Remember the bad old days when unscrupulous trade schools -- set up solely to reap profits from the federal student aid programs -- were enrolling students straight off of the welfare lines and pressuring them to sign up federal student loans they had little hope of ever repaying?
Those times have long past, right? Think again.
According to an investigative report in the latest edition of BusinessWeek by the Pulitzer Prize-winning reporter Daniel Golden, some for-profit colleges have been up to their old tricks, trolling homeless shelters trying to lure their residents in by promising them rich financial aid awards. The big difference now is that these schools are not fly-by-night operations. They are extremely profitable publicly traded or privately held corporations.
Take Drake College of Business, a privately-held institution in New Jersey that trains students in allied health and computer related fields. The school has gone out of its way to attract homeless students, who make up nearly 5 percent of the student body at its Newark branch campus. According to the article, Drake has a pretty unique way (at least we think it’s unique) of enticing these students to enroll:
Late in 2008, it began offering a $350 biweekly stipend to students who show up for 80 percent of classes and maintain a “C” average.
“It’s basically known in the community: If you’re homeless, and you need some money, go to Drake,” says Carmella Hutson, a case manager at the Goodwill Rescue Mission in Newark where about 20 clients have enrolled at Drake in the past two years. “It would put money in my pocket, help me buy a car,” adds Jerome Nickens, 45, who lived at the mission when he talked to a Drake representative but decided not to enroll.
Predictably, officials at Drake say they are doing the Lord’s work -- providing educational opportunities to those with the greatest financial need. What they neglect to mention is the heavy amount of student loan debt that they are pushing these extremely high-risk students to take on to attend the school, which has nearly quadrupled its tuition since 2007.