Tuesday, February 21, 2017
Hottest new investment
With the installment of Betsy DeVos as Secretary of Education and Republican control of both Houses of Congress the hottest investment these days are for profit schools of all types. With the removal of all those pesky requirements that teachers be qualified and students actually learn something, the prospect of ballooning profits is on the horizon.
Since Election Day, for-profit college companies have been on a hot streak. DeVry Education Group’s stock has leapt more than 40 percent. Strayer’s jumped 35 percent and Grand Canyon Education’s more than 28 percent.Regulatory elimination along with increased access to public funds should make these investments winners in everybody's portfolio in the years ahead.
You do not need an M.B.A. to figure out why. Top officials in Washington who spearheaded a relentless crackdown on the multibillion-dollar industry have been replaced by others who have profited from it.
President Trump ran the now-defunct Trump University, which wound up besieged by lawsuits from former students and New York’s attorney general, who called the operation a fraud. Within days of the election, Mr. Trump, without admitting any wrongdoing, agreed to a $25 million settlement.
Betsy DeVos, the newly installed secretary of education, is an ardent campaigner for privately run schools and has investments in for-profit educational ventures.
While Ms. DeVos’s nomination attracted a flood of attention, most was focused on the K-through-12 system and the use of taxpayer-funded vouchers for private, online and religious schools. Higher education was barely mentioned during her confirmation hearings.
Yet colleges and universities are the institutions most directly influenced by the federal government, while public schools remain largely in the hands of states and localities. So it is in higher education that the new administration’s power is likely to be felt most keenly and quickly.
Under the Obama administration, the Education Department discouraged students from attending for-profit colleges, arguing recently that the data showed “community colleges offer a better deal than comparable programs at for-profit colleges with higher price tags.”
The for-profit sector has about 8 percent of those enrolled in higher education, according to the Education Department, but it has 15 percent of subsidized student loans.
While some career training schools delivered as promised, critics argued that too many burdened veterans, minorities and low-income strivers with unmanageable tuition debt without equipping them with jobs and skills that would enable them to pay it off.
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