It is widely known at least among hacks like me that the newsroom that coined the motto “follow the money” loses a crapload of money these days, hemorrhaging $164 million in 2009 alone. But our industry is so bereft of funds and attention spans these days very few have spent a whole lot of time following the operations of the enterprise that subsidizes the Washington Post. Last week I took a look at the Washington Times, a famously cash-bleeding rag whose benefactors range from sushi restaurants to flower shops, all run by a church whose original source of venture capital was the Korean CIA. The “for-profit education” business that sustains the Washington Post is less exotic, but in many ways more disturbing, as yesterday’s New York Times feature demonstrated. As the hedge fund manager and celebrated subprime short-seller Steve Eisman famously told Congress a few months back of the for-profit education industry: “Until recently, I thought that there would never again be an opportunity to be involved with an industry as socially destructive as the subprime mortgage industry. I was wrong.” In the wake of a damning GAO report, some federal whistleblower lawsuits against the Washington Post Company and the vociferous efforts of for-profit activists like Eisman, we’re coming to recognize its ruinous legacy. Now will someone call out the Washington Post for so consistently and zealously proselytizing on behalf of the dirty business that keeps it afloat?
I’m talking about the institutional hardon for “education reform,” and all the other related euphemisms for policies supposedly designed to run the American educational system “more like a business” which nearly always translates to the introduction of actual businesses like the Washington Post Corporation. “Imparting knowledge” is of course in most ways rather antithetical to the priorities of commerce, and the only reason there’s any money in it is that long ago someone realized that, and tacked “education” on the list of stuff for which the government ought to be responsible, and so now there are hundreds of billions of taxpayer dollars for Kaplan and DeVry, the University of Phoenix and hundreds if not thousands of less-established outfits to loot. As Diane Ravitch recently pointed out in her necessary New York Review of Books takedown of the “school choice” docu-mercial Waiting for Superman, charter schools for the most part appear to be a scheme to pay teachers less and MBAs more. Four-fifths of charter schools perform either roughly the same or worse than their traditional public school peers. Some charter schools are great, but so are some retail chains, and certainly some schools have always been great, rules and regulations and unions and all the other irritating strings attached.
The Washington Post runs some charter schools, most of them via the aptly named Kaplan Virtual Education, a subsidiary that runs charter schools in six states that affords kids the awesome opportunity to attend school entirely on the Internet after fifth grade. I do not know how this works or who decided that was a reasonable idea, but with so many states and municipalities more broke than the newspaper industry, I can’t imagine that such a low-overhead method of educating the next generation would not represent a “growth industry.” And that is good news for the Washington Post Company, because the online college degree business that comprises the biggest chunk of its revenue stream—about 60,000 of Kaplan Higher Education’s 65,000 enrolled customers in 2009 were online students—is under serious fire. Ninety-one percent of the division’s annual revenues come from federally-guaranteed student loans, but only 28% of Kaplan alumni are paying them back. That’s because they can’t find jobs, even though getting a job is the only reason anyone ever signed up for an online college degree to begin with. With dismal statistics like that, you’d think Kaplan would have to do a lot of lying to get people to enroll in its programs, and you would be right, as the undercover GAO investigators learned when they talked to recruiters:
[ Admissions Representative: ] Most doctors are walking around with over $250,000 in student loans…but it’s workable, you know, it’s really workable. And the…a lot of people have student loans…but the best thing about it, it’s not like a car note, where if you don’t pay they’re gonna come after you.
And:
[ Admissions Representative: ] You gotta look at it – I owe $85,000 to University of Florida. Will I pay it back? Probably not. I look at life a little differently than most people. I look at life as tomorrow is never promised.
Which is not to say they should expect to have any problems paying their loans…
[ Admissions Representative: ] Now think about this. Haircuts are now, how, I’ll say $20, $20, yeah, $20-$25. Now think about it, if you have 3 people who came into the shop at $25, that’s $75 an hour. And if you work 8 hours and if you have 3 people coming in for those 8 hours at $25, I would say 75 times 8, that’s like $600 a day. $600 a day, and that’s just on the low end. We have some students who are making maybe $600, $700, $800, maybe a $1,000 a day.
The target of these sales pitches, according to a Kaplan training manual mentioned in the Times story, is anyone who conforms to a “Kaplan profile” characterized by traits like “low self-esteem, reliance on public assistance, being fired, laid off, incarcerated, or physically or mentally abused.” Kaplan’s response to this particular part was that they hadn’t used that particular manual since 2006, but a former Kaplan instructor who is a plaintiff in one of the whistleblower cases told the paper that a company PowerPoint presentation instructed recruiters to shoot for “African-American women who were raising two children by themselves.”
I only wish the GAO had actually coughed up the cash to enroll in some of these online diploma mills, as Gene Weingarten did in one of my all-time favorite Washington Post stories, in which he earned a bachelor’s “degree” in “outer space physics.” But that was ten years ago, when American stupidity was still kind of funny, and so was the Washington Post. Now it’s just grim and disgraceful.