Hillary Clinton took aim at the for-profit education industry last week saying it lies to military veterans to boost profits, but the industry’s most predatory schools are Clinton Foundation donors.
Clinton during an event in Nevada last Thursday accused for-profit schools of exploiting the so-called 90-10 rule in order to "target service members, veterans, and their families with false promises and deceptive marketing"; the rule, established by the amended Higher Education Act of 1965, caps the percentage of total revenue for-profit schools can receive from Title IV federal financial aid. The rule forbids for-profit schools from receiving 90 percent of their revenue from federal financial aid—but the amount of federal money they receive in the form of veterans’ benefits is not restricted—making service members and veterans attractive prey for the revenue hungry industry.
The school relying on veterans’ benefits most has been the for-profit University of Phoenix, which took in nearly $1 billion in G.I. Bill funds from 2009 to 2014 according to PBS.
The Apollo Group, which is the parent company of the University of Phoenix, has donated up to $100,000 to the Clinton Foundation and at least part of that donation came as recently as 2014.
The University of Phoenix is highly effective at recruiting veterans. The school’s San Diego campus, which has a high veteran population, took in $95 million through the G.I. Bill during that five-year span, which is more than any other college in the country.
Unfortunately, much of that money is going to waste. A recent study found that only 16 percent of University of Phoenix students graduate within six years. For online students, the graduation rate is just 5 percent.
Brown Mackie College, also a 2014 Clinton Foundation donor, is part of the Education Management Corporation (EDMC), which is the country’s second largest for-profit college company.
A lawsuit from whistle-blowers against EDMC that became public in 2014 alleged that it was recruiting veterans by overpromising on post-graduate employment prospects, and that EDMC was lowering the reported incomes of its applicants with the goal of receiving more G.I. Bill funds.
"[EDMC’s] business is not that of an educational institution. It is a sales company," argued the attorneys in the suit. "Defendants place virtually no stock in providing students with quality educational services and therefore are not entitled to participate in the federal financial aid program."
An earlier lawsuit filed by the Department of Justice argued many of the same points, stating that EDMC disqualified itself from $11 billion in federal and state funds due to its recruitment practices.
The DOJ complaint stated that EDMC, which is partially owned by Goldman Sachs, operated a "boiler-room style" sales team.
Recruiters were instructed to "exploit applicants’ psychological vulnerabilities," and targeted applicants "who were unable to write coherently, who appeared to be under the influence of drugs, or who sought to enroll in an online program but had no computer," according to the suit.
Clinton’s criticism of the industry extended beyond its abuse of the 90-10 loophole.
"Unfortunately there are some programs that take people's money and do not produce the results that were promised, and we've got to crack down on that and put them out of business," said Clinton last week during an event at Trident Technical College.
The Laureate International Universities, partially owned by the liberal billionaire George Soros, have donated between $1 million and $5 million to the Clinton Foundation. New York Magazine characterized Bill Clinton as the "face" of Laureate, which enrolls 800,000 students worldwide.
Clinton was paid an undisclosed salary for his "honorary chancellor" position with Laureate, but resigned earlier this year.
Laureate has been criticized for "turbocharging" enrollment at its schools and lowering admission standards to the point that its schools are now "the place you go when no one else will accept you."
The Clinton Foundation also received money from Kaplan in 2014, which earlier this year made a $1.3 million settlement payment to DOJ for using unqualified instructors to teach students that were paying for their education with federal funds.
Kaplan has been criticized for targeting students who would likely drop-out—so it can receive government aid money without providing any service.
The main target was "African-American women who were raising two children by themselves," according to a whistle-blower. Other markers that those in the sales department were looking out for were "low self-esteem, reliance on public assistance, being fired, laid off, incarcerated, or physically or mentally abused."
Kaplan derives 88 percent of its revenues from federal funding.
The Clinton campaign did not return a request for comment.
Published under: 2016 Election , Democratic Donors , Education , Hillary Clinton