Sunday, March 14, 2010

For Profit Schools Turn Students Into Debt Zombies; It's Time To Kill The Entire Pell Grant Program

If president Obama gets his way, still more money, up to $50 billion, will be thrown at the failed Pell Grant system. Pell Grants are based on a means test and the funding comes with no strings attached. The money does not have to be repaid. That alone should tell you the program is rife with fraud. And it is.

Regardless of grades, ability, or likelihood to graduate, students can apply for the money, take it and run, without ever attending one day of class. Many do.

Those who do use the money for education, as apposed to partying and drugs, frequently waste it on useless degrees that leave students deep in debt after graduation, assuming of course the students even graduate.

Obama Wants To Throw More Money Down This Obvious Sinkhole

Let's start off with a review of the most recent proposal as described by the Washington Post in New funding projection could squeeze Obama's education agenda. http://www.nytimes.com/2010/03/14/busin ... ef=general

Sen. Tom Harkin (D-Iowa), chairman of the Health, Education, Labor and Pensions Committee, said told reporters Thursday that the measure he seeks to enact would channel more than $50 billion into Pell grants. That's up from the House-passed bill's total of $40 billion. In addition, Harkin indicated that the increase in the maximum Pell grant award would be less than the House envisioned. Instead of rising from the current $5,550 to $6,900 over the next decade -- as the House bill projects -- Harkin said the maximum annual award would rise to between $6,300 and $6,500.

Harkin said annual Pell award increases would be tied to inflation, but he omitted mention of a provision in the House bill that would tie the increase to inflation plus one percentage point. Lobbyists say they believe the additional percentage point will be dropped in final negotiations.
Student Debt Zombies

Inquiring minds are reading the New York Times article In Hard Times, Lured Into Trade School and Debt.

One fast-growing American industry has become a conspicuous beneficiary of the recession: for-profit colleges and trade schools.

At institutions that train students for careers in areas like health care, computers and food service, enrollments are soaring as people anxious about weak job prospects borrow aggressively to pay tuition that can exceed $30,000 a year.

“If these programs keep growing, you’re going to wind up with more and more students who are graduating and can’t find meaningful employment,â€