A College Chain Crumbles, and Millions in Student Loan Cash Disappears

The New York Times ^ | 3/7/2019 | Stacy Cowley and Erica L. Green

[Wally_Kalbacken]

When the Education Department approved a proposal by Dream Center, a Christian nonprofit with no experience in higher education, to buy a troubled chain of for-profit colleges, skeptics warned that the charity was unlikely to pull off the turnaround it promised.

What they didn’t foresee was just how quickly and catastrophically it would fail.

Barely a year after the takeover, dozens of Dream Center campuses are nearly out of money and may close as soon as Friday. More than a dozen others have been sold in the hope they can survive.

The affected schools — Argosy University, South University and the Art Institutes — have about 26,000 students in programs spanning associate degrees in dental hygiene and doctoral programs in law and psychology. Fourteen campuses, mostly Art Institute locations, have a new owner after a hastily arranged transfer involving private equity executives. More than 40 others are under the control of a court-appointed receiver who has accused school officials of trying to keep the doors open by taking millions of dollars earmarked for students.

The problems, arising amid the Trump administration’s broad efforts to deregulate the for-profit college industry, began almost immediately after Dream Center acquired the schools in 2017. The charity, started 25 years ago and affiliated with a Pentecostal megachurch in Los Angeles, has a nationwide network of outreach programs for problems like homelessness and domestic violence and said it planned to use the schools to fund its expansion.

[Wally_Kalbacken]

Example # 458,234,197 in the never ending pattern of major media coverage of the student loan crisis - that never mentions the player who is ultimately left holding the bag - the general revenue taxpayer of the United States. The loans that provide the revenue streams for these shoddy schools are federally guaranteed student loans. There is a zero sum game in this - either the borrower repays the loan or the taxpayer does. Despite the ladling of sympathy for the foolish students who borrowed more than was practical to attend these worthless schools, the sympathy for them only has to run so far - because the DOE forgives the loans to students of these fraudulent schools. And then the taxpayer has to make good the guarantee to repay the originating lender. Don't hold your breath waiting for the NYT to show any concern for the taxpayer.

[PeterPrinciple]

When the Education Department approved a proposal by Dream Center, a Christian nonprofit with no experience in higher education, to buy a troubled chain of for-profit colleges, skeptics warned that the charity was unlikely to pull off the turnaround it promised.

---

I don’t think the Education Department approved the purchase. They might provide accreditation based on the curriculum.

Willing to be corrected.

[Fungi]

Depend on the Slime to report news that makes any “Christian”
business or effort look bad. Truth? What is “truth” to the Slime? Never let the truth get in the way of the agenda. The slime gives you a few articles a month before you lose access. I will NEVER give them a dollar to see their crap. Never.

[PGR88]

Just like the massive fraud that was revealed in Government supported housing loans in 2008, when the student loan bubble bursts, everyone is going to be shocked at how much fraud there is.

That’s the nature of collectivism and nanny-statism. Its all a scam with a veneer of virtue.

[PeterPrinciple]

While Argosy students have little hope of getting back money they paid out of pocket, the Education Department said the federal loan debt of affected students would be forgiven for this semester. If the schools close, students can seek help under a program covering school shutdowns.

---

Big long article about poor students and then...…………….

[eastexsteve]

A bunch of dishonest people have their hands in the till, and it’s Trumps fault? My God, somebody needs to turn on the “no snowflakes allowed” sign.

[Big Red Badger]

Tommy Barnet, Joyce Meyers.
Oh Well.

[bigdaddy45]

So what’s the truth? Why don’t you tell us?

[Jeff Chandler]

Here ya go: https://outline.com/AwuppS

[Jeff Chandler]

I don’t think the Education Department approved the purchase.

Yes, the federal government really does have that much power.

[stylin19a]

wow...all these colleges under Education Management Corporation were in trouble before the sale to Dream Center.

They write these articles as if nothing happened prior to Pres. Donald Trump.

[Freedom56v2]

Tommy Barnet, Joyce Meyers.
Oh Well.

---

Neither Tommy Barnet nor Joyce Meyers are referenced in this article, and neither of them are affiliated with the Dream Center discussed in this article.

[VTenigma]

You mean like the Obama administration destroying most “for profit” schools?

[Jim Noble]

I have two kids in (real) college right now, and, so far, no loans.

Most people here who do not have kids currently matriculated would not BELIEVE the pressure, and the deceptive techniques, used to get these students to take on loan debt.

One of my kids, in her first semester, actually was “awarded” a loan that we never applied for or approved, and it took six months to get it off the books.

It’s a racket. These “for profit” bottom feeders are just the tip of the iceberg.

[Big Red Badger]

Yup,
It just rang a bell,
I was in that Circle
Years ago.

[AppyPappy]

Like multi-level marketing companies, for-profit schools don’t sell an education. They sell dreams. Expensive dreams.

[Wally_Kalbacken]

Yes, but when the school craters and the DOE forgives the obligation, we taxpayers pick it up. The putative student has the dreams, we get the expense. As they say, when you are in a hole, rule #1 is stop digging. Instead of proposing actions to limit the damage to taxpayers - take a look at the Democratic House agenda. They are holding hearings to skewer loan servicers who made mistakes in informing borrowers of their cheapest options. This is not rearranging the deck chairs on the Titanic, this is waxing a polishing the deck chairs on the Titanic. Jut listen to Sen. Warren - she gets very exercised about minor errors made in servicing loans, but she has nothing to say about the enormity of the burden being off-loaded on taxpayers.

I had a medical school graduate come to my office a couple of years ago - with what was then $588K in student loan debt. All of it federally guaranteed. He graduated medical school and could not get accepted into ta residency program. He then complete a masters degree in a health sciences field, all paid for with student loans. Tried for residency again, did not get any acceptances. Goes back for yet another masters degree in a health science field, and returns to the residency lottery and comes up with a goose egg again. At the time his $588K came off of deferment - the minimum monthly payment was $8100. He was making $1200 a month tutoring children for standardized testing.

[AppyPappy]

Yes, he made a bad decision. It’s like spending $588k to buy a house hoping to flip it. It’s a risk. He chose poorly.