Today in those little cafes and tropical fruit-flavored icee shops all over Miami where politicians often make the rounds, there is some talk about the election outcomes in Miami-Dade County and, almost certainly, some chatter about Ernesto Perez.
Perez is the owner of the Dade Medical College for-profit school network. He's made a habit of navigating Coral Gables -- a wealthy Miami suburb -- in a pretty-hard to miss silver Bentley. He used to be in a rock band. And, of course, while his job at the medical college paid him a $431,999 salary, Perez managed to somehow make $750,000 in political contributions over the last few years.
On Friday, all six of the for-profit colleges in Perez's Florida network shut down amid what the Miami Herald previously described as "mounting debt" and intense scrutiny from the U.S. Department of Education. About 2,000 students were suddenly left with no school to go to.
The Herald reported it all. Actually, the local paper connected the many pieces of this intriguing tale as Perez surrendered himself to local police in connection with charges that he illegally bundled more than $159,000 in campaign contributions and allegedly committed perjury. So, while Election Day drama played out across the county and in Miami too, it was the campaign finance issues that seemed to bring Perez's high-roller days to an end. As Perez surrendered himself to police, his lawyer told a judge that Perez was in the midst of liquidating some "long-held assets," in order to pay the $200,000 in court costs and other payments that are supposed to be part of a deal with prosecutors.
It's not clear if the Bentley ranks among Perez's long-held assets.
This much is clear. While the Education Department became increasingly concerned about the low graduation rates and remarkably high-student debt loads and default rates in the for-profit college industry, for-profit college owners and their lobbyists have been busy talking to members of Congress and their counterparts in state houses across the country. They've done battle with federal regulators over new rules and academic requirements. And, they have made political friends. Good ones, ones who can help stave off, change or somehow reduce the impact of what the Department of Education is trying to do. That's especially true in Florida.
Just consider this excerpt from part of the Herald's year-long investigation into for-profit colleges and why Florida had become one of the industry's favorite states:
Students are a prized commodity at Florida’s for-profit colleges. Just two dozen can generate a million dollars in tuition by the time they are done.
In their zeal to fill classrooms, some schools do whatever it takes. That can mean deploying strippers as recruiters — according to a federal government complaint against Miami-based FastTrain — lying about job placement rates and using high-pressure, boiler-room sales tactics, including a psychological technique called the “pain funnel,” that can reduce a recruit to tears......
Across the United States, for-profit colleges have been the target of dozens of government lawsuits and investigations aimed at curbing abuses. The typical complaint is that students — generally “adult learners” — get manipulated by schools that market aggressively and offer the illusory promise of a well-paying new career....
But at some for-profit schools, former students have complained they got a poor-quality education, with few or no job prospects. They’re left with tens of thousands of dollars in debt and no way to pay it back.
While other states have attempted to rein in the schools, Florida lawmakers have given the colleges their enthusiastic support. As a result, for-profit colleges have grabbed nearly 18 percent of the Florida market — about 300,000 students — compared to 12 percent nationwide
(Please go and read the story and the rest of the series. Or take a look at this National Conference of State Legislators' summary of state-level action to understand how unusual Florida really is.)
Of course, one of the reasons -- besides that Bentley -- that Perez and other for-profit college leaders might also be the subject of some real conversation in political circles today is that in addition to campaign contributions, jobs or contractual arrangements with several elected officials and their spouses (see the list in this story) they told public officials that the for-profit college industry is engaged in a social good.
The industry as a whole has made the diversity -- large shares of black and Latino students; many students who are older, have children and or jobs, and many veterans -- of their student bodies a real selling point. For-profit lobbyists have told federal and state lawmakers around the country that they are helping build the diverse and educated workforce the country needs and doing so without the range of tax payer supports that go to community and state colleges. And, there is truth in the idea that while current non-profit college enrollment betrays small to nonexistent racial enrollment gaps, vast differences in who graduates remain. If the nation's demographic makeup continues its current shifts and the student makeup at all kinds of schools do not follow, the country as a whole -- not just specific racial and ethnic groups -- will have real reason to worry.
What isn't often said in those lobbying sessions is that for most for-profit schools, the vast majority of their resources and profit come from student loans or rather the funds students borrow from the federal government to attend their schools. But with higher-than-average drop out and default rates comes deeper dependence on student loans for operating expenses. And that makes the claims that for-profit colleges are somehow saving taxpayers money are, at best, arguable.
At some for-profit schools the graduation rates are so low and the debt and default levels so high that the Department of Education has described these schools as "predatory." Consumer, education and civil rights groups have called for stricter oversight and rules geared toward making sure that more students get quality educations and leave with manageable debt loads. When one for-profit college network ran so far afoul of federal education regulators' growing list of academic and financial requirements for these schools in 2014, it quickly closed its campuses and essentially stranded about 72,000 students. And other for-profit college networks accused of fraud by the federal government are still receiving funds.
On final note on Perez and those signs of possible trouble. Some of his Dade Medical College students have described the education they received as insufficient, making it possible that they could harm patients after they graduate, if they get a job, the Miami Herald reported. In 2014, the graduating class from the school's Hollywood, Fla. campus offered an example of how those concerns can also spell big financial trouble for students with heavy debt burdens. That year, only 13 percent of graduates passed the nursing license exam. Over at the Miami campus, 44 percent managed to pass that test.