We begin today's hour with excellent news the Univeristy of Phoenix is experiencing
a record number of students unenrolling from their educational institution and their stock
price has plummeted considerably because of negative press around their program so according
to CNN enrollment at America's for-profit university was 460,00 students five years
ago now it's 213,000 now that number still extremely high considering the amount of students
any other conventional university has but they're experiencing such a dip that investors
are questioning whether or not I makes sense to invest in this company revenues and enrolment
both sank roughly 14% in its latest quarter compared to a year ago and the stock tanked
over 20% on Wednesday dramz yeah well those are big numbers when you lose 14% in the latest
quarter that's not over a long period of time so you start to worry even if it's year over
year and when you've lost more than half of your school that's cause for concern right
that's a giant hit on their business model I love this OK yeah I mean part of the reason
is some of the actions that the Obama administration has taken which to be fair I don't think we've
given him a enough credit for and part of it is Ana Kasparian OK now look I'm somewhat
serious Ana's on the war path against these for profit colleges for good reason cause
it's a bit of a scam right huge default rates they're just trying to get the federal money
in they give the kids a poor education sometimes it works out there's people at the Young Turks
who went to for profit colleges and they're some of our best workers so everybody who
went to for profit colleges aren't bad guys no no no it's not the students fault and they
didn't all get a bad education but unfortunately a large percentage of them did and they're
left to fend for themselves and not get real good meaningful jobs and so part of the reason
they're taking this hits is because of the bad publicity of people like Ana and others
pointing out what they're doing wrong which is what we're supposed to be doing so some
people are confused as to what a for profit college is because there are lots of college
that seem to be making profit conventional colleges but those colleges will take their
money and they will invest it into the school right so they'll create new programs they'll
build new buildings you get the picture but with a for profit college they have investors
so it's run like a business and they're number one priority is the make a profit and so how
do they make a profit what they do is they have these deceptive recruiting methods where
they bring in students and they tell them hey we got a sous chef program and you're
likely to be gainfully employed once you graduate and so they will use these ridiculous statistics
like 85% of our students became chefs after they graduated this program or they were gainfully
employed after they graduated this program often the gainful employment is someone who's
working at McDonald's he's a chef isn't he cooking up those fries so they of course use
misleading statistics in order to convince students to enroll another thing that they
do is they rely heavily on government aid so what they do is they push the students
to take out federal loans and then that federal money goes to these schools and often times
the students don't end up graduating or if they do graduate they're not gainfully employed
so they're unable to pay back their student loan debt in fact let me give you this amazing
statistic for profit colleges only enroll roughly 12% of the country's students but
account for about half of the student loan defaults in 2013 and another thing about 90%
of the revenue that these for profit colleges make is in the form of federal aid see that's
the amazing part here so for those of you who still think the Republican on the national
level is legit think this through Obama says hey look they're living off the high off the
hog off of big government they're taking federal aid the college gets the money right away
they put it in their pocket but then sometimes the students can't repay that loan it's terrible
for the tax payer it doesn't help the student cause he dropped out he didn't get the education
he was looking for the only people benefited are these who are the for profit colleges
and they don't care about the students cause they don't feel like have a responsibly to
them they have a responsibly to their shareholders now look that's a legal thing they have a
fiduciary responsibility to make every dime they can of course they say they care about
the students but that is at best a very distant second priority the first priority is give
me the federal money give it to me give it to me give it to me and then the kids will
do whatever they do right so Obama goes to change that and who steps in to help the for
profit colleges Republicans and not just of course there was Democrats too right but it
was largely Republicans who said how dare you we want them to keep taking federal money
and misallocating it and then when the students can't pay it off we're in a bigger debt we
have a bigger deficient and the Republicans are like yes why cause they contribute to
the Republicans yeah and to the corporatist Democrats so they take that money and round
and round we go look I want to give Obama credit because one thing that he did is he
proposed that community colleges be free and if that happens well then all of these student
that are considering trade schools and for profit colleges are much more likely to go
to a junior college or a community college because it's free and it's actually a better
education and you're not going to take out loans for it so I give him credit in that
regard but years ago back in 2012 Obama proposed regulating the for profit college industry
with something known as gainful employment so basically at least 50% of the students
had to be gainfully employed if they weren't then these for profit colleges would get federal
funds taken away from them well the for profit colleges lobbied very very hard OK and as
a result they passed some sort of watered down version of what Obama originally wanted
to do and I don't give him credit for that he should have been a strong leader in that
regard but I am happy that all the negative publicity about these for profit colleges
has led to people unrolling going to a different college going a different route cause it's
a better way of doing it but I will say this is a very rare instance where President Obama
might have been playing three dimensional chess now look the chance that he got against
the for profit college was just literally 5% OK and I used to kid around before that
that he got us pocket change 5% change in this case it was literally the number was
5% change right so he wasn't play three dimensional chess in that case he lost and he bowed his
head largely to the lobbyist to the Republicans to the corporatists Democrats etc but that
community college trick it hasn't happened yet but his proposal to make community college
free I was I didn't know why he was going in that direction and that is three dimensional
chess cause if you community college free or even threaten to make it free it effects
the stock prices of the for profit colleges and undermines them so he says OK you blocked
me when I was trying to give you meaningful reform well I'll go around and do this instead
and that will undermine you anyway and he's not undermining it because he hates capitalism
and businesses he's trying to protect the students and give them a real education yeah
and he's also trying to protect the taxpayers who have their money funneled to these for
profit colleges right so on this you got to give President Obama cred it well played thanks
Obama no really thanks Obama