Pundits and politicians have scrutinized America’s for-profit colleges in the last few years. Such schools were trouble, many argued, because many of they charged high tuition but when students left they couldn’t really get good jobs.
And getting better jobs was, as advertisements like these
suggest, the whole reason to go to a for-profit in the first place.
Furthermore, since these schools often operated largely on federal grants and loans, this represented not only a waste of personal student money, but taxpayers’ dollars.
And so came the oversight rules. The primary was “gainful employment,” under which at least 35 percent of former students are paying down their loans, former students must not have to pay more than 30 percent of their discretionary income on loan payments, and former students must not spend more than 12 percent of their total income on loan payments.
In order to continue to receive extensive public money, for-profit school had to show that their students were getting jobs and earned enough to pay of the loans they took on to go to college.
One institution seemed to have a rather creative way to address this oversight. According to a piece by Chris Kirkham at the Huffington Post:
After completing a nine-month program in heating and air conditioning repair in the summer of 2011 — graduating with straight As and $17,000 in student debt – [Eric] Parms began to doubt… [his choice to enroll at the for-profit Everest College]. Career services set him up with a temporary contract position laying electrical wires. After less than two months, he and several other Everest graduates also working on the job were laid off and denied further help finding work, he says.
Even that short-lived gig wasn’t secured on the strength of Parms’s degree. The college had paid his contractor $2,000 to hire him and keep him on for at least 30 days, part of an effort to boost its official job placement records, according todocuments obtained by The Huffington Post. The college paid more than a dozen other companies to hire graduates into temporary jobs before cutting them loose, a HuffPost investigation has found.
According to a lawsuit against Corinthian Colleges Inc., which owns Everest, in addition to several other for-profit colleges, filed by the California attorney general, two Corinthian schools just paid a temp agency directly to hire former students.
A former director of career services at one school told Kirkham that his employer told him “You need to find a company that is willing to take on your students for a short period of time, and who cares if they stay?”
How much money do you have to pay a company to hire employees it doesn’t want, anyway? Well, about $2,000. This sort of thing could potentially work pretty well for a company with typically high turnover.