For-Profit College Scammers See Opening Under Trump
This week Bloomberg has noted a recent 40% spike in the stock price for DeVry Education Group since the election of Donald Trump last November. It doesn’t take an education expert to understand why…and of course, there are no such experts in the Trump administration, especially atop the Department of Education.
Trump’s new education secretary, the wealthy Republican fundraiser Betsy DeVos, has long supported directing taxpayer dollars to schools run by for-profit companies, including those operating fully online — an approach pioneered by publicly traded higher-education businesses. That’s good news for them because they rely on federal student loans and grants for as much as 90 percent of their revenue.
That is right, the fact this is “for-profit” education does not mean you the taxpayer are off the hook. By their own admission, a shocking 80.9 percent of DeVry’s total revenue in 2010 was comprised of Federal education funds.
But hey, these private sector educational solutions must really be serving students like big government never could, right? Actually, the US Department of Education found the following just a few months ago:
- Overall, mean earnings of graduates of public undergraduate certificate programs are nearly $9,000 higher than mean earnings of graduates of for-profit undergraduate certificate programs.
- Graduates of certificate programs at public institutions are more likely to have attended programs that provide training for higher earning fields, such as nursing, than graduates of certificate programs at for-profit colleges.
- Nearly a third of for-profit certificate students graduated from programs where the typical graduate earned less than what a full-time minimum wage worker earns in a year—compared with only 14 percent in the public sector.
How can we make this story worse?
Trump, meantime, plans to tap Jerry Falwell Jr., a campaign ally and president of conservative Christian Liberty University, to help examine how to get the government out of higher education altogether. Falwell, son of the fundamentalist preacher who founded the Moral Majority, said he would look at ways of reducing “overreaching regulation” in a Jan. 31 Chronicle of Higher Education story.
Just what this sector needs: less regulation and more Jerry Falwell.
The most famous for-profit education scammer in the world is, of course, the president himself. Just before Christmas he paid $25 million to settle three lawsuits related to his “Trump University”.
A few days earlier DeVry itself paid a $100 million settlement with the Federal Trade Commission to settle a lawsuit related to deceptive advertising claims.
These might seem like huge sums of money to you and I, but they just represent the cost of doing business for scam artists.