Party Ends at For-Profit Schools - MELISSA KORN

http://online.wsj.com/article/SB10001424053111904279004576524660236401644.html

For-profit colleges are facing a tough test: getting new students to enroll.
New-student enrollments have plunged—in some cases by more than 45%—in recent months, reflecting two factors: Companies have pulled back on aggressive recruiting practices amid criticism over their high student-loan default rates. And many would-be students are questioning the potential pay-off for degrees that can cost considerably more than what's available at local community colleges.

If the mission at these schools were to provide an affordable college degree to people whose location, background, or schedule prevented a traditional path to a degree, I would be saddened by this news. But their real mission was essentially to route money from the federal government, via loans, grants, and other forms of student aid, to their shareholders. The default rates on these loans were substantially higher than default rates for loans on traditional education and the dropout rates for these students much, much higher. The schools couldn't have cared less, nor did the banks making these loans. Unlike mortgages, you can't escape these debts in bankruptcy. So the unholy combination of these two factos has led to a 500% increase in student debt just in the last 10 years.

So instead I welcome this news, as both a moral person and a taxpayer.