Phi Beta Cons

For-Profit Epiphany

I just had something of an epiphany regarding for-profit colleges. They are basically a money-transfer operation. Money is taken from the taxpayers and sent to the feds, who lend it to students, who give it to the for-profit colleges, who use it to pay profits to “investors.” Then, the student is left on his own to pay back the loan, with interest, I believe.

A true for-profit enterprise would have the investors lending money to the students, who would use it to avail themselves of the education, or product, offered by the college, and who would then pay back the investors with interest when they got jobs. But as it stands, the “profits” basically come from transferring money from the taxpayer to the fed to the student to the college (with quite a lot taken out to pay college staff and bills), and then to the “investor.” And it’s the student who takes all the risk, while the money to the colleges and the investors seems to be a sure thing, since it’s coming from the government via the taxpayer.

Tell me if I’m wrong. I got this insight after watching a Frontline documentary on for-profit colleges, availabe online. 

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