Fred Grimm

Fred Grimm: For-profit education is bankrupt

What’s a $5,000 campaign contribution buy you?

For Corinthian Colleges, five grand was good enough for a letter from none other than Sen. Marco Rubio himself, asking the U.S. Department of Education to “demonstrate leniency” in its pursuit of the for-profit college chain.

Rubio’s June 20 letter, first reported last week by Bloomberg News, would seem extraordinary, a U.S. senator with presidential aspirations lending his prestige to such a dodgy operator.

It wasn’t only that the Department of Education was looking into Corinthian’s shoddy and misleading business practices in 2014. Rubio surely knew that he was intervening on behalf of a company that had been under almost continuous investigation by one government agency or another over the past decade.

Back in 2004, it was George W. Bush’s Department of Education going after the California-based company for “significant findings of noncompliance” in the way it was peddling student loans.

Corinthian, which at its peak operated 105 “campuses” under various names in 26 states and Canada, including 15 schools in Florida, was sued by the California attorney general in 2007, alleging the company lied about job-placement and salary stats among its grads. In 2011, attorneys general in New York, Iowa, Illinois, Kentucky and Massachusetts launched investigations into similar allegations. In 2013, California filed yet another lawsuit against Corinthian.

That was the same year the U.S. Consumer Financial Protection Bureau started digging into Corinthian’s suspect loan and debt collection practices (finally suing the corporation in 2014). Barred from sucking any more money out of the federal government, Corinthian finally closed last week.

Some company our senator chose to champion. Some industry.

Last summer, after a two-year investigation into the for-profit education business, the U.S. Senate Committee on Health, Education, Labor and Pensions found that hundreds of thousands of students were leaving for-profit colleges “with high monthly payments but without a commensurate increase in earning power from new training and skills.”

The Senate report found that many of the for-profit college operations “fail to make the necessary investments in student support services that have been shown to help students succeed in school and afterward.” Senate investigators reported that in 2010, for-profit colleges devoted an average of 22.7 percent of their revenue to “marketing, advertising, recruiting and admissions” while spending just 17.2 percent on actual education. These operations had profit margins larger than what they spent on teaching.

These were not education entrepreneurs, carving a business out of the private marketplace. The Senate investigation found that 15 of the nation’s leading publicly traded for-profit college corporations received 86 percent of their revenues from taxpayer dollars by exploiting federal student loans, Pell Grants or the GI Bill. For-profits enroll just 13 percent of higher-education students, but take 25 percent of the total amount of federal loans and grants distributed each year.

The stench around for-profit operations should have been enough to keep politicians away. Yet there was Rubio, asking the feds to go easy.

But among Florida politicians, the senator was hardly an outlier.

The Miami Herald’s multi-part series on for-profit education by Michael Vasquez was shocking on several levels. Vasquez described the sleazy high-pressure recruiting practices employed by the for-profit education racket to snag nearly an 18 percent share of the state’s college students.

By sleazy recruiting tactics, I’m not just referring to the lies about graduates’ employment prospects or ploys that encourage massive student debt burdens. In October, the federal government sued a Miami-based for-profit, FastTrain, for hiring strippers as admission counselors. FastTrain, the lawsuit charged, encouraged the strippers “to dress provocatively while they recruited young men.”

But just as startling was how these unseemly outfits were able to garner political support that enabled them to ward off government interference. Vasquez reported that for-profit college operations have contributed $1.5 million in campaign contributions to Florida pols since 2008.

Politicians from both parties, both in Congress and the state Legislature, are raking in the for-profit college money. And in return, they’ve gifted their patrons legislation designed to loosen regulation and tamp down competition from more affordable public community colleges.

Vasquez described how for-profits have managed to pack regulatory boards, how they’ve pushed through legislation that funnels public money into their operations, how they’ve gotten state standards lowered for programs that promise nursing and physical therapy degrees.

The results have been ugly. Of the 39 nursing programs in the state currently on probation — because a high percentage of their grads flunk the state license test — 36 are operated by for-profit companies.

Vasquez described how state Rep. Carlos Trujillo, R-Miami, pushed through legislation that allowed graduates of unaccredited physical therapy programs to sit for the Florida license examination.

The bill mostly benefited Coral Gables-based Dade Medical College, which just happened to have employed Trujillo’s law firm for legal work.

(For good measure, the school also hired, at $115,000 a year, Sen. Rene Garcia, R-Hialeah, as vice president of external affairs.) Unhappily for Dade Medical’s grads, major hospitals have no interest in hiring therapists from unaccredited programs.

Meanwhile, some key Miami-Dade Republican legislators, including the conflicted Rep. Trujillo, blocked legislation in 2014 that would have allowed a referendum on the county ballot for a half-cent sales tax to benefit Miami Dade College, a public institution that trains students in similar but fully accredited vocational programs at a fraction of the cost. Because their sugar daddies running for-profit mills couldn’t abide more competition.

Accountability has been the great watchword in Florida politics over these last few years. Gov. Rick Scott pushed through “performance funding” in 2013 for the state university system, with financial awards or punishments doled out according to criteria that includes the percentage of grads who find work within a year after graduation and considers their median full-time wages.

Obviously, Florida’s politicians aren’t applying those kind of standards to their buddies in the for-profit education business, who are getting rich off public dollars despite shameful performances. The pols figure $1.5 million in campaign contributions is all the accountability they need.

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