The New York Times informs us that the leading “private,” for-profit educational companies get the vast majority of their reported revenues from public sources:
The Career Education Corporation, a publicly traded global giant, last year reported revenue of $1.84 billion. Roughly 80 percent came from federal loans and grants, according to BMO Capital Markets, a research and trading firm. That was up from 63 percent in 2007.
The Apollo Group — which owns the for-profit University of Phoenix — derived 86 percent of its revenue from federal student aid last fiscal year, according to BMO. Two years earlier, it was 69 percent.
These numbers are far higher than most of the ones I have seen for the percentage of public funding in public university budgets, and it is notorious that the levels of government support for higher education have been dropping. What we seem to have here is a massive transfer of public funds from major educational institutions where there is some public control and scrutiny of its use, into corporate pockets where its use and outcomes become proprietary information shared only in advertising and financial reports. It turns out that the risks these brave educational entrepreneurs have run — such as loaning tens of thousands to culinary students whose future careers as dishwashers or line cooks or sawers of novelty ice sculptures can never possibly allow them to pay back their massive student loan debts — are considerably surer things when the federal government backs the loans. Students pay, Feds pay, Career Edu Corp profits either way.
So the next time some politician or pundit tells us we should run the universities more like businesses, the answer should be, give us more taxpayer money, and maybe we will give you a few email addresses of former students to tell you how much they loved us. (As the companies did in this story.)
[Hat tip on the post title to Citizen Freneau.]
Now playing: The Soundtrack of Our Lives – The Passover