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Cashing in on Porkulus?

A Pell Grant “is a type of post-secondary, educational federal grant program sponsored by the U.S. Department of Education. It is named after U.S. Senator Claiborne Pell of Rhode Island, according to Wikipedia. For 2009- 2010, the maximum award amount is $5,350.

A story in today’s Atlanta Journal-Constitution reports that “for-profit colleges reap big benefit from stimulus.” The paper reports that last February's stimulus bill, i.e., the American Recovery and Reinvestment Act, included $17.1 billion in funding for Pell grants with about $9.8 billion having so far been distributed. However, the story’s lede questions how a quarter of the money has been spent:

“Massage and beauty schools, online universities and other for-profit colleges in Georgia and across the nation are cashing in on federal stimulus spending, collecting $2.2 billion in tuition grants for low-income students, public records show.”

The Journal-Constitution lays out the arguments of the two sides for these schools as follows:

“Critics, however, question the quality of some for-profit schools and the wisdom of sending so much taxpayer-funded assistance to them. They point to statistics that show such schools generally have higher percentages of students defaulting on government loans compared to public and nonprofit schools.

“Profit-making schools are collecting a growing share of federal aid. In fiscal year 2008, they received more than $16 billion in federal loans, grants and other aid. Their share of Pell grants increased from 16 percent in 2007 to 21 percent last fiscal year, when the stimulus money started to flow.

“Proponents say some of the arguments against for-profit schools are elitist. Proprietary schools, supporter say, are meeting the top goal of the stimulus program by preparing people for work. They say they also serve as an alternative for people who can’t — or don’t want to — attend traditional community colleges or four-year schools, some of which have crowded classrooms.

“The reality is that without the high-quality education we provide and the availability of Pell grants, many of our students might not have access to the skills-based, post-secondary education so critical to our nation’s economic recovery and growth,” said Jeff Leshay, a spokesman for Illinois-based Career Education Corp., which owns several for-profit schools that are receiving stimulus funds and have campuses in Georgia and other states.”

To paraphrase Fox News, we report, you decide.


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