Burkett isn't the only angry alumnus of schools owned by Education Management Corp., the Downtown-based operator of for-profit colleges that runs the Art Institutes, Argosy University, Brown Mackie College and South University. He is one of thousands of former students demanding that their loans be forgiven. More than 22,000 people have signed an online petition demanding the debts be cleared for students who attended Art Institutes between 2003 and 2011.
Alumni have protested outside of EDMC campuses and criticized the company on social media. Critics say the company got off cheap in a $95.5 million settlement of a federal lawsuit over allegations of illegal recruiting practices, money that will go to the federal and state coffers but not a dime for former students.
Sofia is one of 7 million former students in default on a record $115 billion of federal loans, an amount that has grown almost 25 percent in two years, according to U.S. government data. The mountain of debt, for which taxpayers are on the hook, has provided a stream of revenue to companies at every stage of the process.
One of the most popular tropes among career advisors, guidance counselors, school officials, and college recruiters today is that going to college is an investment. As more and more options for work experience and education outside of the higher education cartel crop up, those pushing the college option on young people are forced to fall back on telling the young that, though it may look costly now, it will pay off in the future. Like their Housing Crisis predecessors, they urge young people to take on the seemingly-unimaginable cost with some statistics and graphics showing that, in the recent past, a college degree pays for itself over a lifetime.
It’s time that we admit that this isn’t the case.
This worldview presents fundamental philosophical problems, especially in the American system that was built on individual liberty and limited government. This goes to the issue of privacy – does the government have the right to compile this information, even for well-intentioned purposes? But the other, more pedestrian concern is simple data security – is the information the government has being kept safe?
The short answer is no.
A crisis in student loans? How changes in the characteristics of borrowers and in the institutions they attended contributed to rising loan defaults
By Adam Looney, U.S. Treasury Department and Constantine Yannelis, Stanford University - brookings.edu
This paper examines the rise in student loan delinquency and default drawing on a unique set of administrative data on federal student borrowing, matched to earnings records from de-identified tax records. Most of the increase in default is associated with the rise in the number of borrowers at for-profit schools and, to a lesser extent, 2-year institutions and certain other non-selective institutions, whose students historically composed only a small share of borrowers. These non-traditional borrowers were drawn from lower income families, attended institutions with relatively weak educational outcomes, and experienced poor labor market outcomes after leaving school.
Students heading back to college are in for sticker-shock at the bookstore, that’s because textbook prices are soaring.
Textbook prices have risen 9 percent this year, it’s part of a decades-long trend in which textbook prices have risen more than 1,000 percent since 1977.
“It’s overwhelming and I feel for the students,” said Susan Powers, with Academic Affairs at Indiana State University.
Federal banking regulators are expanding the power of the Consumer Financial Protection Bureau (CFPB), demanding records and testimony from higher-education accreditation agencies as part of an investigation into possible “unlawful acts and practices in connection with accrediting for-profit colleges.”