As an attorney representing hundreds of students defrauded by a number of for-profit vocational schools, which Steve Gunderson innocuously calls “private sector colleges” I have seen the predatory lending and deceptive misrepresentations made to many prospective students of these schools. When Steve Gunderson’s group, the Association of Private Sector Colleges and Universities convene in Las Vegas on June 20-22nd at the Mandalay Bay Hotel & Casino, there will no doubt be much focus on defending against the ability of students who were defrauded to make their claims together en masse and to gather defensive intelligence against states’ Attorney General actions like Illinois’ Lisa Madigan. But how much focus will be on: a) reducing tuition to make their programs competitively priced in comparison to community colleges, or b) ensuring the quality of the programs they deliver are on par or better than the public choice alternatives?
Buried in non-dischargeable, high interest debt by a number of these over-priced for-profit schools, many thousands of these students were misled into taking expensive courses with promises of “gainful employment” when it is clear upon examination that the value proposition of, say, an $18,000 8 month basic medical billing and coding course is, to be charitably characterized, dubious. For that price in tuition, after paying their monthly loan payment the typical graduate does not see much of an improvement in wages above minimum wage.
Many of these schools now protect themselves against any serious redress by those students who were defrauded, by systematically forcing individual arbitration, rather than a public court fight or face exposure for their misdeeds in a class action. Therefore, when fraud is committed on a large scale basis – such as widespread lies covering up the fact the “accreditation” touted by the school’s sales people to prospective students is worthless (very often not discovered until years later and tens of thousands of dollars of debt later) when they later try to transfer to a community college or four year university – these corporations needn’t be worried by any serious repercussions. After all, insulated from large claims without the availability of class actions and no teeth in the federal government’s Gainful Employment regulations (no student can sue even when the school deliberately lies and exaggerates their past graduate’s financial outcomes), individual students’ claims are mere gnats and a negligible cost of doing business. Therefore, when maximization of profit rather than ethics are a primary concern, it pays to put more sizzle than steak on the plate.
The keynote speaker at the Association of Private Sector Colleges and Universities’ Annual Convention this June will be President Bush, whom I voted for and briefly volunteered in his presidential campaign. I sincerely hope President Bush will show more concern for providing serious educational products to students of those schools that provide a meaningful living, and not merely patting the schools on the back for making highly profitable investments for friends and people in the upper class. American education should always be about upward mobility. And from what I have seen, the vast cases of education products of for-profit vocational schools fail to enable their graduates to do so, but actually, incredibly, leave their students worse off than before enrollment.
Original post and response here
