My case

My case: I consider government policy and actions to be the springboard for for-profits to create their business model. The huge influx of students enrolling at for-profits and the government funding of these students are allowing for-profits to reap large profits. What stands out is that the people who run the for-profits are aware that they are running a business that sole purpose is to make money. This equates to the minimal in everything regarding education at these colleges because funding education costs money. My conclusion is that our government has been bought out by for-profits to enable these business to prey on the lower class.

           

Here are some links that I use in my paper and are very interesting.

 http://www.huffingtonpost.com/2012/08/30/for-profit-colleges-lobbying_n_1842507.html

http://www.huffingtonpost.com/2012/06/26/for-profit-colleges-new-measures_n_1626286.html

http://www.theatlantic.com/features/archive/2014/08/the-law-school-scam/375069/

http://www.usatoday.com/story/news/nation/2013/11/25/federal-student-loan-profit/3696009/

For-Profit colleges gobbling up funds

Like the caption says, For-profits are gobbling up funds which come directly from tax payer dollars. This picture is of tremendous importance when you consider the extremely high default rates of students at for-profit institutions. This is meaning that the government is pouring money into a sector of higher education that does not produce much success but enriching its own executives.

LR #4

MCGUIRE, MATTHEW A. "Subprime Education: For-Profit Colleges And The Problem With Title Iv Federal Student Aid." Duke Law Journal 62.1 (2012): 119-160. Academic Search Premier. Web. 13 Nov. 2014.

This scholarly article's main conclusion concerning the negative outcomes of students is that "the blame lies not with for-profit institutions but with federal student-aid policy."“[T]his Nation could never rest while the door to knowledge

remained closed to any American,” President Johnson said. The article goes on to mention how colleges are opening their doors to many students, low-income included. Although for-profits are accepting many under privileged kids and adults, their success at these schools is not frequent but instead, outcomes are usually negative. The article continues and states that amendments to laws allow for-profits to consume low-income students who are attached to title IV grants and loans.

            This article has much of the same information about for-profits as do the others on my blog BUT! This article directly incorporates government action into the problem.

“The public supply model involves direct public investment in educational institutions. These subsidized institutions, in turn, can expand access to higher education because they can offer education at a lower price.”

 VS.

“The portable-subsidy model embodied by Title IV involves granting students portable government benefits, such as grants or loans with favorable terms, to expand access to higher education by enabling the student to defray the costs of attendance.”

Clearly, for-profits are making a killing from the portable-subsidy model. The combination of this and the predatory actions by for-profits recruiters creates a tough situation for any low-income individual seeking higher education.

--“An undercover investigation by the Government Accountability Office (GAO) found that recruiters at every for-profit school targeted by the study made deceptive, if not totally fraudulent, statements to investigators posing as prospective students.”

L.R. #3

O'Malley, Susan. "The Leading Edge Of Corporatization In Higher Ed: For-Profit Colleges." Radical Teacher 93 (2012): 22-28. Academic Search Premier. Web. 17 Oct. 2014.

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). 

Research Proposal

Working title: Follow the Money

Topic: I will explore student debt and student loans as an idea that drives for-profit colleges.

Research question: Has higher education become a sweet business for those who are able to invest in (FPU)? Who benefits from increased prices of colleges? Why has the burden of paying for college fallen so heavily on the student when the government advocates so positively for educating its people?  Are current tuition prices presented to keep the lower class the lower class?

Theoretical frame: I will use information from sources to prove true that higher education, in particular (FPU) are becoming a lucrative business in many aspects. Here, education is no longer about educating, it is about the margin. The more students these colleges get to enroll equals more revenue and in addition, you will see how (FPU) keep educational costs down. One theory I will keep in my head while writing is how (FPU) are similar to fast food joints. Very low cost of production, extremely convenient and being able to cater to hundreds of thousands of people.

Research plan:

The article, "Globalization And The Emergence Of For-Profit Higher Education." Tells how society is gearing itself to the system (FPU) implements. (FPU) are very convenient because many classes are online and about 90% of those who apply get accepted. The magazine article “The Law-School Scam” answers the question, has higher education become a sweet business? The article highlights one (FPU) that was founded by a private equity firm. When recruiting students to their law school, they promised there will be jobs for them after graduation and they simply were not there. A documentary about (FPU), College, inc. interviews an entrepreneur who invests in (FPU) so he can make millions. Also, they interview a former head of University of Phoenix and in his interview he states I some way that he made more money than he ever could have imagined.

BIBLIOGRAPHY

Belfield, Clive. "Student Loans And Repayment Rates: The Role Of For-Profit Colleges." Research 

Campos, Paul. "The Law-School Scam." TheAtlantic.com. 13 Aug. 2014. Web. 14 Oct. 2014. <http://www.theatlantic.com>.

In Higher Education 54.1 (2013): 1-29. Academic Search Premier. Web. 17 Oct. 2014.

 

Morey, Ann I. "Globalization And The Emergence Of For-Profit Higher Education." Higher Education 48.1 (2004): 131-150. Academic Search Premier. Web. 8 Oct. 2014.

Tierney, W., & Hentschke, G. (2007). New Players, Different Game: Understanding the rise of for-profit colleges and Universities. Baltimore: The Johns Hopkins University Press.

Schade, Sarah Ann. "Reining In The Predatory Nature Of For-Profit Colleges." Arizona Law Review 56.1 (2014): 317-340. Academic Search Premier. Web. 17 Oct. 2014.