Victor Rezabala
Mid Term – Project Proposal
Prof. Cacoilo
In some regards, things are sometimes in fact too good to be true. Looking back at the subprime mortgage crisis which began late 2006, thousands of people could purchase a home for the first time. This was possible with easier mortgage approval ratings and an influx of real estate inventory. Everyone was either buying, selling, or building property with the immediate idea that real estate could never go down in value. The ability to refinance your home quicker and easier was a tool used to continue the inventory of mortgage loans in circulation which was used to bundle mortgage backed securities. It all came crashing down when property values began to decrease and the demand from global inventors for these securities evaporated. Thus, leading America into a massive recession leading to foreclosures and employment layoffs. Economist are scurrying to locate the next bubble, in hopes of containing it and haltinganother economic downfall. The next area of concern for many lays within the future of America, both fugitively and literally.
Student loan debt has become the largest amount of debt throughout the country, surpassing credit card debt. According to numerous websites and studies conducted by Forbes, USA today, and studentloan.net, the amount of debt held by students has topped $1.4 trillion. The average student in the graduating class of 2016 held on average $37,156 in student loan debt. Of course, the American dream portrays the image that a college graduate makes more money, will achieve more in life and surpass his peers. This concept later turns into a business plan and the goal of higher education has become strictly a new business model to make some individuals very wealthy. The business concept of For-Profit colleges is one that has been duplicated, modified, and shows a proven track record of making people millionaires.
John Sperling is an intelligent business man, so much so that he viewed the current traditional college model and saw imperfections. He knew he could make a school that was easier, and geared more towards a student’s interest versus a student taking required courses to graduate. John would create University of Phoenix, a subsidiary of Apollo Global Management which happens to be a private equity firm. The concept of the college took off offering students easier admission rates and online courses. While it offered students easier access to college programs and a shorter time line to graduate, it was almost triple the cost compared to an in-state public university. With actual data supporting John’s business concept, the idea of for-profit colleges took off and the number of these colleges would begin to open and grow at an alarming rate. History shows us that where there is money to be made, business man will maximize it with little concern on the effects of other people.
Sources
“The Shrinking Sector.” Number of for-Profit Colleges Declines as Enrollments Wither, www.insidehighered.com/news/2015/07/24/number-profit-colleges-declines-enrollments-wither.
"A Phoenix Still in Ashes : For-Profit Open Admissions and the Public Good" (PDF). Digilib.gmu.edu. Retrieved 4 July 2015.
“Information About Debt Relief for Corinthian Colleges Students.” Federal Student Aid, 13 Jan. 2017, studentaid.ed.gov/sa/about/announcements/corinthian.
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