Home > Uncategorized > $2,000,000,000,000 Bailout Winner: For-Profit Colleges!

$2,000,000,000,000 Bailout Winner: For-Profit Colleges!

Today’s NYTimes article describing some of the fine print in the $2,000,000,000,000 bailout and this one sentence paragraph describes one sector that won:

And for-profit colleges will be able to keep federal loan money from students who drop out because of the coronavirus.

Further down in the article, which enumerates many intended and perhaps unintended beneficiaries of the new bailout, is a description of WHY the profiteering colleges would benefit:

A provision in the bill would allow all colleges to retain federal funds allocated to help educate qualifying students, even if the students in question dropped out because of coronavirus-related emergencies. While the provision applies to all colleges, critics of for-profit colleges contend that, because those schools tend to have higher dropout rates, they would be able to retain more of the money they collect via federal loans to their students than would traditional nonprofit colleges.

“What’s happening now is causing a crisis for all sectors of higher ed, and I understand the intent, but it would disproportionately help for-profit schools because their dropout rates are higher than other segments of higher ed,” said Toby Merrill, the founder of the Project on Predatory Student Lending.

In a massive spending bill like the one passed by the Senate it is impossible to push back on each and every flaw, but the fact that this was not flagged earlier is, the cynical part of me believes, an indication that for-profit education institutions that benefit because they fail large numbers of students are not an anathema to the leadership of the Democratic party. I hope my cynicism is misguided.

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