Wednesday, August 18, 2010

For Profit Schools Is Newest Windfall for Rep. Kline

As the ranking Republican on the Labor and Education Committee, Rep. John Kline (R-MN-02) has consistently advocated for legislation allowing 'For-Profit' colleges and trade schools to gain millions of federal subsidy dollars without bothersome federal regulations. There is an awful lot of money being pushed into the hands of people like Rep. John Kline right now by 'For Profit' schools which can only mean they want to influence legislation.
Over at MN Political Roundtable, MNCentral describes Kline as the Corinthian College mascot of a CASH COW because the windfall from 'For Profit' colleges like California's Corinthian College that funnels thousands of dollars to GOP PACs like Kline's Freedom and Security PAC.

But unlike his completely blind support of 'For-Profit' schools, John Kline has voted against funding to public schools and teachers while he continues to bemoan  or vote against federal dollars that go to public schools including money to the school lunch program...think of that...Kline begrudges giving a lunch to a hungry child! Kline wants the program to account for the increase dollars (a measly 10 million over 7 years!) by cuts in other social programs while increasing the cost of war til it's now 43% of our total budget.

But if you are a 'For Profit' schools, Rep. Kline doesn't want regulations to interfere with the spending of millions of federal dollars (our taxes) even though the General Account office is sounding the alarm on high interest rates on student loans, worthless degrees, marketing scams, and the looming student loan financial crisis...almost sounds like the mortgage industry with it's deceptive practices and gouging ballooning fees.

The problem is not the rising cost of schools, it's the rising cost of 'For Profit' schools and the burden they put on us with excessive costs underwritten by the federal government. The student loan default rate is three times higher at a 'For Profit' colleges, while the direct-loan program to students from these schools is three percentage points higher and they cost more to attend (11.9 percent more). 

Yet Rep. Kline still supports 'For Profit' schools as alternatives to public schools and advocates for no regulation. Meanwhile, Kline voted  'NO' this week on public school funding through the Education Jobs and Medicaid Assistance Act.  The  Act provides $16.1 billion to extend the Medicail assistance to states and 10 billion in funding for states to create or retain public teachers' jobs. (BTW-the bill passed).

Yes Kline has become a cash cow to special interests including 'For Profit' schools over public schools. Save your money now for your kid's college needs because with John Kline in office schooling costs will continue to balloon out of control while Kline continues to reap part of their profits and taxpayers like us pay the bill.


Minnesota Central said...

One of the often misstated reasons for opposing this legislation was that it would raise the national debt. NOT TRUE. The legislation was paid for by cuts in a number of programs including those in the Department of Education. It's doing what we want Congress to do ... spend the monies wisely.

Congress had to make hard choices. Budgets faced rescissions … small cuts, such as $50 million from the Millennium Challenge … and large cuts, nearly $12 billion cut to the food stamp program … and Education funding took a hard hit … including a $10.7 million cut to Ready to Teach, which finances telecommunications-based professional-development programs for educators and educational videos; an $82 million cut to student financial-aid administration; and a $50 million cut to Striving Readers, which underwrites adolescent-literacy programs.

Further, a West Tribune article with Collin Peterson presented why he voted for this legislation :
WILLMAR — U.S. Rep. Collin Peterson said he flew to Washington early this week thinking he would vote against a $26 billion emergency jobs bill.

“I don’t think we should be spending new money,” he said during a visit Friday to Willmar.

Peterson did vote for the bill to provide funding for Medicaid and to save public sector jobs. In the end, he was won over by a plan to pay for it through cuts in future funding for food stamps and by closing tax loopholes. President Obama has already signed it into law.

Peterson, chairman of the House Agriculture Committee, said the economic stimulus bill passed more than a year ago had increased future funding for food stamps, which his committee oversees. The last farm bill had already provided an increase for food stamps, he said.

Since he felt that the extra food stamp money could be spared, the switch allowed him to support a program he thinks will help the state’s hospitals.

Minnesota Central said...

FYI : CBS News story on 9/5810 :

(CBS) No segment of higher education is growing faster than for-profit colleges. Enrollment has shot up from 365,000 a few years ago to five times that now, but complaints by dissatisfied students are also rising.

Congress holds hearings again in September after investigators went undercover.

Two years after graduation, Michelle Zuver doesn't know how her college debt reached $86,000. She was told the cost would be less for a criminal justice degree she says many police agencies don't recognize. Her degree came from Westwood College, a for-profit school with 17 campuses, reports CBS News correspondent Wyatt Andrews.

"It's definitely a false American dream," says Zuver. "I can't get a job, I'm in debt and living at home."

Justin Schulthies, another Westwood student, borrowed $84,000 and also says he was never told the true cost. He describes his degree in videogame design as almost worthless.

"I feel like I went to Wal-Mart and bought myself a degree," he says.

Widespread complaints like this - overpriced degrees, misleading claims, and an alarming level of student debt - led to some embarrassing revelations this year on the entire for-profit college industry, including Westwood. When the Government Accountability Office went undercover to investigate how 12 for-profit colleges recruited their students and found that every one - 12 of 12 - made deceptive claims and that four colleges encouraged fraud. In a video, a Westwood sales rep tells the GAO agent not to report a quarter-million dollar bank account in order to maximize his student loans.

"Just FYI, they don't need to know your cash," says the recruiter on the video.

In June, the Senate heard testimony on why these colleges recruit so aggressively.

"Excuse the language, but it's putting asses in classes," says Senate witness Margaret Reiter.

Turns out, the explosive growth and profitability of the industry, including its big names like Kaplan and the University of Phoenix, is being funded by students using taxpayer-financed grants and loans. The industry now educates 10 percent of all college students, 1.8 million. But those students get 23 percent of federal loans and grants, and are the most likely to default on those loans.

"The whole business model of the for-profit school industry depends on taxpayer money," says Sen. Tom Harkin (D-Iowa)

The for-profit college system does play a critical role in society. It serves older students, workers between jobs and adults upgrading their skills. But now to protect taxpayers against huge losses, the Department of Education wants some new rules, including one that would expel a for-profit school from the student loan system until more of their graduates start to pay. The industry is fighting that rule, calling it a penalty for serving low income students who can't attend state universities.

"We're always going to have higher default rates than those who go to much more highly selective traditional institutions," says Harris Miller, president and CEO of the Career College Association.

Westwood College declined our interview request but claims that most of its graduates have "positions in their field of study." Meanwhile Schulthies works in a mail room and Zuver works in retail.

"They've put me in a situation where if I'm lucky I'll recover around the age of 50 or 60," she says.

Westwood tells CBS News that Zuver got the information she needed on the cost and value of her degree but Westwood and the other colleges caught on tape by the GAO have promised major improvements in what they tell students what they disclose during recruiting, including more details on costs and whether the degree being offered is likely to result in a job.

Minnesota Central said...

FYI : Did you know that the Westwood College Inc Fund for Educational Excellence donated $1,500 to Mr. Kline’s campaign in April ? This was the first time they have every donated money to Mr. Kline.