Government Gives Away Billions In Grants To Students Who Never Graduate

Tyler Durden's picture

In “Who Is Stoking The Trillion Dollar Student Debt Bubble?,” we highlighted the rather disconcerting fact that in 2014, the US government gave out some $16 billion in loans to students attending colleges that graduated fewer than a third of their students after six years.

As WSJ suggested, accrediting agencies are part of the problem. “One problem may be that the accreditation game suffers from similar conflicts of interest as those which caused ratings agencies like Moody’s and S&P to rate subprime-ridden MBS triple-A in the lead-up to the crisis,” we argued.

In the end, the disbursal of billions in federal aid to students attending schools where they’re unlikely to graduate is, like lending to students that attend for-profit colleges that the government is fully aware will likely one day be shut down, just another example of the misappropriation of taxpayer funds.

Well, if you needed further evidence of this, look no further than the Pell grant program.

As NBC reminds us, “Pell grants are given to low-income families and, unlike student loans, do not need to be paid back – [they] are the costliest education initiative in the nation.”

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MORE FEEDBACK FROM THE UNIVERSITY OF PHOENIX

It seems the University of Phoenix takes offense with my articles about their bilking of the American taxpayer and screwing of thousands of people who were lured into debt with the promise of an on-line worthless degree. How could I possibly question an institution that has a graduation rate of 16%, awarded Shaq a doctorate, and whose students have a 30% loan default rate within 3 years. I received the following email from a professor at the University of Phoenix. I’ve left his name out, but I verified that he is a professor. Did you know their on-line programs are better than Harvard, Yale and Stanford. I’m sure they are shaking in their boots. I interviewed someone with a University of Phoenix MBA on their resume. This person was a dullard. The entire For-profit education racket is a joke and completely dependent upon your tax dollars to keep the scam going.

I’ve included my response to the professor below his public relations drivel.

 

Greetings Mr. Quinn,

I have taught strategic management MBA courses for a number of universities for more than ten years and presently teach several online MBA courses for 2 universities. Most of my experience is with teaching online MBA courses. In some of your Burningplatform articles you have made some rather misinformed statements about the University of Phoenix. Just like non-profit universities – not all for profit universities are the same quality. I know Wharton is an excellent school – but UoP online offers an important option for adult-learners.

The University of Phoenix (UoP) has the most effective and by far the best quality online university programs in the world. Like Wal-Mart dominates retail – UoP has the most innovative and effective online learning programs for adult-learners. Harvard, Stanford, Yale’s, etc. online learning programs are nowhere near the quality or effectiveness of UoP’s online learning platform.

I would not make the same comparison about the in-person classroom programs – but for online learning – UoP has huge competitive advantage edge over all other universities.

Some facts you may not know about UoP are:

The University of Phoenix (UoP) is a highly accredited institution of higher learning that offers a wide variety of classroom and online degree programs.

The University of Phoenix has close to 600,000 graduates, nearly 480,000 current students and 32,000 faculty members. The faculty members bring an average of 16 years of “real world” work experience to the classroom unlike most tenured professors at traditional colleges who have never worked in business nor held an executive position in a corporation. UoP requires faculty to be specialists and/or successful practitioners of the business discipline in which they teach.

University of Phoenix is accredited by The Higher Learning Commission and is a member of the North Central Association. University of Phoenix business programs are accredited by the Accreditation Council for Business Schools and Programs (ACBSP).

ACBSP has accredited the University of Phoenix’s Bachelor of Science in Business, Master of Business Administration, Master of Management, Doctor of Management and Doctor of Business Administration.

Why is accreditation of University of Phoenix business programs significant? Because only about one in four business schools offer programs accredited by a programmatic accrediting body, University of Phoenix is part of an elite group in the higher education community for business students.

Regards,

 

MY RESPONSE:

I’m sure you do your best to teach people who want to learn. The University of Phoenix/Apollo Group is as bad as Wall Street in their manipulation of the federal student loan system to create profits. Your employer admits tens of thousands of people who should not be in college. It’s a scam. I deal with facts, not PR bullshit and slogans. Apollo stock is down 80% from its 2009 high. Your employer is shutting down 50% of your campuses. Your employer will not exist in five years. It will be bankrupt.

A graduation rate of 16% is a joke. Your employer was getting $2.5 billion per year in Federal government support and luring people into debt. The 84% who didn’t graduate are left with debt and no degree. I consider that to be a despicable business concept.

“When calculated using the standards set by the Department of Education, the university’s overall graduation rate is 16 percent, which, when compared to the national average of 55 percent, is among the nation’s lowest. The federal standard measures graduation rates as the percentage of first-time undergraduates who obtain a degree within six years. The number is significantly lower at the university’s Southern California campus (six percent) and its online programs (four percent).”