For-Profit Diploma Mills Drain Away Cash and Hope
Sunday's New York Times had a revealing piece on the leeches and bottom feeders in the for-profit college business who prey on the poorest and most vulnerable. By making big promises and delivering nothing of value in return, these diploma mills drain students' Pell Grant funds, and students are left in debt with no job prospects. A clip:
. . . .The stakes are enormous: For-profit schools have long derived the bulk of their revenue from federal loans and grants, and the percentages have been climbing sharply.
The Career Education Corporation, a publicly traded global giant, last year reported revenue of $1.84 billion. Roughly 80 percent came from federal loans and grants, according to BMO Capital Markets, a research and trading firm. That was up from 63 percent in 2007.
The Apollo Group — which owns the for-profit University of Phoenix — derived 86 percent of its revenue from federal student aid last fiscal year, according to BMO. Two years earlier, it was 69 percent.
For-profit schools have proved adept at capturing Pell grants, which are a centerpiece of the