Did you notice how many colleges in our area have nicknames featuring animals ?
There are the Golden Gophers for Minnesota, the Bison for North Dakota State, the Jackrabbits for South Dakota State, the Hawkeyes for Iowa, the Badgers for Wisconsin
… do you know John Kline’s favorite
… anybody guess the Corinthian Colleges Cash Cows ?
For those of not familiar with the term “cash cow”, it’s slang for : a steady dependable source of funds or income from a profitable asset producing funds that are used to finance investment in other areas, support unprofitable ventures, etc.
And Corinthian is a cash cow … John Kline happens to be the most recent recipient … not directly, but better … indirectly.
The top contributor to John Kline (R-MN-02) Freedom and Security PAC is Corinthian College at $15,250.
Corinthian has been a “steady dependable source” for Republicans for awhile … for example, from this 2006 Washington Post story about John Boehner (R-OH) and his Freedom Project PAC :
Boehner’s PAC received $72,550 in donations from employees and lobbyists from for-profit colleges and trade schools.
The largest single source of money from the for-profits, $17,500, was given by corporate officers and senior employees of California-based Corinthian Colleges Inc., a for-profit educational firm which disclosed eight weeks ago that the Florida attorney general is investigating a Florida subsidiary.
Boehner has sponsored legislation strongly supported by private student lenders to restrict the ability of the U.S. Department of Education to make government student loans less expensive by cutting fees. Student loans constitute a multibillion-dollar market in which the nonprofit government and for-profit private lenders compete.
During the current congressional session, Boehner’s committee endorsed his legislation to allow the for-profit colleges and trade schools to gain millions of dollars in federal subsidies.
Earlier this month, the RoundTable reviewed a General Accounting Office study which included undercover tests at 15 for-profit colleges found that all 15 made deceptive or otherwise questionable statements to GAO’s undercover applicants.
Considering those fraudulent actions encouraged by for-profit colleges, the Department of Education is proposing regulations which will reinforce a ban on compensating admissions recruiters based solely on success in securing student enrollment, i.e. incentive pay. There is also a proposal which would cut federal aid to some for-profits whose graduates paid more than 8 percent of their salary to service their student-loan debt.
Mr. Kline, as the ranking Republican and potential Chairman of the Labor and Education Committee has made his views clear, writing :
“Are some students borrowing too much for a college degree from which they receive too little value?
Can that problem be solved with arbitrary debt-to-income ratios?
Mr. Kline will protect his “cash cow” … but who will be slaughtered ?
Consider a recent Good Housekeeping article featuring a heartbreaking story of a 28-year-old single mother who paid $27,000, $15,000 of it borrowed, to attend a for-profit school based on promises of placement support and a booming job market, only to discover that her training was not sufficient to allow her even to register to take the test for the professional credentials she would need to get hired and the placement services were missing in action.
The education that had cost her $27,000 turned out to be worthless—but of course she still had to repay the loan.
The predatory practices to which this young lady was subjected are two of the most common and most egregious. And they represent the essence of what is wrong with far too many for-profit colleges and career schools. These schools are expensive—substantially more than most public universities and private colleges, and far more than the community colleges that, like career schools, offer certificate-focused programs. The curriculum they offer at these inflated prices all too often turns out to be worthless in the job market. And their economic model is based on luring students into exhausting their federal student aid and running up debt—debt that, because the training is so often worthless in terms of finding a good job, they cannot repay.
Statistics from the College Board and the Department of Education statistics show, for example, that more than half of all for-profit students leave school with more than $30,000 in debt (compared to 12% of four-year college students) and more than one in five federal student-loan borrowers default within three years of leaving school and beginning repayment.
If the syndrome sounds familiar—companies fattening up their bottom lines by leading low-income families and individuals into borrowing money they cannot repay to buy goods and services that turn out to be, at best, vastly overpriced—it should. Because it replicates the course of conduct that led us into the financial crisis that began in 2007 and persists today.
It was bad enough that, when housing prices stopped increasing and loans came due, the already-fragile economic security of millions of families was destroyed. And then it got worse. The widespread defaults on ill-advised loans destroyed not only the people who had borrowed the money, but the financial institutions that had loaned it. And those institutional defaults spread throughout the economy.
Do these gloomy portents seem overstated? The amount of money being consumed by proprietary schools is skyrocketing. “Federal aid for students at these schools has exploded in the last few years,” NPR reports, and now stands at about $27 billion. “And even though only 7 percent of all college students attend for-profit schools, they represent almost half of the students who default on their loans.” And default rates among students of for-profit schools have almost doubled in the last decade, according to the independent education policy think tank Education Sector, “growing from 11 percent to 21.2 percent.”
Yep, it’s a Cash Cow …. And by giving the money to Mr. Kline’s PAC means that he can direct “finance investments to other areas” … which he has done … such as “contributions” to Demmer for Congress and Paulsen for Congress. Investing the Cash Cows monies now, will ensure the votes of Randy Demmer (Congressional candidate for Minnesota’s First District) and Erik Paulsen (R-MN-03) if their campaigns are successful this November.
Now, if you accept that the nickname is “Cash Cow”, the obvious question is : “What’s the sport ?”
The answer : Golf.
Not only is golf, John Boehner’s prime sport, but Mr. Kline’s PAC has expended $12,389 at the Kiawah Island Golf Resort in Charleston, South Carolina. Yes, $12,389 is a mere pittance compared to Mr. Boehner’s whose Freedom Project PAC spent at least $82,998 on golf outings in 2009 as Mr. Boehner headlined 119 events.
Golfers, mark your calendar for Monday, August 30th when Mr. Boehner takes his “tour” to Minnesota that is being promoted as a benefit for Randy Demmer (but maybe should be a down-payment from Corinthian for future votes).
Hopefully, between swings, some media member will be able to ask : If the taxpayer should be stuck with 100 percent of the unpaid principal on defaulted loans ?