There’s a reason why the investment bank Goldman Sachs is called “a great vampire squid wrapped around the face of humanity” — it will do anything to make a quick buck. Goldman, though, has reached a new low in its craven pursuit of profits: targeting college students. The investment bank took over the for-profit college company Education Management Corporation (EDMC) and then forced them to take up exploitative and cravenly opportunistic practices to get students to take on debt, according to a new report by Huffington Post reporter Chris Kirkham.
For-profit colleges make money for every student that comes to their school. Goldman Sachs executives realized that they could make more money by shifting resources out of teaching and into recruitment. Kirkham reports: “After the deal closed and Goldman became a partner, employees soon noticed a drastic shift in culture. Longtime admissions managers were replaced, ushering in an era in which recruiters were endlessly hounded by supervisors about hitting weekly enrollment targets.” The company culture started caring more about getting students into the classroom than educating them.
This aggressive recruitment especially became a problem because recruiters were told to “prey on poor and uneducated consumers” who would have to take on substantial debt to get a degree. Fueled by the debt that low-income students were taking on, EDMC (and by extension Goldman Sachs) tripled their revenues in less than five years, bringing in almost 3 billion dollars in 2011. Of that revenue, almost 90% came from federal student aid programs.
Given that for-profit colleges have the highest rate of student debt and that EDMC has the highest tuition rates among for-profit colleges, it’s clear that Goldman Sachs is making profits by saddling poor students with a lifetime of debt. Thankfully, the Obama administration issued new sets of guidelines earlier this summer to prevent companies like Goldman Sachs from profiting from student debt, which should hopefully curb these predatory practices.
These reports, though, just underscore how unethical companies like Goldman Sachs are, and how necessary it is to protest them, much as Occupy Wall Street has done over recent weeks. The accompanying “We Are the 99%” movement speaks to this issue — Americans of all stripes are tired of the wealthiest in the country profiting while everyone else has to take on astounding debt just to stay afloat. It’s time to stand up against the corporations like Goldman Sachs that make money off of others pain and loss.
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