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The scourge of for-profit colleges

July 24, 2013

Colleges rarely have been viewed as businesses. The reasons are easy to state. Students lack money. Those of us older, with a modicum of money, tend view colleges as institutions needing a long-term vision for the benefit of society, rather than a short-term vision for the benefit of shareholders. So they are established by state or charity, get funding from public money, endowments, donations, and money bequeathed, and are run as non-profit institutions. This is as true for private colleges as public ones.

Alas, the US has established a system of student loans that is ripe for exploitation by for-profit institutions that call themselves colleges. Chief culprits include Phoenix University and ITT. They exist only to originate student loan debt, guaranteed by the government, and not dischargable by their marks. The Obama administration is responding to this fraud and misuse of public money by setting measurable results schools must deliver to qualify for federally-guaranteed student loans. A better solution would be to eliminate federal student loans in favor of other funding solutions. But that requires legislative action.

The fraudulent colleges are not taking this lying down. They are donating to key House members, John Kline (R-MN) and Virginia Foxx (R-NC), to insert language into new legislation that would thwart such requirements. (They previously were hoping for a president Romney, but aren’t giving up without.) And though they seem to lean Republican, some Democrats are also sucking at their teat, too.

Let’s hope they lose. And everyone young, looking to go to college: be very, very wary of any school that is for-profit.

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