When the last recession hit, millions of people displaced from their jobs returned to school in the hopes of boosting their career prospects. At that time, companies wrapped in the language of technology and disruption marketed themselves as a quick path toward a sure job and a brighter future. Sadly, borrowers are still dealing with the fallout of this fraud today.
There is now evidence that the next chapter in the long story of fraud and abuse by for-profit colleges is only beginning. The employment shock stemming from the COVID pandemic has proven to be even more severe than the job loss associated with the payday loans no credit check online Alaska Great Recession. The past year has seen over 81 million first-time claims for unemployment. Over 4 million people are currently long-term unemployed, and estimates indicate that 42 percent of COVID-related job loss will be permanent.
The rise in credentialization amid treacherous economic conditions has created a new wave of anxiety among American workers
In response, a renewed push toward credentialization-a central feature of the post-Great Recession job market-has already begun. Credentialization refers to the phenomenon of employers increasingly relying on higher education as a precondition for employment or employees pursuing an ever-growing set of certificates and diplomas to compete for jobs, particularly in fields where no such requirement existed in past ple, where home healthcare aides and providers of early childcare education once pursued careers with just a high school diploma, today some higher education is often required by major employers. Similarly, where a high school or college degree was once generally enough to ensure job security, workers who are already employed are increasingly pursuing additional certifications to demonstrate continued value to employers-a process referred to as upskilling-or to accelerate efforts to break into new fields.
COVID hit just as fears of job displacement from rising automation were already top of mind for many. These fears are shared by workers from coast to coast and in every field.
For-profit colleges and career training institutions have quickly entered the breach to target the newly unemployed with promises that seem worryingly similar to those made by predatory schools during the last recession. Like their predecessors, these actors cloak themselves in language bringing to mind cutting-edge technology, with many offering programs in computer science that can be attended by taking on dubious new forms of easy credit to draw borrowers toward certifications that too often have not lived up to their lofty branding or promises. In fact, some of these actors are the very same companies that cashed in on job displacement during the last crisis, but with new branding and even with new strategies to masquerade as nonprofits.
But the decade that followed the Great Recession was marked by a long line of school failures, lawsuits, and broken promises in which hundreds of thousands of students took on billions of dollars in student loan debt for degrees that left them worse off than when they enrolled
SBPC has been vigilantly monitoring, investigating, and working to shine a light on developments in the for-profit college sector and across the dangerous web of companies that empower predatory schools. What we have unearthed has been disturbing:
- Tech giants are exploiting workers seeking to build new skills. During COVID, private student loan companies’ efforts to lock students into high-cost debt have only accelerated. For example, research by SBPC revealed that PayPal’s online credit card product PayPal Credit was being offered by over 150 for-profit schools including dubious vocational training institutes and coding bootcamps as a means for students to finance tuition. Only days later, in response to this investigation, PayPal cut ties with hundreds of the risky institutions SBPC flagged as exposing students to this expensive and risky credit product.