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A How-To Instruction Manual For the ‘Ambitious’ For-Profit College

Here is a Profile of the Sociopath  that can be found in its entirety at the link. A more in depth discussion and list of symptoms can be found at Sociopath World I highly recommend checking it out (alongside for-profit college recruiting and promotional materials).

Profile of the Sociopath

  • Glibness and Superficial Charm
  • Manipulative and Conning
    They never recognize the rights of others and see their self-serving behaviors as permissible. They appear to be charming, yet are covertly hostile and domineering, seeing their victim as merely an instrument to be used. They may dominate and humiliate their victims.
  • Grandiose Sense of Self
    Feels entitled to certain things as “their right.”
  • Pathological Lying
    Has no problem lying coolly and easily and it is almost impossible for them to be truthful on a consistent basis. Can create, and get caught up in, a complex belief about their own powers and abilities. Extremely convincing and even able to pass lie detector tests.
  • Lack of Remorse, Shame or Guilt
    A deep seated rage, which is split off and repressed, is at their core. Does not see others around them as people, but only as targets and opportunities. Instead of friends, they have victims and accomplices who end up as victims. The end always justifies the means and they let nothing stand in their way.
  • Shallow Emotions
    When they show what seems to be warmth, joy, love and compassion it is more feigned than experienced and serves an ulterior motive. Outraged by insignificant matters, yet remaining unmoved and cold by what would upset a normal person. Since they are not genuine, neither are their promises.
  • Callousness/Lack of Empathy
    Unable to empathize with the pain of their victims, having only contempt for others’ feelings of distress and readily taking advantage of them.
  • Poor Behavioral Controls/Impulsive Nature
    Rage and abuse, alternating with small expressions of love and approval produce an addictive cycle for abuser and abused, as well as creating hopelessness in the victim. Believe they are all-powerful, all-knowing, entitled to every wish, no sense of personal boundaries, no concern for their impact on others.
  • Irresponsibility/Unreliability
    Not concerned about wrecking others’ lives and dreams. Oblivious or indifferent to the devastation they cause. Does not accept blame themselves, but blames others, even for acts they obviously committed.
  • Lack of Realistic Life Plan/Parasitic Lifestyle
    Tends to move around a lot or makes all encompassing promises for the future, poor work ethic but exploits others effectively.
  • Criminal or Entrepreneurial Versatility
    Changes their image as needed to avoid prosecution.

Other Related Qualities:

  1. Contemptuous of those who seek to understand them
  2. Does not perceive that anything is wrong with them
  3. Authoritarian
  4. Secretive
  5. Paranoid
  6. Only rarely in difficulty with the law, but seeks out situations where their tyrannical behavior will be tolerated, condoned, or admired
  7. Conventional appearance
  8. Goal of enslavement of their victim(s)
  9. Exercises despotic control over every aspect of the victim’s life
  10. Has an emotional need to justify their crimes and therefore needs their victim’s affirmation (respect, gratitude and love)
  11. Ultimate goal is the creation of a willing victim
  12. Incapable of real human attachment to another
  13. Unable to feel remorse or guilt
  14. Extreme narcissism and grandiose
  15. May state readily that their goal is to rule the world

(The above traits are based on the psychopathy checklists of H. Cleckley and R. Hare.)

This little gem of an article is courtesy of and can be found @ ForProfitEDU. Please keep in mind the profile above as you read through the article below.

Understanding why for-profits are growing @ ForProfitEDU

All student interests and motivations are not at all the same, you need to understand their motivations to understand the market.  Lack of Remorse, Shame or Guilt: A deep seated rage, which is split off and repressed, is at their core. Does not see others around them as people, but only as targets and opportunities. Instead of friends, they have victims and accomplices who end up as victims. The end always justifies the means and they let nothing stand in their way. Shallow Emotions: When they show what seems to be warmth, joy, love and compassion it is more feigned than experienced and serves an ulterior motive. Outraged by insignificant matters, yet remaining unmoved and cold by what would upset a normal person. Since they are not genuine, neither are their promises.

You need to not think about yourself here as you are NOT the typical student growing to these schools. Grandiose Sense of Self Feels entitled to certain things as “their right.”
Hmm could this be code for ‘minority’ seeing as the argument has been that the For-Profit College regulations penalize minorities.

We are talking demographics, ethnicity’s, socioeconomic differences and growing population trends.  For many of us the decision to go to college was a big one. College is a BIG DECISION for most people, especially now that college tuition costs the same as a Bentley!  Thanks Wall Street!

We spent a lot of time and effort thinking about where to go, the advantages of each school and what would be the best opportunity for us.  We went and visited many of the schools, we looked at the academia, the campus life and the fit for us at those schools. The question was not should we go to college, but rather which college should we go to… this was a massive decision and we treated it as such. Grandiose Sense of Self: Feels entitled to certain things as “their right.”

Well, that’s not the case for the vast majority of the students who enroll in the for-profit schools. Rage and abuse, alternating with small expressions of love and approval produce an addictive cycle for abuser and abused, as well as creating hopelessness in the victim. Believe they are all-powerful, all-knowing, entitled to every wish, no sense of personal boundaries, no concern for their impact on others

They for the most part are simply viewing the decision as I need to get a degree, and I don’t have the luxury of stopping everything else in my life for 4 years in order to get it.  Thanks to you and your Wall Street cronies the majority of people, including those you reference above, no longer have that option psycho!

I need to get a degree to get a job and start my career.  I can’t make any money without a degree, so how do I get my degree.  I also want it local and flexible (or online) so my life doesn’t have to stop while I am doing it. Callousness/Lack of Empathy Unable to empathize with the pain of their victims, having only contempt for others’ feelings of distress and readily taking advantage of them. Here comes the BAIT and SWITCH that we’re all so PISSED OFF ABOUT!

They search online or maybe see a TV commercial, they call or fill out a lead form (requesting information) and then they get “the call”.  The call is when a trained admissions rep (in other industries they are called sales reps.) calls them ASAP.  The faster they get them on the phone, the better their odds of bringing in the student.  Lack of Realistic Life Plan/Parasitic Lifestyle: Tends to move around a lot or makes all encompassing promises for the future, poor work ethic but exploits others effectively. 

They establish a rapport, they build the case for why the prospective student MUST move forward to change their life for the better and they go for the enrollment.  Shallow Emotions: When they show what seems to be warmth, joy, love and compassion it is more feigned than experienced and serves an ulterior motive. Outraged by insignificant matters, yet remaining unmoved and cold by what would upset a normal person. Since they are not genuine, neither are their promises.

Most prospects don’t shop around, and once they have established a relationship with a school they move forward with that school, rarely will they return calls from the other schools they may have requested info from. Manipulative and Conning: They never recognize the rights of others and see their self-serving behaviors as permissible. They appear to be charming, yet are covertly hostile and domineering, seeing their victim as merely an instrument to be used. They may dominate and humiliate their victims. It’s called trust you Sociopath….they trust you and y0ur admissions counselors! They trust that you have their best interests in mind that you understand they want to better themselves and their lives. So what do you do? You take that trust and use it in the most SATANIC, DESPICABLE AND DASTARDLY MANNER FOR YOUR OWN PERSONAL MONETARY GAIN

They rarely step back and say…okay I need to stop here for a moment and look at what else is out there. Irresponsibility/Unreliability: Not concerned about wrecking others’ lives and dreams. Oblivious or indifferent to the devastation they cause. Does not accept blame themselves, but blames others, even for acts they obviously committed.

They instead plow ahead and move through the process including financial aid and ultimately start school.  It’s a means to an end decision, and often a degree is a degree is a degree type of thinking.  Therefore, as the population continues to shift to an increasing percentage of the population of the non-traditional means to an ends thinking student from the traditional college selection is a huge decision for me student for-profits will continue to grow. Their models are aggressive, fine tuned marketing & enrolment machines, yet they provide the solution to what a growing population is looking for. Pathological Lying: Has no problem lying coolly and easily and it is almost impossible for them to be truthful on a consistent basis. Can create, and get caught up in, a complex belief about their own powers and abilities. Extremely convincing and even able to pass lie detector tests.Criminal or Entrepreneurial Versatility: Changes their image as needed to avoid prosecution.  

A college degree and/ or career training in an environment filled with like minded students whose goal is to get a degree as soon as they can so they can join the workforce.  Callousness/Lack of Empathy: Unable to empathize with the pain of their victims, having only contempt for others’ feelings of distress and readily taking advantage of them.

Without the pomp and circumstance of traditional academia, without the huge sprawling campus, the sports teams, the fraternities, and the need to stop everything else in their life (for years) in order to obtain their education/degree. Shallow Emotions: When they show what seems to be warmth, joy, love and compassion it is more feigned than experienced and serves an ulterior motive. Outraged by insignificant matters, yet remaining unmoved and cold by what would upset a normal person. Since they are not genuine, neither are their promises.

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STUDENT LOAN FRAUD ALERT: Fitch Downgrades and Withdraws Ratings on Education Loans Inc., Indenture Trusts

Wells Fargo in Laredo, Texas, is located near ...

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FYI Education Loans Inc. is ClassNotes Inc. it is also Wachovia Education Finance and they are all now Wells Fargo Education. For those students currently serving a debt life sentence at the WACHOVIA or WELLS FARGO STUDENT LOAN DEBT PRISON it may be worth your time to investigate this further. My gut says that someone found SERIOUS FRAUD in these trusts!

NEW YORK–(BUSINESS WIRE)–Fitch Ratings takes the rating actions described below on Education Loans Inc.’s Student Loan Trusts 1999-1, 2004-1 & 2004-C&D and withdraws all ratings. For these trusts, all ratings of senior and subordinate bonds are downgraded as indicated below except for one tranche which was recently affirmed. In addition, ratings on Education Loans Inc.’s Student Loan Trust 1998-1 and 2005-1 are being withdrawn.

Fitch used its ‘Global Structured Finance Rating Criteria’, ‘U.S. Private SL ABS Criteria’ and ‘FFELP Student Loan ABS Rating Criteria’, as well as the refined basis risk criteria outlined in Fitch’s Sept. 22, 2010 press release ‘Fitch to Gauge Basis Risk in Auction-Rate U.S. FFELP SLABS Review’ to review the ratings.

Each of the 1999-1, 2004-1, 2004-C&D transactions are under significant pressure as losses continue to accumulate at rates above Fitch’s expectations. The trusts are undercollateralized and exhibiting a downward parity trend, particularly for the 2004-C&D and 1999-1 trusts. The trusts are also under pressure due to the high cost associated with the failed auction-rate securities, not allowing the trusts to accumulate asset to build parity.

Fitch is withdrawing all of its ratings assigned to Education Loans Inc.’s Student Loan Trusts following the issuer’s decision to redeem subordinate bonds in the 2004-1 transaction with trust funds, an action which appears to be in breach of the provisions of the trust documents. In addition, the issuer has indicated that it has applied cash from 1999-1 trust accounts to make a payment related to a lawsuit.

These actions took place in late 2009 and during this year and Fitch only became aware of them in recent conversations with the issuer as part of its surveillance review process. These actions were not contemplated in Fitch’s rating analysis and Fitch has determined that it can no longer maintain accurate ratings as a result of such actions.

For the portion of the trusts mentioned above that is backed by private loans, Fitch conducted a review of the collateral performance that involved the calculation of loss coverage multiples based on the most recent data provided by the issuer. A projected remaining net loss amount was compared to available credit enhancement to determine the loss multiples. Fitch derived the expected lifetime net loss based on the projected lifetime net default for each repayment year. Fitch then applied the current cumulative net loss level to determine the expected net loss over the remaining life for the trust. In addition, Fitch applied the most recent 12-month average excess spread rate over the remaining life. Basis risk stresses were also applied to account for the risk associated with the auction-rate securities. The ratings prior to the withdrawal are commensurate with the loss coverage multiples calculated.

Fitch has taken the following rating actions:

Education Loans Inc, – 1998-1 Indenture Trust:

–Class 1D withdrawn;
–Class 1F 6/1/20 withdrawn;
–Class 1H withdrawn;
–Class 1K withdrawn.

Education Loans Inc, – 1999-1 Indenture Trust:

Series 1999-1
–Class A downgraded to ‘BBsf’ from ‘Asf’; withdrawn;
Class C downgraded to ‘CCCsf’ from ‘Bsf’; withdrawn.

Series 2001-1
–Class A downgraded to ‘BBsf’ from ‘Asf’; withdrawn;
–Class B downgraded to ‘BBsf’ from ‘Asf’; withdrawn;
–Class C downgraded to ‘CCCsf’ from ‘Bsf’; withdrawn.

Series 2002-1
–Class A downgraded to ‘BBsf’ from ‘Asf’; withdrawn;
–Class B downgraded to ‘BBsf’ from ‘Asf’; withdrawn;
–Class C downgraded to ‘CCCsf’ from ‘Bsf’; withdrawn.

Series 2003-1
–Class B downgraded to ‘BBsf’ from ‘Asf’; withdrawn;
–Class C downgraded to ‘BBsf’ from ‘Asf’; withdrawn;
–Class D downgraded to ‘CCCsf’ from ‘Bsf’; withdrawn.

Education Loans Inc, – 2004-1 Indenture Trust:

–Class A1 downgraded to ‘BBBsf’ from ‘AAsf’; withdrawn;
–Class A3 downgraded to ‘BBBsf’ from ‘AAsf’; withdrawn;
Class A4 downgraded to ‘BBBsf’ from ‘AAsf’; withdrawn;
–Class B1 affirmed at ‘Bsf’; withdrawn.

Education Loans Inc, – 2004-C&D Indenture Trust:

–Class C1 downgraded to ‘BBB-sf’ from ‘AA-sf’; withdrawn;
–Class C2 downgraded to ‘BBB-sf’ from ‘AA-sf’; withdrawn;
–Class C5 downgraded to ‘BBB-sf’ from ‘AA-sf’; withdrawn;
–Class D downgraded to ‘CCCsf’ from ‘Bsf’; withdrawn.

Education Loans Inc, – 2005-1 Indenture Trust:

–Class A3 withdrawn;
–Class B withdrawn.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

–‘Global Structured Finance Rating Criteria’ dated Aug. 13, 2010;
–‘U.S. Private Student Loan Criteria dated Aug. 24, 2009;
–‘Rating US Federal Family Education Loan Program Student Loan ABS’, dated April 11, 2008;
–‘Fitch to Begin Review of U.S. FFELP SLABS Applying Updated Criteria’ dated June 29, 2010;
–‘Fitch to Gauge Basis Risk in Auction-Rate U.S. FFELP SLABS Review’, dated Sept. 22, 2010.

Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=547326
U.S. Private Student Loan ABS Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=463174
Rating US Federal Family Education Loan Program Student Loan ABS Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=382306

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS SITE.

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UPDATE AND CORRECTION: The List Keeps Growing:The Student Loan Industry’s DIRTY Secret

A special purpose entity (SPE; or, especially in Europe, special purpose vehicle/SPV, in Ireland – FVC financial vehicle corporation) is a legal entity (usually a limited company of some type or, sometimes, a limited partnership) created to fulfill narrow, specific or temporary objectives. SPEs are typically used by companies to isolate the firm from financial risk. A company will transfer assets to the SPE for management or use the SPE to finance a large project thereby achieving a narrow set of goals without putting the entire firm at risk. SPEs are also commonly used in complex financings to separate different layers of equity infusion. In addition, they are commonly used to own a single asset and associated permits and contract rights (such as an apartment building or a power plant), to allow for easier transfer of that asset. Moreover, they are an integral part of public private partnerships common throughout Europe which rely on a project finance type structure-WIKIPEDIA

IF THIS REMINDS YOU OF THE HOUSING BUBBLE I.E. THE STOREFRONT ,MORTGAGE LENDERS THEN YOU’RE BEGINNING TO UNDERSTAND WHAT’S GOING ON AND WHY YOU’RE DEBT KEEPS GROWING AND GROWING AND GROWING AND GROWING!

Banks partnered with student loan guaranty agencies, student loan servicers, and other banks to create student loan brokerage firms aka student loan special purpose entities the majority of which were incorporated in State of Florida. For example, Student Loan Xpress, Goal Financial, K2 Financial, Education Finance Partners, US Education Finance etc. Kinda like the storefront mortgage companies and unlicensed brokers, think Enron’s LJM2, the Raptors, Chewco etc

The bank ffelp lenders, servicers and guaranty agencies used the student loan brokerage companies to access and repeatedly access students’ personal information, nslds, and credit reports for what they claimed were Marketing or Promotional Purposes. If you don’t believe me then just check your credit reports from 2006-2008. I bet you’ll have 3 ‘Promotional Purpose’ pages that are all student loan companies. Unfortunately, they weren’t accessing your reports for marketing purposes as they claimed. They were accessing the reports for your personal information which they unlawfully used to originate federal consolidation loans.

The Education Department’s Office of Inspector General found that American Education Services/Pennsylvania Higher Education Assistance Authority  (CLICK THE LINK I PROMISE IT’S WORTH IT!) received about $33 million in overpayments — and possibly much more — under an exemption in federal law that allowed lenders that financed the student loans they issued using tax-exempt bonds issued before 1993 to earn a government subsidized interest rate of 9.5 percent. Congress engaged in several aborted attempts to fully close the loophole throughout the 1990s and the early part of this decade, but some lenders continued to find ways to take advantage of it by recycling the pre-1993 loan funds, before Congress, as part of the Higher Education Reconciliation Act, finally closed it permanently last year.

Guess how they did it? You guessed it, by partnering with lenders to create student loan brokerage firms, special purpose entities and special purpose vehicles that unlawfully used your personal information to create federal consolidation loans. The lenders then used the fraudulent consolidations loans to replace loans that defeased, were repaid or discharged in their 9.5 percent floor loan securitized trusts and student loan revenue bonds. Consequently, because the federal consolidation loans were unlawfully created by the student loan brokerage firms (lenders + servicers + guaranty agencies) theft of your personal information they are not valid obligations; thus they are not enforceable! So, in protest of the nearly $1 trillion dollar student loan debt bubble and your ASTRONOMICAL student loan debt that’s growing bigger by the day pull your NSLDS report highlight that fraudulent loan, complete an UNAUTHORIZED SIGNATURE / UNAUTHORIZED PAYMENT false certification discharge form, and send it to fraudnet@gao.gov!

Don’t forget to name your lender, servicer, and guaranty agency on the discharge form and attach your NSLDS report with showing the fraudulent consolidation loan you never applied for or agreed to!

So without further ado here are a few of the Student Loan Special Purpose Entities that you should LOOK FOR ON YOUR CREDIT REPORTS. Please note this list is a daily work in progress and by no means complete:

National Collegiate Trust/                                                         PHEAA/American Education Services

American Educational Loan Services                               PHEAA/American Education Services


MRU HOLDINGS:                                                                             J.P. Morgan Chase, Key Bank, Morgan Stanley,

                                                                                                                       Lehman Bros, Assured Guaranty,

                                                                                                                        Global Securitization Service, LLC,

 Sallie Mae
J.P. Morgan Chase,

Bank of America,

J.C. Flowers & Co.,

Friedman Fleischer & Lowe.

First National Wachovia
First Savings Wachovia
Affinity Direct d/b/a Educational Direct Citibank Student Loans
Credit Card Protection Bain Capital Ventures

Bain Private Equity

CORTRUST Bank Citibank
Academic Funding Foundation Educaid/

Wachovia/

Class Notes Inc

Erie Processing Corp Wachovia
Xanthus Higher Education ABN AMRO
Student Loan Processors US Bank
K2 Financial Ceigis LLC

ACS-Education

Discover

University Financial Lenders Bank of New York
Educational Lending Group Citibank
Post Collegiate Financial First American Title Ins.

Wachovia

Federal Family Education Wachovia Securities
Goal Financial Cit Group/Bank of New York
American Educational Loan Processing PHEAA/

American Education Services

Student Loan Xpress Bank of Lake Mills,

Citibank,

AMACAR,

HedgeForum Renaissance

Education Finance Partners

Education Finance Partners ACS Inc
PHEAA/American Education Services Citibank

Wachovia

Academic Finance Corporation ACS/

US Bank

Amerifund Education Corporation ACS/

Fifth Third/

RBC Bank/

US Bank

Ardent Financial, LLC/NSL Direct Citibank
US Education Finance PHEAA/

AES,

ACS,

Citibank,

Wachovia

Academic Financial Services ACS
Acapita Education Finance Corporation ACS/

US Bank

AMS Education ACS/

Bank One/

Sallie Mae

Fleet National Bank

Student Capital Corporation ACS/

Deutsch/

Bank of New York/

P Morgan Chase/

Citibank

Studentloans.com ACS/

Brazos/

Wells Fargo

Bosque HEA AES/

Wells Fargo Bank/

ACS

Pecos Student Finacnial Corp AES/

US Bank

us Education Finance Corporation AES
US Contracting Corp PHEAA/

AES

American Educational Services PHEAA/

AES

Education Funding Resources Cit Group
Education Lending Group Cit Group
Education Finance Partners ACS/

Cit GROUP/

HedgeForum Renaissance

Wachovia

AMACAR

Grad Partners Student Loan Xpress/

Education Lending Group

Cit Group


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Fitch Rates SLC Student Loan Trust: The Student Loan Bubble is Beginning to LEAK!

FYI an OUTLOOK NEGATIVE RATING USUALLY MEANS THEY DISCOVERED FRAUDULENT LOANS IN THE TRUST 
April 28, 2011 02:47 PM Eastern Daylight Time

Fitch Affirms Ratings on SLC Private Student Loan Trust 2006-A

NEW YORK–(BUSINESS WIRE)–Fitch Ratings has affirmed ratings on the Student Loan Corporation (SLC) Private Student Loan Trust 2006-A senior class A, subordinate class B and junior subordinate class C notes issued by the Student Loan Corporation. The Rating Outlook remains Negative. Fitch’s Global Structured Finance Rating Criteria and Private Student Loan Asset-Backed Securities (ABS) Criteria were used to review the transaction. The rating actions are detailed at the end of this press release.

The calculated loss coverage multiples for the class A, class B and class C notes are sufficient to maintain the current ratings. The Outlook remains Negative because of Fitch’s negative view of the private student loan sector in general.

The rating affirmations are based on a loss coverage multiples commensurate with the notes’ current assigned ratings and are based on the collateral performance data as of March 31, 2011. A loss coverage multiple was determined by comparing projected net loss amount to available credit enhancement. Fitch used historical vintage loss data provided by SLC to form a loss timing curve representative of the series 2006-A collateral pool. After giving credit for seasoning of loans in repayment, Fitch applied the trust’s current cumulative gross loss level to this loss timing curve to derive the expected gross losses over the projected remaining life. A recovery rate was applied, which was determined to be appropriate based on the latest data provided by the issuer.

Credit enhancement consists of excess spread, a reserve fund, overcollateralization and subordination. Fitch assumed excess spread to be the lesser of the average historical excess spread (earnings on the assets minus interest payments to bondholders and fees) and the most recent 12-month average excess spread, and applied that same rate over the stressed projection of remaining life.

The collateral supporting the SLC Private Student Loan Trust 2006-A note consists entirely of private student. The private student loans are intended to assist individuals in financing their undergraduate or graduate education beyond what the FFELP affords. The private loans are available to students enrolled in or recently graduated from graduate-level certificate or degree programs. Loan proceeds are used by students to finance a portion of the costs of attending law school, medical school, dental school, graduate business school, and other graduate schools, as well as preparing for and taking state bar examinations or participating in a medical residency program.

As of December 31, 2010, Discover Financial Services acquired SLC and its servicing operations for private student loans. SLC, a wholly owned subsidiary of Discover Financial Services, will continue to act as the primary servicer and administrator for the trust and Citibank (South Dakota) National Association will continue to act as sub-servicer.

Fitch affirms the SLC Private Student Loan Trust 2006-A notes as follows:

–Senior class A-4 affirmed at ‘AAAsf’; Outlook Negative;
–Senior class A-5 affirmed at ‘AAAsf’; Outlook Negative;
–Subordinate class B affirmed at ‘AAsf’; Outlook Negative.
–Junior Subordinate class C affirmed at ‘Asf’; Outlook Negative.

Senior class A-3 notes have been paid in full.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:
–‘U.S. Private Student Loan ABS Criteria’ (Aug. 24, 2009);
–‘Global Structured Finance Rating Criteria’ (Aug. 16, 2010).

Applicable Criteria and Related Research:
U.S. Private Student Loan ABS Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=463174
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=547326

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS SITE.

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Student Loans And For-Profit Colleges: “They’re Worse Than You Think” – OpEd

University of Phoenix

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Written by: Mike Whitney

Student loans are a big business. In fact, student debt now exceeds $895 billion which is more than the total Americans owe on their credit cards. And, most of these loans are underwritten by the US government, which means that the taxpayer is on the hook when students can’t repay the debt. This is a big problem, because many of the people taking out loans are not really qualified for college, so they end up dropping out of school and defaulting on their loans putting themselves in long-term debt while passing the bill along to Uncle Sam. But not everyone loses on the deal. In fact, the institutions that help unqualified applicants get loans, do quite well. After all, they’re paid in full by the government. If this sounds like it might be a scam; it’s because it is. All the recruiters need to do is find a credulous subject, bamboozle him into signing on the dotted line, and hold his hand for the first few weeks of the new semester.That’s all it takes to net a big government payout.

Here’s a rundown of how it works from an article by Chris Kirkham at the Huffington Post:

“The goal, employees say, is getting “starts”: students who fill out the paperwork for student loans and make it through at least four weeks of their first five-week course. That is the point at which the university is able to keep the student’s federal aid money, regardless of whether they continue their studies. After that, according to the Ashford employees, any form of counseling drastically drops off.

“There were numerous times when I enrolled students and thought, ‘All I’ve got to do is babysit them for four weeks,’” said a former leader in the admissions department, who spoke on the condition that he not be identified because he is still employed at another for-profit university. “I’d be thinking, ‘Come on, this person is clearly not ready to go to school.’ But I’d call you, pump you up, keep you confident for four weeks, and once I knew you completed, you were forgotten. It’s easy when I’m counting the money.” …

According to the Ashford employees, the pressure drives recruiters to enroll students who they know have little chance of success: people who openly say they have no regular access to a computer or the Internet, despite the exclusively online course offerings, and even those who acknowledge they have difficulty reading.

Bridgepoint has among the highest withdrawal rates of any publicly traded school in the industry, according to a Senate report last year. Based on a pool of students examined between 2008 and 2009, more than 80 percent of those in an associate’s degree program had exited within two years of enrollment, and nearly 65 percent of bachelor’s degree students had left the company’s schools in the same timeframe.

Last year, Bridgepoint posted its best year ever: netting income of more than $127 million, almost triple the year before. The company spends about 37 percent of operating costs related to education; the rest goes to marketing, corporate compensation and overhead.” (“Buying Legitimacy: How A Group Of California Executives Built An Online College Empire”, Chris Kirkham, Huffington Post)

Nice, eh? Just sign them up, dupe them into believing you care about their future, and then fleece ‘em til they bleed. Cha-ching; in rolls the money from Uncle Sugar. But aren’t we blaming the wrong people? Shouldn’t the young people who took out the loans be responsible for their own actions? After all, no one put a gun to their head and forced them to sign, right?

It’s a persuasive argument–and one that’s been used many times by industry lobbyists and their lackeys in congress–but it’s easy to disprove once we take a look at the victims in this swindle.

So, who are the victims? Well, as it turns out, quite a few of them are hard-luck cases and ex-military personnel who were hoodwinked by smooth-talking recruiters into signing their lives away. For example, here’s a clip from an article that appeared in Bloomberg in 2010:

“Benson Rollins wants a college degree. The unemployed high school dropout who attends Alcoholics Anonymous and has been homeless for 10 months is being courted by the University of Phoenix. Two of its recruiters got themselves invited to a Cleveland shelter last October and pitched the advantages of going to the country’s largest for-profit college to 70 destitute men.

Their visit spurred the 23-year-old Rollins to fill out an online form expressing interest. Phoenix salespeople then barraged him with phone calls and e-mails, urging a tour of its Cleveland campus. “If higher education is important to you for professional growth, and to achieve your academic goals, why wait any longer? Classes start soon and space is limited,” one Phoenix employee e-mailed him on April 15. “I’ll be happy to walk you through the entire application process.”

Rollins’s experience is increasingly common. The boom in for-profit education, driven by a political consensus that all Americans need more than a high school diploma, has intensified efforts to recruit the homeless, Bloomberg Businessweek magazine reports in its May 3 issue. Such disadvantaged students are desirable because they qualify for federal grants and loans, which are largely responsible for the prosperity of for-profit colleges….

Other schools see nothing wrong with reaching out to the disadvantaged. “We don’t exclusively target the homeless,” says Ziad Fadel, chief executive of Drake, which also sends recruiters to welfare and employment agencies…

While many caseworkers for the homeless are gratified by the attention, some see only exploitation. The companies “are preying upon people who are already vulnerable and can’t make it through a university,” says Sara Cohen, a case manager at Shelter Now in Meriden, Conn. “It’s evil.” (“Homeless High School Dropouts Lured by For-Profit Colleges”, Bloomberg)

So, is this a legitimate business that’s adding educated people to the workforce or just a scam that targets vulnerable young people in order to bilk the government out of billions of dollars?

Keep in mind, the Bloomberg story is not exceptional at all; there are loads of similar stories on the Internet. Here’s an excerpt from an article by Peter Fenn who fills in some of the important details:

“In just a few years, however, enrollment (in for-profit colleges) went from 365,000 to 1.8 million students. Marketing madness resembled March Madness for these schools, and many more new ones were established. Slick TV ads and thousands of marketers were hired. Returning vets were targeted, even at hospitals.

The key: Bring in millions from Pell grants and student loans. Taxpayer money.

By 2009, these for-profit schools were raking it in—$4 billion in Pell grants and $20 billion in student loans provided by the Department of Education. Over 80 percent of the revenue for the for-profits came from federal loans and grants.

In many cases, these were shell games. No campuses, few classrooms, and little interaction with teachers, but make no mistake about it, they were not cheap. Students were told they could get loans and grants and just send in the checks.

So, how was all this working? Graduation rates for private colleges are about 65 percent, for state schools about 55 percent, and for the for-profit colleges? Twenty-two percent.

Houston, we have a problem.” (“Congress Should Put a Stop to For-Profit College Rip Offs”, Peter Fenn, US News)

Huh? So, for-profit colleges are netting $24 billion from the government and only graduating 22% of their students? It’s mindbogglingly. Fenn continues:

“The top executives for the top 15 for-profit colleges pulled in $2 billion last year. Two billion dollars, practically all taxpayer money.

And that student loan money?—the default rate at these for-profits is 43 percent!

So, only 22 percent graduate and 43 percent default on the loans, leaving us holding the bag because students have been sold a bill of goods by slick marketers.” (“Congress Should Put a Stop to For-Profit College Rip Offs”, Peter Fenn, US News)

Can you believe it: “43 percent default on their loans”? That’s got to be some kind of record. Good grief, at the peak of the subprime fiasco the loans were only blowing up at a 6 percent rate. This is 7-times bigger than subprime. And we’re not talking chump-change either. There’s hundreds of billions involved in this Ponzi-scam. And on top of that, the Fed has been using the distorted numbers from this flimflam to show that a credit expansion is underway. Here’s what they said in the recently released Credit Report: :

“The new U.S. consumer credit numbers reflect an economy that is reaccelerating, and that is very bullish for growth — as well as inflation. All in all, U.S. household credit surged by $7.62 billion in February, ramping up faster than at any other time since June 2008.” (Hat tip to The Big Picture)

What a joke. The taxpayer is getting reamed and the Fed is boasting about a “recovery”. Go figure? The only area of credit that’s budging at all (apart from subprime auto loans) is student loans, which are experiencing a veritable goldrush as every scoundrel, scalawag and miscreant flocks to get a piece of the action. These chiselers know that these kids will never be able to repay their loans. In fact, they make more money when they’re delinquent. They just jack up the interest rate and grab what they can before crying “Default” and gouge the government for the balance of the loan. What a swindle.

The GOP-led congress is up to their eyeballs in this crookery. They’ve been using every trick in the book to protect their fatcat buddies by blocking the implementation of regulations that would prevent gullible students from being plucked-clean by cheesebag recruiters. The Republicans would rather defend the “inalienable right” of shifty recruiters to rip off students then save the taxpayer hundreds of billions of dollars.

Boy, these guys really stink.


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