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+--- Thread: How to rip off student loans (/showthread.php?tid=125775)
How to rip off student loans - RgrF - 10-22-2011
Throwaway.
I work for a for-profit education company. There are a few things I have to get off my chest. If you want a TL;DR upfront (call it a TL;WR), here you go: the industry is a complete joke and I'm sickened by what we do.
OK, here we go.
First, we accept anybody. A student is merely a conduit in which student loan money flows from the federal government, to us. We could give two shits if we think a student will succeed. A student is a revenue unit (and is referred to as such). We'd let everbody in if we could. Unfortunately for us, we can't.
Why? Well, the federal government only allows us to generate 90% of our revenue from their loans. Last I checked, we're at 89.something. We are "private, for-profit" and nearly 100% government subsidized through their loan program. Think about that. Almost 90% of our revenue comes directly from the government and we can keep as much profit out of that as we want with zero obligation. Oh, there’s this thing called gainful employment floating around that’s a feeble attempt to regulate us, but everybody’s pretty sure most of the regulations will be stripped away or watered down to the point of uselessness.
While we’re on the subject of loans, let’s talk about how our students get them. In short, we handle everything. All we need is their name and their consent. We process all the paperwork on their behalf. It's probably our most important function. It's how we stay in business.
Here’s a fun tidbit: We encourage students to take out the maximum loan amount allowed even though they don't need it all to cover their tuition. Why? Because it’s "free money" for the student, that’s why. Let’s just say we charge $25,000 a semester (we actually charge more if you can believe it) and when we talk to the student we'll advise them to take out $30,000 so the student can use the extra $5000 towards whatever they want; perhaps a computer for their online courses or a car to commute to our brick and mortar facility, whatever. We also point out that they don't have to pay this loan back for, like, years so who gives a shit? By that time they’ll have landed a sweet job because of the awesome education their going to get from us.
This might be a really good time to mention our one rule when hiring: If a candidate submits a resume and lists an online for-profit education school as their education (ours included), it is immediately thrown out. Let's just say we know our product.
Our product. My god. I've seen the courses we offer online and they're beyond a joke. I wish I could be more specific, but I'd probably give myself away. I've seen passing grades given for essays that wouldn't have gotten past my 6th grade english teacher. I shit you not. Don't get me started on the technical degrees.
If all that isn't bad enough, here's the best scam we pull. As a “benefit to our students”, we've established a "Foundation”. We solicit donations for the foundation that go towards student tuitions in the form of "scholarships". This is akin to a company like Best Buy taking donations for a self-administered Best Buy Foundation and then giving that money to Best Buy customers and forcing them to use it at Best Buy. We use scholarships as a means to launder our foundation money to our bottom line. The scholarships we hand out usually go to the students who we think we can squeeze a little more out of, probably because they've hit their maximum lifetime limit of how much they can receive in government financial aid. Our scholarships make up the difference so we can get whatever government cash they're still entitled to.
If our industry exists in ten years I’ll be very sad.
AMA.
AMA means ask me anything at the following link:
Re: How to rip off student loans - Grace62 - 10-22-2011
Thanks for sharing that. I've been pretty shocked at what I've read about this "industry" of late. Did you know that Goldman Sachs invested billions into for-profit education and turned it into the recruiting machine that it is now?
One of my son's friends decided to attend culinary school at the Seattle Art Institute instead of going to traditional college. He will spend $80K (or his parents will) to get a 3-year bachelor's degree in "restaurant management."
My experience is that nobody gets hired to be a chef or run a restaurant without working their way up and impressing people with demonstrated talent and experience, not degrees. This kid has never had a paying job. I think he's in a for a rude surprise when he's done, assuming he follows this through.
I've read the stories about kids getting this training and then getting a $8/hour job at a bakery that they could've gotten right out of high school...and they're stuck w/tens of thousands in loans.
It's criminal. Well at least it should be.
Re: How to rip off student loans - SDGuy - 10-22-2011
"$25,000 a semester (we actually charge more if you can believe it)"
What kind of idiot falls for this?
For that kind of money, you should be going to a "real" University for a real degree, not something that looks & reads like you got it out of a Cracker Jack box...
Re: How to rip off student loans - RgrF - 10-22-2011
The government guarantees the payoff, these poor schmucks can't even bankrupt out of the scam. Guess who proposed and passed this gem?
Re: How to rip off student loans - Grace62 - 10-22-2011
who?
Re: How to rip off student loans - Acer - 10-22-2011
I saw this post on Frontline last year...
http://www.pbs.org/wgbh/pages/frontline/collegeinc/view/
Re: How to rip off student loans - RgrF - 10-22-2011
Bankruptcy Abuse Prevention and Consumer Protection Act act of 2005
How they did it
Re: How to rip off student loans - cbelt3 - 10-22-2011
I'm not surprised... I have a brother in law who works in the industry for one of those 'we have a university EVERYWHERE institutes of 'higher learning'. He *does* have standards for grading, most of his students are professionals getting a higher degree for work, at night. But he's seen the same things you have.
When I think of that kind of "industry" I think of 'comp e w t er training dot comm' (deliberate mangle to avoid pagelinks). My future son in law looked into that for his A+ certification. They wanted $30K for '2 years of in depth training'.
He went to a local community college and got certified in 8 months. For about $2,500. And was taught by people who were actually doing the job, and knew the subject matter.
I support the local community college process.. it's these institutes that offer decent education (I call it High School +1 and +2, since the High Schools are failing to cover the basics due to the teach to the test syndrome courtesy of No Child Left Unscrewed), at a reasonable price.
- - -
Good luck, try to stick to your principles and hang on to your soul.
Re: How to rip off student loans - Acer - 10-22-2011
RgrF wrote:
Bankruptcy Abuse Prevention and Consumer Protection Act act of 2005
How they did it
109th Congress
Senate Majority: Republican Party
House Majority: Republican Party
Things that make you go "Hmm."
Re: How to rip off student loans - GGD - 10-23-2011
SDGuy wrote:
"$25,000 a semester (we actually charge more if you can believe it)"
What kind of idiot falls for this?
For that kind of money, you should be going to a "real" University for a real degree, not something that looks & reads like you got it out of a Cracker Jack box...
I think "real" Universities have admission requirements.