincing the public that everything is fine, that their schools are paragons of free-market innovation and upward mobility.
The latest and perhaps inevitable step in this expensive persuasion campaign is, of course, a movie. As the Chronicle of Higher Education reports, Michael E. Platt, CEO of a marketing company that helps find recruits for for-profit colleges, has produced Reconstructing the Dream, a documentary purportedly about the need for colleges to get better at training students for careers.
But the trailers for the documentary reveal what appears to be an incendiary propaganda film, complete with stirring, emotional music, aimed at obscuring the facts about for-profit college abuses. "Many politicians continue to manipulate the truth and serve the interests of the unions in order to keep the private sector from serving adult learners, creating a virtual, permanent underclass," says the narrator in one clip -- which was removed after a reporter for the Chronicle asked about it.
Platt told the Chronicle he took advice on shaping the film's message from Steve Gunderson, president of the for-profit colleges' main trade association, APSCU.
The trailers, posted on the fundraising websites Kickstarter and Fractured Atlas, include borrowed footage of genuine experts, such as U.S. Secretary of Education Arne Duncan, juxtaposed with self-serving statements by for-profit college executives like Gregory Cappelli, CEO of Apollo Group / University of Phoenix, and, extensively, Michael Platt himself. "There are many people in government that just cannot reconcile the concept of education with for-profit. They think if you're in education and you're for-profit, you are inherently a crook. That's an affront to me...." says Jonathan Liebman, an outraged for-profit college owner, in one of the clips.
The trailer also includes this aggrieved voice-over:
Unfortunately, the one sector of higher education nimble enough to meet the needs of the 21th-century workforce is under attack.... Career colleges have aggressively implemented new technology and designed their education delivery to meet the needs of today's adult learners. And yet a war is being waged against them for having the audacity to earn a profit while providing an education and job training.
That setup goes into a clip of President Obama, standing with soldiers last year at Fort Stewart, Georgia, and vowing to protect them against for-profit college ripoffs. As violins swirl and students stroll on a leafy campus, the narrator then warns, "These insidious attacks and lies perpetrated against education's private sector must end."
Jamie Merisotis, a widely-respected education expert and president of the Lumina Foundation, taped an interview for the documentary, but his spokesperson raised concerns with the Chronicle after viewing these trailers. "It was going to be about higher-education attainment in the United States, skills-gap issues, and the question, Is college really worth it?," wrote Lucia Anderson of Lumina. "But the preview makes it appear the documentary will take a different approach. We were not made aware of this angle when we agreed to an interview, and now we will be in touch with the company that produced this piece to address our concerns."
In one trailer, Platt informs us that "Plattform Films" has spent "hundreds of thousands of dollars" to make Reconstructing the Dream, and he appeals to viewers on Kickstarter and Fractured Atlas to contribute money -- he's seeking a million dollars -- to pay to distribute it. Fractured Atlas's executive director told the Chronicle that his site aims to support only non-commercial projects, and that he is now examining whether Reconstructing the Dream is connected to for-profit colleges. It's a good question.
The for-profit college industry's misleading propaganda continues to invade other media. This week, Fox Business Channel presented APSCU president Gunderson as a higher education expert commenting on President Obama's College Scorecard effort, which provides students better information about costs and programs at various colleges. The Fox host noted that Gunderson is a former (Republican) congressman from Wisconsin, but she made no mention of the controversy over for-profit college abuses, or that Gunderson's job is to avoid accountability for those abuses, or that College Scorecard, if well implemented, will make more clear to students how expensive for-profit colleges really are. Presenting Steve Gunderson as an expert on college costs is like putting Lord Voldemort on your show to analyze wizardry.
And this isn't the first time that Fox has given Gunderson a platform to cheerlead for his industry without challenging him in any way. (Puzzling. If Fox actually stands for free markets and small government, why would it stand with predatory companies that feed off taxpayer money and offer shoddy services? And if Fox honors our troops and veterans, why stand with predatory companies that deceive and abuse our service members?)
- Minnesota Attorney General Lori Swanson announced an intensified probe of the industry, especially deceptive recruiting of U.S. troops and veterans. According to the Minneapolis Star-Tribune, "one part of the investigation" is this: "a recruiter who was never in the military would put on a uniform when it came time to close the sale on a veteran." Jeff Pool, veterans services director for a local community college, told the paper that he frequently had to help and console students who had transfered from for-profit schools, only to find that public schools do not accept credits earned at most for-profits. According to the article, "Pool told of the case of one for-profit that continued to receive a veteran's GI Bill benefits even after he informed them he had withdrawn. The school stopped only after Pool threatened to go to Congress."
- Benjamin Cordoba of Brandon, Florida, told the Tampa Tribune that he had sued for-profit Everest University, claiming his degree was worthless in the job market. Cordoba says an Everest recruiter told him that his credits would transfer to a local community college, but that promise turned out to be false. So Cordoba finished his studies at the much-pricier Everest, and ended up with $27,000 worth of debt. "If you gave me a choice of having my degree or offering me five bucks, I'll take the five bucks," Cordoba said. Everest, which is part of the troubled Corinthian Colleges chain, performed the worst of all colleges tested by the Obama administration for leaving students deep in debt. Corinthian is under investigation by at least six state attorneys general, and is also the target of whistleblower lawsuits claiming that admissions staff receive improper payments.
- Senator Dick Durbin (D-IL) gave a floor speech on for-profit college abuses that included this account:
Ramon Nieves attended the American Intercontinental University, a for-profit college owned by Career Education Corporation. Like many who attend for-profit colleges, Ramon was the first person in his family to go to college. The recruiters at these for-profit schools look for these students.
Without guidance from his family -- a family that had no experience with college -- he trusted the school when they advised him about student loans. He said the school just told him to sign his name. That is all he had to do. They never explained the difference between the kinds of loans that students could take out; that there are government loans, Federal loans, and then there are loans from private financial institutions. He was never told what his balance would be -- how much he owed -- or what he could expect his monthly payments to be when it was all over.
He signed up. He wanted to get started with college. And he kept signing and signing, semester after semester, year after year, until he graduated. He graduated from this for-profit school with $90,000 of debt -- $90,000.
He works several jobs, almost 80 hours a week, so he can pay his monthly student loan payments, which are $1,000 a month, right off the top.
His student debt is a constant burden for him and his family. He owns a home, and he thinks he is going to lose it because of the student loans. He decided to try to file for bankruptcy because he was in debt so deeply, but he learned the hard way that the bankruptcy court cannot help him when it comes to student loans.
Ramon says he wishes he had not gone to college at all; that he was better off before he got that deeply in debt. Now he is at a community college -- a community college -- trying to get an education because the $90,000 in the for-profit college turned out to be a waste of time. He is now where he should have started....
He says he wishes he had known that at the beginning -- starting at that community college instead of the American Intercontinental University. Then, he says, he would have received the same education but without $90,000 of debt.
Why does he have so much debt? According to a recent committee report in the Senate, the American Intercontinental University costs 250 times more than a nearby community college -- 250 times more.
Durbin concluded with these words, "Congress needs to act now to stop this for-profit school industry from exploiting students and their families and taxpayers. Why we are spending so much money -- money we can no longer afford -- to subsidize these highly profitable schools is beyond me. I cannot explain it."
There is only one way to explain it. Congress made these big for-profit college businesses very rich by allowing them access to a flood of taxpayer money. The for-profits now use a chunk of that money for lobbying and propaganda to buy the allegiance of Members of Congress and try to hang on to their privileged position. The only way to force the for-profit colleges to reform is for citizens to let their representatives in Washington know that we are tired of the abuses, and that we expect Washington to take action.
This article also appears on Republic Report.