The following information and analysis is by investigative researcher, professor and organizer, Dahn Shaulis.
Readers can thank Dahn for his unrelenting fight against the for-profit demons we call ‘for-profit colleges and universities’.
As Dahn has stunningly showed, these so-called colleges are asset stripping money machines whose existence has little, if anything to do with learning and everything to do with ‘earning’.
It is time for the teacher pension funds to begin massive disinvestment in these stocks that fuel Wall Street and allow these crime syndicates to profit and exist. These investment centers are now sucking the blood out of both social-economic life in American and individual existence as they vacuum up free tax monies to work to put students into debt peonage for life.
As Dahn has shown time and time again, teacher pension fund managers are now white collar hedge fund managers who are putting past, present and future retirees at risk. Why are they buying for-profit college stocks? Why do they refuse to address the issue of ‘disinvestment in criminal rackets’?
Photos of Strayer College by Dahn Shaulis: a homeless man in Philadelphia sleeps under the canopy of the for-profit syndicate, Strayer College
For-profit colleges are destroying the US educational system and democratic society in general
By Dahn Shaulis
Since 9-11, FPEs in higher education have systematically siphoned off about $400,000,000,000 from the US government, in the form of VA benefits, Pell grants, and federally backed student loans.
Several hundred billion dollars that could have gone to community colleges and other public colleges. Instead, that money has been going to banks, hedge funds, CEOs, and other investors.
What FPEs have not been able to take from the federal government, they have taken from vulnerable populations (veterans, people of color, middle-age women, the underemployed and unemployed, the disabled, and the socially isolated).
Many of these targeted people do not finish their education, and a significant number default on loans that will keep them in debt peonage for life.
FPEs are backed by a variety of other institutions (e.g. banks, hedge funds, retirement funds, mainstream media and their advertisers, politicians from both parties). Groups that typically supported and protected working class people have not shown the courage to fight the powerful FPEs and their lobbies.
The complicity extends to unions such as AFT and NEA, and college professors and public school teachers who look the other way.
At some point, there should be a critical mass that understands what is going on, and will demand for radical changes. This exploitation cannot continue.
Apollo Group, Strayer, and ITT are money making machines. With the tens of billions of dollars they siphon from the US government and from targeted populations, they generate billions more in cash
For-Profit educators use billions of dollars on advertising and aggressive recruiting, hire part-time teachers at low wages, give executives large chunks of the stock to cash in-and they still have mountains of cash.
That’s why investors won’t give up on these stocks, even as enrollments decline.
Putting Free Cash Flow Yield to Use
1) Enzon Pharmaceuticals Inc (ENZN) - 38.99% FCF yield
2) Cirrus Logic Inc. (CRUS) - 29.50%
3) RPX Corp (RPXC) - 26.43%
4) USA Mobility Inc (USMO) - 20.27%
5) Columbia Laboratories Inc. (CBRX) - 19.76%
6) Strayer Education Inc (STRA) - 18.84%
7) United Online Inc (UNTD) - 18.62%
8) PDL BioPharma Inc (PDLI) - 18.12%
9) Cornerstone Therapeutics Inc (CRTX) - 15.93%
10) Great Northern Iron Ore Properties (GNI) - 15.54%
11) Apple Inc (AAPL) - 13.25%
12) Inteliquent Inc (IQNT) - 13.25%
13) Smith & Wesson Holding Corp (SWHC) - 13.14%
14) Cisco Systems Inc (CSCO) - 12.94%
15) ITT Educational Services Inc (ESI) - 12.52%
16) Apollo Group Inc (APOL) - 11.69%
Many of the Corinthian Colleges campuses are default factories.
Photo of Strayer College
One Chronicle reader commented:
“What stands out most on this list, for me, is the 5 institutions that have more than 5 campuses above 30%: Everest (18 campuses); Heritage (5); ITT (13); Kaplan (6); and Lincoln (5). These 5 institutions account for 25% of the entire list. Two of them, Everest and ITT, account for 16% of all the campuses.”
Tens of thousands of former Corinthian College students now in debt peonage.
Much of the following graph cannot be displayed due to size. However, the two and three year default rate is the eye opener. And the rates just keep on going up and up!
Undergraduate federal student-loan borrowers (2008-9)
2-year default rate
3-year default rate
|Source: U.S. Department of Education
|EVEREST COLLEGE||CO||Proprietary 2 to 3 Years||1663||2065||26.2%||48.2%||21.9|
|EVEREST COLLEGE||CA||Proprietary 2 to 3 Years||586||740||31.2%||47.0%||15.8|
|EVEREST COLLEGE||UT||Proprietary 4 Years or More||1434||1914||24.8%||43.6%||18.8|
|EVEREST COLLEGE||MO||Proprietary 4 Years or More||1180||1336||27.6%||43.1%||15.5|
|EVEREST COLLEGE||OR||Proprietary 2 to 3 Years||3177||4128||23.3%||42.4%||19|
|EVEREST COLLEGE||VA||Proprietary 2 to 3 Years||1497||1995||20.8%||41.5%||20.7|
|EVEREST COLLEGE||NV||Proprietary 2 to 3 Years||471||583||22.8%||41.3%||18.5|
|EVEREST COLLEGE||CO||Proprietary 2 to 3 Years||685||845||20.0%||37.3%||17.3|
|EVEREST COLLEGE PHOENIX||AZ||Proprietary 4 Years or More||2862||3254||20.4%||40.0%||19.6|
|EVEREST INSTITUTE||NY||Proprietary 2 to 3 Years||2208||2606||25.7%||48.2%||22.5|
|EVEREST INSTITUTE||FL||Proprietary 2 to 3 Years||1399||1807||27.6%||47.4%||19.8|
|EVEREST INSTITUTE||FL||Proprietary 2 to 3 Years||3384||4623||22.5%||44.3%||21.8|
|EVEREST INSTITUTE||WV||Proprietary 2 to 3 Years||2060||2753||20.3%||43.7%||23.4|
|EVEREST INSTITUTE||PA||Proprietary 2 to 3 Years||601||756||22.8%||41.6%||18.8|
|EVEREST UNIVERSITY||FL||Proprietary 4 Years or More||2900||3235||23.4%||41.3%||17.9|
|EVEREST UNIVERSITY||FL||Proprietary 4 Years or More||6980||7974||13.7%||37.6%||23.9|
|EVEREST UNIVERSITY||FL||Proprietary 4 Years or More||7164||8286||17.0%||36.7%||19.6|
|EVEREST UNIVERSITY - POMPANO BEACH||FL||Proprietary 4 Years or More||2678||3355||16.1%||33.3%|
So what are the teacher pension funds doing about all of this? Investing in these for-profit racket stocks, that’s what!
Here is a letter to the upper echelon of AFT by Dahn Shaulis (http://www.dailycensored.com/profit-college-news-strayer-teacher-unions-call-centers-called-colleges/). These unions have continuously refused to address the fact that investment in Wall Street fraud is disinvestment in the public commons.
Craig, Daniel, and David-
I’m sorry that AFT officials have decided not to fight the for-profit schools, at least not in a serious way. As a member of AFT, I am very disappointed, but not surprised.
Craig, you provided me with evidence (Mr. Rosen’s testimony) that AFT should be doing more, with what you already know about the tactics of corporations such as Corinthian Colleges.
But it’s this path of complicity that means the slow demise of AFT and big unions.
I’m sure you’ll get your pensions, but what about the next generations of teachers and public service employees?
Please read this article.
Dahn Shaulis (e-mail to AFT, 11/25/2013)
The AFT crew never responded.