It's final call for the leading titans of for-profit colleging:
SANTA ANA, Calif., April 26, 2015 – Corinthian Colleges, Inc. (Nasdaq:
COCO) today announced that the Company has ceased substantially all
operations and discontinued instruction at its remaining 28 ground
campuses.
It has been a long hard road in the past year for these guys, and the helpful folks at USED have done their best to make sure that nobody's investment was severely damaged (well, except may the investment of time and debt put in by Corinthian students). Recently a group of students have even staged a sort of debt strike, and while the Consumer Financial Protection Bureau has already asked the courts to grant relief, and the Department of Justice has reportedly said that the Department of Education has "complete discretion" to make the loans evaporate, so far, much of that debt it still alive and kicking former Corinthian students in the butt.
What will this mean to current students? The press release says that company is looking for other outfits to provide "continuing educational opportunities for its approximately 16,000 students." Given Corinthian's previous practice of hiring graduates to pump up placement numbers, I shudder to think what this might mean.
But this sucks mightily for the students who were presumably hoping they might get an education in before the roof collapsed.
In the end, Corinthian blames the feds for their lack of success in getting anyone to take over some of the chain. Apparently the feds have attached some penalties to the college's assets, including their former students, and nobody is in the mood to pay Corinthian's fines for them.
Would this have looked less ugly if USED had moved sooner? Hard to say. But this final collapse of Corinthian is a one more good lesson on how the Invisible Hand of the Free Market causes a lot of damage when it waves around the educational marketplace. Not just to the investor and business backers (though one would hope they'd be burned enough to remember the lesson), but the damage done to the students who were caught between being continually bilked and being tossed out of school with literally nothing but debt and lost time to show for it. A school that can abandon its students in the middle of their education is not a school-- it's a scam.
One can only hope that the USED will finally do the decent thing and make these bunco victims free of their debt. The feds can afford to do it, and it would be the least they can do to help rescue these men and women who were really trying to do the right thing and get skills to get ahead.
Showing posts with label Corinthian College. Show all posts
Showing posts with label Corinthian College. Show all posts
Sunday, April 26, 2015
Wednesday, April 15, 2015
Paying Your Bills & The Corinthian 100
The slow-motion train wreck that is the unspooling of the Corinthian for-profit college chain has just dumped one more car off the tracks. Students have announced that they will not repay the debt they incurred attending the nation's top contender for the Predatory College gold medal. While the group launched as a collective fifteen, they have now rounded themselves off at an even 100.
This is not an easy issue to parse. Most of us in the adult world understand a few basic financial principles, including "If you don't want to pay back a huge loan, don't take out the huge loan." But there are other factors at play here.
Corinthian's history is less than exemplary. Founded in 1995, they have since glommed up twenty other post-secondary institutions. They have been called "the nation's worst private college chain" and have been sued many, many, many times; California's attorney general charged them with false and predatory advertising as well as securities fraud. Huffington Post caught them using the practice of hiring their own graduates to help keep their post-grad employment numbers inflated.
One would think that when the USED announced that they were going to shut down predatory colleges that used students as conduit for borrowed money, leaving those students with crushing debt and no marketable job skills-- one would think that just such a pronouncement would leave Corinthian shaking in its boots. That crackdown was announced in March of 2014. By June of 2014, the USED was announcing a plan to keep Corinthian in business. Undersecretary Ted Mitchell (who came to the department carrying strong ties to Pearson, NewSchools Venture Fund, and other investor ties to the private education biz) announced that Corinthian would receive an influx of cash, permission to keep admitting students, and a government overseer to keep an eye on them (powered, I supposed, by the threat of-- I don't know. Stern looks? More cash?). This, apparently, is what Too Big To Fail looks like in the college world.
Next up was selling off parts of the chain-- to Educational Credit Management Corporation, a group specializing in shaking down college students for their loan debts. They have been the subject of more than a few horror stories about overzealous collecting, but they did immediately (as in, December of 2014) set up a new subsidiary named Zenith Education Group to run the schools. Putting a debt collection agency in charge of a college doesn't make a lot of sense, unless you understand that the purpose of the "college" is to recruit "students" to use as carriers for transporting loan dollars from lenders to the "college." The students shoulder all the interest and fees associated with the loans, while everyone else makes the profit. Or as Rep. Steve Cohen (D-Tenn) put it in the Washington Post:
"To prop up a school whose main purpose seems to be to get federal money is a misguided use of federal funds," Cohen said. "When a school like [Corinthian] that has a checkered history is on the mat, throw in the towel. It's over."
Of course, when I say "everyone makes a profit," that's a longer list than you expect. Jump back to November of 2013 with me to read this report about the $41.3 billion dollars in profits on student loans made by the US government. Even if there's a decimal point misplaced, that's an obscene profit to make on the backs of students. If the feds are worried about the cost of college, they need only look in the mirror. Arne Duncan had a sort of non-response response to the report at the time, but the botom line here is that the feds are among the folks with incentive to keep the college debt machine grinding away.
Which brings us back to the issue of the Corinthian 100 and their resolution not to pay back the debt (some of which hits the six-figure range).
On the one hand, I fully sympathize with folks who say, "When you borrow money, you pay it back. Doesn't get any simpler than that. If you borrow more money than you can pay back, that's just dumb. If you don't pay back your debts, somebody else pays the price. Other people should not pay for your dumb."
On the other hand, it's easy to make dumb choices people are lying to you.
Folks who find themselves in debt for Corinthian educations, but without any marketable skills that would allow them to make money-- those folks got in this mess by driving past a dozen corners where there should have been big bright neon red flags. But there were no flags there, because the gatekeepers had taken the flags down and stuffed them in their back pockets.
Corinthian has a repeatedly gotten in trouble for lying, false advertising, misrepresenting itself, and promising what it could not deliver. But the feds did not shut them down, did not demand they put a warning label on their applications, did not publicly chastise them in a manner that might have given applicants pause. And when Corinthian actually started to suffer the free-market consequences of bad behavior, the feds stepped in to protect not the students, but the investors and operators. They actually crafted a plan to allow Corinthian to draw in more students!
And the loans? If I go to buy a house, and I visit the bank for a mortgage loan, generally speaking the bank (excepting the years between, say, 2002-2008) will make sure that they don't lend me more than I can pay, and they will also demand an assessment of the house so that they know I'm getting their money's worth in my purchase. Who was exercising such oversight of these college loans? Apparently, nobody.
Corinthian students have racked up over a half billion dollars in federal loans. The Consumer Financial Protection Bureau has already asked the courts to grant relief, and the Department of Justice has reportedly said that the Department of Education has "complete discretion" to make the loans evaporate. Back in February, a $480 million relief package was announced which would help (about 40%) with the private loans that students took out, but those are separate from the half billion in federal loans. Yesterday the USED released a "heightened cash alert" list of institutions that are under extra scrutiny, but given the department's history, it's not clear what the "extra scrutiny" could lead to, since the scrutinizing that has gone on so far has been pretty unimpressive.
Since I originally posted this piece, Corinthian has been slapped with a $30 million fine by the USED, for the same old shenanigans including lying about job placement (counting in some cases two day jobs at the school itself). Corinthian remains unbowed and claims this is just unfair and unfounded. If I were a cynical man, I might read into the article that the feds finally got fed up with fakery on the principle that it's okay to lie to students, but not to us. Or maybe the relentless coverage finally got to them. At any rate, Corinthian did finally get spanked a bit.
I suppose we could argue that young adults should know better than to trust colleges, loan companies and the federal government, and that grown-ups in the US should know not to trust anybody at all ever. But it's hard for me to look at this mess and not conclude we could do better. Certainly we can do better than to get to the point where 100 young Americans decide that only by publicly trashing their own credit ratings can they hope to get somebody's attention.
Originally posted at View from the Cheap Seats
This is not an easy issue to parse. Most of us in the adult world understand a few basic financial principles, including "If you don't want to pay back a huge loan, don't take out the huge loan." But there are other factors at play here.
Corinthian's history is less than exemplary. Founded in 1995, they have since glommed up twenty other post-secondary institutions. They have been called "the nation's worst private college chain" and have been sued many, many, many times; California's attorney general charged them with false and predatory advertising as well as securities fraud. Huffington Post caught them using the practice of hiring their own graduates to help keep their post-grad employment numbers inflated.
One would think that when the USED announced that they were going to shut down predatory colleges that used students as conduit for borrowed money, leaving those students with crushing debt and no marketable job skills-- one would think that just such a pronouncement would leave Corinthian shaking in its boots. That crackdown was announced in March of 2014. By June of 2014, the USED was announcing a plan to keep Corinthian in business. Undersecretary Ted Mitchell (who came to the department carrying strong ties to Pearson, NewSchools Venture Fund, and other investor ties to the private education biz) announced that Corinthian would receive an influx of cash, permission to keep admitting students, and a government overseer to keep an eye on them (powered, I supposed, by the threat of-- I don't know. Stern looks? More cash?). This, apparently, is what Too Big To Fail looks like in the college world.
Next up was selling off parts of the chain-- to Educational Credit Management Corporation, a group specializing in shaking down college students for their loan debts. They have been the subject of more than a few horror stories about overzealous collecting, but they did immediately (as in, December of 2014) set up a new subsidiary named Zenith Education Group to run the schools. Putting a debt collection agency in charge of a college doesn't make a lot of sense, unless you understand that the purpose of the "college" is to recruit "students" to use as carriers for transporting loan dollars from lenders to the "college." The students shoulder all the interest and fees associated with the loans, while everyone else makes the profit. Or as Rep. Steve Cohen (D-Tenn) put it in the Washington Post:
"To prop up a school whose main purpose seems to be to get federal money is a misguided use of federal funds," Cohen said. "When a school like [Corinthian] that has a checkered history is on the mat, throw in the towel. It's over."
Of course, when I say "everyone makes a profit," that's a longer list than you expect. Jump back to November of 2013 with me to read this report about the $41.3 billion dollars in profits on student loans made by the US government. Even if there's a decimal point misplaced, that's an obscene profit to make on the backs of students. If the feds are worried about the cost of college, they need only look in the mirror. Arne Duncan had a sort of non-response response to the report at the time, but the botom line here is that the feds are among the folks with incentive to keep the college debt machine grinding away.
Which brings us back to the issue of the Corinthian 100 and their resolution not to pay back the debt (some of which hits the six-figure range).
On the one hand, I fully sympathize with folks who say, "When you borrow money, you pay it back. Doesn't get any simpler than that. If you borrow more money than you can pay back, that's just dumb. If you don't pay back your debts, somebody else pays the price. Other people should not pay for your dumb."
On the other hand, it's easy to make dumb choices people are lying to you.
Folks who find themselves in debt for Corinthian educations, but without any marketable skills that would allow them to make money-- those folks got in this mess by driving past a dozen corners where there should have been big bright neon red flags. But there were no flags there, because the gatekeepers had taken the flags down and stuffed them in their back pockets.
Corinthian has a repeatedly gotten in trouble for lying, false advertising, misrepresenting itself, and promising what it could not deliver. But the feds did not shut them down, did not demand they put a warning label on their applications, did not publicly chastise them in a manner that might have given applicants pause. And when Corinthian actually started to suffer the free-market consequences of bad behavior, the feds stepped in to protect not the students, but the investors and operators. They actually crafted a plan to allow Corinthian to draw in more students!
And the loans? If I go to buy a house, and I visit the bank for a mortgage loan, generally speaking the bank (excepting the years between, say, 2002-2008) will make sure that they don't lend me more than I can pay, and they will also demand an assessment of the house so that they know I'm getting their money's worth in my purchase. Who was exercising such oversight of these college loans? Apparently, nobody.
Corinthian students have racked up over a half billion dollars in federal loans. The Consumer Financial Protection Bureau has already asked the courts to grant relief, and the Department of Justice has reportedly said that the Department of Education has "complete discretion" to make the loans evaporate. Back in February, a $480 million relief package was announced which would help (about 40%) with the private loans that students took out, but those are separate from the half billion in federal loans. Yesterday the USED released a "heightened cash alert" list of institutions that are under extra scrutiny, but given the department's history, it's not clear what the "extra scrutiny" could lead to, since the scrutinizing that has gone on so far has been pretty unimpressive.
Since I originally posted this piece, Corinthian has been slapped with a $30 million fine by the USED, for the same old shenanigans including lying about job placement (counting in some cases two day jobs at the school itself). Corinthian remains unbowed and claims this is just unfair and unfounded. If I were a cynical man, I might read into the article that the feds finally got fed up with fakery on the principle that it's okay to lie to students, but not to us. Or maybe the relentless coverage finally got to them. At any rate, Corinthian did finally get spanked a bit.
I suppose we could argue that young adults should know better than to trust colleges, loan companies and the federal government, and that grown-ups in the US should know not to trust anybody at all ever. But it's hard for me to look at this mess and not conclude we could do better. Certainly we can do better than to get to the point where 100 young Americans decide that only by publicly trashing their own credit ratings can they hope to get somebody's attention.
Originally posted at View from the Cheap Seats
Saturday, April 11, 2015
Arne's New History of CCSS on MSNBC
Arne Duncan sat down with Chris Hayes on MSNBC to explain why folks are just so all-fired fire-up about Common Core. Let's see what the current story is.
Hayes starts by saying that CCSS has trouble because it has been conflated with high stakes testing which was linked to all sorts of stuff because of NCLB. This skips past the Obama/Duncan administration's role in bolting high stakes testing to everything from school evaluation to teacher evaluation, but okay. We're only seven seconds in.
Hayes leads with a fun question-- what, if anything, has been achieved in the years since NCLB was signed by Bush?
Duncan: Fixing achievement gaps is the big achievement, but NCLB "has been broken for a while" (which raises the question-- was it ever not broken) and Congress also sucks. So the administration "partnered with states" to provide waivers which allowed them to part ways with the most onerous parts of the law. Which begs a huge question-- outside of the absurd 100% above average test scores requirement, was there any part of NCLB that wasn't given a huge shot of steroids under waivers? Sadly, Hayes is not going to ask that question.
Hayes: My reading of the data (and one of the problems is that there's so much data you can read anything) is that the testing gap (and I love him just a little for calling it a testing gap and not an achievement gap) hasn't really narrowed at all, "certainly not the narrowing that we were promised back in 2001."
Duncan: We have a long way to go. (Which is true in the same way that I have a long way to go to get to Chicago because I'm still sitting in my office at home.) Anyway, we've seen gains over the past twenty-thirty years, but it's not fast enough. So this law has to be about equity. So put politics aside (says the guy who's got no political juice left in his thermos). This law also has to be about early childhood education, because that will level the playing field. Also, we have to bring more dollars to disadvantaged communities. The children who need the most get the least, says the man whose administration likes to frame all aid and grant proposals as competitions. But he thinks maybe Congress can fix inequity.
Hayes: I want to talk about Common Core for a second. (And he smiles a little smile, like "let's do this silly thing, I'm going to ask a question, you're going to sling baloney, it'll be fun"). Are you surprised by how controversial Common Core (which he characterizes as "kind of an obscure issue in certain ways") has become?
Duncan: "It's actually very simple. The goal's to have high standards." So, kids, the whole national consistency issue, the whole being able to compare kids in Idaho and Maine, the whole keeping everyone on the same page so mobile students will never get lost-- that's no longer the point.
Duncan goes on to display how much he doesn't understand about how this works. He talks about how, under NCLB, too many states dummied down standards. He says this was "to make politicians look good." I'd be more inclined to say "to avoid punitive consequences for their schools." If Arne had reached my conclusion (and really, given that he was in charge of a large school district at the time, it's kind of amazing that he didn't reach my conclusion) then perhaps he wouldn't have figured that the solution was to make the consequences of high stakes testing even more punitive than before.
Insert story here of how schools lied to students about how ready they were for college. So brave governors decided to stop lying to children. "Let's have true college and career ready standards for every single child." As always I wonder why reaching that conclusion leads to a next step where one says, "Let's hire a couple of guys who have no real education experience, either pedagogical or developmental, and have them whip something up."
Hayes: When you say it like that, it sounds swell. But instead this is very polarizing. Arne looks dumbfounded like "I know, right, dude? What is up with these crazy people?" and Hayes continues to point out that Jeb Bush is going to have to spend a bunch of time in Iowa confronting people (unless his huge ad buy actually helps and....nahh).
Duncan: It's only polarizing to politicians. If you talk to parents, to real parents--
And Hayes cuts him off to say "I disagree. I strongly disagree" which is an appropriate response to Arne's deep-fried fluffernuttery. It's ironic. Duncan is all "let's keep politics out of this" and yet the whole "this is polticians raising a stink and real parents just love it" is, of course, pure political spin.
Duncan soldiers on. If you ask parents if they want their children to really be college and career ready, do you want them to be able to write well, think critically, have a real chance at life, parents think that's just swell.
Hayes: That's right. But if you go in and say Common Core-- and he cuts to specific examples all across the country of kids coming home with dumb crap or taking a terrible test and the source of their kid's anxiety is Common Core. Common Core has become the name for all testing related stress.
And I'm going to interrupt to say, yes, that's right, because at this point "Common Core" is a deeply meaningless term. Duncan's point is also deeply dumb, because it assumes the sale. Sure parents want all those things-- but there is not an iota of evidence that Common Core is linked to any of them.
Look. If I say right now that I'm hungry and ready for supper, and you bring me out a plate of steaming hot liver covered in peppermint ice cream and pickles, when I say "Get this out of here," you would be an idiot to be puzzled and ask, "But I thought you wanted supper." Common Core is steaming hot liver covered in peppermint ice cream and pickles, with sauerkraut on the side.
Anyway.
Duncan: People are just confused and misinformed. The higher standards are different degrees of higherness in different places. We need to communicate with parents and students-- which is just a great insight to have five years into this mess. I suppose it's an improvement that he didn't just call white suburban moms big babies. Again.
Now he's going to trot out Tennessee as an example-- he looks really excited, like he just thought of the correct answer for a tough test-- which is brave given the mess that Tennessee has become, including the slinking away of reformster Kevin Huffman last fall. But the state was brave enough to tell their students that they all sucked, and now they are rapidly improving by some measure that we're not going to discuss.
Hayes: Softball round. Here's the Ted Cruz quote about repealing every word of Common Core and get the feds out of curriculum. Ted is of course wrong twice-- Common Core isn't in any federal law and it's already illegal for the feds to mess with curriculum. Let's see if Arne can handle this high lob.
And he gets it. And he looks so happy. Duncan always looks so pleased and surprised when he really nails something.
In the next over-talking portion, Arne says that we never claimed that the standards were universal. Which is...wellllll. It's true the administration has been pretty careful about not saying things that could be construed as, say, illegal federal directing of state education. But if you look at, say, Duncan's 2010 speech about the Big Vision, there's an awful lot of talk about how this will bring the whole nation up to equal excellence and scary stuff like this:
The North Star guiding the alignment of our cradle-to-career education agenda is President Obama’s goal that America will once again have the highest proportion of college graduates in the world.
That goal can only be achieved by creating a strong cradle-to-career continuum that starts with early childhood learning and extends all the way to college and careers.
This would probably be the time to note that the original draft of Race to the Top allegedly mentions CCSS by name. [Can't find a link-- if you've got it, leave it in the comments.]
Duncan plows on. States should do their own thing, but their universities should be saying that freshmen don't need remedial classes, which-- you do remember that CCSS only covers math and language, right, Arne?
Hayes: There is a question of who makes those standards. The fear is "that some nefarious actor somewhere..." and he doesn't really need to finish the sentence because "nefarious actor" sufficiently conveys that some critics be crazy.
Duncan: Nobody nefarious here. This has been led on the local level by governors from both parties (in some cases, "led" so much that they signed up for the standards before they were completed). This has also been led by educators, fantastic teachers-- and I'll give him a pass on what exactly "led" means in this context because I just know he's not silly enough to trot out the old canard about teachers helping to create the Core.
Hayes: Finally, a higher ed question. The for-profit Corinthian chain comes up, and that is not Arne's happy face. Corinthian, disaster, and federal government all make it into the same sentence, but Hayes fumbles this one, saying that the chain was essentially cut off from federal loans, and no, not so much. The feds were remarkably reluctant to kick Corinthian off the federal teat. Either way, there are now students with lots of debt and not so much education. Nine attorney generals are calling for the USED to forgive the loans. Are you going to do that?
Duncan: We're looking at this very closely. Duncan takes credit for the gainful employment measure and Hayes interrupts to call it one of the best things this department has ever done. Anyway, Duncan is watching the hell out of this, and even talked to some of the students.
Hayes: That's a non-answer (I love Hayes a little bit more).
Duncan tries to rally by adding a very (We are looking at this very very closely) and how it's about bad actors (cousins to the nefarious actors) who were allowed to just do whatever, which is swell, but does not address why the USED, which is already making obscene amounts of profit from student loans, can't just tear these loans up. But, boy, he's not going to tolerate any more of this bad acting, even though the department has been tolerating the heck out of it for over a year. There's no excuse at all for this weaselly response unless he's just afraid to say out loud that the department is deeply committed to looking out for the interests of the investors in Corinthian, which might be reflected by the association of Undersecretary of Education Ted Mitchell, whose qualifications for his job were his long history in the for-profit school industry. Duncan finishes with some noise about how he's not afraid of political pushback on the thing that he might do some day after he's done looking very very closely at the situation.
And we're done.
Kudos to Chris Hayes for pressing Duncan a tad harder than anybody else at MSNBC is ever inclined to, thereby adding to our gallery of ever-changing Common Core narratives. But this was still largely a baloney-delivering conduit for Arne, who should be limited to only so many stretchers per tv appearance, and he was once again over his limit.
Hayes starts by saying that CCSS has trouble because it has been conflated with high stakes testing which was linked to all sorts of stuff because of NCLB. This skips past the Obama/Duncan administration's role in bolting high stakes testing to everything from school evaluation to teacher evaluation, but okay. We're only seven seconds in.
Hayes leads with a fun question-- what, if anything, has been achieved in the years since NCLB was signed by Bush?
Duncan: Fixing achievement gaps is the big achievement, but NCLB "has been broken for a while" (which raises the question-- was it ever not broken) and Congress also sucks. So the administration "partnered with states" to provide waivers which allowed them to part ways with the most onerous parts of the law. Which begs a huge question-- outside of the absurd 100% above average test scores requirement, was there any part of NCLB that wasn't given a huge shot of steroids under waivers? Sadly, Hayes is not going to ask that question.
Hayes: My reading of the data (and one of the problems is that there's so much data you can read anything) is that the testing gap (and I love him just a little for calling it a testing gap and not an achievement gap) hasn't really narrowed at all, "certainly not the narrowing that we were promised back in 2001."
Duncan: We have a long way to go. (Which is true in the same way that I have a long way to go to get to Chicago because I'm still sitting in my office at home.) Anyway, we've seen gains over the past twenty-thirty years, but it's not fast enough. So this law has to be about equity. So put politics aside (says the guy who's got no political juice left in his thermos). This law also has to be about early childhood education, because that will level the playing field. Also, we have to bring more dollars to disadvantaged communities. The children who need the most get the least, says the man whose administration likes to frame all aid and grant proposals as competitions. But he thinks maybe Congress can fix inequity.
Hayes: I want to talk about Common Core for a second. (And he smiles a little smile, like "let's do this silly thing, I'm going to ask a question, you're going to sling baloney, it'll be fun"). Are you surprised by how controversial Common Core (which he characterizes as "kind of an obscure issue in certain ways") has become?
Duncan: "It's actually very simple. The goal's to have high standards." So, kids, the whole national consistency issue, the whole being able to compare kids in Idaho and Maine, the whole keeping everyone on the same page so mobile students will never get lost-- that's no longer the point.
Duncan goes on to display how much he doesn't understand about how this works. He talks about how, under NCLB, too many states dummied down standards. He says this was "to make politicians look good." I'd be more inclined to say "to avoid punitive consequences for their schools." If Arne had reached my conclusion (and really, given that he was in charge of a large school district at the time, it's kind of amazing that he didn't reach my conclusion) then perhaps he wouldn't have figured that the solution was to make the consequences of high stakes testing even more punitive than before.
Insert story here of how schools lied to students about how ready they were for college. So brave governors decided to stop lying to children. "Let's have true college and career ready standards for every single child." As always I wonder why reaching that conclusion leads to a next step where one says, "Let's hire a couple of guys who have no real education experience, either pedagogical or developmental, and have them whip something up."
Hayes: When you say it like that, it sounds swell. But instead this is very polarizing. Arne looks dumbfounded like "I know, right, dude? What is up with these crazy people?" and Hayes continues to point out that Jeb Bush is going to have to spend a bunch of time in Iowa confronting people (unless his huge ad buy actually helps and....nahh).
Duncan: It's only polarizing to politicians. If you talk to parents, to real parents--
And Hayes cuts him off to say "I disagree. I strongly disagree" which is an appropriate response to Arne's deep-fried fluffernuttery. It's ironic. Duncan is all "let's keep politics out of this" and yet the whole "this is polticians raising a stink and real parents just love it" is, of course, pure political spin.
Duncan soldiers on. If you ask parents if they want their children to really be college and career ready, do you want them to be able to write well, think critically, have a real chance at life, parents think that's just swell.
Hayes: That's right. But if you go in and say Common Core-- and he cuts to specific examples all across the country of kids coming home with dumb crap or taking a terrible test and the source of their kid's anxiety is Common Core. Common Core has become the name for all testing related stress.
And I'm going to interrupt to say, yes, that's right, because at this point "Common Core" is a deeply meaningless term. Duncan's point is also deeply dumb, because it assumes the sale. Sure parents want all those things-- but there is not an iota of evidence that Common Core is linked to any of them.
Look. If I say right now that I'm hungry and ready for supper, and you bring me out a plate of steaming hot liver covered in peppermint ice cream and pickles, when I say "Get this out of here," you would be an idiot to be puzzled and ask, "But I thought you wanted supper." Common Core is steaming hot liver covered in peppermint ice cream and pickles, with sauerkraut on the side.
Anyway.
Duncan: People are just confused and misinformed. The higher standards are different degrees of higherness in different places. We need to communicate with parents and students-- which is just a great insight to have five years into this mess. I suppose it's an improvement that he didn't just call white suburban moms big babies. Again.
Now he's going to trot out Tennessee as an example-- he looks really excited, like he just thought of the correct answer for a tough test-- which is brave given the mess that Tennessee has become, including the slinking away of reformster Kevin Huffman last fall. But the state was brave enough to tell their students that they all sucked, and now they are rapidly improving by some measure that we're not going to discuss.
Hayes: Softball round. Here's the Ted Cruz quote about repealing every word of Common Core and get the feds out of curriculum. Ted is of course wrong twice-- Common Core isn't in any federal law and it's already illegal for the feds to mess with curriculum. Let's see if Arne can handle this high lob.
And he gets it. And he looks so happy. Duncan always looks so pleased and surprised when he really nails something.
In the next over-talking portion, Arne says that we never claimed that the standards were universal. Which is...wellllll. It's true the administration has been pretty careful about not saying things that could be construed as, say, illegal federal directing of state education. But if you look at, say, Duncan's 2010 speech about the Big Vision, there's an awful lot of talk about how this will bring the whole nation up to equal excellence and scary stuff like this:
The North Star guiding the alignment of our cradle-to-career education agenda is President Obama’s goal that America will once again have the highest proportion of college graduates in the world.
That goal can only be achieved by creating a strong cradle-to-career continuum that starts with early childhood learning and extends all the way to college and careers.
This would probably be the time to note that the original draft of Race to the Top allegedly mentions CCSS by name. [Can't find a link-- if you've got it, leave it in the comments.]
Duncan plows on. States should do their own thing, but their universities should be saying that freshmen don't need remedial classes, which-- you do remember that CCSS only covers math and language, right, Arne?
Hayes: There is a question of who makes those standards. The fear is "that some nefarious actor somewhere..." and he doesn't really need to finish the sentence because "nefarious actor" sufficiently conveys that some critics be crazy.
Duncan: Nobody nefarious here. This has been led on the local level by governors from both parties (in some cases, "led" so much that they signed up for the standards before they were completed). This has also been led by educators, fantastic teachers-- and I'll give him a pass on what exactly "led" means in this context because I just know he's not silly enough to trot out the old canard about teachers helping to create the Core.
Hayes: Finally, a higher ed question. The for-profit Corinthian chain comes up, and that is not Arne's happy face. Corinthian, disaster, and federal government all make it into the same sentence, but Hayes fumbles this one, saying that the chain was essentially cut off from federal loans, and no, not so much. The feds were remarkably reluctant to kick Corinthian off the federal teat. Either way, there are now students with lots of debt and not so much education. Nine attorney generals are calling for the USED to forgive the loans. Are you going to do that?
Duncan: We're looking at this very closely. Duncan takes credit for the gainful employment measure and Hayes interrupts to call it one of the best things this department has ever done. Anyway, Duncan is watching the hell out of this, and even talked to some of the students.
Hayes: That's a non-answer (I love Hayes a little bit more).
Duncan tries to rally by adding a very (We are looking at this very very closely) and how it's about bad actors (cousins to the nefarious actors) who were allowed to just do whatever, which is swell, but does not address why the USED, which is already making obscene amounts of profit from student loans, can't just tear these loans up. But, boy, he's not going to tolerate any more of this bad acting, even though the department has been tolerating the heck out of it for over a year. There's no excuse at all for this weaselly response unless he's just afraid to say out loud that the department is deeply committed to looking out for the interests of the investors in Corinthian, which might be reflected by the association of Undersecretary of Education Ted Mitchell, whose qualifications for his job were his long history in the for-profit school industry. Duncan finishes with some noise about how he's not afraid of political pushback on the thing that he might do some day after he's done looking very very closely at the situation.
And we're done.
Kudos to Chris Hayes for pressing Duncan a tad harder than anybody else at MSNBC is ever inclined to, thereby adding to our gallery of ever-changing Common Core narratives. But this was still largely a baloney-delivering conduit for Arne, who should be limited to only so many stretchers per tv appearance, and he was once again over his limit.
Tuesday, February 3, 2015
USED Continues To Support Predatory Colleges
The Department of Education is pleased to announce that their program to preserve the school-to-debt pipeline is proceeding apace.
You may recall that the USED once declared they would crack down on predatory for-profit flim-flam artists masquerading as colleges. You may also recall that, when presented with an exceptional example of a chain of egregious sharks, the USED finally stepped in to preserve the interests of everyone except the students involved in the massive scame.
I've covered the story of the USED and Corinthian Colleges before; the more detailed version is here. Let's look at what today's cheery press release actually says.
Zenith Education Group has announced that they have finished glomming up fifty-some campuses from Corinthian College, in a deal that has been under construction since November.
Zenith is a subsidiary of Educational Credit Management Company. ECMC is a debt collection company, specializing in chasing down student loan repayment. Apparently they have pursued those debts a bit overzealously at times, but here they are, cutting out the middle man. Exactly what expertise the "newly created" Zenith has in operating colleges (other than chasing the debts that students run up paying tuition to them) is not clear. But the removal of the middle man allows Zenith to turn these for profit schools into non-profits. After all, I don't have to make money collecting tuition from you if I can make money from selling you the loan for the tuition money.
When they call Zenith "newly created," they aren't kidding. Bizapedia shows them forming in December of 2014. The company is filed in Florida, but it operates out of Oakdale, Minnesota (the six principals are Gary M. Cook, John F. Depodesta, Daniel S Fisher, David L. Hawn, James V. McKeon, and Gregory A. Van Guilder) at 1 Imation Place in the same building as the other ECMC offices reside, plus Premiere Credit of North America LLC. Cook was or is the director of ECMC Technology Services Corporation. DePodesta is the ECMC chairman of the board.
Zenith's interim president is Troy A. Stovall, who "comes to the position with eight years of leadership experience in nonprofit higher education administration and a distinguished background serving in various management consulting and advisory roles." So he totally knows about education. Most recently he was the Executive Vice President and Chief Operating Officer for Howard University, but he also runs his own consulting firm; his LinkedIn profile includes a plug for Time Driven Activity Based Costing, so apparently he speaks fluent consultantese. He's also a principal at something called Oak Forest Ventures, "a solutions firm dedicated to substantially improving the profitability of its clients."
Are you getting the impression that this is way more about business and money than about education and a future for students?
Zenith has a chirpy new website. It touts the qualities of, but does not list by name, its "employees." So, not a faculty, I guess. And they have a whole tab devoted to their partners:
We intend to graduate high-performing, highly skilled students from our schools, and our new partnership program will identify high-quality employers in industries with clear local workforce needs that are sufficiently equipped to support students as they work to embark upon their new careers.
One can hope that will become a bit more concrete and nailed down, as one of Corinthian's many scam-related issues was its tendency to create fake employment for its students to hide its lousy job placement record. This is not great for schools specifically devoted to preparing students for a place in the workforce.
A look at the "our schools" tab confirms what news reports imply-- Zenith has no schools in its chain other than the ones it just grabbed from Corinthian.
That grabbage depended hugely on the USED's involvement. So when they said that they would drop the hammer on predatory colleges, apparently by "hammer" they meant "big fluffy hammer sculpted out of money." Truthout tells the story and makes the case that the USED is saving a chunk of its own bacon. If Corinthian had simply gone belly up or been shut down by the feds, some students would have had the option of a get-out-of-loans free cards, which could have cost the USED a few hundred million bucks. The USED has reportedly been making big bucks from student loans, so anti-shark measures may not be in their business interests.
As part of the deal, "the parties agreed to pay the Department $12 million in an up-front payment, and up to an additional $17.25 million earn-out over the next seven years that will be used to benefit Corinthian students." The Department is announcing a $480 million loan forgiveness plan for borrowers who paid their way to Corinthian with high-cost private loans. Who this covers is not clear from the USED press release, but in any version, it's not much help. If the $480 mill is split over the 30,000 students who just became assets traded from Corinthian to Zenith, that's about $16K. If we add in current Corinthian students as well, it's closer to $7K. The press release says this money will also help past Corinthian students get a fresh start, so that $480 mill is looking tinier and tinier.
The USED also cheerfully reports that Zenith has agreed to all manner of swell things, like voluntarily hiring an independent monitor, which is right up there with politicians setting up ethics committee to oversee their own behavior, under their own direction. I'm not impressed.
Also, "in the months since the announcement of the sale" (which would be December and January) "Zenith has agreed to implement a series of improvements to improve outcomes, strengthen career training, and ensure accountability and transparency." Yes, boys and girls, in just two months (with, presumably, time off for to celebrate Christmas and the big fat present Santa Duncan was delivering) Zenith managed to retool an entire college system that was previously designed to fraudulently use students as straws through which to suck up delicious loan money. Given an organization run by guys who have no actual college-running experience, that is a managerial feat of amazing skill and bullshittery.
Here's the big finish to the federal PR notice:
Throughout, the Department has sought a wind down of Corinthian Colleges that protects students, protects the investment taxpayers have made in their success, and creates opportunities for students to finish what they started. The Department has also sought a resolution that, where possible, establishes a strong and ongoing platform for high quality career education in the future. Today’s announcement by Zenith and Corinthian is a major and positive step in these directions.
And here's how I described this story the last time I covered it
Short version: feds threatened to shut down predatory loan-sucking for-profit scam schools, but decided to bail them out instead. Kind of like finding people in a burning building and saying, "You guys just stay there inside. We're going to hire someone to paint the place."
Once again, we see that zealous federal oversight is for public schools. For privately operated school-flavored businesses, the feds are there to make sure that nothing interrupts the sweet. sweet stream of money flowing to private pockets. It is always possible that Zenith will turn out to be awesome stewards of education, I suppose. But for students, it's a caveat emptor world. For businesses, don't worry-- the government will always watch your back. And don't forget-- this deal was only for a portion of the Corinthian chain-- the rest is still out there, still in business, still preying away. Caveat emptor, indeed.
You may recall that the USED once declared they would crack down on predatory for-profit flim-flam artists masquerading as colleges. You may also recall that, when presented with an exceptional example of a chain of egregious sharks, the USED finally stepped in to preserve the interests of everyone except the students involved in the massive scame.
I've covered the story of the USED and Corinthian Colleges before; the more detailed version is here. Let's look at what today's cheery press release actually says.
Zenith Education Group has announced that they have finished glomming up fifty-some campuses from Corinthian College, in a deal that has been under construction since November.
Zenith is a subsidiary of Educational Credit Management Company. ECMC is a debt collection company, specializing in chasing down student loan repayment. Apparently they have pursued those debts a bit overzealously at times, but here they are, cutting out the middle man. Exactly what expertise the "newly created" Zenith has in operating colleges (other than chasing the debts that students run up paying tuition to them) is not clear. But the removal of the middle man allows Zenith to turn these for profit schools into non-profits. After all, I don't have to make money collecting tuition from you if I can make money from selling you the loan for the tuition money.
When they call Zenith "newly created," they aren't kidding. Bizapedia shows them forming in December of 2014. The company is filed in Florida, but it operates out of Oakdale, Minnesota (the six principals are Gary M. Cook, John F. Depodesta, Daniel S Fisher, David L. Hawn, James V. McKeon, and Gregory A. Van Guilder) at 1 Imation Place in the same building as the other ECMC offices reside, plus Premiere Credit of North America LLC. Cook was or is the director of ECMC Technology Services Corporation. DePodesta is the ECMC chairman of the board.
Zenith's interim president is Troy A. Stovall, who "comes to the position with eight years of leadership experience in nonprofit higher education administration and a distinguished background serving in various management consulting and advisory roles." So he totally knows about education. Most recently he was the Executive Vice President and Chief Operating Officer for Howard University, but he also runs his own consulting firm; his LinkedIn profile includes a plug for Time Driven Activity Based Costing, so apparently he speaks fluent consultantese. He's also a principal at something called Oak Forest Ventures, "a solutions firm dedicated to substantially improving the profitability of its clients."
Are you getting the impression that this is way more about business and money than about education and a future for students?
Zenith has a chirpy new website. It touts the qualities of, but does not list by name, its "employees." So, not a faculty, I guess. And they have a whole tab devoted to their partners:
We intend to graduate high-performing, highly skilled students from our schools, and our new partnership program will identify high-quality employers in industries with clear local workforce needs that are sufficiently equipped to support students as they work to embark upon their new careers.
One can hope that will become a bit more concrete and nailed down, as one of Corinthian's many scam-related issues was its tendency to create fake employment for its students to hide its lousy job placement record. This is not great for schools specifically devoted to preparing students for a place in the workforce.
A look at the "our schools" tab confirms what news reports imply-- Zenith has no schools in its chain other than the ones it just grabbed from Corinthian.
That grabbage depended hugely on the USED's involvement. So when they said that they would drop the hammer on predatory colleges, apparently by "hammer" they meant "big fluffy hammer sculpted out of money." Truthout tells the story and makes the case that the USED is saving a chunk of its own bacon. If Corinthian had simply gone belly up or been shut down by the feds, some students would have had the option of a get-out-of-loans free cards, which could have cost the USED a few hundred million bucks. The USED has reportedly been making big bucks from student loans, so anti-shark measures may not be in their business interests.
As part of the deal, "the parties agreed to pay the Department $12 million in an up-front payment, and up to an additional $17.25 million earn-out over the next seven years that will be used to benefit Corinthian students." The Department is announcing a $480 million loan forgiveness plan for borrowers who paid their way to Corinthian with high-cost private loans. Who this covers is not clear from the USED press release, but in any version, it's not much help. If the $480 mill is split over the 30,000 students who just became assets traded from Corinthian to Zenith, that's about $16K. If we add in current Corinthian students as well, it's closer to $7K. The press release says this money will also help past Corinthian students get a fresh start, so that $480 mill is looking tinier and tinier.
The USED also cheerfully reports that Zenith has agreed to all manner of swell things, like voluntarily hiring an independent monitor, which is right up there with politicians setting up ethics committee to oversee their own behavior, under their own direction. I'm not impressed.
Also, "in the months since the announcement of the sale" (which would be December and January) "Zenith has agreed to implement a series of improvements to improve outcomes, strengthen career training, and ensure accountability and transparency." Yes, boys and girls, in just two months (with, presumably, time off for to celebrate Christmas and the big fat present Santa Duncan was delivering) Zenith managed to retool an entire college system that was previously designed to fraudulently use students as straws through which to suck up delicious loan money. Given an organization run by guys who have no actual college-running experience, that is a managerial feat of amazing skill and bullshittery.
Here's the big finish to the federal PR notice:
Throughout, the Department has sought a wind down of Corinthian Colleges that protects students, protects the investment taxpayers have made in their success, and creates opportunities for students to finish what they started. The Department has also sought a resolution that, where possible, establishes a strong and ongoing platform for high quality career education in the future. Today’s announcement by Zenith and Corinthian is a major and positive step in these directions.
And here's how I described this story the last time I covered it
Short version: feds threatened to shut down predatory loan-sucking for-profit scam schools, but decided to bail them out instead. Kind of like finding people in a burning building and saying, "You guys just stay there inside. We're going to hire someone to paint the place."
Once again, we see that zealous federal oversight is for public schools. For privately operated school-flavored businesses, the feds are there to make sure that nothing interrupts the sweet. sweet stream of money flowing to private pockets. It is always possible that Zenith will turn out to be awesome stewards of education, I suppose. But for students, it's a caveat emptor world. For businesses, don't worry-- the government will always watch your back. And don't forget-- this deal was only for a portion of the Corinthian chain-- the rest is still out there, still in business, still preying away. Caveat emptor, indeed.
Saturday, November 29, 2014
Feds Committed To Preserving Crappy Colleges
You may recall that the Corinthian College for-profit chain was in trouble. Specifically, they were in trouble for 1) running a massive scam and 2) not even running it successfully.
For-profit colleges are a great study in how a voucher system really works. The feds grant higher ed vouchers to a sector of potential students, and then various institutions compete to get those vouchers. Do they compete by being the most awesome providers of the most excellent education? Don't be ridiculous. Do Coke and Pepsi compete by trying to create the most excellent, healthful beverage, or by piling on the marketing and putting in just enough sugary sweetness to trigger the monkey pleasure centers in our brains?
So these for-profit colleges specialized in marketing techniques like Empty Promises and Lying About Previous Results.
And of course, there's one significant difference between this system of vouchers as compared to the usual-- these are vouchers that students have to pay back with interest (which turns out to be difficult when you've sunk all your money in an education that doesn't get you a good job).
Anyway, the full story is here. Short version: feds threatened to shut down predatory loan-sucking for-profit scam schools, but decided to bail them out instead. Kind of like finding people in a burning building and saying, "You guys just stay there inside. We're going to hire someone to paint the place."
Now we've arrived at Chapter 2. After bailing Corinthian out so that students could continue to stay warm and toasty inside the burning building, the feds are supporting a new deal. As reported in the Washington Post, a chunk of the chain has been bought up by----- a debt collection company!
“What we are seeing is an unprecedented attempt on the part of a regulator to prop up one of the very worst companies in the industry,” said Barmak Nassirian, director of federal relations and policy analysis for the American Association of State Colleges and Universities. “You could debate which is better — allowing a predatory operation to collapse, or keeping it on life support so that it could victimize more people. That is what the federal government has done.”
Nassirian is being generous-- I'm not sure exactly what the argument for allowing predatory operations to collapse, other than it would be disruptive for the students sooner than letting them finish school and then finding out that they've been had.
Educational Credit Management Corporation is the buyer, and if you've heard horror stories about students being relentlessly pursued to pay up school debts, these guys were probably the monster under those stairs. They've been spanked a few times for overzealous pursuit of the money. They might seem to be, to say the least, an odd choice to own and operate a for-profit college chain.
ECMC is an odd choice to run chunks of Corinthian only if you think the purpose of these schools is to provide an education. If you understand that the whole for-profit college biz exists only to move school loan money around so that outfits can make money from the process every time the dollars change hands. For-profits exists in order to convince students to go into debt; the school collects the principal, and the owners of the loans collect the interest, and the students collect the debt. It is a great model for privatizing profit while sloughing the risk and debt off on citizens. So ECMC, as a debt collector, is simply getting into some vertical integration, making money from the loans both coming and going (earlier this year they also acquired College Abacus "the kayak.com of college loans). They can hire somebody to maintain the illusion that there is an actual school at the center of this giant scam, and do it through their own Zenith Education Group subsidiary so that not a single delicious dollar leaks out of any of the seams.
How do federal authorities feel about these efforts to keep a shark in the educational waters? Are you kidding? They helped broker the deal. Because in all of this, it's far more important that the for-profits remain intact and viable than the futures of tens of thousands of students be safeguarded. This is as if Gerber laced a hundred thousand jars of baby food with arsenic and the fed's first priority was to make sure the company was okay while leaving the babies to just fend for themselves.
I'm sure that the obscene profits that the fed makes from student loans has nothing to do with this. It couldn't be that nobody called it a bad idea, because many, many people have spoken out at every step of this process. From the Huffington Post:
“While bailing out 56 schools, the sale treats the more than 30,000 students like financial assets,” said Maggie Thompson, manager of the Higher Ed, Not Debt campaign.
“If you’re supposedly a regulatory agency, and your mission is to protect students, why wouldn’t you want students to know that?” said Mark Huelsman, a senior policy analyst at policy organization Demos. The Education Department, in effect, allowed Corinthian to enroll as many students as it wanted, even as it teetered on insolvency -- ignoring the demands of a dozen Democratic senators.
From the Washington Post:
“Corinthian faced enrollment challenges and regulatory scrutiny common to other for-profits, but the thing that did them in at the end of the day was plain old mismanagement,” [Trace Urdan, a higher education analyst at Wells Fargo Securities] said. “They failed to cut costs like they needed to, operating under the assumption that next year would be better — and it never was.”
Rep. Steve Cohen (D-Tenn.) said he was “shocked” that the Education Department would support the deal and questioned whether keeping Corinthian open under any management was in the best interest of students or taxpayers.
“To prop up a school whose main purpose seems to be to get federal money is a misguided use of federal funds,” Cohen said. “When a school like [Corinthian] that has a checkered history is on the mat, throw in the towel. It’s over.”
But here's who liked it:
“We are glad that Corinthian has reached an agreement with ECMC Group and believe that this transition will allow students to maintain progress toward achieving their educational and career goals and protect taxpayers’ investment, while Corinthian moves out of the business,” Undersecretary of Education Ted Mitchell said in a statement.
The whole Corinthian mess is as clear an example as we've ever seen of the federal government putting corporate interests ahead of the interests of citizens. It's also a fine example of the federal policy of say one thing, do another. Just last month, Arne Duncan said
“Career colleges must be a stepping stone to the middle class. But too many hard-working students find themselves buried in debt with little to show for it. That is simply unacceptable.”
It's unacceptable. But not so unacceptable that we're going to do anything about it.
It's not complicated. If you want an example of for-profit colleges that bury hard-working least-able-to-afford it students under debt while giving them nothing to show for it, you could not find a clearer example than Corinthian. If the feds couldn't bring themselves to intervene on behalf of students in this situation, they never will. The US ED can talk all it wants, but its actions show the truth, and the truth is that predatory for-profit schools get no punishment and plenty of profitable help from Arne Duncan's department.
For-profit colleges are a great study in how a voucher system really works. The feds grant higher ed vouchers to a sector of potential students, and then various institutions compete to get those vouchers. Do they compete by being the most awesome providers of the most excellent education? Don't be ridiculous. Do Coke and Pepsi compete by trying to create the most excellent, healthful beverage, or by piling on the marketing and putting in just enough sugary sweetness to trigger the monkey pleasure centers in our brains?
So these for-profit colleges specialized in marketing techniques like Empty Promises and Lying About Previous Results.
And of course, there's one significant difference between this system of vouchers as compared to the usual-- these are vouchers that students have to pay back with interest (which turns out to be difficult when you've sunk all your money in an education that doesn't get you a good job).
Anyway, the full story is here. Short version: feds threatened to shut down predatory loan-sucking for-profit scam schools, but decided to bail them out instead. Kind of like finding people in a burning building and saying, "You guys just stay there inside. We're going to hire someone to paint the place."
Now we've arrived at Chapter 2. After bailing Corinthian out so that students could continue to stay warm and toasty inside the burning building, the feds are supporting a new deal. As reported in the Washington Post, a chunk of the chain has been bought up by----- a debt collection company!
“What we are seeing is an unprecedented attempt on the part of a regulator to prop up one of the very worst companies in the industry,” said Barmak Nassirian, director of federal relations and policy analysis for the American Association of State Colleges and Universities. “You could debate which is better — allowing a predatory operation to collapse, or keeping it on life support so that it could victimize more people. That is what the federal government has done.”
Nassirian is being generous-- I'm not sure exactly what the argument for allowing predatory operations to collapse, other than it would be disruptive for the students sooner than letting them finish school and then finding out that they've been had.
Educational Credit Management Corporation is the buyer, and if you've heard horror stories about students being relentlessly pursued to pay up school debts, these guys were probably the monster under those stairs. They've been spanked a few times for overzealous pursuit of the money. They might seem to be, to say the least, an odd choice to own and operate a for-profit college chain.
ECMC is an odd choice to run chunks of Corinthian only if you think the purpose of these schools is to provide an education. If you understand that the whole for-profit college biz exists only to move school loan money around so that outfits can make money from the process every time the dollars change hands. For-profits exists in order to convince students to go into debt; the school collects the principal, and the owners of the loans collect the interest, and the students collect the debt. It is a great model for privatizing profit while sloughing the risk and debt off on citizens. So ECMC, as a debt collector, is simply getting into some vertical integration, making money from the loans both coming and going (earlier this year they also acquired College Abacus "the kayak.com of college loans). They can hire somebody to maintain the illusion that there is an actual school at the center of this giant scam, and do it through their own Zenith Education Group subsidiary so that not a single delicious dollar leaks out of any of the seams.
How do federal authorities feel about these efforts to keep a shark in the educational waters? Are you kidding? They helped broker the deal. Because in all of this, it's far more important that the for-profits remain intact and viable than the futures of tens of thousands of students be safeguarded. This is as if Gerber laced a hundred thousand jars of baby food with arsenic and the fed's first priority was to make sure the company was okay while leaving the babies to just fend for themselves.
I'm sure that the obscene profits that the fed makes from student loans has nothing to do with this. It couldn't be that nobody called it a bad idea, because many, many people have spoken out at every step of this process. From the Huffington Post:
“While bailing out 56 schools, the sale treats the more than 30,000 students like financial assets,” said Maggie Thompson, manager of the Higher Ed, Not Debt campaign.
“If you’re supposedly a regulatory agency, and your mission is to protect students, why wouldn’t you want students to know that?” said Mark Huelsman, a senior policy analyst at policy organization Demos. The Education Department, in effect, allowed Corinthian to enroll as many students as it wanted, even as it teetered on insolvency -- ignoring the demands of a dozen Democratic senators.
From the Washington Post:
“Corinthian faced enrollment challenges and regulatory scrutiny common to other for-profits, but the thing that did them in at the end of the day was plain old mismanagement,” [Trace Urdan, a higher education analyst at Wells Fargo Securities] said. “They failed to cut costs like they needed to, operating under the assumption that next year would be better — and it never was.”
Rep. Steve Cohen (D-Tenn.) said he was “shocked” that the Education Department would support the deal and questioned whether keeping Corinthian open under any management was in the best interest of students or taxpayers.
“To prop up a school whose main purpose seems to be to get federal money is a misguided use of federal funds,” Cohen said. “When a school like [Corinthian] that has a checkered history is on the mat, throw in the towel. It’s over.”
But here's who liked it:
“We are glad that Corinthian has reached an agreement with ECMC Group and believe that this transition will allow students to maintain progress toward achieving their educational and career goals and protect taxpayers’ investment, while Corinthian moves out of the business,” Undersecretary of Education Ted Mitchell said in a statement.
The whole Corinthian mess is as clear an example as we've ever seen of the federal government putting corporate interests ahead of the interests of citizens. It's also a fine example of the federal policy of say one thing, do another. Just last month, Arne Duncan said
“Career colleges must be a stepping stone to the middle class. But too many hard-working students find themselves buried in debt with little to show for it. That is simply unacceptable.”
It's unacceptable. But not so unacceptable that we're going to do anything about it.
It's not complicated. If you want an example of for-profit colleges that bury hard-working least-able-to-afford it students under debt while giving them nothing to show for it, you could not find a clearer example than Corinthian. If the feds couldn't bring themselves to intervene on behalf of students in this situation, they never will. The US ED can talk all it wants, but its actions show the truth, and the truth is that predatory for-profit schools get no punishment and plenty of profitable help from Arne Duncan's department.
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