Screw U

Betsy DeVos’ top advisor led a for-profit university that defrauded students and hoovered up federal student aid. Now Robert Eitel is tasked with *right-sizing* the Department of Education. What could possibly go wrong?

Jennifer Berkshire: This week Betsy DeVos announced that she was tasking one of her top advisors, Robert Eitel, formerly of Bridgepoint Education, Inc., with overseeing the *right sizing* of the Department of Education. Bridgepoint has something of, um, an interesting backstory that I’d like you to walk us through. Start in 2005 when the company purchased a nun-run Iowa college and blew it up into an online behemoth.

Christopher Crowley: So Bridgepoint Education was started by a group of former University of Phoenix executives who were able to get Wall Street seed money and then used that money to buy a small college in Iowa called the Franciscan University of the Prairies. When Bridgepoint bought the college in 2005, there were around 300 students enrolled, taught mostly by the nuns who founded the school. Bridgepoint changed the name of the school to Ashford, and by 2010 there were more than 80,000 students enrolled, mostly online. That’s huge. Continue reading →

All in For Profit

A Wall Streeter explains why he’s bullish on for-profit education company K12

By Mazinger Z
As president Coolidge once said, the business of American business is rent seeking. No surprise then that the efficiency, resources and ingenuity of our profit-seekers are increasingly being enlisted in the fight to turn around our failed and failing public schools. Of course, this process inevitably involves siphoning off a few tens of billions from the generous teat of the US taxpayers. But only carpers or whiners could object to the risk-bearing shareholders extracting proper compensation for the hard work of following their stocks on Yahoo and opening their monthly brokerage statements. Continue reading →