Student debt has been growing rapidly in America as college degrees become more important for getting jobs and escaping poverty. As a result, for-profit universities have jacked tuition rates and abuse supply-and-demand, which shouldn't belong in education anyway.
But there's a catch: The degrees are practically worthless. Worse, many of these colleges target African-American students, often those most in need of financial aid and a legitimate degree.
But this headlong rush of black Americans to get schooled has also led too many down a depressingly familiar path. As with the mortgage market of the pre-crash era, those who are just entering in the higher ed game have found themselves ripe for the con man’s picking. They’ve landed, disproportionately, at for-profit schools, rather than at far less expensive public community colleges, or at public universities. And that means they’ve found themselves loaded with unimaginable debt, with little to show for it, while a small group of financial players have made a great deal of easy money. Sound familiar? Two points if you hear troublesome echoes of the subprime mortgage crisis.
Most of it is being controlled by corporate America (again).
In this respect, for-profit schools function less like traditional educational institutions and more like payday lenders, rent-to-own businesses, pawn shops and the like — they all offer products that churn customers through debt for years on end. And, like the rest of the subprime market, selling for-profit degrees is especially good business in the worst of times. Career Ed’s previous CEO left his post just as the New York attorney general’s probe sent the company’s stock into free fall; he departed with a reported $5.1 million parachute. According to a Senate report last July, which used data from 2009, three-quarters of students at for-profit schools attended institutions that were owned by publicly traded corporations or private equity firms. The former had an average profit margin of nearly 20 percent — and their CEOs made an average of $7.3 million.
What a disgusting and, sadly, predictable mess in America; cheapening the future of many for the present of a few in a gross perversion of capitalism.
I'll let "Mo Money" from J. Cole's Born Sinner say the rest before I continue on for an hour.
