This piece up at Salon gives a good narrative account of the problems with the for-profit college industry. These colleges prey on vulnerable students, making sunny promises about life after graduation. Once those students enroll, the colleges pocket the students’ federal grant and loan money. An alarming percentage of the students don't even finish a class, much less obtain a degree of any sort. What they mainly obtain is student-loan debt. The industry thus combines an incredibly brazen rent-seeking to protect their access to student financial aid with a basic finance-capital accumulation by dispossession: student loans are unforgiveable, even in bankruptcy, and so these students will forever be owing ever increasing amounts of money, which gets sent directly to Wall Street.
The piece also highlights the insidious role of big data in this process:
For-profit schools find students … through a process called “lead generation.” Using relatively unknown marketing firms, they tap data culled from the digital footprints left behind by the use of smartphones and web browsers. Lead generators use algorithms that can sift through hundreds of data points to identify prospects. Search engine queries, browser histories, email metadata, Facebook posts and GPS records of your movements all contribute to powerful algorithms. Having collected a consumer’s online history, they match up demographic records, credit scores and other details that can be purchased from third-party sources to estimate both the likelihood that a person will apply and as his or her lifetime customer value. Their algorithms can incorporate as many as 70 different user characteristics. They can analyze a person’s viability as an applicant in seconds and sell it to the highest bidder instantaneously.
No, it’s not the same as the NSA, but it’s as clear example as I’ve seen in a while of why it’s worth worrying about big data in the private sector. As the article makes clear, these colleges very, very aggressively market themselves to students they think are likely to get federal loans and grants.