O’Malley has committed her time to teaching as a professor
throughout most of her professional career at City College’s center for worker
education. I would say she is a good source from her experience.
Summary:
This article starts off quickly by targeting the student debt taken
on by (FPU) students. In total the debt has increased to 1 trillion dollars and
at the same, which is no coincidence, student dropout rate is climbing. Susan
O’malley states,”
The primary purpose of for-profit colleges is to make money for
partners (in a privately held company) or for shareholders (in a publicly held corporation).”(22).
To O’Malley education is a by-product of for-profits not the reason why they
were created. I do not entirely agree with this but I will say in my paper how
for-profits adopted a scheme to make millions. In addition “Eighty-seven
percent of revenue for the 14 largest for-profit colleges is from the GI Bill,
Pell Grants, Tuition Assistance Program, and other government-backed loans paid
for by taxpayers.” These grants and federal loans come straight from the
taxpayers’ produces a question. Does this mean as a society, we are paying
double for college? “Stocks of thirteen for-profit companies, running several times
that many colleges and universities, are publicly traded. Although their
profits have recently declined, the for-profit sector made $26 billion in 2009
and outperformed the S&P 500 by about 40 percentage points during
2008-2010.” With the knowledge of students defaulting and running into large
piles of debt, they cannot be the ones who benefit from their college doing
“well” on the stock floor. The large salaries of CEO’s and the capital and
financial squeezing of faculty, the beneficiaries of for-profits seem to be the
one’s at the top of the administrative hierarchy.
Business-model: All (FPU) have business models that
suggest that they run mostly like a profit-centered corporation. Their business
model is in short to streamline education in the most cost effective way. This
equates to more profit for their investors and the administrative board.
Title IV education funds: These funds are loans and grants
issued by state and federal government to students to aid in payment of
tuition. This does not include the GI bill. The GI bill is especially important
because “colleges must obtain 10% of their revenue from sources other than
Title IV education loans. Hence, there is a scramble to recruit
veterans…”(22-23).
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