Capitalism for Investors, Socialism for the Rest

Bizarre business of government giving "public taxpayer money" to "FOR PROFIT" educational institutions as part of the federal student loan programs. According to the Dept. of Education, more than half of these institutions have a high percentage of students not repaying principal when due. The companies keep the money (as part of tuition and fees that's paid) but the government is stuck with the loss. If the students of these institutions do not find an adequate job (or any job, in some cases) the government has to take write-downs. The pain is distributed to the public, while the companies and the investors make money the easy way- taking it from the government. In this regard this business is no different than banks getting government money, either through "mortgage guarantees" or through bailouts.

Capitalism, only when it benefits the investors.

Stocks of for-profit colleges fall after government report - USATODAY.com: "The Department of Education data show 53% of the 181 publicly traded for-profit institutions had fewer than 35% of students repaying principal on their loans in a timely manner, according to FBR. That's well above the 37% of not-for-profit schools with such low repayment rates.

For-profit institutions that fall below a 35% repayment rate could lose their right to collect money from federal student loan programs under rules proposed to begin in the 2012 school year. Schools with repayment rates below 45% may have restricted access to federal aid programs, which account for a large percentage of their revenue.

Among the hardest hit stocks: Strayer Education (STRA) and Capella Education, (CPLA) which fell 18% to $163.26 and 13% to $60.94, respectively, as investors thought their repayment rates would be 45% or higher, says Trace Urdan, analyst at Signal Hill."