The for-profit education industry—think University of Phoenix, Corinthian Colleges, and schools owned by Kaplan—is booming. Enrollment at these institutions is growing 5 to 10 times faster than in all of higher ed combined. But with that growth has come an onslaught of criticism (PDF) for hard-sell recruiting tactics (PDF), risky loans, and inflated degrees. Here are three warning signs that your for-profit college may be cheating you out of your money—and an education.
Warning Sign #1: You were recruited at a blackjack table or soup kitchen. For-profit colleges spend huge amounts advertising at bus stops and online, but recruiters also visit (PDF) homeless shelters and casinos, where they often exaggerate their school's rigorous academics and job-placement success rates.
Warning Sign #2: You'll be paying off your student debt well into your golden years. The average debt for a for-profit grad is $32,650, among the highest in all of higher ed. More than 90 percent of for-profit students borrow money, versus 70 percent at private schools and 50 percent at public universities. Several for-profits have been accused (PDF) of saddling (PDF) students with high-interest loans and other onerous terms.
Warning Sign #3:Every time you make a new friend at school, he disappears. Only one-third of for-profit students will have graduated (PDF) six years after they enrolled, compared to 55 percent at public schools and 65 percent at private colleges. Part of the problem is misleading information about a degree's total cost, or disappointment at the quality of the education received.
Scholastic sticker shock got you down during the college admissions process? Bypass the $50,000 student loan and check out MoJo's selection of great schools that won't break the bank.
Sonoma State University (CA)
Tuition: $2,754 in-state/$8,334 out-of-state
Best value for: Pinot-loving building nerds
Most famous for its wine-business program, Sonoma State is also home to the Environmental Technology Center, a sustainable-architecture think tank where students can learn the basics of green building.
Tuition: $2,844-$9,792 on a three-tier scale, depending on how much Indian heritage you can claim
Best value for: Students hoping for a different kind of res. life
Located on the Flathead Indian Reservation in Pablo, Montana, SKC, considered one of the country's best tribal colleges, has a great Native American Studies Program (PDF), with classes like Hide Tanning, Drumming & Singing, and Coyote Stories.
University of Montevallo (AL)
Best value for: Swamp things
Alabama's only public liberal arts college. Montevallo's Ebenezer Swamp Ecological Preserve and wetlands research center make this school a good choice for aspiring naturalists.
Bethel College (KS)
Best value for: Students who want to give peace a chance
This small Mennonite college houses the Kansas Institute for Peace and Conflict Resolution, where undergrads can earn a certificate in conflict mediation in addition to their diploma.
Best value for: Take-charge types with a conscience
At this highly selective public liberal arts college in New York's Finger Lakes region, students can learn to be ethical leaders through workshops and service-learning projects offered by the Geneseo Opportunities for Leadership Development (GOLD) program.
Tuskegee University (AL)
Best value for: Students who want to heal historical wounds
From Rep. Kendrick Meek (D-Fl.) directed at his Democratic opponent, Jeff Greene, in last night's US Senate primary debate:
"Your life is a question mark and every day we learn about your business dealings and how you treat your employees and how you come up with versions of why you went to Cuba and why you didn't go to Cuba. You have more versions of why you went to Cuba than Baskins Robbins has ice cream."
As this utterance suggests, last night's Meek-Greene debate was short on, well, debating, and looked more like Ali-Spinks (the first version, that is). Indeed, the entire Meek-Greene race has devolved into a big, bruising slugfest. One day Meek's campaign blasts out an email titled "One Investigative Story, One Editorial, And One Terrible Day for Jeff Greene" and the next Greene rips Meek for his ties to security contracting company Wackenhut. And 'round and 'round it goes.
That's not to say seamy ties and skeletons in the closet—or, in this case, Cadillacs of dubious origin and vomit-caked yachts—don't matter. They do, sort of. But when they consume an entire campaign, as last night's debate showed, leaving little oxygen in the room to address issues of social and economic policy, of fixing Florida's jobless crisis or housing debacle, then we have a problem. No wonder Americans are so pissed off at Congress and disillusioned by American politics.
Sen. Michael Bennet, the Obama administration-backed candidate in Tuesday's Colorado Democratic primary, glided to an easy victory over former state House speaker Andrew Romanoff, winning his party's US Senate nomination 54 percent to 45 percent with most precincts reporting. Despite staging a late comeback in the polls, and unleashing a barrage of attack ads revolving around past financial dealings of Bennet's, Romanoff, the more liberal candidate, never closed the cash gap—heading into the primary vote, Romanoff had raised only $1.96 million while Bennet had raised $7.7 million. It's that financial advantage, coupled with the Obama grassroots machine's support for Bennet, that likely helped the former Denver Public Schools chief come out on top.
Bennet will now defend his Senate seat against Republican Ken Buck, the district attorney for Colorado's Weld County, in the general election this fall. Buck defeated former lieutenant governor Jane Norton by a slim margin Tuesday, 51 percent to 48 percent.
According to Public Policy Polling, Tuesday's results in Colorado set up what could be a tight race for November, with Bennet edging out Buck 46-43 in a November projection. Complicating the picture, PPP found, is the sheer dislike of both candidates as voiced by voters. In August, 48 percent of voters said they didn't like Bennet, and 46 percent said they didn't like Buck. So while Bennet might have a small edge right now, the likely winner in November is anyone's guess.
From a campaign finance perspective, Bennet's victory on Tuesday marked a win for big, deep-pocketed donors over small contributors. According to the Center for Responsive Politics, only 10 percent of Bennet's donations came from people giving $200 or less; Romanoff, on the other hand, raised 62 percent of his funds from small donors. (These totals are through July 21, the last day covered by Colorado election reports.) The GOP's Ken Buck, meanwhile, saw 50 percent of his donations come from small voters. Now, with Bennet squaring off against Buck, we'll see whether the GOP's grassroots efforts can match the fundraising prowess of the well-connected, wealthy Bennet.
The Florida Attorney General's office announced today new investigations into three of the state's biggest law firms handling foreclosure cases, otherwise known as "foreclosure mills"—including the law firm run by multimillionaire David J. Stern, the subject of a Mother Jones investigation last week. The probes, led by the AG's Economic Crimes Division, are examining whether "improper documentation may have been created and filed with Florida courts to speed up foreclosure processes, potentially without the knowledge or consent of the homeowners involved," according to a press release. The other two firms targeted by the AG are the Law Offices of Marshall C. Watson and Shapiro & Fishman, who, together with Stern's firm, handle a vast number of the foreclosure cases now clogging Florida's courts system.
As I reported last week, foreclosure mills like Stern's are well-greased, assembly line-like operations that try to squeeze profits from every step of the foreclosure process, from the filing of the legal complaint (in states where foreclosures are a judicial matter) to litigating the foreclosure to the selling of repossessed homes—or as they say in the industry, from "cradle to grave." As a result, the mills' economic interest arguably runs to counter to the well-being of your average homeowner. Stern himself admitted so much, in an investor presentation earlier this year: "When people say, 'Oh, my god, the economy is bad,' I'm like, 'Oh, my god, it's great.' I hate to hear people are losing homes, and credit isn't available, and people's credit is such that they can't [refinance]. But if you are in our niche, it's what we want to do, and it's what we want to see."
Over the past decade and a half, Stern has built up one of the industry's most powerful operations—a global machine with offices in Florida, Kentucky, Puerto Rico, and the Philippines—squeezing profits from every step in the foreclosure process. Among his loyal clients, who've sent him hundreds of thousands of cases, are some of the nation's biggest (and, thanks to American taxpayers, most handsomely bailed out) banks—including Wells Fargo, Bank of America, and Citigroup. "A lot of these mills are doing the same kinds of things," says Linda Fisher, a professor and mortgage-fraud expert at Seton Hall University's law school. But, she added, "I've heard some pretty bad stories about Stern from people in Florida."
Stern's firm and Stern himself have, over the years, faced an array of damaging lawsuits. They include blithely foreclosing on homeowners who'd never defaulted (pdf), gouging homeowners who were trying to get out of default (pdf), and even sexual harassment (pdf). I began my story, titled "Fannie and Freddie's Foreclosure Barons," with an anecdote about a foreclosure defense employee, Ariane Ice, who'd discovered a number of backdated documents. Stern's firm, she realized, had used the documents to foreclose on Florida homeowners. And these weren't minor documents, either: They were "assignments of mortgage," a crucial piece of evidence showing who owns the mortgage and thus has the legal right to foreclose on it. From reading the AG's press release, it looks like they've clued into that assignment funny business:
Because many mortgages have been bought and sold by different institutions multiple times, key paperwork involved in the process to obtain foreclosure judgments is often missing. On numerous occasions, allegedly fabricated documents have been presented to the courts in foreclosure actions to obtain final judgments against homeowners. Thousands of final judgments of foreclosure against Florida homeowners may have been the result of the allegedly improper actions of the law firms under investigation.
The AG's office is also investigating foreclosure mills' use of offshore affiliates to pump out legal filings. Again, this sounds like Stern's firm, which maintains an offshore operation described in an SEC filing as "a scalable, low-cost operation in Manila, Philippines that provides data entry and document preparation support." In other words, a paper mill on the other side of the world that churns out legal documents.
Sounds similar to me. The AG's office sent me copies of the subpoenas for each of three investigations, which are embedded below. I'll add more on the subpoenas' content when I get done reading through them.
Read the Florida AG's subpoenas sent to three major foreclosure mills as part of a new investigation: