by David Safier
You know Kaplan, the tutoring/test-prep company? (You need to boost your SATs or LSATs, or you're having trouble with math? That's what Kaplan is there for.)
Now they run a string of for-profit colleges as well, and they make four times as much from them as they do from their tutoring business.
As I mentioned in an earlier post, the Feds are starting to crack down on for-profit college abuses.
Reports of students who leave such schools with heavy debt, only to work in low-paying jobs, have prompted the Department of Education to propose regulations that would cut off federal financing to programs whose graduates have high debt-to-income ratios and low repayment rates.
The way this works is, either the students who didn't benefit from their educations beggar themselves paying off their loans, or they default and the U.S. government pays off the loans. In one case, the ex-student loses. In the other, the taxpayer loses. In both cases, the for-profit college wins.
If the regulations are tightened, as they should be, for-profit colleges will be less profitable, so Kaplan is lobbying hard to stop the government from cracking down — to the tune of $350,000 in the third quarter of 2010 alone.
The kicker to this story is, Kaplan is owned by the company that owns the Washington Post. As a matter of fact, Kaplan is where the company makes most of its money, since newspapers aren't doing so well these days. So I read this story in the NY Times. Though the Post has covered it, a wee bit of conflict of interest creeps into WaPo's reporting.