Friday, March 4, 2016

Two Bits, Four Bits, Six Bits, A Dollar! All For Trump U. Stand Up And Holler!

     And hollering they are, "they" being a bevy of students claiming they were scammed by
Student With Cardboard Cutout Of Trump
They Were Promised A Pic With Trump
(photo from nro.com)
D
onald Trump and his for-profit venture into the groves of academe, "Trump University." Actually, the enterprise was never a licensed university and had to change its name in 2010 to "The Trump Entrepreneur Initiative," but either way, the tale is one that should give potential students some reason to think through a decision to get an education from for-profit schools.  As for Trump and his venture, to watch him last night, standing there in the Fox News debate claiming that the Better Business Bureau had given his institution-of-lower-learning an "A" rating without mentioning that its latest rating is a "D-" makes me wonder how anybody can take this self-aggrandizing megalomaniac seriously.  Taken to another level, Trump's venture was so blatantly obnoxious that the New York State Attorney General in 2013 filed a $40 million lawsuit against the operation for "engaging in persistent fraudulent, illegal, and deceptive conduct."  
     I give Trump and his cohorts the benefits that come from due process.  But I do so while noting that there is now a little cottage industry within the legal community that seeks to jump on the litigation bandwagon created by enough students to file two class-action lawsuits against Trump's venture.  The deep-pocketed Trump set himself up for this one, but at the same time provides an object lesson about for-profit institutions and the problems that some of them have created for their students and the country as a whole.  The "student debt crisis" that makes so much news nowadays has been disproportionately fueled by students borrowing money to attend for-profit institutions.  In 2000 the amount of debt owed by students attending these schools was $39 billion.  In 2014 it was $229 billion.  The Brookings Institution released a deep study of this last September, which found that in 2000 only one for-profit school was among the top 25 institutions where students had the most
Default Rates
Not Pretty
(source: U.S. Dept. of Education)
student loan debt.  By 2014, there were 13 for-profit schools among the top 25.  

     We're talking about debt burdens amounting to billions of dollars, much of it guaranteed by the U.S. Department of Education.  Last year's abrupt closure of the for-profit Corinthian College group stuck thousands of students with $3 billion of debt.  In the meantime, many ongoing institutions are promising much more than they can deliver when it comes to job placements.  I have an acquaintance who went to a bartenders college that counted him as having been placed in his field when he got a job as a clerk in a liquor store.  Really.  From his story I concluded that getting an education in a for-profit institution is a caveat emptor venture:  expensive schooling with little to show for it except a mountain of debt is the risk, and it's all to common.   Let the buyer beware.
     We have several for-profit colleges here in South Dakota.  As far as I know, they're fine schools. One acquaintance with a government job in Washington got an advanced degree in public administration from one of them. Another, who interned with me when I was brokering and feeding cattle now has a successful meat processing business. No doubt there are many similar stories. But enough nightmares like the Corinthian and Trump ventures are out there to justify some skepticism about the industry--which should make potential students cautious enough to examine, examine, examine before signing on the dotted line.  

     

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