For-profit education firms slide after Jim Chanos labels them "a national shame," passing out...


For-profit education firms slide after Jim Chanos labels them "a national shame," passing out worthless degrees and tons of debt. "I cant think of a more predatory business," he says, singling out ITT Educational Services (ESI -4.6%) as a particularly egregious offender. Other education names sink: APOL -3.5%, CECO -7%, DV -4%, WPO -2.6%.

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Comments (7)
  • wyostocks
    , contributor
    Comments (9113) | Send Message
     
    It has amazed me for a long time that these "schools" exist at all.
    17 Oct 2011, 03:33 PM Reply Like
  • D_Virginia
    , contributor
    Comments (2278) | Send Message
     
    > "I can't think of a more predatory business"

     

    Banking?
    17 Oct 2011, 03:36 PM Reply Like
  • Native Texan
    , contributor
    Comments (276) | Send Message
     
    I couldn't agree more. When a "For Profit" educator has "staff" that whose compensation is in part based on the # of people they enroll, that should tell you something.
    17 Oct 2011, 03:36 PM Reply Like
  • Leftfield
    , contributor
    Comments (4061) | Send Message
     
    Let's not absolve mainstream colleges and universities who have been so instrumental in allowing costs to escalate into a true and abusive bubble that leaves their students pauperized well into adulthood.

     

    These people are also sharks preying on the innocent with funding granted at taxpayer expense. This boondoggle has obviously caused them to compete on bells, whistles, frills and executive salaries as the inflated price of college education has even outstripped medical expenses in the US for a generation.
    17 Oct 2011, 03:38 PM Reply Like
  • inthemoney
    , contributor
    Comments (997) | Send Message
     
    Why are they worthless, though? Because their standards are too low? And why accredited schools don't set up online degrees? What difference does it make - do I listen to a lecture in a lecture hall or online as long as I can demonstrate the mastery of the material afterwards?
    I guess, may be the difference - I am thinking about what would be good for me vs. what would be good for people running the schools?
    Honestly, the whole model of the college education is hopelessly outdated. I can learn whatever I want to for free on the itnernet. The only thing I can't learn is - practical application. But colleges don't teach that either.
    17 Oct 2011, 03:39 PM Reply Like
  • Ted Bear
    , contributor
    Comments (700) | Send Message
     
    Not to pick on Chanos...he is a pretty smart guy, but the short crowd has been in these stocks for a couple of years. They go up and down on news, and the market..... and in spite of it all, the government continues to fund their students, thus supporting the price of the shares.

     

    At some point it is time to move on to other, more 'fertile' situations. Chanos and his gang may be 'right', but in the end it is about making money...not being 'right'.
    17 Oct 2011, 04:10 PM Reply Like
  • davidbdc
    , contributor
    Comments (3194) | Send Message
     
    He's correct. We've always had "for-profit" schools. Truck Drivers, Cooks, Plumbers, Electricians, etc, etc - learn a skill in a period of time and pay for that.

     

    Then the government began to offer stupid amounts of money. Now, hey your in your pajamas and need to make more money?? Just borrow 80 grand and we'll give you a degree over the internet. Of course, no one will actually hire you on the basis of your "degree", and the odds are that you'll quit after a year or two - but as long as we get the cash and you get to pay off the debt then everything is good!!!

     

    There should be no government money involved in these schools and then 75% of them would close within a year.
    17 Oct 2011, 10:51 PM Reply Like
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