I have written extensively about how for-profit colleges cashed in on higher education and vulnerable populations, but NPR has taken the lid off with a new article and interview with Tressie McMillan Cottom. Cottom, a former insider who helped recruit students into the for-profit college that employed her. Her book, “Lower Ed: The Troubling Rise of For-Profit Colleges in the New Economy” is a close and troubling look at how in the last three decades, for-profit schools have sucked up vast amounts of federal student loans, student aid, and veterans’ benefits.
Foundations of a For-Profit College Scam
When the for-profit schools were able to get expanded access to federal funds, it was 1992 and in the deeper part of a recession. Congress authorized for profit colleges to get as much as 85 percent of their total revenue from federal programs, with the cap being raised to 90 percent following their 1998 reauthorization. This only applied to loans, grants, and work study programs, but not to federal veterans’’ benefits, which are a significant source of funding for many for-profit colleges. With veterans’ benefits factored in, a number of colleges exceed 90 percent funding from federal programs, with the now-closed ITT being almost 100 percent funded by federal student loans, aid, grants, and veterans’ benefits. At their peak in 2010, for-profits enrolled over two million students, with at least 70 percent of their revenues coming from federal programs.
ABCs and 123s
The article and interview with Ms. Cottom are eye-opening, and heartbreaking. The cynical exploitation of the American belief that education is the way to a better life, to social mobility is ruthlessly exploited by for-profits who would quickly enroll the students who would be able to get the maximum amount of financial aid and loans from the government. Not the ones who would most benefit from education, or the ones most likely to successfully obtain their degree, just the ones who could bring in the most money. The cry of “college for all” is being choked by an ever increasing pile of student loan debt in the trillions of dollars Students who enroll in for-profit colleges tend to pay more for their credentials versus community colleges, but also fare more poorly afterwards – earning less than their community college educated peers.
If You Need Help
If you were recruited by a fraudulent school, a school that closed without granting your credential or degree, or were recruited with misleading tactics and deceived into enrollment, you may be able to get your loans discharged. If your loans are overwhelming, whether or not you completed your degree, we can help you get back on track in a number of ways. If you have financial hardship, disability, or if you are on the hook for a deceased family member’s loans, we can get you the relief you need. Call our Fort Lauderdale or West Palm Beach office seven days a week and set up a free consolation. We’re here for the tough stuff!