Thursday, December 17, 2009

For-Profit Schools Engaging in Outright Fraud Taking Taxpayer Dollars.

Schools Matter ran across the following story about wasteful government spending in the private sector. It appears for profit colleges receiving taxpayer support, often sighted as a better alternative to public education, is doing nothing more than stealing our money. If conservatives were to be perfectly honest about the results of the research, they would put a halt to their continued vilification of public education. According to

Of the billions that taxpayers spent to help students attend for-profit colleges and universities in 2007, half will never be repaid, according to Department of Education projections [1] (PDF) released Tuesday.

By comparison, the department projects that the students who took out loans toattend nonprofit four-year colleges in 2007 will default at significantly lower rates — 22 percent for freshmen and sophomores, and 12 percent for juniors and seniors.
Ignored by the Republicans Party's push to destroy public education is the illegal gaming of the system that rips off taxpayer money.
A recent investigation by the Government Accountability Office found instances of for-profit schools’ engaging in outright fraud to sign up unqualified students [3] (PDF) and warned that "the government cannot be assured that its student aid funds are only provided to students who have an ability to benefit from higher education.’’
There are victims in this for profit failure, as usual:
The GAO found … schools, which typically do not have
entrance exams, accept students from lower socio-economic groups who would be
unlikely to gain entry into more traditional institutions. They also accept more
women and minority students, as a percentage, than nonprofit schools. These
groups, the GAO said, are more likely to default on loans.

The GAO found, "Students who default are also at risk of facing a number of personal and financial burdens," the report said. These risks include ruined credit ratings that would make it more difficult or impossible to obtain other loans, to find a job or rent an apartment, or to continue their schooling elsewhere.
Still crazy about moving higher education into the private for profit free market system?

No comments:

Post a Comment