US government already in the newspaper bailout business – just ask Donald Graham and the Washington Post Co.
It is not much of a secret that the Washington Post Company has been held aloft by its Kaplan Education Subsidiary. As reported by Bob Garfield for On the Media, 75 percent of the company’s profits come from the for-profit education division.
Or at least they used to. With enrollment falling due to the economy, and with government regulators looking into the practices of the industry, the Washington Post’s CEO Donald Graham probably has lost a few nights of sleep.
But he should be sleeping like a baby again now that the Department of Education handed down new rules involving the for-profit education industry that were far weaker than those originally proposed. As a result, US tax payers will continue to subsidize his company in a major way.
While the graduation rate at public and private non-profit colleges and universities is 55 percent and 65 percent respectively, the graduation rate at for-profit colleges averages 22 percent, according to a report from The Education Trust (PDF). Additionally, the median debt college students can expect to have after school is an astounding $31,190 – compared to $17,040 for private universities, and $7,960 for public colleges.
But as Katie Leslie of the AJC reported two weeks ago: Students at for-profit institutions represent just 12 percent of all higher education students — but they account for 46 percent of all student loan dollars in default, according to the Department of Education.
(As of last year, for-profit universities like the University of Phoenix and DeVry, receive 25 percent of all Pell Grants, according to The Chronicle of Higher Education.)
In essence, the government is taking money away from public education and giving it to corporations like The Washington Post Co. No surprise then that politicians, who covet the support of the media, are continuing to turn a blind eye as companies profit from this redirecting of education funding.
Simply put: there is no need of a bailout for the newspaper industry, they are already getting one.