That's not the end of the story. Rauner is also a stockholder in Education Management Corporation (EDMC), which operates more than 100 campuses around the country, including the Illinois Institute of Art in Chicago, Schaumburg, and Tinley Park.
The total enrollment at EDMC schools soared from about 38,000 in 2001 to more than 158,000 in 2010, according to a report from the U.S. Senate committee on health, education, labor, and pensions. And the growth was fueled by taxpayer funds.
In 2011 the federal government, the state of Illinois, and ten other states sued the company and its schools, alleging they committed widespread fraud while collecting $11 billion in federal student aid between 2003 and 2011. Student recruiters—known as assistant directors of admission, or ADAs—were paid solely on the basis of how many warm bodies they were able to enroll, and almost anyone was admitted if it meant more money coming in, the feds said.
"EDMC also regularly instructs ADAs to enroll applicants regardless of their qualifications, including applicants who are unable to write coherently, applicants who appear to ADAs to be under the influence of drugs, and applicants for EDMC's online program who do not own computers," the suit alleged.
If potential students had misgivings about signing up, admissions staff were supposed to convince them with a tactic called "finding the pain."
"'Finding the pain' means locating a prospective student's vulnerabilities and exploiting those vulnerabilities to persuade the student to enroll in an EDMC program," the suit alleged. "EDMC trains ADAs that examples of 'the pain' include a hypothetical student's desire to earn enough money to move her kids out of a dangerous neighborhood, or her desire to make her father proud."
Students were also assured that they'd have assistance in finding a job. However, "students may use the Career Services Office for a limited time after graduation, despite the fact that many ADAs tell students that they will have lifetime access."
The suit is still in litigation.
At the same time, EDMC schools did a dismal job of retaining students: more than half left without a degree or diploma within four months, the Senate report found.
Even students who manage to get degrees from for-profit schools usually leave with debts, and many are never able to pay them off, leaving taxpayers on the hook. Nearly half of all federal student loan defaults—47 percent—are from students who attended for-profit schools.
Rauner's campaign says he has no direct ties to EDMC. "That is a publicly traded company and the stock is held by the Rauner Family Foundation, so Bruce has no personal financial benefit from it," Schrimpf says.
But Rauner lists himself as a stockholder in the company on the statement of economic interest he filed with the state. And EDMC is nowhere to be found in the most recent tax filings for the Rauners' charity.
In his education blueprint, Rauner gives Governor Pat Quinn a "failing grade" for making higher education accessible to all. "Too often the result of this process is many students with some postsecondary education, no degree, and a crippling amount of student debt. We can do better."
Correct.