According to an article in The New York Times of Tuesday May 3, 2011, the Justice Department will "intervene in a whistle-blower lawsuit charging that one of the nation’s largest for-profit college companies, the Education Management Corporation, defrauded the government by illegally paying recruiters based on the number of students they enrolled, according to a Securities and Exchange Commission filing on Monday."
The Times article said this is the first time federal prosecutors have joined such a case, one of dozens filed by state governments in recent years that accuse the for-profit college industry of illegal practices devised to increase federal student aid revenue.
EDMC, 40 percent of which is owned by Goldman Sachs, enrolls nearly 150,000 students, operates several career-college chains...
For-profit schools enroll about 12 percent of the nation’s higher-education students yet receive about a quarter of all federal student aid; their students account for almost half of all defaults. In general, these institutions get more than 80 percent of their revenues from federal student aid.
The United States Department of Education believes that such colleges too often leave their students with mountains of debt and no marketable job skills.
"The Education Department has taken action to rein in abuses by the for-profit sector but has so far delayed the most controversial regulation it has proposed, the “gainful employment” rule that would cut off federal aid to programs whose graduates have high debt loads and not enough income to pay them," the article concludes.
Wall Street won't pass up any opportunity to loot, pillage and raze anything that stands in its path in order to suck up profits, especially if it's easy money from the public till. For-profit "universities" are a cancer eating up funds that should be going to real universities that attempt to give an education to incoming students.
The students who get conned into going to one of Goldman Sachs' fake colleges are unaware that they are being suckered into a hopeless dead end. For less tuition they could enroll in a community college or state or city university and have a fair chance to make a career for themselves.
The for-profit schools operate on the principle explained by W.C. Fields, "never give a sucker an even break."
You'd think maybe some of these capitalist visionaries might wonder what they are doing to their own future viability with their "profits now, any way, any how" approach. They are contributing to the failure of mass education in the USA. Maybe the figure that they don't need the poor schleps they rope into their "universities." They can always work flipping burgers. Investment banks can always get new hires from China and India....maybe...the pay might be better in China and India.