Briarcliff College has a founder by the name of John Sperling, and he recently sold his share of stocks for fifty-nine million dollars. The reason he did that was because the gainful employment act passed. Since then, for-profit colleges have seen a huge increase in the cost of their stocks.
Now let me explain what the gainful employment act is;
So these for profit colleges were found to have these deceptive recruiting techniques, they were recruiting students and promising them the moon and the stars after they graduate and at the same time the students would take out these huge loans and then they would enter these programs that were not beneficial at all. They would graduate with huge student loan debt and they would default on those debts because of the fact that they were unable to find work after graduating.
The Obama administration and congress found this to be a huge problem and they wanted to regulate the for-profit system because in the end the losers here are the American taxpayers, because our tax dollars are funding the schools and going into the financial aid that allows these students to go to these horrible institutions. So Congress decides that they are going to pass the gainful employment act, which would make sure that a certain number of students who graduate from these schools find work. If they do not find work, the government will no longer offer financial aid to those students should they choose to go to a for-profit college that is underachieving. It was very strict proposal and the for-profit colleges freaked out, they didn’t know what to do.
So they sat back and thought of the following; they know that everyone in government is bought and so the best place to start was by using some campaign dollars. They start funding both republicans and democrats, actually funding more democrats than republicans.Â Heavy funding and in the end when the gainful employment act passed, it was a very watered down and lenient version. Basically, it gives these for-profit colleges three different shots to get things right within a four-year time span. So in four years, they have to mess up in three of them for the government to take the funding away. And that gave John Sperling plenty of time to cash out.You may not know this, or maybe you do. Student loan debt is now more than credit card debt. We have a whole generation of kids/students that are coming out of college right now and unable to find work. There are a lot of professors and educators in each of these institutions that are highly qualified, don’t get me wrong we need to acknowledge that. But these schools do not offer the degrees that are necessary to succeed after they graduate.
Another thing that will astonish you is that only 12% of students in the United States attend for-profit colleges, however 50% of the default on student loans come from students who graduate from for-profit colleges. These for-profit schools have investors, like our friend John Sperling. Private Universities like USC they don’t have investors, they’re not run like businesses. These for profit schools are run like businesses that’s the difference. So the Briarcliffe, Kaplan College, university of Phoenix, Harrington College all of those for profit universities are run like business and they make huge profits and they make huge profits because of the American taxpayer.
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STUDENT LOAN FORGIVENESS
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