Kaplan University charges the following populations different amounts for a 180 quarter unit Bachelor of Science degree: $30,000 for active duty military, $41,000 for veterans, $50,000 for international students and $68,000 for low income Title IV eligible students.
Why do the poor pay more? Kaplan blames it on a government regulation called the 90/10 rule, which states no more than 90% of revenues may come from Title IV grants and loans. As Donald Graham stated in a letter to shareholders:
“each time the federal government raises the maximum amount granted under Pell Grants or the maximum federal loan amount, we end up compelled to raise tuitions to comply with 90/10” (http://www.truth-out.org/washington-post-ceo-kaplan-and-predatory-accounting-hits-poor-students-hard/1327434164).
The 90/10 rule was designed to ensure at least 10% of revenues come from non-governmental sources, to insure that tuition was not being inflated above market rates. The reality is few individuals have any money or are willing to spend their own money for what are overpriced, curriculum starved internet colleges with questionable credentials — where little learning goes on.
In Kaplan’s case, a number of their programs have lacked proper accreditation necessary for students to obtain licensure in their chosen field. For example at Kaplan Title IV students pay $68,000 for a bachelor of science in nutrition yet are unable to seek licensure as a registered dietician. Several programs have recently closed or been shutdown due to accreditation issues, including a dental program in North Carolina and a radiology program in California(http://www.truth-out.org/kaplan-college-closes-north-carolina-dental-program-after-fraud-exposed/1327448249). This is just the tip of the iceberg.
Because of a lack of private-pay students to make up 10% of revenue as required by law, many for profit colleges have been raising tuition on low income Title IV students so it exceeds loan and grant maximums. They have been inflating tuition in direct contradiction to the intent of the 90/10 rule. This way they get their hands on government money even though the students cannot pay.
This has created a problem. As tuition keeps going up, fewer private pay students are willing to enroll. Would you pay $68,000 for a $30,000 degree which may lack proper accreditation?
Kaplan Universityand other for profit colleges have been engaging in a price gouging scheme which preys upon the poor and have been blaming the government and poor students for “forcing” them to do this. As Washington Post CEO Don Graham stated in his 2010 letter to shareholders:
“the federal government is an inadvertent price-fixer in the for-profit education field” and “As a general matter; no university can limit how much a student can borrow under Title IV” (http://www.truth-out.org/washington-post-ceo-kaplan-and-predatory-accounting-hits-poor-students-hard/1327434164).
Both of these claims are disingenuous and ‘irrational’ rationalizations for predatory business practices that harm students and cheat taxpayers. The real issue is of course, the profits Kaplan makes and the bloated CEO pay that they give to their executives while students are mired in debt and face the prospects of no jobs (http://truth-out.org/kaplan-university-pays-executives-quarter-billion-dollars/1326222281). It’s a crime, and it must be stopped.
Readers can go to the above cited Truthout articles to read more about Kaplan CEO pay, illegal activities by Kaplan, shuttered unaccredited ‘schools’ run by Kaplan, and other predatory news.