Getting Their Hands on the Money: The Financial Aid Counselor

In part two, we looked at the role of the federal government as an enabler of ruthless profiteering by for profit, proprietary colleges. Any cursory glance at these institutions would recognize that those vested, elite powers who carnival-bark for limited government are the same benefactors and cheerleaders for direct government intervention, but only when it represents their class interests. This is the lesson of neo-liberalism, as I am trying to illuminate with this series.

In this context, part two also looked at the deregulatory activities of the captured corporate government in allowing for the incredulous rise of these for-profit proprietary schools, while at the same time putting a head-lock on public institutions, forcing the public sector to increasingly become a secondary provider of education. It must be mentioned that a similar plan is being launched nationally within traditional public school systems, K-12, in the form of charter schools (see and for more) by some of these same actors and entrepreneurial Elmer Gantry’s.

We also scrutinized in part two those students who attend these proprietary schools and why, along with the cattle ranchers, or recruiters who serve to herd them into the slaughter houses of a de-politicized, deracinated for-profit education and eventual debt peonage.

In this third part of our four part series, we will look at the heart of the proprietary organizations — the financial pulse center, the financial aid arm that pursues rigorous capitalization of profits in favor of public investment. Part three will also attempt to highlight more vigorously the dungeons of debt that these institutions represent, both for students and taxpayers. Finally, we will also examine the Bush bail-out plan, the $700 billion dollars that taxpayers bellied up in 2008, and how these monies ironically or intentionally, benefited and continue to benefit, the proprietary for-profit colleges.

In order to do this, we will continue with the ranch metaphor, at least for a moment, for it provides rich manure from which we can gain an understanding of the sprawl and virtual spawning of proprietary schools and the role the government plays through its regulation and deregulation in favor of capital maximization for these companies in an effort to aid their growth models and business plans, while essentially raping the very public it purports to serve.

Financial ‘Head’ Quarters: financial aid as the feeding tray to profits and the role of the financial aid counselor

We looked in our last part at the job of the recruiters, or cowboys on the ranch. Now, once the “admission counselors” or recruiters have wrestled the steers to the ground and roped them up for delivery to the ranch, they are handed over to the “Financial Aid Counselor” for price branding. The financial aid counselor’s job is to get the student to fill out the necessary federal government forms to get the maximum loans and grants that will then be allocated to the whole sordid operation and to do so within a ‘term’; a limited time frame to suck up funds.

They do all this online, sending the candidate the FASA form by computer (the form necessary to receive federal funds), which a prospective student then fills out and sends back to the financial counselor, along with their recent tax forms, who then attends to it for detail, assuring all the student tax forms are included and the application filled out correctly. The form is filled out in accordance with the federal government guidelines (all done online). This is the important step, for without the federal monies the ranch owners cannot maintain, profit from or expand the cattle ranch. Inevitably, the logic of the system sees each student as a walking steer waiting to be roped. So although the critical step is getting them into the ranch, the crucial step is getting them price branded through applications and approvals for government loans.

But the marketing and recruiting is not limited to simply cowboy recruiters and the midwifery of financial aid counselors. In my perusal and interviews with proprietary colleges as a prospective student, I evidently got on a list that was sold, for on November 3, 2009 I received an e-mail from the following ‘person’ moc.60emityppahnull@985024951.diA.laicnaniF.tnedutS. The body of the message said, “Your student financial aid check is now available”, which I found surprising for I had not applied for any financial aid. The ad showed the pretty face of a young woman and then stated, “Money is one of Life’s Big Hurdles, Make it Small. Find Financial Aid from Top online Colleges and Get Started Today”. I was then told to click on Financial Aid Available for Online Education – Click Show Images Above. I did and was sent to the following address or cite where there appeared advertisements on the right hand side of the page for the University of Phoenix, DeVry Institute, Strayer University, Virginia College Online, Walden University, Grand Canyon University, American Intercontinental University and The Art Institute of Pittsburgh Online Division. On the left of the page, I was asked to select and submit my age, but underneath the request the ad stated:

Discover the best way to pay for your online education. Our search service will find the schools that can connect you with an aid package that fits your needs.

The schools in our database will get you connected with:

  • Federal student loans
  • Employer-based financial aid
  • Tuition Reimbursement programs
  • Direct payment through Third-Party Billing
  • FAFSA applications
  • Privately funded aid such as grants and scholarships.

Many of the online universities and colleges in our database have counselors equipped with financial aid calculators, and they can guide you through the process of finding the school loan that’s right for you.

Once I selected my age, I was then asked to select the country I was in. Once that was accomplished, I was told that 676 programs were available that matched my interest. From here I entered my zip code and e-mail. I chose an area of ‘study’ which then catapulted me to 26 schools that could service my needs. Another click led me to fill out an online form asking for my phone number, work phone, cell phone and street address. All of this serves as leads for the ranch hands, the recruiters.

Since that date of November 3rd, I have received over twenty five e-mails from proprietary colleges and over thirty phone calls from “admission counselors”. By responding to the computer placed consortium ads, I was now a “lead”, for the cattle ranchers to be delivered right into the coffins of the financial aid unit for immediate branding. This is how insidious the whole thing has become for now we self-recruit, just as we pump our own gas, self-check-out at the store by bar coding our own groceries; in essence, we voluntarily surrender and otherwise play butler to the for-profit system that can promise nothing but despair.

The Academic Counselor

Once the student is firmly ensconced in the dens of the proprietary school they then meet the “Academic Counselor”; these ‘creatures’ of corporate engineering help the cattle graze on curriculum with lax supervision. They operate as mid-wives to the operation, the comfort of the “client” their sole concern. The Academic Counselor works with students to pick the classes they need for their degrees and help them plan their completion target dates. They answer questions as to what ‘credits’ will be needed to formalize a successful journey through the slaughter house. The counselors say they are there to assist students whenever needed, but a cursory look on the website of any of the 2,000 or more proprietary colleges and universities reveals that they do shockingly very little, other than assuring the student registers for the ‘right’ courses; that and making sure the student maintains attendance long enough for the school to get its federal money; this is key to understanding the operation. These ‘academic counselors’ must pander to the student’s vanity, appeal to unconscious irrationality, overlook functional illiteracy anything, as long as the process takes for the transfer of funds to occur and the money is firmly parked in the bank.

The Curriculum and Teachers

And then there is the curriculum itself, the educational training pasture where the cattle actually feed. With only about 25% of the federal dollars going to the actual institutions for curriculum, salaries and costs, the proprietary schools are online cyber schools made up of mostly adjunct professors with no cost-effective benefits or retirement, shallow curriculum, minimal work, and all the work done in segregation, online.

At Kaplan University, I was told when posing as a prospective student, that a criminal justice degree would have assignments due each week but they were generally multiple choice tests, true or false exams or fill in the blank type of quizzes, so I shouldn’t worry much. When I asked about writing essays, I was told not to fret, Kaplan had a writing lab where my essays would be read by professionals and then corrected for me. The goal of the proprietary colleges is ensure functional illiteracy through the commodification and standardization of education wedded to “necessary illusions” and/or self-deception.

Students are told, for example, that they will work with professors “in the fields” they have chosen — be it nursing, criminal justice, homeland security degrees, whatever. Course work is due each week as well as general, mandatory “attendance” in a ‘discussion’ group online once per week with the professor. Go to any of the colleges mentioned in this article and you can see the content of the curriculum. It is the typical Wal Mart, standardized, one size fits all pre-packaged curriculum guaranteed to dummy down learning based on rote memorization and regurgitation. It is basically education reduced to training. The programs brag about their ability to get you graduated more quickly than a traditional public college or private non-profit college. Sure, they give students the bum’s rush and then fish wrap their diploma in failing newspapers, give them a list of job fairs and companies to look for employment, walk them to the door and then move on, like parasites looking for another host.

Teachers as dispensers of canned curriculum?

The teachers can be credentialed or non-credentialed, but most are adjuncts, meaning they often work as intellectual migrant workers, dispensing curriculum at more than one college. As mentioned, most of the proprietary colleges I talked to spoke highly of their professors noting that the teachers “worked in their fields or are working in their fields” (Post University interview with recruiter). Teachers do not get paid much at these schools, though. At Kaplan a PhD gets paid only about $2,800 per ‘section’ making the pay scale far lower than that at a customary public college or university. ((Wiki Answers. ))

Kim Bobo, in her new book, Wage Theft in America: Why Millions of Working Americans Are Not Getting Paid – And What We Can Do About It found that at the University of Phoenix wage theft is notorious. This is due to the fact that the workers at these schools are also seen by the ranch owners as chattel in the grubby operation and they receive no benefits, no guarantee of employment, are overworked without compensation, wage deprived, and they lack health benefits and pensions. There is no tenure or job security offered, no seniority or collective bargaining rights, no solidarity among or with teachers — thus there is no culture of shared pedagogical successes and failures, no opportunities to develop good practices based on sound evidence. The classes are online and there is no formal or informal connection to legitimate student and teacher concerns, either quantitatively or qualitatively.

At Kaplan teachers are told to call their students if their work is late and to allow them to work repeatedly until the work is turned in correctly. ((Wiki Answers. )) This assures that the federal funds continue to roll in for the student stays “enrolled” in this manner. At the Art Institute of Houston, another for-profit college, according to a former teacher there, instructors have to get a student signature, permission from the student, to give the student a “D” or an “F” at midterm (e-mail from teacher at Color Theory at the Art Institute of Houston, October 30, 2009). No one is to leave their seat.

Yet the tale of the grim yet “flexible” curriculum looms much larger than the extolling rhetoric of the campus personnel. One student commented at, a site for student discussions, forums and information about proprietary colleges:

I am a recent graduate of Kaplan University and I would not recommend them to anyone. Let me explain.

I had an AAS in accounting. I have a small tax business and I thought earning my BS would help me attract clients and grow my business. I shopped around and Kaplan appeared to be the best of the bunch. So I enrolled.

While I feel that many of my classes and instructors were excellent, there were significant issues. For one, most exams were set up so you could take them over and over again until you got the answers all correct. All exams were open book too. So unless you simply did not apply yourself at all you could easily ace all exams, even the finals.

There were quite a few students in my classes who could not read, write or spell. I’m not trying to put anyone down here, but when you are in college you should be able to write a coherent sentence. Many could not.

On two occasions I was approached by other students asking me to help them cheat. I reported both of them, but I don’t think much came of it. I have read newspaper articles written by professors at Kaplan stating that despite what the school said in its policies, cheating was tolerated.

On two separate occasions I was left without an advisor. The second advisor I got was useless. He knew nothing about accounting, the degree requirements, or what was required to sit for the CPA exam. As a result I did not take a class that is required in order to take that exam, and I do not quality for the majority of Federal and state accounting positions.

Finally there is the financial aid issue. This was, and still is, an absolute nightmare. Loans and grants were cancelled without my knowledge. Living expense subsidies were always late. No one would return calls or emails. I never got the same story twice.

The result is that I have a degree that cost me $45,000 and I cannot get an interview, let alone a job. Actually, I have had three interviews. These were all for entry level jobs that someone with an AAS qualified for. I did not get any offers. I have applied for at least 30 jobs.

Today I did get an offer. It was a long-term temp data entry position that doesn’t require more than a high school education. I declined.

I’ve spent two years and all that money, and this is the only type of job I can get? BTW, I graduated magna cum laude. If I had it to do over, I would not have gone to Kaplan. As it stands I have a degree that is being laughed at by local employers and I am swimming in debt.

I think you will get more valuable training by attending a local, on-campus school. It will probably be cheaper too. ((Online Degree Forum regarding Kaplan College.))

Even more troubling is the fact that students are lining up at the colleges in order to receive a host of securitization degrees they now offer, like Homeland Security degrees, FEMA degrees, criminal justice degrees and forensic crime degrees – all this as we see rising securitization and militarization as growth industries in the US and around the world. This is seen as a big development industry for the ranchers and is often induced by tantalizing commercial television, where students see series like Lock-up, CSI, 24 and other similar “combating crime or terrorism” fables on cable. Young, many of them poorly educated, these candidates who have been herded into the long cattle drive often think that they can become just like those they watch on TV, and therefore the television itself acts as one large info-commercial for the proprietary colleges. Sandwiched between the shows one can find paid-for proprietary school commercials, proliferating and beguiling the young, many who are often desperate, unemployed and caught up in a cycle of despair.

The growth of the security culture and the for-profit degree

The Security Industrial Complex is indeed growing. The Security Industry Association boasts that they are:

Advocating pro-industry policies and legislation on Capitol Hill and throughout the 50 states; producing leading-edge global market research; creating open industry standards that enable integration; advancing industry professionalism through education and training; and opening global market opportunities. ((The Security Industry Association.))

The Security Industry Buyer’s Guide, published by ASIS International, is the most current, comprehensive database of security products and services in the industry. Comprising more than 3,000 manufacturers and suppliers of security products and services, the SIBG fully categorizes the available resources of the security industry from the most elemental tools to its most advanced technology. ((Service Industry Buying Guide.))

They are just one of many such organizations that offers items and services for sale such as alarm control devices, monitoring, asset tracking, bio-terrorism equipment, executive and VIP protection, bullet resistant building material, detectors, couriers, crowd control, recovery crisis, document control and destruction devices, drug testing laboratories, eaves dropping detection services, surveillance systems, explosives engineering, guard services, firing range equipment, and the list goes on and on. Service Industry Buying Guide’s list of VIP executive protection services of course includes Wackenhut and the Carlisle group, but a quick count brought the total to 53 companies. Most are located in the US with some outside the US, in Canada and elsewhere but there is little doubt that security will play a strong role in future economics and employment.

This is what the proprietary colleges are counting on, the increasing securitization and militarization of the culture and society, this as well as the returning GI’s who have federal benefit dollars they can sign over to the schools and then hopefully turn around with a debt-degree and enter the burgeoning business of surveillance, war and militarization. Watching other people’s property, or securitization by actual security guards and monitoring, is now big business and training people to watch video screens and monitor the comings and goings of others is poised to be an even bigger business as world capitalism melts down. Proprietary schools cater directly to this industry and the people who will eventually occupy these fields.

Dungeons of Debt and Fraud

Proprietary schools generally have a higher default rate than public and private non-profit schools. For example, among the four year schools, the bachelor programs, four years after borrowers entered repayment, 23.3% of proprietary school borrowers have defaulted, compared with 9.5% of borrowers from public schools and 6.5% of borrowers from private, non profit schools (United States Government Accountability Office, Proprietary Schools: Stronger Department of Education Oversight needed to help ensure only eligible students receive financial aid, August 2009).

In the two year sector, or what would be equivalent to a community college, the default rate was a whopping 27.2%. This is incredible, and is far higher than either the public or the private non-profit schools. It is no surprise that many of these so-called colleges are little more than cash centers, Pay Day Loan emulators that make their money off the backs of students who are often low-hanging fruit for the company’s predatory practices. These proprietary schools operate more like rackets that deliver a commodified education to students while they strip the treasury of federal funds we provide as taxpayers. This is the asset stripping taking place with the help of the educational policies inherited by the Obama administration that continue to allow for such predatory practices.

When political controversies over default rates arise, as they are prone to do, the proprietary schools shoulder none of the blame for their sordid practices. According to Barons online, the proprietary schools would rather blame their victims then take on any culpability for their piracy and high default rates amongst students:

For-profit schools like to blame dropouts and defaults on the population of poor and minorities the industry “serves”-but the evidence doesn’t show whether the industry’s serving that population or preying on it.

For-Profit College Shares Get Held Back.” Stocks in this sector have fallen after a critical Barron‘s story November 9, 2009.

Sound like the subprime mortgage industry blaming “greedy homeowners” for the subprime meltdown? You bet it does.

Much like bailed out banks, when students default on Federal student loans the government that guarantees the loans, are stuck with the costs, and this means working people bail them out through their taxes. Meanwhile the proprietary schools, who use the government as an ATM machine, can then saunter onwards to Wall Street or log-in to with cash in hand in the form of gross and hideous profits provided by the federal government. It is not just a diploma debacle; it’s a national raid on public funds.

The Untold Chapter: $700 billion dollar bail-out fills the coffers of private banks and capitalizes them with public funds to loan shark to college students

In a letter dated November 19, 2008 to Henry Paulson, then Secretary of the U.S. Department of Treasury, the American Association of Collegiate Registrars and Admission Offices along with the American Association of State Colleges and Universities, the Consumers Union, The National Consumer Law Center, the Project on Student Debt, the National Association for the College Admission Counseling, U.S. Public Interest Research and the United States Students Association all wrote to urge Paulson to reconsider his plan to unleash the stimulus monies for private student loans. They implored Paulson in the letter, noting that:

Most students and families do not use private student loans to pay for college, nor should they. ((Letter to Henry Paulson, November 19, 2008, by the American Association of Collegiate Registrars and Admission Offices along with the American Association of State Colleges and Universities, the Consumers Union, The National Consumer Law Center, the Project on Student Debt, the National Association for the College Admission Counseling, U.S. Public Interest Research and the United States Students Association.))

According to the letter to Paulson, only 8% of students currently use standard bank loans to attend university. This might all be changing now that the banks are flush with money and looking for profitable investment strategies and new investment ‘opportunities’. What could be better than to offer subprime loans to desperate young people looking for an education and a way to maintain civilian life? Yet the fact is private loans are risky and expensive, and lack the protections, oversight and regulations of safer federal loans. Furthermore, providers of private student loans already receive special treatment in bankruptcy at borrower’s expense.

In their letter to Paulson, the signing groups went on to indicate that unlike federal loans, private loans from banks have no real protections for borrowers and co-signers. And there is no limit to how high the interest rate can climb. The letter notes that private student loans are like subprime mortgages where the lowest income borrower is saddled with the highest interest rates and the worst terms. Not only this, but the letter goes on to point out that in case of unemployment, disability or periods of no income — even death, their families have few options for relief. ((Letter to Henry Paulson, November 19, 2008, by the American Association of Collegiate Registrars and Admission Offices along with the American Association of State Colleges and Universities, the Consumers Union, The National Consumer Law Center, the Project on Student Debt, the National Association for the College Admission Counseling, U.S. Public Interest Research and the United States Students Association.)) The loans are almost impossible to discharge in bankruptcy courts, unlike other forms of consumer debt. As the associations noted in their letter to Paulson, someone who racks up thousands of dollars buying skis on a credit card can get relief through bankruptcy. Yet in the case of say a teacher, saddled with private loans from the proprietary schools, who can’t work due to disability — she has no way out. The use of bail-out monies would put the lenders investments, or usury, in a privileged category at the expense of students and consumers.

It would be criminal if billions of taxpayer dollars are allowed to be spent enabling lenders to continue to make these high risk loans which then become defaults picked up by taxpayers. But unfortunately this is precisely what is going on, for Paulson of course didn’t listen to the various gate-keeping organizations intent on protecting the public interest, nor did he care; he was more focused on bailing out his friends not public citizens who have to work for a living. He doled out federal monies despite fervent warnings, to major banks for private student loans just as he bailed out AIG and Goldman Sachs. The Fed bailed out the lenders of these student loans by allowing them to use subprime student loan assets as collateral for accessing federal funds. Now the proprietary schools had another venue for slopping up funds headed for debt — thanks again to the actions of the federal government. This is legal crime committed during broad daylight hours, but of course no mention of it was reported in the corporate press.


Part four, the final part of this series, will ask what can be done and what is being done to eliminate or curb the practices of these predatory institutions. We will look in more detail at the “fringe economy” in general, and how these crafty institutions and avaricious proprietary schools capitalize on student despair and what this means for students left with debt they cannot pay and the significance for an economy that cannot provide for their needs. Finally, we will talk about proprietary schools as a social holding tank for a population surplus, usually young and economically marginalized, often with no other place to go in a world where there are simply little if no opportunities and very few public space left.

Read Part 1 and 2.

Danny Weil is a junior college teacher at Allan Hancock College in California where he teaches philosophy. He is a former kindergarten, first grade, and second grade teacher who has written a great deal on education. Read other articles by Danny.

3 comments on this article so far ...

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  1. Jim said on December 4th, 2009 at 6:19am #

    One should also note the fact that many of the degrees granted by our colleges and universities 1) do not lead to gainful employment, and 2) are not at all socially beneficial. Our educational institutions preserve and division of knowledge into areas of study, such as literature, sociology, art, drama, philosophy and biology, and many degrees are unrelated to the needs of our fellow citizens/society, let alone the realities of the job market. No one informs students with dreams of careers in this or that area of knowledge that few no jobs await them with only a bachelor’s-level education in many disciplines.

    In this sense, higher education is a scam that keeps institutions functioning and professors at the top of the academic heap employed, but offers little to nothing to many of those who pursue knowledge. I personally know three young men who are forced to live together in a small apartment and work in home remodeling, a terribly insecure “career” because of debts of $50-60 thousand because they’d blindly followed their inclinations, interests and talents in drama and other liberal arts disciplines.

    Someone needs to put warning labels on universities.

  2. Michael said on December 4th, 2009 at 10:00am #

    You have obviously done a lot of research here, and you have a big axe to grind (with justification).

    I’ll point out just a couple of items.

    One of, if not the most confusing issues (to us) is that families don’t plan for college by the time the sophomore year comes around. Things typically get left until late in the junior year, or even well into the senior year. This leaves the family and the student at the mercy of the system, regardless of the direction the student will take.

    This is not a user friendly system.

    The growth of the online/for profit schools seems to reflect the absence (or ignorance of) of appropriate community college courses or adequate technical/vocational schools. That they go for the growth industries you mention should not come as any big surprise.

    The approach made to you regarding student financial aid is typical, and is a standard online practice to gather information. These outfits pay high “pay-per-click” fees, so you know there is a lot of money to be made.

    It has been reported that a class action suit is being filed against a well know for profit school here in Atlanta for failure to deliver service. Another quite famous school in Florida has counselors that are regularly described as sales consultants, and teachers that are barely more qualified than incoming freshmen.

    So, faced with the reality, the best advice is to plan ahead, research, and “buyer beware”.

  3. cleondann said on December 8th, 2009 at 12:01am #

    Hi i m cleon .. can i get any suggestion on criminal justice online degree as i m pursuing this from university of phoenix…

    cleon dann