Education Is A Racket
Published on October 24, 2016
Higher Education Analyst at GlobalWonks
‘Without understanding the cutthroat business of education, and all of the financial and political players, it’s difficult to see the enormity of corruption in the system–and how it devalues the nation as a whole.
The more I learn about US education, the more I understand how much of a racket K-12 and higher education have become. If students (and their families) are serious enough about their studies, they can still learn valuable skills in college. But college teaching and learning have become secondary to business, bureaucracy, and dealing with the “savage inequalities” of K-12 that feed into higher education “degrees of inequality.”
In the US, education at all levels increasingly reinforces a social system of “winners” and “losers” based less on potential and hard work and more on family position in the existing class structure.
In my previous articles on the US College Meltdown and America’s Most Endangered Colleges, I mentioned some of the “winners” and “losers” in American higher education. The list on both sides is long and growing as the US College Meltdown becomes more apparent.
Big losers: About 10 million Americans are in deferment, forbearance or default with their student loans
Even Bigger Losers: Young (and even middle-aged) adjuncts may be the biggest losers, if they have large grad school debt and rely financially on dead end teaching jobs. According to Peter Cappelli, 1/4 of all colleges offer a negative rate of return.
The “savage inequalities” we see in K-12 schools are inextricably linked to the “degrees of inequality” we see in America’s colleges. In this analysis, it’s important to examine powerful private, non-profit, and public players as well as for-profit operations.
It’s also important to look at money and favors changing hands at the state, county, and local levels. So who makes big money in US education? The list of participants at BMO Capital Markets gives us a Who’s Who in the business of education.
But there are many more people making money from the US education racket: in K-12 education management, higher education management, online and software services and other forms of outsourcing, publishing and curriculum, real estate, construction, accreditation, advertising and marketing, banking and finance, and political lobbying.
Two-thirds of the officials responsible for policing the quality of the nation’s colleges and universities are employed by schools their agencies oversee, highlighting potential conflicts of interest in a system that faces reform efforts in Washington.
It’s believed that hundreds of billions of dollars are held in college slush funds and endowments, with limited transparency and oversight.
Private Student Loan Lenders include Sallie Mae, Wells Fargo, Discover, and SoFi.
Student Loan Servicers: ECMC, Navient.
Navient makes billions of dollars by buying and selling student loans, and coercing students to repay their student loans.
The big educational spenders on K Street are mostly elite schools, with a few subprime colleges.”