There wouldn't be this huge student loan problem if the Federal Government wouldn't have taken over the lending process. By handing out loans to anyone that breathes they opened up the student loan system to fraud in the for profit education industry. Also, every time they raised the limit on student loans it forced the for-profits to raise the tuition to stay in compliance with the 90/10 rule. If the government would have kept the maximum limit lower it would have forced all colleges to keep their tuition lower. This is another example of the government thinking they need to get involved with something they know nothing about and it hurt the very people they thought they were helping the most, students and tax payers.
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The Feds should have limited marketing and admin expenses to 10% regardless of sources to remain eligible for federal funds. That would have killed many for profit abuses from the start.
Feds to accreditors: Is this school doing a fine job, so we can ok money requested by the school
School to accreditors: Are we doing a good job, so we can get the money to pay you?
Accreditors to Fed: They sure are doing an excellent job!!!
Feds to school: Here's the money
School to accreditors: We can finally pay you.
Accreditors to Feds: Let us know if we can help further.
Good article. Now the show is over. What happens next? Does anyone knows for example what will be happening with the buildings at WPB, FTL, Hialeah; rumor is that before the debacle the lease at FTL won't be renewed, the leases at WPB and Hialeah supposed were good to continue. Not sure if the only structures that hey own in Florida were Tampa and Lake Mary. If company is closed what occurs with the leases, can they sell the building they own?, if yes where those dollars go?. On the other hand if Broward College in South Florida is accepting the student credits, please go there; in addition please also check Strayer and Albizu. Does anyone knows about Gene, Simich, Dean, Burr, Cherry?
Honestly, that is some of the more confused thinking I have come across in regard to the ITT Tech situation. The federal student aid program is a FEDERAL program so of course the FEDERAL government is involved in it!
The federal student aid program should only be available to students studying programs which meet certain minimum academic quality requirements and that is where federal government has gone astray. By effectively outsourcing accreditation then taking their eyes of the quality of those third party accrediting agencies the federal government has indeed allowed the conditions to arise which let ITT Tech abuse the system so blatantly and for so long.
There are always multiple ways to skin a cat. The fact that students could not borrow enough money via the standard Federal and State loan related sources to cover the high cost of tuition didn't stop the IIT leadership. All they did was invent the company’s PEAKS and CUSO loan programs (see the SEC's description of this roose at https://www.sec.gov/litigation/complaints/2015/comp-pr2015-86.pdf
Adopting a humorous approach to the situation may be the only viable approach to sanity. Think about the fact that keeping people who are not working in a classroom may actually be a sort of "adult daycare" service. A sort of approach to the "an idle mind is the devils playground" concept. Keep 'em busy has in my humble opinion, the possibility of reducing the crime rate.
Now I'm not suggesting that this is true of all college students. But I'm mindful of the costs that are expended to maintain the incarceration of an individual versus the cost of high tuition. And there is always a chance the student will repay that cost under a student loan structure. Victim restitution and other cost recovery from prisoners, well that's doubtful in terms of recovery.
every time they raised the limit on student loans it forced the for-profits to raise the tuition ..
....nothing forced them to raise tuition !! (just borrow same $$ on student loan & bank as before).
Fed should require a serious entrance exam...can't pass, no loan, no retry for 1 month. No proof of transport to school...no loan. ..maybe a loan for remedial courses instead. Should require students to get pricing from 3 different schools before allowing any funds. Serious students will still be able to get loans, other "players" will not.