The recent admissions scandal in the US has exposed the discrepancies within the US higher education system and how it can be exploited if you know the right people and have the right cash. Allegations against wealthy parents for abusing their connections and power for securing admissions at elite universities in America highlights how the system is being rigged or manipulated by the well-heeled.
Despite these allegations, the education system of the US remains a lucrative industry, leading to a staggering student debt of $1.7 trillion, much higher than auto loans and credit card debts of the country. According to a recent article by Forbes, a report released by OpenTheBooks.com on the US Department of Education found millions of dollars were being wasted on skewed policies, weak accounting mechanisms and obsolete policies.
The report highlighted the following seven interesting facts about the education department, raising questions about the overall efficacy of the education sector in the US.
- The elite or wealthiest colleges received federal subsidiaries of almost $7 billion in the previous academic year. The top 25 varsities which also had the largest endowments procured almost $7 billion in federal student aid, burdening the taxpayers further.
- Bad debt- a billion dollar fraudulent project for the taxpayers raiseed some serious questions. According to the Education Department, almost 26 percent of the undergrad student loans given by the government in the academic year 2018 will soon be entering the default stage. Another study by the Brooking Institution found 28 percent of college students applied for student loans without even realising that it was a debt that needed to be paid back.
- ED lacks an internal financial accounting mechanism and accepts of overpaying $11 billion in Pell grants and student loans in the last two years. Almost eight percent of Pell grants and four percent of student loans were overpaid by the ED.
- Taxpayers were also driving up tuition costs. For instance, different colleges of cosmetology like Empire Beauty School received more than $500 million as student subsidiaries between the academic years 2014 and 2017, admitting of charging almost $22,100 as tuition and fees.
- Golf, gambling, seminaries and bartending procured the largest amount of subsidiaries. Taxpayers also funded non-traditional institutions like music and design academy, professional golfers Career College and seminaries for pastors and priests.
- Almost $1 billion subsidies were given to the 50 worst performing junior schools in the country, where almost 10 worst schools had an average graduation rate of 12 percent.
- Non-profit colleges procured $10.5 billion as student aid, while the for-profit received staggering 30 percent of the federal subsidies. The large competitors were given all tools by the ED to fence out small competitors.