Colleges Lure Homeless, Pay Tuition with Taxpayer Dollars

In 2009, Toni Clark walked across the stage and graduated from the Essex County College. The most remarkable thing about this particular graduate is that she's homeless and living on the streets the whole time she attended classes at the New Jersey college. She got her degree with no books, no computer, and no place for her to sleep at night. After losing her job a few years ago, Clark decided to use her limited unemployment benefits to pay her tuition. Paying tuition meant no money left for an apartment so Clark had no choice but to live on the street.

I believe Ms. Clark should be applauded for her efforts and for earning a college degree when it seemed so many things were against her. After all, the odds were against ever earning a college degree and yet she did it anyway. This is a great story and many who think college is difficult could learn a thing or two from Ms. Clark's amazing tenacity. But not all stories about homeless folks going to college have a happy ending. Some colleges seem to be taking advantage of financially disadvantaged homeless people in order to pay their own bills.

Homeless College Students Desirable, Profitable for Schools

Financially disadvantaged students are very profitable for colleges and universities because these folks are eligible for federal grants and student loans. Currently, higher education for-profit institutions that are traded publicly get about 75 percent of their revenue from federal funds and programs. Federal law allows up to 90 percent of operating revenues for colleges and universities to come from federal aid. And yes, federal aid means taxpayer dollars.

It's profitable for colleges and universities to enroll financially disadvantaged homeless people. So profitable that Chancellor University and Phoenix University were both actively trolling the Cleveland homeless shelters looking for students. After enrolling homeless folks as students, the college helps the homeless get as much federal aid from government loans, grants, and scholarships. The schools pay a small amount of money to each homeless student totaling about $2,000 for the academic year, and pockets the federal loans, grant, and aid money. In other words, the school pays out $2,000 and gets $20,000 in return. That's a pretty tidy return on investment.

Colleges Pay Homeless to Attend Classes

On the street in Newark, it's well known that if you're homeless and you want money, just go and enroll in Drake College of Business. The college enrolls homeless people and pays them a "stipend" of $175 each week. All they have to do is show up 80 percent of the time and maintain a "C" average. The college then takes the tuition money to use for operating expenses. Drake raised tuition from $4000 in 2008 to more than $15,700 in 2010 in order to gain access to more federal money. Drake trains people to be medical and dental assistants.

Tenacious students like Toni Clark are to be applauded for their efforts to get a college education. Colleges, universities, and trade schools who actively seek out homeless people to enroll in classes are cheating these folks. The homeless are drawn in by the lure of a weekly stipend, the college takes the financial aid as revenue. Seems like a pretty neat deal. Both parties get what they want, or so it seems. In the end, most homeless students fail or drop out incurring a huge amount of debt to pay off. In 2009, Federal aid to for-profit colleges was $26.5 billion. When those homeless folks can't pay off their federal loans, the taxpayer has to make up the difference.

Sources:

Homeless High School Dropouts Lured by For-Profit Colleges

Homeless - and going to college

Homeless New Jersey Woman Graduates College while Living on the Streets