Phoenix Rising: Default Rates at Proprietary Institutions of Higher Education and What Can Be Done to Reduce Them
2011; Jefferson Law Book Company; Volume: 40; Issue: 2 Linguagem: Inglês
ISSN
1226-301X
Autores Tópico(s)Financial Literacy, Pension, Retirement Analysis
ResumoI. INTRODUCTION The burgeoning world of for-profit higher education has many different faces - many of whom were captured in a recent PBS Frontline investigation that is worth committing to print in some detail.1 One face is Michael Clifford, a musician-and-drug-addict-turned venture capitalist who has made his money by infusing failing institutions of higher education throughout California with private capital from investors. Frontline correspondent Martin Smith recently spent time with Clifford to learn about his business model, conducting interviews at Clifford's headquarters overlooking the Pacific Ocean in Del Mar, California or on the fly as Clifford prowled the streets of San Diego in his MercedesBenz, scoping out his next investment prospect. One such prospect is The Dream Center, a non-profit Christian mission that is housed in a former hospital in downtown Los Angeles. The Dream Center acts as a 24hour rehab facility for ex-convicts, drug addicts, and prostitutes. But Clifford recently closed a deal that links the Dream Center to Patten University, a struggling, private, non-profit coeducational Christian college in Oakland that- critically- already holds regional accreditation and is therefore eligible for Title IV student aid. Clifford described his vision for the Dream Center's college to Smith: Clifford: We take a prostitute off the street, or an ex-Crips or Bloods member, and we bring them into our center, and we start an education process. Smith: Let me make sure I understand . . . so the former gang member, or prostitute, or whoever it is that comes to you . . . a homeless person . . . can get a college loan for an education? Clifford: Absolutely.2 Clifford told Smith that he wants to keep Patten and the Dream Center nonprofit, but the deal with Patten reserved the right to convert the college to for-profit status if too few charitable donors emerged. The Dream Center, which is eligible for Title IV financial aid, has also considered a for-profit online education program. Another face of the for-profit education sector is Ann Cobb. In 1994, she was a single mother of two, drowning in her ex-husband's bankruptcy debt and living on food stamps. Despite an income of less than $8,000 a year, an enrollment counselor at the University of Phoenix helped her secure a student loan for a four-year undergraduate program. Cobb described it as an incredibly simple process. She graduated in 1999 with $30,000 in debt, which, on account of deferments, penalties, and interest rates that have varied as high as 14%, has ballooned to $60,000 by 2010. Smith's report suggests that there are far more Ann Cobbs in this world of for-profit education than there are Michael Cliffords.3 Smith spoke with Ray Campbell, a former loan officer at a for-profit school. Campbell said that he faced significant pressure to enroll and start students in graduate programs, even when the student could not or was not ready to begin classes. And Smith spoke with three former students at Everest College- a subsidiary of the for-profit giant Corinthian Colleges- who told him that they paid over $28,000 for a vocational nursing certificate after Everest told them that they would be placed in jobs paying $25 to $35 an hour after graduation.4 The students say that they were promised practical training in hospitals, but instead went to a museum of scientology for a psychiatric rotation and a day care center for a pediatrie rotation. Unable to find jobs, the students are considering filing suit against Corinthian. Smith took the students' story to Harris Miller, the current President of the Career College Association, which lobbies Congress on behalf of many for-profit institutions. Their conversation is worth repeating verbatim: Martin Smith: Let me ask you about these nursing students at Corinthian. They have thirty thousand dollars in debt. What can they do? Harris Miller: Well, the government can basically wipe that out. …
Referência(s)