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University of Phoenix Tops Debt Slave Racket with 35,049 Student Loan Defaults
Global Economic Analysis ^ | 09/11/2012 | Michael Shedlock

Posted on 09/11/2012 9:16:47 AM PDT by SeekAndFind

Congratulations to the University of Phoenix, a private for-profit school, which has the dubious distinction of having 4,359 percent more student loan defaults than Columbus State, the top public school.

A student loan is considered in default when it is 360 days delinquent.

Number of Loans in Default



The above chart from the New York Times article Bad Student Debt Stubbornly High as Collection Efforts Surge.

There is now over $1 trillion in student debt and $76 billion of that is in default reports the NY Times in Debt Collectors Cashing In on Student Loans

As the number of people taking out government-backed student loans has exploded, so has the number who have fallen at least 12 months behind in making payments — about 5.9 million people nationwide, up about a third in the last five years.

In all, nearly one in every six borrowers with a loan balance is in default. The amount of defaulted loans — $76 billion — is greater than the yearly tuition bill for all students at public two- and four-year colleges and universities, according to a survey of state education officials.

In an attempt to recover money on the defaulted loans, the Education Department paid more than $1.4 billion last fiscal year to collection agencies and other groups to hunt down defaulters.

Unlike private lenders, the federal government has extraordinary tools for collection that it has extended to the collection firms. Ms. Cordeiro has already had two tax refunds seized, and other debtors have had their paychecks or Social Security payments garnisheed. Over all, the government recoups about 80 cents for every dollar that goes into default — an astounding rate, considering most lenders are lucky to recover 20 cents on the dollar on defaulted credit cards.

There is no statute of limitations on collecting federally guaranteed student loans, unlike credit cards and mortgages, and Congress has made it difficult for borrowers to wipe out the debt through bankruptcy. Only a small fraction of defaulters even tries.

“You are going to pay it, or you are going to die with it,” said John Ulzheimer, president of consumer education at SmartCredit.com, a credit monitoring service. 

Debt Slave Collection Business is Booming

Last year the government paid $1.4 billion to collect defaulted loans of which $355 million went to 23 private debt collectors. Student debt collection is now the most sought-after contract within the industry.

No wonder.

Student loan collectors have the ability to garnish wages, seize tax refunds, and seize other government payments.

Those in the debt slave racket are of course willing to do anything to keep the business alive. Obama wants to expand the program. Of course, so do all the universities and anyone associated with the slave trade.

The schools and slave trade collection agencies are big contributors to politicians willing to accept campaign bribes to keep the student "aid" programs intact.

Student "Aid" or Economic Prison Sentence?

You know the answer to the question if you have any common sense. Student "Aid" is not for the kids. Virtually nothing of importance in the education industry is "for the kids".

From public unions, to aid programs, and even grants, the entire system is geared to sending as many kids as possible to school, hoping to make debt slaves out of them for life.

The only rational thing to do is kill every one of these ridiculous programs cold turkey.  Those in the slave trade will fight tooth-and-nail against cutbacks, led no doubt by the University of Phoenix.

For more on Student "Aid" please see



TOPICS: Business/Economy; Education; Society
KEYWORDS: college; debt; studentdefaults; studentloans; tuition; univofphoenix

1 posted on 09/11/2012 9:17:01 AM PDT by SeekAndFind
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To: SeekAndFind
There is now over $1 trillion in student debt and $76 billion of that is in default.
And thanks to Øbama, who do they owe all that money to ..... the GUBMINT.
2 posted on 09/11/2012 9:26:15 AM PDT by oh8eleven (RVN '67-'68)
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To: SeekAndFind

I vaguely recall an article several years ago about the ownership of one of those for profit schools being associated by ownership with the Washington Post newspaper.

Seems IIRC the article stated to the effect that the owners of the school were carrying the newspaper which was a money pit with the tremendous profits from the school, and most of that was from funding by the government backed loans, but I can’t remember which school, nor who the owners were.


3 posted on 09/11/2012 9:31:16 AM PDT by rockinqsranch (Dems, Libs, Socialists, call 'em what you will, they ALL have fairies livin' in their trees.)
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To: SeekAndFind

There was a good piece in the Village Voice about the nefarious practices of for-profit online colleges, especially in regard to student loans. I’ll try to find it later.


4 posted on 09/11/2012 9:34:33 AM PDT by firebrand
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To: SeekAndFind; abb
U of P is a slave master alright, but I have noticed Kaplan on the list. Kaplan and the leftist Washington Post need each other. heh.
5 posted on 09/11/2012 9:35:00 AM PDT by GeronL (The Right to Life came before the Right to Pursue Happiness)
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To: SeekAndFind

Did the students have guns to their heads when they signed those loan agreements?


6 posted on 09/11/2012 9:36:39 AM PDT by agere_contra (Vote ABO. Don't choose the Greater Evil and then boast about how principled you are)
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To: SeekAndFind

The NY Times writers usually think that debt is good for the economy, there was an article just last night.


7 posted on 09/11/2012 9:38:31 AM PDT by GeronL (The Right to Life came before the Right to Pursue Happiness)
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To: rockinqsranch

Kaplan University is owned by the Washington Post.

http://en.wikipedia.org/wiki/Kaplan_University


8 posted on 09/11/2012 9:39:12 AM PDT by DFG ("Dumb, Dependent, and Democrat is no way to go through life" - Louie Gohmert (R-TX))
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To: SeekAndFind
I see those “cool” commercials for such diploma mills practically non-stop nowadays.

They entice desperate, broke people into taking out loans for worthless degrees.

Then the people end up exactly where they started but this time with loads of non-dissmissable debt for LIFE that can be garnished from their wages. I have even heard of SWAT teams being used for student loan issues.

It is truly slavery by another name...

9 posted on 09/11/2012 9:45:33 AM PDT by varyouga
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To: SeekAndFind

I was told that the U. of PHX and some of the other main for-profit educational groups are all headed by big libs. Major Obama donors!


10 posted on 09/11/2012 9:45:45 AM PDT by LS ("Castles Made of Sand, Fall in the Sea . . . Eventually (Hendrix))
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To: SeekAndFind
University of Phoenix -- 35,000 student defaults.

I knew someone who registered there and after a month cancelled because they changed the terms of the tuition and loan in a surreptitious way.

Why are they still in business with defaults like that???

11 posted on 09/11/2012 9:46:17 AM PDT by Uncle Chip
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To: DFG

Thanks for the link. Quite informative.


12 posted on 09/11/2012 9:50:17 AM PDT by rockinqsranch (Dems, Libs, Socialists, call 'em what you will, they ALL have fairies livin' in their trees.)
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To: SeekAndFind

I have a dream that someday, all people, of every race creed and color, will go to college.

And then, all people will realize that they flushed $100k down the toilet.

And the, maybe, just maybe, we’ll get over this college thing.


13 posted on 09/11/2012 9:51:12 AM PDT by St_Thomas_Aquinas (Viva Christo Rey!)
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To: SeekAndFind
If student loans were privately issued and discharged in bankruptcy, the high-default schools would be shunned by the loan issuers (as they should be).

These places should be made to originate their own loans, and eat the loss if they admit people who cannot get a job with their degree.

14 posted on 09/11/2012 9:53:43 AM PDT by PapaBear3625 (Charlie Daniels - Payback Time http://www.youtube.com/watch?v=EWwTJj_nosI)
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To: varyouga

>> taking out loans for worthless degrees ...

“We guine to collie.” (Heard often by my now-deceased friend who was Dean of Admissions of one of the largest community colleges in the USA.)

Did they learn anything valued in the marketplace? Wanna guess?


15 posted on 09/11/2012 9:54:33 AM PDT by QBFimi (When gunpowder speaks, beasts listen.)
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To: PapaBear3625

The single most valuable thing Obama has done to ensure his re-election was to convert student loans from private to government backing and responsibility.

I expect, would be on, that Obama will issue a new proclamation of the ‘first’ thing he’ll do when re-elected is to announce a program to ‘suspend’ and ‘review’ all student loan debt now owned by the Federal Government. IOW, blanket forgiveness.


16 posted on 09/11/2012 9:57:28 AM PDT by Gaffer
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To: SeekAndFind

Those numbers are worthless. You need to look at percent of total loans in default, not raw numbers.

Last time I checked, University of Phoenix had an enrollment of 400,000, so I wonder how many total loans they have out there. Not surprised they have 32,000 loans in default in raw numbers, given their high enrollment.


17 posted on 09/11/2012 10:00:46 AM PDT by gotribe
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To: rockinqsranch
I have also read that Nancy “Dementia” Pelosi has a financial interest in this school
18 posted on 09/11/2012 10:01:30 AM PDT by tom paine 2
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To: Uncle Chip

Because they’re not part of the free market!

The CLOSED SHOP is nowhere healthier than in academia. Accreditation is the first hurdle, and precious few nonliberal institutions ever qualify. Then there’s what must be price-agreement if not outright price-fixing, for tuitions. Oddly, the U. S. military has been marginally successful in offering degree programs that pass muster AND offer affordable rates. Even so, they’re never rated in the top tiers and tend to be snidely tolerated by in-the-loop universities. If someone ever figures out how to break the deadlock on accreditation and teaching efficiencies, he’ll make a fortue while charging a tenth of the price..


19 posted on 09/11/2012 10:01:38 AM PDT by Mach9
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To: SeekAndFind
Most on that list are vocational "colleges." They entice the gullible and not so smart by convincing them that a cheesy "degree" is their ticket to the good life. I once hired someone from one of the technical colleges to do software engineering. He had a "B.S." in IT and was on the "Dean's List." He turned out to be functionally illiterate. But he had high self-esteem because of a "4.0 GPA." He gave me a hard time when his performance ratings matched his actual performance. I later found that these places give EVERYONE a 4.0 and a place on the Dean's List because it looks impressive on a resume, even if it doesn't indicate anything in real life.

I am sure there are competent people who graduate from these diploma factories and do well, but it's a ripe environment for taking advantage of the dumb and naive.

20 posted on 09/11/2012 10:06:54 AM PDT by informavoracious (Abortions are unproductive wrongs, not reproductive rights.)
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To: gotribe
Those numbers are worthless. You need to look at percent of total loans in default, not raw numbers. Last time I checked, University of Phoenix had an enrollment of 400,000, so I wonder how many total loans they have out there. Not surprised they have 32,000 loans in default in raw numbers, given their high enrollment.

Exactly. But this analysis would not meet their agenda of profit is bad. How about some traditionally black colleges and their rates of default?

21 posted on 09/11/2012 10:10:54 AM PDT by gunnut
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To: varyouga

“They entice desperate, broke people into taking out loans for worthless degrees”

That’s 99% of universities today!


22 posted on 09/11/2012 10:10:57 AM PDT by VanDeKoik
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To: SeekAndFind

I’m not defending U of Phoenix, but an absolute number of defaults is a meaningless stat. A percentage default rate would actually make sense.


23 posted on 09/11/2012 10:12:12 AM PDT by Onelifetogive (I tweet, too... @Onelifetogive)
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To: SeekAndFind

Most of the time to a hiring manager, University of Phoenix = Resume in Circular File.


24 posted on 09/11/2012 10:19:00 AM PDT by Mr. Jeeves (CTRL-GALT-DELETE)
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To: SeekAndFind

Blame Congress for making student loans non-dischargeable. This is causing a new bubble. Many “students” are taking out loans for living expenses etc. and not bothering to attend classes or do the minimum amount of work to keep the financial aid coming. This is obviously a setup for another bailout of the financial institutions that make these loans.


25 posted on 09/11/2012 10:22:47 AM PDT by Dan Cooper
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To: rockinqsranch
I vaguely recall an article several years ago about the ownership of one of those for profit schools being associated by ownership with the Washington Post newspaper.

The President of one of the biggest ones is married to one of the RINO sisters from Maine.


26 posted on 09/11/2012 10:23:48 AM PDT by Buckeye McFrog
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To: SeekAndFind

The question of interest, would be why, UofP? and therefore, _who_ at UofP. Ie., are these students illegal immigrants?


27 posted on 09/11/2012 10:29:20 AM PDT by veracious
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To: agere_contra
Did the students have guns to their heads when they signed those loan agreements?

Nope. And by golly they have a right to a college education. Well they also
have to pay that right back. I guess teachers never explained real life to them.
I have a hunch that many also have CC debt up the wazoo to boot.

28 posted on 09/11/2012 10:32:01 AM PDT by MaxMax
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To: SeekAndFind

I have a friend who work in HR, she says University of Phoenix resumes are the first to get shredded.


29 posted on 09/11/2012 10:52:39 AM PDT by riri (Plannedopolis-look it up. It's how the elites plan for US to live.)
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To: oh8eleven
So all those cookie-cutter on-line MBA’s are unable to pay their bills. It's good to see the people who created our economic mess (MBA’s) being hoisted on their own petards.
30 posted on 09/11/2012 11:48:46 AM PDT by fella ("As it was before Noah, so shall it be again")
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To: Gaffer

My college age children tell me the campuses are abuzz with rumors that Obama is going to forgive all their loans in a second term.


31 posted on 09/11/2012 11:49:05 AM PDT by Buckeye McFrog
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To: fella
So all those cookie-cutter on-line MBA’s
Many years ago (~1979) Kodak came out with the Disc Camera that proved to be a terrible product and failed miserably. The project manager's initials were LM.
A few years later, he went to the Univ of Rochester Graduate School of Management to teach ... future MBAs (go figure).
And where did Kodak send all of its management "geniuses" for their MBAs? The Univ of Rochester Graduate School of Management.


32 posted on 09/11/2012 12:36:40 PM PDT by oh8eleven (RVN '67-'68)
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To: PapaBear3625
These places should be made to originate their own loans, and eat the loss if they admit people who cannot get a job with their degree.

The Just Us Dept. would seize their bank accounts the second they reduced accepting protected minorities. There just aren't enough academically qualified non-Asian minorities to go around.

33 posted on 09/11/2012 2:14:49 PM PDT by Reeses (An optimist believes the Republicans nominated their best. A pessimist knows they did.)
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To: St_Thomas_Aquinas
I have a dream that someday, all people, of every race creed and color, will go to college.

And then, all people will realize that they flushed $100k down the toilet.

And the, maybe, just maybe, we’ll get over this college thing

No, we won't. See the Supreme Court case, Griggs v. Duke Power (1971) and its implications (the main one: college degrees became proxies for IQ tests). This is what set this whole madness about college education for everyone (it took time but it was inevitable) into motion.

34 posted on 09/11/2012 6:10:38 PM PDT by OldPossum
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To: St_Thomas_Aquinas
I have a dream that someday, all people, of every race creed and color, will go to college.

And then, all people will realize that they flushed $100k down the toilet.

And the, maybe, just maybe, we’ll get over this college thing

No, we won't. See the Supreme Court case, Griggs v. Duke Power (1971) and its implications (the main one: college degrees became proxies for IQ tests). This is what set this whole madness about college education for everyone (it took time but it was inevitable) into motion.

35 posted on 09/11/2012 6:14:12 PM PDT by OldPossum
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To: OldPossum

Got a link or book recommendation? I’ve never been able to figure out the connection between college degrees and business. It’s a pet peeve.


36 posted on 09/11/2012 7:37:23 PM PDT by St_Thomas_Aquinas (Viva Christo Rey!)
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To: St_Thomas_Aquinas

The most complete paper I have run across is produced by the John William Pope Center for Higher Education Policy. It’s entitled “Griggs v. Duke Power: Implications for College Credentialing.”

I copied down the URL and it’s http://scribd.com/doc/9912960/Griggs-vs-Duke-Power. I hope that I didn’t transpose anything but I don’t think so. If that doesn’t work, the same paper can be found by going to www.centerforcollegeaffordability.org and clicking on “Credentialing.”

As I understand it, the Supreme Court decision forbade companies from administering written tests that could be challenged in court as not being germane to the job for which the applicant was applying.

Griggs and those who joined him in the suit were black, and is as usual, they went to the courts when they thought they were being discriminated against.

I think that it took a lot of time to have an impact but it came down to this: companies gave up on tests and went to the college degree as a substitute to weed out those who probably could not pass an IQ test.

It must have been a common practice to administer these tests prior to this SC decision. I know that upon my graduation in 1966 the one and the only company I applied to required that I take an IQ test before being hired.

You can readily see how this 1971 case was in fact the College Professors Full Employment Act.


37 posted on 09/11/2012 8:21:39 PM PDT by OldPossum
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To: OldPossum

Thank you! I knew the government had to be involved, but I couldn’t find the mechanism.


38 posted on 09/12/2012 8:37:00 AM PDT by St_Thomas_Aquinas (Viva Christo Rey!)
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To: SeekAndFind; All
Here is the Village Voice article. Read and weep.
39 posted on 09/12/2012 9:16:58 PM PDT by firebrand
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