There is a new scam going on at Wall Street and it doesn’t involve bad credit loans or foreclosures.

The big players have finally found a way to make millions of dollars off of education and the federal government is helping them.

How? For-Profit Institutions.

QUICK FACTS

1. While students at for-profit schools make up only 10 percent of the college-going population, they consume almost a 25% of all federal financial aid.
2. The majority of a for-profit school’s revenue comes from federal grants and loans.
3. Critics of for-profit schools say such institutions use high-pressure sales tactics to recruit students, provide easy access to federal financial aid, load them with debt.
4. For-profit colleges spend almost 25 percent of their total revenue on getting people to come to the college and only about 10 to 15 percent on instruction once the student is there.

Have you ever heard of an Educational Entrepreneur? They are investors who look for under achieving trade schools, colleges, vocational institutions who are losing money and they turn them around, for a small profit.

There is an extremely valuable asset that these investors look for when searching for their next investment. Its called “Regional Accreditation” and it allows investors to receive federal loans from the government.

The return on investment for these “Educational Entrepreneurs” are in the millions and they are using our tax dollars to fund their next project.

One person you will meet in the documentary is Michael Clifford, an educational entrepreneur who gives Front line private access to business meetings and how the business works.

Frontline searches for answers and exposes some of the top For-Profit institutions and the people who own them. This video documentary will open your eyes to a new ponzi scheme that is destroying lives of students around the world.

To watch this documentary, please click on the link below:

http://www.pbs.org/wgbh/pages/frontline/collegeinc/

USA TODAY Article:

http://www.usatoday.com/news/education/2010-09-29-1Aforprofit29_CV_N.htm

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TIPS:
Not all For-Profit institutions are bad. Look at these tips below to find out how you can avoid registering with the wrong school.

1. Do Your Research- Check the history of the school, the program  you’re looking to enroll in and the credentials of the faculty members.
2. Stay Away from High Interest Loans- Be very careful when stepping into the financial aid office of for-profit institutions. Ask your financial advisor questions about the type of loan, payment terms, and any other relevant information.
3. Ask Employers- If a school is known for a specific type of job training, ask the employers if they felt the college curriculum was effectively preparing students  for the jobs related in that field.