In this video by John Oliver on student debt, the news-oriented funny man takes on student debt, which has topped $1 billion in the United States.
Oliver says thanks to the skyrocketing cost of college tuition, most students will be leaving school with a lot more than a tacky polyester robe. Total student debt in the United States is now bigger than credit card debt and auto loan debt and is second only to debt from home mortgages.
In the video, John Oliver likens student debt to the Human Papilloma Virus (HPV). He says anyone who goes to college will almost certainly get it and that it will likely follow them for the rest of their life.
The comedian also says student debt has tripled in the past decade, therefore surpassing Bob Marley’s greatest hits album as the one thing all students definitely have.
Student debt from federal government loans started with the best intentions, says Oliver, as a way to give people an escape from poverty. However, states have recently slashed funding for higher education by 23%, which has caused many colleges to raise tuition rates.
John Oliver says the University of Phoenix and ITT Technical Institute are publicly traded companies that run TV commercials, including one that shows an ITT graduate living an affluent lifestyle. However, Oliver points out that the man in the ad has an associate’s degree in engineering, and that the program he graduated from only placed 13 out of 115 students in jobs in their field. He says the other students would have been better off going to Hogwarts, because at least then they’d have an owl.
For profit schools like ITT Tech are responsible for a full third of the student debt in the country but only have 13% of the students. Further, the for-profits aren’t cheap, costing five to six times as much as a community college and twice as much as a state university.
Mark Defusco, past director of the University of Phoenix, says in the video that 20 to 25% of the total revenue from for profit colleges is used in sales and marketing. This means the schools spend half as much on teachers as they do on marketing. John Oliver quips, “One for the teachers, two for a spot during Wayne Brady.”
Defusco says the ratio makes sense and gives the example of buying perfume for his mother. He says the chemicals in the bottle may cost 50 cents, while the advertising costs $5 or $6 dollars. Oliver says first, Defusco should stop buying perfume for his mother and second, perfume is not education.
The video features a former recruiter for the for-profit Westbrook College, who quit because she felt like she was preying on disadvantaged youth. The recruiter was told to use “pain points.” For example, if she learned that a potential recruit’s mother worked at McDonald’s, she was instructed to ask the recruit, “Do you want to work at McDonald’s the rest of your life?”
John Oliver speculates that working on “pain points” is an industrywide technique. He cites for example an actual image a recruiter at ITT Technical Institute used during trainings, which featured a still frame from the movie Marathon Man with the caption “Find out Where Their Pain Is.” Oliver points out that the image depicts Nazi torture, and says it doesn’t say much for your business model if you tell your trainees, “This technique seemed to work well for the Nazis, let’s try it.”