Monday, April 25, 2011

Goldman Sachs Profiting Off The Law School Scam

Ever heard of Western State College of Law? If you haven't, it's a notorious TTTT located in sunny Southern California in Orange County. Western State is known for its atrocious attrition rate and even worse bar pass rate. Some years this school posts a sub 50% pass rate. Clearly a winner, not. It turns out that Western State and Goldman Sachs, the infamous vampire squid which has wrapped its tentacles everywhere from the Greek bond market fiasco to even the law school scam, have a very close relationship. In fact, Goldman Sachs (hereinafter the "squid") is one of several owners of the company that owns Western State. This scamshop company is Education Management Corporation, (NASDAQ: EDMC). EDMC is a private operator of post-secondary educational institutions, primarily in the United States. EDMC operates the following shitholes (H/T Nando); the Art Institutes, Argosy University, Brown Mackie College and (drumroll......................) Western State College of Law!

Western State is one of the few for profit law schools in the country and charges a hefty 35k per year for tuition. That sure is a ton of money for this terribly low ranked tier 4 school that can barely get half of it's graduates a license. But who is making all the money if this is a "for profit" institution? Let's take a look at the major holders.

Per wikipedia:

This move to become a public company once again followed a June 1, 2006 transaction, in which a consortium of private equity investors acquired Education Management in a transaction valued at approximately $3.4 billion. The principal investors in Education Management are Providence Equity Partners, Goldman Sachs Capital Partners and Leeds Equity Partners. The leveraged buyout of EDMC was the largest buyout in the for-profit education sector to that point

And here is where the squid (Goldman) comes in! Per MSM, Goldman Sachs owns roughly 40% of the 136 million shares outstanding. Providence Equity Partners comes in second with 30% ownership. Yes Western Law grads, the squid owns your ass.

http://moneycentral.msn.com/ownership?Symbol=EDMC

The story gets even more disturbing. This web of double dealing is ripe with conflicts and bribes. Observe the cozy relationship of EDMC's upper management with the Department of Education's Advisory Committee on Student Financial Assistance:

Former Governor, John R. McKernan Jr. (R-ME) is Chairman of the Board of Directors at EDMC and is husband of United States Senator Olympia Snowe. Snowe (R-ME) has publicly declared assets between $5 million and $25 million in EDMC. EDMC Senior Vice President – Regulatory Affairs and Strategic Development, Anthony J. Guida Jr., was appointed to the United States Department of Education’s Advisory Committee on Student Financial Assistance (ACSFA) by the Speaker of the United States House of Representatives in 2009 to serve a term that expires in September 2011. Guida also serves on the Board of Directors at the Association of Private Colleges and Universities, the chief advocacy organization of the proprietary higher education industry. Catherine A. Caponi serves as Vice-President, Government Relations for EDMC. Caponi also serves on the Business Board of Advisors—Associate Business Members at the National Hispanic Caucus of State Legislators (NHCSL). The NHCSL has spoken out regarding a proposed "gainful employment" rule which, arrording to the US Department of Education seeks to protect students and taxpayers. The NHCSL has claimed minority students would be harmed if they were prevented from taking on student loan debt for programs that do not lead to gainful employment and provide graduates with a means of repaying their debt.

Check on the special investments (read: lobbying ) EDMC has done in order to keep the tax payer funded gravy train running:

In 2010, Education Management Corporation spent $410,000 on lobbying in the first nine months, an increase from $50,000 a year earlier. In addition to documented lobbying expenditures and EDMC-EDU PAC contributions, corporate officers of EDMC and its subsidiaries have given money to members of Congress including Congressman Jason Altmire (D-PA). Jason Altmire (PA-04) is a member of the House Committee on Education and Labor. Altmire assisted in passing legislation which has increased Federal Funding to for-profit institutions such as those owned by EDMC.

How this is all completely legal is completely fucked up. If I were to fart in court the judge would probably hold me in contempt. I get screamed at when my firm has trouble serving a defendant that continues to shine service. Yet these crooks can sit on boards of major corporations AND serve in government departments that ensure the survival and profitability of the same company! Bullshit!

The squid, via EDMC, has made a killing off of students and the loans they take out to attend these putrid cesspools. Art Institutes is by far one of the biggest scams out there, charging as much as many TTT's do for degrees in cooking, media, video game production, or whatever else they "teach" their students. Check out EDMC's revenue for the past few years:

2008 $1.6 billion
2009 $2.0 billion
2010 $2.5 billion

Those are incredible numbers for a company. The 2 year growth from 2008 to 2010 is a astounding 56%. All these poor saps going "to school" to ride out the recession are getting obliterated by their nondischargeable student loans. Fucking A, anything the squid touches, it sucks the blood out of.

Yuck

37 comments:

  1. great find. of course GS would have to have its hooks into a juicy scam like private higher education.


    unperson

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  2. EDMC operates the following shitholes (H/T Nando); the Art Institutes, Argosy University, Brown Mackie College and (drumroll......................) Western State College of Law!

    http://www.youtube.com/watch?v=4B_UYYPb-Gk

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  3. This shows CONCLUSIVELY that "higher education" is for the benefit of "professors" and administrators. And investors. We cannot forget these speculators can we?

    Apparently, politicians are more than happy to stick their hooves in the pot. They allow the federally-backed student loan spigot to run full blast - even though they KNOW that there are not enough jobs requiring a college degree.

    http://chronicle.com/blogs/innovations/why-did-17-million-students-go-to-college/27634

    "Over 317,000 waiters and waitresses have college degrees (over 8,000 of them have doctoral or professional degrees), along with over 80,000 bartenders, and over 18,000 parking lot attendants. All told, some 17,000,000 Americans with college degrees are doing jobs that the BLS says require less than the skill levels associated with a bachelor’s degree."

    From Richard Vedder, economics professor at Ohio University. It is not difficult to find. Do these elected officials want us to believe that they and their congressional staffs are unaware of this situation?!

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  4. Yes, they (and other major banks) are also milking the charter schools industry:

    http://prorevnews.blogspot.com/2010/11/goldman-sachs-sees-gold-in-charter.html

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  5. Nando,

    CONgress could give a fuck about the plight of young debt slaves. They are too busy making money off of it. The bottom line is $$$ talks in this life, and with the moneyed interests having access to the ears of pockets of CONgress, there will be no change from the top end. Thus, if anything happens, it will come from the bottom.

    Lying crooked greedy bastards

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  6. Hey! None other than the District Attorney of San Francisco is a Western States College of Law grad, George Gascon! Of course, he went at night while working a day job as a cop and then spent 30 years doing police work before climbing the political ladders in SoCal, AZ and SF before he got appointed. Exceptional case, I suppose.

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  7. This law school in China is applying for accreditation from the US ABA:

    http://stl.szpku.edu.cn/en/about/index.aspx

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  8. http://www.prisonplanet.com/student-loan-debt-hell-21-statistics-that-will-make-you-think-twice-about-going-to-college.html

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  9. @ April 26 7:16pm

    I know several attorneys that went to Western that have been successful. The vast majority of them went there back in the 80's and early 90's. Now the place costs over 35k per year in tuition making it a rip off.

    @ 4:52pm
    21 stats, the article is popping up on all kinds of sites.

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  10. Instead of law school, why don't people apply to medical school?

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  11. After reading this, I went to the state bar of CA's website (www.calbar.org). Western State actually had a 83% pass rate on the CA Bar Exam and its grads did better than several other CA law schools. On the school's websiite it stated that the school has several grads that work as DA's, Public Defenders and has one of the highest rates of grads serving as Judges on the bench in CA courts. Apparently Goldman made a good investment. They would not be as profitable a company if they made bad investments right??

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    Replies
    1. I believe i see Western State's nose growing.

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  12. Does Goldman Sachs or Leeds Equity Partners ever hire EDMC graduates? Any statistics available?

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  13. At least EDMC's stock is tanking. When this article was written EDMC stock was $22 and today it is $3.86.

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  14. Western State is an absolute garbage school, ask anyone, many (if not all) respectable law firms have an anti western state policy and will not hire anyone from this school, who could blame them? The only reason to go to this school is with a full scholarship, absolutely do not take any student loans under any circumstances, you will regret it. The quality of the students there is equally reprehensible. Many class GPA's are around a 1.8 out of a 4.0, enough to get pass through an occasional "oops" class but not enough to graduate at all. Don't pay a single cent to listen to their crappy professors bump their gums, it is not worth it. Don't have a western state attorney ever represent you, all they do is go through the motions because they are the biggest morons ever existing on the face of this earth. They will try to do something like "you are being sued for 100,000 therefore we can settle for 99,999, you are coming out ahead what a bargain". WESTERN STATE IS A SCAM!!!

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  15. Western State prided itself on giving those who didn't have the time to attend law school full time the chance to go part time. Thousands of graduates passed the CA bar and have had highly successful careers. When the ABA indicated that they would consider new candidates for approval that offered PT programs (previously unheard of), WSU jumped at the chance to gain ABA approval. The previously privately-owned school was sold to a large education corporation and, subsequently, to EDMC. Big mistake. Neither corporation cared about teaching students, helping them pass the bar, or cared the tiniest bit about faculty and staff. Their goal was to get ABA approval for WSU to make their other schools look good. It was all downhill from there.

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  16. Three words accurately describe Western State: stink, stank, stunk! The only reason to go to this school is if you are going into private practice or have a friend or relative to work for after you graduate, even there your prospects are dubious at best. By don't take my word for it. Simply imagine yourself even getting an interview with a law firm only to talk about how you went to little old western state, and how you don't know one little old thing! In other words don't go to this school if you plan to look for a job as a lawyer working for someone else, it will never happen! Also, don't waste any money on any bar review course. These courses are simply a way for the companies to make a quick $4000 or whatever profit from idiots deadlocked by student loans into pissing away even more money without thinking about it. Here's some great idea's: If you are considering western state, don't go to law school, if you are enrolled at western state, drop out, if you graduated don't take the bar, if you passed the bar out of western state, quit the legal profession and find a regular job.

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  17. Western State has always been notorious. Even in the early 1990s before the internet, students would get flyers on the car windshield discussing the horrible attrition rate asking if Western State has taken them for a ride. Well of course Western State did! That is the name of the game; admit anybody charge them a year of tuition and then dismiss them, only to replace them with new suckers. But that is no news insofar as the law school scam is concerned. Just like any pyramid scheme, money is not made by selling the product or service, it is made by getting others to pay to sign up to sell the product or service. This is how Western State makes its money, and it is no wonder why its graduates can't make anything with its worthless degree. The smartest thing to do with a western state degree or law license obtained thereby is to simply refuse to use it. Surely, anyone must be biting their tongue when they say they graduated from Western State.

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  18. Western State University College of DEBT!!! What else can anyone say!!!!!!

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  19. Daniel Anderson, Moreno Valley, confessed to a home invasion robbery.

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  20. The Dean of Western State confessed that all these allegations are true!!!! Too bad that with these sites and similar others, ripoff report, complaintsboard, etc., nobody including GOD can remove the statements thereon. The free speech statements are there FOREVER which means that the business complained against is ABSOLUTELY FOREVER DEADLOCKED by these statements and must explain them away to any potential consumer who questions them and believe you me there will be one or more. At $117,600 total tuition this is a big amount not to let get away!!!!!

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    Replies
    1. It has gone up from $117,600 since then.

      Delete
  21. Western State has the highest bar pass rate in California.

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  22. This is to acknowledge the receipt of your inquiry email to my posting on craigslist regarding my house for rent. Dan Adersson Scam

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  23. The posted blog content seems quite useful and helped me to get idea on Private Equity Advisory Services . Thanks for sharing the valuable post.

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  24. There was actually a student at Western State, Arhtur Alan Dotson, class of 1996, who always gloated stating "I'm paying as I go." Even more so, Dotson, a retired deputy sheriff (now since deceased), paid the total full amount of the tuition, every single semester because he did not receive any form of scholarship (he only had a 2.4 GPA out of 4.0 anyway). He marveled in the fact how some students could get these great scholarships and still be death-trapped student debtors. He felt compelled to explain to anyone who would listen how exactly he "simply wrote a check" to pay for his tuition. Of course, with Western State's reputation so horrific, paying as you went is about the most exalted event that could occur then. Also, Mr. Dotson never took the bar, he simply obtained the degree for the knowledge.

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  25. And the comments keep on coming years later. Of course they do, as long as even a donkey can get a student loan, over priced sewer pits like western state continue to profit.

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  26. Anyone who goes to Western State is an ass.

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  27. Is paying tuition to Western State the same as burning money in the fireplace? According to all these comments, the answer must be yes.

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  28. This is what a public defender who graduated from western state would say: "The offense you are being charged with has a maximum of 5 years in state prison. I can get you the 5 years in state prison." Then the client would respond that the 5 years is better than the lifetime of the western state grad being a student loan debtor.

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  29. The next time you call around looking for lawyers ask them where they graduated from. If they say western state, just hang up.

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  30. If you ever find out in a conversation that someone is a western state graduate when you ask what they do for a living, just tell them that the restroom looks a little bit ripped, but then they wouldn't know nothing about how to clean it or to do anything for that matter coming from western state.

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  31. Which would land first if they fell off the empire state building? A western state attorney, your ex spouse, or a door to door salesperson? Who cares?

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  32. Whether you attended a top tier law school, TTT, Western State or whatever, here is a simple solution to avoid law school debt: When then tuition bill is presented for the upcoming semester, simply write a check for the total amount of the tuition. For you Western State dummies: date the check, take the numerical amount of the tuition and place it into the appropriate place of the check. Then write out in words the amount. Lastly, sign the check. It is that easy. You too can be gracious, you don't have to be a studente debtor. There are hundreds of thousands of people without any student loans, you can be one of them too!

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  33. How does a Western State grad introduce themselves? Hi, I am a death trapped, death cursed studente debtor from lil ol western state?

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