Showing posts with label Apollo Education Group. Show all posts
Showing posts with label Apollo Education Group. Show all posts

Sunday, August 21, 2016

"Looters Will Be Shot"--Except for hedge fund managers, shoddy manufacturers, and owners of for-profit colleges

I passed by a low spot on Highway 16 a few days after the Great South Louisiana Flood of 2016, and I saw a house that had obviously been inundated with water.  Nailed to a tree in the front yard was a spray-painted sign: "Looters will be shot."

But of course, the sign isn't quite accurate. Some looters might get shot: the scumbags prowling flooded subdivisions looking for something to steal. It wouldn't bother me if someone nailed one of them with a Bushmaster assault rifle. That's what those rifles are for, after all.

But other looters are perfectly safe from any kind of vigilante justice.  Hedge fund managers, for example, get a special tax break for the ultra wealthy. President Obama--that hopie change guy--didn't bother to clean up that scam, which he easily could have done.

Other corporate looters run for-profit colleges. In fact, Martin Nesbitt, chairman of the Obama Foundation, is CEO of an equity fund that plans to get into the for-profit-college scam business.

In fact, the working people of America get looted all the time, whether or not they are victims of a natural disaster.  For example, I was pushing a wheelbarrow load of wet sheet rock to a trash pile yesterday, and the axle of the wheelbarrow broke. It couldn't handle the modest load that it was supposedly designed to carry.

A co-worker examined the damage and told me to throw the wheelbarrow on the trash pile along with the sheet rock, which I did. This was a new True Temper wheelbarrow! I'd say whoever bought that wheelbarrow was looted.

And today, I was reminded of another corporate looter. I took some time off from flood-damage cleanup to smoke a rack of ribs in my Cabala's electric smoker--which is a piece of shit. For one thing, Cabala didn't make the smoker; Masterbilt did. Cabala's just put its name on the thing to deceive buyers into thinking they were buying a quality product.

The thermometer on the smoker's lid (marked Masterbilt) registers temperatures up to 700 degrees, but I've never gotten the damn thing hotter than 250.  The plastic handle broke the first time I dropped the lid, and the little wooden side tray is busted. Do you think I was looted when I bought that piece of junk? You're damned right I was.

In fact, the Great South Louisiana Flood of 2016--Redneck Katrina--reminded me again and again of how much cheap crap the multinational corporate looters sell to working Americans. Thousands of tons of debris line the streets of Denham Springs, Louisiana--piles of worthless stuff. Microwave ovens, refrigerators, freezers, fake-wood furniture: all crap.

In fact, I don't think many flood victims mourn the loss of their chattel. They knew it was junk when they bought it. They know the Chinese are making more crap for us right now and that they can buy their new crap at the Denham Springs Walmart just as soon as it cleans up its own flood damage and reopens.

Even our homes are crap, sold to us by looters. The doors on new spec houses aren't made out of wood anymore; they're made from some kind of laminate. If the bottom six inches of one of these fake-wood doors is subjected to water for just 24 hours, the whole door is ruined. I know; I tossed out about 30 of them.

But at least you can save the hinges, you might think, and the door frames. But no--these cheap faux-wood doors are sold new with hinges and door frames already attached. When you throw your ruined door on the trash heap, you might as well toss in the hinges and the door frame.

So--to return to my main point--not all looters will be shot. So if you are a looter who wants to rip off your neighbor, don't steal his home generator. You might get your ear shot off.

No, do what Martin Nesbitt is doing; buy a for-profit college.

Image result for martin nesbitt and president obama


References

Blake Neff. America's Largest For-Profit College Sold to Group Led By Obama's Best Friend. Daily Caller, February 28, 2016. Available at http://dailycaller.com/2016/02/08/americas-largest-for-profit-college-sold-to-group-led-by-obamas-best-friend/

Gretchen Morgenson. Ending Tax Break For Ultrawealthy May Not Take Act of Congress. New York Times, May 6 2016. Available at http://www.nytimes.com/2016/05/08/business/ending-tax-break-for-ultrawealthy-may-not-take-act-of-congress.html?_r=0

Tuesday, May 24, 2016

University of Phoenix is eliminating mandatory arbitration clauses in its student agreements. Hmmm. When a for-profit does the right thing, it's probably in trouble

On May 19th, Apollo Education Group, which owns University of Phoenix, announced that it is eliminating mandatory arbitration clauses in its student contracts. This is good news and is in harmony with the Department of Education's desire to do away with arbitration clauses in for-profit universities' student agreements.

Arbitration clauses, as many commentators have noted, tend to favor corporate entities over individuals. Students who signed arbitration agreements can't sue the institution they attended in court even if they have a fraud claim. Arbitration clauses generally prohibit class action suits, which would be a useful way for a group of defrauded students to band together to get relief. And arbitration decisions are generally secret. Thus, even if a university loses an arbitration dispute with a student who was victimized, other injured students are unlikely to learn about it.

Please forgive my cynicism about the for-profit industry, but here's my first reaction. When a for-profit college does the right thing, it's probably in trouble. And University of Phoenix is in big trouble.

Enrollments are down by more than half from Phoenix's peak enrollments. Its stock price, once as high as $90 a share, is now selling for a little more than nine bucks. The key senior executives have negotiated a deal with three private equity groups to buy the Apollo Education Group and Phoenix, and all the big boys will get golden parachutes.

The key player in the buyout partnership is Martin Nesbitt, literally Barack Obama's best friend. And the guy in charge (if the deal goes through) will be Tony Miller, former Deputy Secretary of Education in the Obama administration.  Such a cozy arrangement.

So what the heck--why not eliminate mandatory arbitration clauses now, especially since that is what the Department of Education wants the for-profits to do.

But--as I've said before--DOE's push against mandatory arbitration clauses is tardy. President Obama has been in office seven and half years, and DOE is just now getting around to addressing this serious problem. And new rules will be going through a negotiated rulemaking process that the for-profit industry knows well. There is a very good chance that any new rule restricting mandatory arbitration clauses in student enrollment agreements will be watered down.

Nevertheless, Apollo Education Group's announcement is a good start, and higher-education reformers should take heart. Not that there are any higher-education reformers. Just you and me; that's just about everybody.

References

U.S. Department of Education. U.S. Department of Education Takes Further Steps to Protect Students from Predatory Higher Education Institutions. March 11, 2016. Accessible at http://www.ed.gov/news/press-releases/us-department-education-takes-further-steps-protect-students-predatory-higher-education-institutions?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=

News Release. Apollo Education Group to Eliminate Mandatory Arbitration Clauses. May 19, 2016.
Accessible at http://phx.corporate-ir.net/phoenix.zhtml?c=79624&p=irol-newsArticle&ID=2169809

Ronald Hansen. Apollo Education sale 'golden parachute' could be worth $22 million to executives. Arizona Republic, March 8, 2016. Accessible at http://www.azcentral.com/story/money/business/2016/03/08/apollo-education-sale-executives-payout-22-million/81483912/

Sarah Jones. Top Apollo Education Investor Urges Board to Resist Takeover. Bloomberg News, January 29, 2016. Accessible at http://www.bloomberg.com/news/articles/2016-01-29/top-apollo-education-investor-urges-board-to-resist-takeover

Patria Cohen and Chad Bray. University of Phoenix Owner, Apollo Education Group, Will Be Taken Private. New York Times, February 8, 2016. Accessible at http://www.nytimes.com/2016/02/09/business/dealbook/apollo-education-group-university-of-phoenix-owner-to-be-taken-private.html

Soyong Kim. Apollo teams with Washington insider for education deal. Reuters, January 12, 2016. Accessible at http://www.reuters.com/article/us-apollo-education-m-a-apollo-global-idUSKCN0UQ23W20160112

Dan Primack. Obama's 'best friend' raises millions for private equity fund. Fortune Magazine, August 11, 2014. Accessible at http://fortune.com/2014/08/11/obamas-best-friend-raises-millions-for-private-equity-fund/

Thursday, April 28, 2016

University of Phoenix to be sold to private equity groups: Insiders float away on golden parachutes

Earlier this year, Apollo Education Group, owner of University of Phoenix, announced that it was in negotiations with three private equity funds to sell out for a little more than $1 billion.

Vistria, one of the potential buyers, is run by Martin Nesbitt, widely described as President Obama's best friend.  And that label is probably not hyperbole. Nesbitt was Obama's campaign manager for both his 2008 and 2012 presidential campaigns, and Nesbitt now heads the Obama Foundation, which will oversee the construction of Obama's Presidential Library. Yes, Nesbitt may really be Obama's best friend.

Why is Apollo Education Group, a publicly traded company, selling out to three private equity groups? Perhaps because things aren't going well with the University of Phoenix, Apollo's principal asset.

In its heyday, UP enrolled almost half a million students and raked in more than a billion dollars a year in federal student aid money. UP's parent company was worth $16 billion, and its stock soared to $95 a share.

But times have changes. UP's enrollment has plummeted to less than 200,000, forcing it to close some campuses. In 2015, the Federal Trade Commission began investigating. Today the stock is trading at below $8 a share, and the company is worth less than 1/16 its peak value.

So the big boys decided  it was time to put some lipstick on their pig and sell it.  

And if the sale goes through, Apollo's insiders will do very well. According to a story appearing last month in the Arizona Republic, the sale would provide gold parachutes to several top executives:
  • Greg Cappelli, Apollo Education's CEO, would get $4.2 million in cash and $3.1 million in equity and other benefits.
  • Sean Martin, Apollo Education's General Counsel, would get $1.4 million in cash and $4.2 million in stock.
  • J. Mitchell Bowling, Chief Operating Officer, would get $1.5 million in cash and $1.8 million in stock.
  • Timothy Slottow, president of University of Phoenix, would get $2 million case and $717,000 in stock.
  • Gregory Iverson, Apollo Education's chief financial officer, would get almost a million in cash and $1.7 million in stock.
Not bad compensation for the guys who ran the University of Phoenix into the ground!

And who are the potential buyers? Three private equity groups are partnering to buy Apollo Education Group: Phoenix-based Najafi Companies; Apollo General Management (not affiliated with Apollo Education Group); and Chicago-based Vistria Group, founded and run by Obama's good friend, Martin Nesbitt. Tony Miller, who served as President Obama's Deputy Secretary of Education from 2009 to 2013, has been tapped to run the University of Phoenix operations.

But the deal may not go through. First of all, shareholders may not approve the sale. Schroders Global Recovery Fund, a British equity group, is Apollo Education's biggest shareholder. Schroders bought its stock when Apollo was worth about $3 billion, probably thinking Apollo's stock price would rise and it would make a killing.

Schroder doesn't want to sell to the private equity groups because it would suffer a huge loss.  The Schroders team said this: "We see the potential for multiple hundreds of percent of upside in Apollo’s stock from current levels over a period of years."  And Andrew Lyddon, Schroders' fund manager, said last January that Apollo Education has "had everything thrown at it, but we think it would be terrible for shareholders at this point if management were to capitulate.”

Earlier this week, the Apollo Education board issued a statement stating that a sale to the consortium "is in the best interests of shareholders" and indicated that it would explore the possibility of selling the University of Phoenix if the sale of Apollo Education doesn't go through. (Apparently, the board can sell the University of Phoenix without shareholder approval.)

I am not a "master of the universe" financial wizard. I can hardly balance my own checkbook. Nevertheless, I doubt whether this sale will ever be finalized. The opposition of the Schroders group may stop it--the folks would take a big haircut if Apollo Education sold out for only about $1 billion.

But apart from this challenge, I think there is a growing awareness that the for-profit college industry is ceasing to be a good investment for private equity groups. People made a killing in this racket a few years ago, but students are becoming more sophisticated than they once were and enrollments are dropping. Moreover, public universities now offer an array of online degree programs that once made the University of Phoenix distinctive; and the public universities usually offer online programs at much more affordable prices than the for-profits.

It would not surprise me if Martin Nesbit and his rich hedge-fund cronies decided to back out of their tentative deal to buy Apollo Education Group. And that would be a shame, because that would suck all the air out of a bunch of golden parachutes.

References

Ronald Hansen. Apollo Education sale 'golden parachute' could be worth $22 million to executives. Arizona Republic, March 8, 2016. Accessible at http://www.azcentral.com/story/money/business/2016/03/08/apollo-education-sale-executives-payout-22-million/81483912/

Sarah Jones. Top Apollo Education Investor Urges Board to Resist Takeover. Bloomberg News, January 29, 2016. Accessible at http://www.bloomberg.com/news/articles/2016-01-29/top-apollo-education-investor-urges-board-to-resist-takeover

Patria Cohen and Chad Bray. University of Phoenix Owner, Apollo Education Group, Will Be Taken Private. New York Times, February 8, 2016. Accessible at http://www.nytimes.com/2016/02/09/business/dealbook/apollo-education-group-university-of-phoenix-owner-to-be-taken-private.html

Soyong Kim. Apollo teams with Washington insider for education deal. Reuters, January 12, 2016. Accessible at http://www.reuters.com/article/us-apollo-education-m-a-apollo-global-idUSKCN0UQ23W20160112



 

Tuesday, April 19, 2016

Hillary Clinton's ties to the for-profit college industry: If she becomes President, expect the status quo

The for-profit college industry has had a good run. For years, it has sucked up about a quarter of all federal student-loan money, while only enrolling about 12 percent of the nation's students.

The for-profits have reaped big profits, and why not? Some of them spend more on recruiting than they do on instruction.  Most of their revenues (nearly 90 percent for most for-profit colleges) come from the federal student-loan program, and their docile students passively sign the  loan documents that are pushed in front of them by the for-profits' efficient student processors.

And if anyone accuses them of fraud or misrepresentation--hey, no problem. Most for-profits force their students to waive their right to sue somewhere in the enrollment documents.

For years, the for-profits have greased the wheels on their gravy train by making strategic campaign contributions to important people in Congress and by hiring Washington lobbyists to protect their interests. Everyone from Mitt Romney to Florida Congresswoman Debbie Wasserman Schultz got a little money from the for-profits, and so adequately regulating this gang of pirates is out of the question.

Will things change if Hillary is elected President? It's very unlikely. Here are a few tidbits of information about Hillary and Bill Clinton's ties to the for-profit industry that come from a recent article by Michael Stratford.

  • Bill Clinton worked for Laureate Education, which has for profit colleges all over the world. According to Stratford's article, Bill earned $16.5 million between 2010 and 2014 working for Laureate. In fact, Bill Clinton served as honorary chancellor for Laureate International Universities  until last year, when he resigned  shortly before Hillary launched her campaign. 
  • Hillary earned $225,000 making a speech to Academic Partnerships, a for-profit company that makes big bucks partnering with public universities and turning face-to-face courses into online courses that Academic Partnership oversees. 
  • Several of Hillary Clinton's campaign-fund bundlers have worked as lobbyists for Apollo Group, the parent company of University of Phoenix. (And by the way, Barack Obama's "best friend," Martin Nesbitt, is making plans to buy Apollo Group.)
David Halperin, an investigative reporter who has done a good job reporting on the for-profit industry, praised Hillary for taking a "strong, principled stand against predatory for-profit college companies," but I am highly skeptical.

When I was growing up, I was taught that there are only two kinds of snakes: dead ones and live ones. Similarly, with perhaps a few exceptions, there are only two kinds of for-profit colleges: the ones that exploit the student-loan program to the detriment of their students, and the ones that have closed.

Former President Bill Clinton speaks to students at Laureate’s Universidad Latina in Costa Rica.

References

Frank Cerabino. Failed medical college was reliable source of campaign money. Palm Beach Post, November 2, 2015. http://www.mypalmbeachpost.com/news/news/cerabino-failed-medical-college-was-reliable-sourc/npD6Q/

David Halperin. Top Democratic Lawyer Pushed Pentagon to End U. of Phoenix Suspension. Huffington Post, March 17, 2016. http://www.huffingtonpost.com/davidhalperin/top-democratic-lawyer-pus_b_9487600.html

Richard Rubin. Hillary and Bill Clinton Mad $139 Million in Eight Years. Bloomberg.com, July 31, 2015. http://www.bloomberg.com/politics/articles/2015-07-31/hillary-and-bill-clinton-paid-43-million-in-federal-taxes

Charles M. Smith and Dina Rasor. For-profit colleges are bankrolling Romney to keep to keep student loan money flowing. Truth-out.org, June 14, 2012. http://www.truth-out.org/news/item/9790-for-profit-colleges-are-bankrolling-mitt-romney-and-other-republicans-to-keep-their-public-student-loans-flowing

Michael Stratford. Hillary Clinton's ties to for-profit education companies. Inside Higher Education, April 18, 2016. https://www.insidehighered.com/news/2016/04/18/hillary-clintons-ties-profit-education-companies

Tuesday, April 12, 2016

Henry Fernandez of Fox Business News says 40% of students aren't paying back their student loans. Is Fernandez correct? Does it matter?

Henry Fernandez of Fox Business News published a story last week reporting that 40 percent of college borrowers aren't paying back their student loans.  Here's what he said:
There's new concern over student loans as more than 40% of people who borrow from the government are not making their payments. That's nine million of the 22 million people with student loans who may never be able to pay their loans.
Is Hernandez correct?

Is Hernandez's analysis correct? And if so, does it matter?

Although the Fernandez did not cite a source for  his 40 percent statement, I think he's right. Looking at data from multiple sources, here's how I get to a 40 percent nonpayment rate.

First of all, 43 million people have outstanding student loans. As the New York Times accurately observed last year, 10 million student borrowers have either defaulted on their loans or are delinquent.  It is true that some people with delinquent loans will eventually bring their loans current, but a lot of them won't because unpaid interest will accrue during the delinquency period, making the loans grow larger and more difficult to repay.  Theoretically, defaulters can also bring their loans current, but the penalties assessed against defaulting borrowers are unbelievably onerous; and once defaulters have penalties attached to their loan balances they are doomed.

Then we have 4.6 million people who have entered income-based repayment plans (IBRPs) that extend loan repayment periods out to 20 or even 25 years. Most of these borrowers are making payments so low that interest will continue to accrue, which means a very high percentage of borrowers in IBRPs will never pay off their loan principal.  And this number grew by 140 percent in just due two years! I think it is safe to predict that within a year, at least 5 million people will be in IBRPs of some sort. So let's add 5 million to the 10 million people whose loans are delinquent or in default.

Finally, there are about 9 million people who are in economic-hardship deferment programs or loan forbearance programs of some kind that excuse them from making loan payments.  Again, interest is accruing on these loans.

When we consider this data together, we can understand why more than half of college-loan borrowers are seeing their loan balances go up within two years of beginning the repayment stage (as reported by the Brookings Institution). This is a clear sign that a lot of borrowers are either not making any payments or are making payments so low that they are not paying down their loan balances.

Based on the analysis I just outlined, it is clear that Mr. Hernandez is right and that at least 40 percent of student borrowers are not repaying their loans, and most never will.

Does it matter?

From the perspective of society as a whole, does it matter whether students pay back their college loans? Yes it does. Steve Hayward, a professor at Pepperdine University, who was interviewed for Fernandez's story, said that colleges are delivering an inferior product, "and I think there is a bubble coming." In fact, Hayward went further and said if colleges were publicly traded, he would short them.

Hayward has it right.  Let's look at Apollo Education Group, the owner of University of Phoenix. Apollo once traded at $80 a share and now trades for about $8.  If you had shorted Apollo, you would have made some money.

Basically, I think what Hayward was suggesting is this: The government  cannot go on forever loaning billions of dollars a year to college students, when a high percentage of college borrowers are receiving inferior educational experiences and aren't paying back their loans.

In fact, higher education is in a bubble right now. Hundreds of private liberal arts colleges and for-profit colleges are struggling to survive and could not survive 30 days without federal student aid money. They are like drug addicts who must have federal dollars flooding into their coffers just to survive from month to month.

But the government cannot keep loaning more than $150 billion a year in student-loan money if 40 percent of the borrowers don't pay back their loans.

The Obama administration and the entire bloated college industry are relying on a single strategy to keep the gravy train rolling: long-term income-based repayment plans.  If they can force the kiddies into 20-year or 25-year repayment plans with lower monthly payments than the standard 10-year repayment period, they think the party will go on forever and the bubble will never burst.

But the party won't go on forever, and the bubble is about to burst. Within five years, we will see dozens of colleges close their doors because more and more students will simply refuse to pay outrageous tuition prices for degree programs that don't lead to good jobs. And we will see nonpayment rates go higher than they are now, and they already pretty damn high.

In fact, the student-loan bubble is already causing more suffering than the home-mortgage bubble. According to text at the end of the movie The Big Short, about six million people lost their homes during the home-mortgage crisis of 2008  But those people could file for bankruptcy and get a fresh start. More than 20 million people are burdened by unmanageable student-loan debt, and most of them cannot get relief in the bankruptcy courts..

References

Henry Fernandez. 40% of Students Aren't Paying Back the Government. Foxbusiness.com, April 8, 2016. Accessible at http://www.foxbusiness.com/features/2016/04/08/40-students-arent-paying-back-government.html



Thursday, April 7, 2016

4.6 million student debtors are in long-term repayment plans, default rates are up, and President Obama's "best friend" is buying University of Phoenix: "Things fall apart; the centre cannot hold."

Things fall apart; the centre cannot hold;
 Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.


The Second Coming
William Butler Yeats

As William Butler Yeats put it, "Things fall apart; the centre cannot hold." Everywhere, we see signs that the federal student-loan program is on the verge of collapse. And when the loan program collapses, so will American higher education.

Here are some portents of the coming disaster:

Student borrowers are enrolling in long-term repayment plans in record numbers

First, the U.S. Department of Education recently announced that 4.6 million student debtors are enrolled in Income-Driven Repayment plans (IDRs) to pay off their college loans. This is a 48 percent increase since December 2014 and a 140 percent increase since December 2013. 

People in IDRs are obligated to pay on their student loans for 20 or even 25 years, and most are making payments so small that that their loan balances are going up, not down, due to unpaid accumulating interest. In other words, most people in IDRs will never pay off their college loans.

Yet lenient income-based plans are President Obama's chief strategy for addressing the student-loan crisis. As the DOE blog put it,"President Obama has fought hard to make college more affordable and to help borrowers keep their student loan payments manageable." And thanks to those efforts, DOE continues, students in the new IDRs never have to pay more than 10 percent of their monthly income on your federal student loans."   Indeed, borrowers who are  "temporarily unemployed" don't have to pay anything. "After all, as DOE cheerily pointed out, "10 percent of zero dollars is zero dollars."

But of course, 20-year and 25-year repayment plans are crazy, especially when we consider that most people don't sign up for these plans until their backs are against the wall. Remember Brenda Butler, who entered a 25-year repayment plan 20 years after graduating from college? She won't be finished with her student loans until 2037, 42 years after acquiring her degree!

The Feds are garnishing wages and Social Security Checks; and default rates are rising

Meanwhile, the government garnished $176 million in wages from student-loan defaulters during the last three months of 2015. And the government garnishes Social Security checks of 155,000 elderly student-loan defaulters. 

And despite governmental assurances to the contrary, student-loan default rates are rising. According to a recent analysis by Jason Deslisle, 20 percent of all borrowers with loans due are in default. A Brookings Institution report noted that almost half of  a recent cohort of student borrowers who attended for-profit colleges defaulted within 5 years

And let's not forget the nine million people in the repayment phase of their loans who aren't making payments because they've obtained economic hardship deferments or some other deferment from making loan payments.  Those folks are counted as defaulters, but in reality, most of them will never pay back their loans. 

Law schools are in trouble

And then there are the law schools, some of which are in real trouble. Over the last few years, law schools began behaving like pirates, raising tuition rates to insane levels even as the market for lawyers imploded. Now they are seeing  a 20 percent decline in enrollment applications; and many have lowered their admission standards just to get warm bodies in their classrooms. A typical law student now graduates with $140,000 in debt; and many have almost no prospect of getting jobs in the legal field.

The for-profit college sector: The barbarian are at the gates

Finally, in the private sector, the barbarians are at the gates. Corinthian College, which had 350,000 students or former students as of last year, filed for bankruptcy; and thousands of its victims have filed claims to have their student loans forgiven. The Department of Education brokered a sale of some Corinthian campuses to a company affiliated with Educational Credit Management Corporation, the rapacious college-loan debt collector, just to maintain some semblance of order in the chaos of the Corinthian collapse.

Apollo Education Group, owner of the University of Phoenix, is in real trouble. Enrollments at UP dropped from a a peak of 475,000 in 2010 to less than half that number in 2015. Apollo's stock, which once sold for more than $80 a share, is now trading below 8 bucks.

Apollo is in negotiations to sell out to a group of private equity firms, including Visteria Group. Visteria was founded by Martin Nesbitt, described as President Obama's "best friend." In fact, Nesbitt was treasurer for both of Obama presidential campaigns; and he heads the Obama Foundation that is planning the Obama Presidential Library. 

If the deal goes through, Tony Miller, former Deputy Secretary of Education in the Obama administration and Martin Nesbitt's business partner, will become Apollo Education Group's new Board Chairman.  Very cozy!

"The ceremony of innocence is drowned."

To borrow a phrase from Yeats, "The ceremony of innocence is drowned" in American higher education.  Colleges and universities were once honored as the guardians of our civilization's ideals, the places where young people came to grow and learn, and to develop the civic and moral values that are indispensable to maintaining a healthy and vibrant society.

No more.  Arrogant college presidents, greedy profiteers, and mindless bureaucrats now control our once beloved universities. The best of these characters "lack all conviction, while the worst are full of passionate intensity." 

All of this craziness is paid for by federal student-loan money. And millions of college-loan borrowers are strangling in debt they can never pay off. This cannot go on forever.

President Obama and Martin Nesbitt



Anthony W. Miller official portrait.jpg
Tony Miller, former Deputy Secretary of Education
and soon-to-be Board Chairman of Apollo Education Group
References

Jillian Berman. Americans just had $17 million in wages garnished by the government due to unpaid student loans. Marketwatch.com, March 22, 2016. Accessible at http://www.marketwatch.com/story/the-government-just-garnished-176-million-in-wages-because-of-unpaid-student-loans-2016-03-21

Ronald J. Hansen. Apollo Education, parent company of University of Phoenix, to go prvate at $1.1 billion deal. Arizona Republic, February 9, 2016. Accessible at http://www.azcentral.com/story/money/business/2016/02/08/apollo-education-to-go-private-in-11b-deal/79998782/

Jason Delisle. @usedgov latest data out today shows student loan defaults just hit another record high, 20% of those w/ loans due. Mhttps://twitter.com/delislealleges/status/710539989256429568

Matt Sessa. Student Aid Posts Updated Reports to FSA Data Center. Department of Education, March 17, 2016. Accessible at https://www.nasfaa.org/news-item/7943/3-17_Federal_Student_Aid_Posts_Updated_Reports_to_FSA_Data_Center

Dan Primack. Obama's 'best friend' raises millions for private equity fund. Fortune Magazine, August 11, 2014. Accessible at http://fortune.com/2014/08/11/obamas-best-friend-raises-millions-for-private-equity-fund/

Patricia Cohen and Chad Bray. University of Phoenix Owner, Apollo Education Group, To Be Taken Private. New York Times, February 9, 2016. Accessible at http://www.nytimes.com/2016/02/09/business/dealbook/apollo-education-group-university-of-phoenix-owner-to-be-taken-private.html?

No, You Won't Be Arrested for Falling Behind On Your Student Loans. US. Department of Eduation Official Bog, April, 2016. Accessible at http://blog.ed.gov/2016/04/no-you-wont-be-arrested-for-falling-behind-on-your-student-loans/