Is Education The New Subprime?
By: Jacob H. Zamansky Saturday, October 02, 2010 11:28 AM
Stop me if you've heard this one before: Publicly traded corporations accused of wrongdoing countering critics by saying they are helping low-income Americans achieve the American dream.
No, this isn't the subprime loan debacle all over again. It's the for-profit higher education industry, which is currently reeling from plummeting stock prices and shareholder unrest due to a government investigation that found potentially fraudulent practices and a need for new regulations.
Indeed, on August 3, 2010, the U.S. Government Accountability Office (GAO) issued a report which concluded that for-profit educational institutions had "encouraged fraudulent practices" designed to recruit students. The GAO investigated for-profit colleges in Arizona, California, Florida, Illinois, Pennsylvania, Texas and Washington, D.C. Recruiters at