
For-profit college cancels $500M in student debt after fraud allegations - daegloe
https://www.nbcnews.com/news/us-news/profit-college-cancels-500m-student-debt-after-fraud-allegations-n954486
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ada1981
This would be a good requirement for any educational institution:

“give all prospective students a single-page disclosure with information
including job placement rates, anticipated costs and the average earnings of
graduates.”

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protonfish
This seems like a terrible idea. Colleges should be about learning. I can
understand guaranteeing what skills at what proficiency should be attained,
but job placement and career advancement are the result of a different
process. If you want a business that studies the needs of employers, gives
crash courses in those skills to build what is determined to be a desired
resume, and then aggressively markets you to prospective job opportunities,
that sounds valuable, but it most definitely not an educational institution.

~~~
_jal
Like it or not, the primary reason a lot of people go to school is related to
desires about their future earning potential. I don't see how intentionally
refusing to provide information on outcomes experienced by past students is
going to benefit those people.

Not everyone goes off to an expensive school at 18. Rest assured, those
institutions are going to stay available. This is about for-profits, and
calling those "educational institutions" is already an arguable proposition.

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wonthegame
I would assume graduates that obtained high paying jobs would be more likely
to complete these surveys. Of course they could include how many graduates
were polled and how many responded.

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bko
> The debt stems from institutional loans the company issued to students

The article makes it sound as though these weren't government loans. Are
students of that institution able to tap government loans?

Bootcamps often post misleading statistics about placement numbers [0]. Will
they be subject to the same fraud allegations? I would think misleading
statistics are pretty much par for the course for nearly all form of sales. I
generally apply by the principal of "never ask your barber if you need a
haircut". These seem kind of fraud allegations seem to be arbitrarily enforced
and politically motivated.

[0] [https://medium.com/@abinoda/coding-bootcamp-placement-
rates-...](https://medium.com/@abinoda/coding-bootcamp-placement-rates-are-
still-misleading-and-harmful-a761a0b9ecaf)

~~~
rcarrigan87
The value of a college degree has changed whether you get the degree from an
Ivy League School or a diploma mill. All colleges are basically false
advertising at this point. The settlement will make some politicians feel
good, but the reality is the entire system needs to be overhauled.

~~~
exogeny
I would dispute this, if only using personal experience. The value of my
degree from CMU has paid itself back multiple times over in terms of doors
opened.

Your statement feels like too broad of a brush. In my view, there’s a huge fat
tail of non-value add schools that are only surviving because of this
perception, but the narrow bulb of the elite schools maintains that value if
only due to networking and social proof.

~~~
ada1981
Did you study engineering at CMU and literally design a system that opens
doors?

That would be awesome.

~~~
SketchySeaBeast
"We here believe that the most important thing a college can do is lift its
students up and open doors for them here at the Central Minnesota School of
automatic door and elevator repair. Keeping you cool under pressure is the job
of our sister school, the Minnesota Institution of Heating, Ventilation, and
Air Conditioning."

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Vaslo
Sometimes these issues occur in public Universities. A friend of mine took a
Masters in Occupational Therapy, and their school continually advertised very
high averages for OTs. The vast majority of the program staying the East
Ohio/West PA area looking for jobs. The schools average was US and included
much higher Cost of Living cities where salaries would be higher. When asked
for local data, they had none available and claimed the data was local.
Literally nobody got anywhere near that salary who stayed in the area, and
none of the interviewing companies ever even offer something near that. An
honest disclosure on how many people get jobs and how much they earn
regionally should be required for any school, profit or non-profit.

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esotericn
Why regionally?

In the UK, most move away from home to study, and then move away from their
University to work.

Anecdotally I don't know a single person who studied at University and works
near their hometown.

For many it's the main reason they study. To get out.

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vinceguidry
I'm guessing the kids who actually paid their student loan debts didn't get
any of their money back.

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mirimir
If it's been established that there was fraud, I'd think that they would have
claims. If Career Education has any capital left, there's potential for a
class action. And if I remember correctly, plaintiffs can demand treble
damages.

~~~
vinceguidry
> If Career Education has any capital left, there's potential for a class
> action.

I'm guessing there isn't any capital left.

~~~
leereeves
Is it possible to sue the executives and investors?

Morally it seems appropriate. Execs who participated in or knew about and
didn't report fraud sound like accomplices, and investors who received the
proceeds of criminal activity shouldn't be able to keep those proceeds.

~~~
vinceguidry
Piercing the veil is deliberately kept difficult by the justice system. You
need concrete proof, which is easily destroyed.

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stolson
> More than 90 percent of its students are enrolled through online courses,
> according to the company.

That's a huge number. I believe online education is going to be an important
part of college education, but that's almost the entire student body. Good to
see this debt being cancelled.

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madengr
/rant

The entire premise of these (snobbish) comments seems be: if you majored in
anything that is employable, then it’s “vocational”, and you really didn’t
learn anything.

That’s insulting and a load of bullshit. I can only speak for EE, but it’s all
theory and loaded with difficult math, physics, etc. So an English major is
“educated”, but an EE education is trade school? I think the “educated” majors
ought to take graduate level electromagnetics. They’d be raked over the coals.

/rant

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8bitsrule
It should be mentioned that both of the schools owned by Career Education
Corporation receive over 90% of their funding from the US Govt.

[https://en.wikipedia.org/wiki/Colorado_Technical_University](https://en.wikipedia.org/wiki/Colorado_Technical_University)

[http://en.wikipedia.org/wiki/American%20InterContinental%20U...](http://en.wikipedia.org/wiki/American%20InterContinental%20University)

AIU was founded in 1970 'as the American Fashion College of Switzerland'. CEC
has been under investigation since the mid-2000s, and decided to close most of
its schools in 2015.

Not that for-profit vocational-training schools with credibility problems are
a new thing. They are 'accredited' by ten nationally recognized accrediting
agencies overseen by the Dept. of Ed. It should be dismaying that schools
which primarily 'serve' federally-funded DoD and GI Bill students are not held
to objective claims about their efficacy.

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exogeny
For-profit college? Fraud?

Surely you jest.

