They being students of on-line 'colleges'. The vast majority of these students obtain loans from the federal government and the government pays each year's tuition upfront. That is our money being paid upfront. If the student fails to pay the loan (and for on-line students the default rate is double that of regular college students), we are stuck with it. The 'college' still gets its money.
The Huffington Post has a lengthy article about one of these on-line 'colleges', Education Management Corp. The article recounts the company's performance after Goldman became a 41% owner. The company hired former University of Phoenix management and really changed into a very, high-powered selling machine. It didn't matter whether the customer had a computer to access the courses, was poor, had a checkered past, was not desperate to go to college. The customer was seen as a prospect who had to become a customer or the salesperson would be punished in some fashion.
Now, the federal government and that of five states have decided that the behavior of the company violates the law and have instituted suit.
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