How Banksters use Universities for rent extraction: HuffPost
I wrote previously that Universites were becoming part of Finance Capital’s move into all the areas of what used to be public goods owned by the people. They have become merely conduits for recruitment of suckers for a financial rent taking.
Now the Huffington Post has a new article showing exactly how this was done. Goldman Sacks was part of a buyout of for-profit University company EDMC. The elements of a familiar bankster led rent extraction scheme are all here: Goldman Sacks, Congress, soaking the poorest and vulnerable for rents. When will the people say enough?
“When Goldman shows up at the party, they show up as the smartest guys in the room,” said Barmak Nassirian, who followed EDMC’s rise over the past decade as the associate executive director of the American Association of Collegiate Registrars and Admissions Officers. “2006 was the significant year, because that was the year that the smartest people figured out how easy it was going to be to grow geometrically. You’d have to be from Mars not to know that they were smelling an easy path to big bucks.”
And the tactics were taken right out a some subprime slime selling manual:
After the deal closed and Goldman became a partner, employees soon noticed a drastic shift in culture. Longtime admissions managers were replaced, ushering in an era in which recruiters were endlessly hounded by supervisors about hitting weekly enrollment targets. The admissions staff nearly tripled, requiring expanded floor space to accommodate a sales force of more than 2,600 across the country.
Management handed down revamped telemarketing scripts designed to prey on poor and uneducated consumers, honing in on their past mistakes in life as a ploy to convince them that college would solve all their problems, according to conversations with more than a dozen current and former Education Management Corp. employees over the past two months.
“You’d probe to find a weakness,” said Brian Klein, a former admissions employee who worked for three years at Argosy University Online, one of four major colleges operated by EDMC. “You basically take all that failure and all those bad decisions, and you spin it around and put it right back in their face as guilt, to go to this shitty university and run up all of this debt.”
Recruiters told people with felony criminal records that pursuing a criminal justice degree would allow them to achieve their dreams of joining the FBI — an impossible scenario, because the bureau is barred from hiring people who have been convicted of such offenses. They convinced students with no access to a computer or Internet that they could use the local library for classes, even though they would need to save files and download specific software to access coursework.
“It just got to the point where I felt like I was lying to these people on a regular basis,” said Patrick Flynn, a recruiter at EDMC’s South University online from 2006 through 2009, when he quit. “Honestly, I just felt dirty doing the things I was doing. It’s almost like they were trying to make me take advantage of people’s belief in what this education was going to get them, when I didn’t buy into it myself.”
Notice also that Congress was complicit in the creation of this rent extraction on the back of the people as well.
For the new investors, 2006 opened a particularly attractive opportunity to invest in higher education. After years of lobbying by the for-profit college industry, John Boehner, then the chairman of the House education committee, helped to eliminate a key provision that had moderated the growth of exclusively online universities.
The so-called 50 percent rule, which required half of all students to be at a ground campus in order for a school to be eligible for federal aid, had been put in place to discourage dubious distance education programs that offered subpar learning. Boehner helped to nix the rule in a budget agreement that took effect in early 2006, allowing schools to expand enrollments — and revenues — without having to invest in additional ground campuses. A spokesman for Boehner did not respond to requests for comment.