$32 Billion For-Profit College Industry Becomes Pass-Through for Wall Street
Glen Ford: With a 50% graduation rate and heavily indebted students, the government needs to establish a federal agency to regulate this newest Wall Street-connected scam
JESSICA DESVARIEUX, TRNN PRODUCER: Welcome to The Real News Network. I’m Jessica Desvarieux in Baltimore. And welcome to this edition of The Ford Report.
Now joining us is our guest of honor, Glen Ford. He’s the executive editor of the Black Agenda Report.
Thanks for joining us, Glen.
GLEN FORD, EXEC. EDITOR, BLACK AGENDA REPORT: Oh, thank you.
DESVARIEUX: So, Glen, this week you’re working on an article about the for-profit college industry. Can you describe a little bit about what your article’s about?
FORD: Well, we’ve got a crisis that’s approaching, and it’s a crisis in two parts. Part of the crisis is for Wall Street, and we’re not really worried about that part. These for-profit colleges, which collect between them $32 billion in federal student aid money of one kind or another, these are actually not educational institutions. They are set up as pass-throughs for those federal monies. And so the absence of these institutions may in fact be a very good thing. They sap what little economic vitality is left in poor and black communities by stringing out people on years of debt and giving out diplomas, when people do manage to graduate, that aren’t worth much in the workplace.
But the other part of the crisis is the one that hits those people who are the students who have flocked to these institutions because nobody else was serving them. And that’s why they were a group to be plundered by the shysters headquartered on Wall Street.
DESVARIEUX: Well, let’s name some names, Glen. We’re talking about University of Phoenix. Who are we talking about here?
FORD: Well, the University of Phoenix and an outfit called the Ashford University actually produce the most black bachelors degrees of any institutions in the country. If you’re looking for people who are handing out degrees to black folks, it’s not Clark University, it’s not Morehouse, it’s not Howard. It’s Ashford and the University of Phoenix. So these are pretty well known if you watch television. These are organized hucksters who have tapped into a huge demand in black America. In the first decade of this century, black enrollment in these for-profit universities, like the University of Phoenix, went up 235 percent. Black enrollment in colleges in general, in all kinds of colleges, for-profit and traditional, went up 35 percent in that first decade, and most of that enrollment was into these for-profit colleges. And that tells you that the existing educational structure is not serving that particular community and is therefore complicit with driving literally hundreds and hundreds of thousands of poor people and aspiring people into the clutches of folks who are nothing but ripoff artists who ought to be sent to jail.
The first victim–we hope they are a victim–is Corinthian, which is not the worst of the for-profit institutions. It’s got about 70,000 students. It has 100-plus campuses around the country. It gets 83 percent of its revenue from the federal government. And when the feds were cracking down and were threatening just institute a pause in payments, Corinthian had to fold and move towards bankruptcy right away, because, once again, these are pass-throughs set up by hedge fund operators and the reason for their existence is just to move the money from the federal government into the coffers of Wall Street. And they don’t have great reserves. They just to channel the money to the rich folks.
DESVARIEUX: Yeah. And we’re not the only ones talking about this, Glen ’cause I know on Capitol Hill you have senator from Illinois Dick Durbin and Elijah Cummings, Representative Cummings of Baltimore, really, they come out with a letter, and they were asking and calling for more oversight. Is that correct?
FORD: Calling for more oversight, and Dick Durbin was actually calling for the heads of these organizations. He sounded like an abolitionist. He has pointed out that that $32 billion a year that goes from federal accounts straight through these for-profits–and then, of course, on to Wall Street–$32 billion is equivalent to the ninth-largest federal agency. That is, it is a big, a significant chunk of federal funding.
Now, Durbin said it was the equivalent of a federal agency. I’m saying, well, why isn’t there a federal agency, one that is set up specifically to serve the needs of this population that clearly has not been served by the traditional educational establishment, this population that was forced through desperation because nobody else was providing a service at all, would let them in, was forced into the hands of these–well, these corporate criminals who ripped them off? At most of these schools you’re lucky if 50 percent of the students graduate. But they still owe money. Of those 50 percent or so that might graduate, they are lucky if they get a job that pays anything close to enough to pay back the student loan.
DESVARIEUX: And, Glen, when we’re talking about these students, most of them are parents, is that right, themselves?
FORD: This is a much older demographic than your traditional student. These are people who want to improve their lives. They are hopeful. They believed the old maxim that education changes everything. And they stake their futures on it. Many of them are in middle age. They’re scattered around the place. These are hopeful and aspiring people. And it is doubly cruel that they should have their hopes crushed by these evil criminal organizations at a later stage in life.
But what is also evil is that there was no place else for them to go. There is no cabinet department with $32 billion that is saying, damn, all these black folks and brown folks really want an education; let’s try to provide it for them since it’s quite clear that the existing institutions won’t do it.
DESVARIEUX: Alright. That gives you a lot of food for thought next time you see one of those commercials, University of Phoenix commercials.
Glen Ford, thank you so much for joining us.
FORD: Thank you.
DESVARIEUX: And thank you for joining us on The Real News Network.
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