What better example of media bias, than when a company you own has been alleged to have conducted fraudulent business practices, questionable lobbying tactics, and possible insider trading – and you report nothing about it.
The Washington Post recently published an article regarding a potential ‘debt bomb’ on the American economy – student loans. But in this article, the Post continues to do little in the way of reporting on for-profit colleges, a prime sector for student loan defaults. And it most certainly ignores a for-profit college which is the main source of its very own revenue – Kaplan University.
Kaplan over the last several years has accounted for the vast majority of revenue at the Washington Post company. In 2009 for example, Kaplan accounted for 58% of the Post’s revenue, while newspaper and magazine publishing accounted for a mere 19%. So it stands to reason that the Post’s lack of reporting may be due to their reliance on cash from the university.
By ignoring the story however, the Post is avoiding the dark side of the Kaplan enterprise.
The university has generated profit by putting many students into deep debt, with degrees that offer lesser value in the job market. They pressure potential students into signing up at their school based on the reputation of their parent company. The Post itself has lobbied to water down federal regulations which could have cleaned up the way Kaplan runs its business, while fighting to dissolve government regulations that would protect students. Additionally, CEO Donald Graham has partaken in some rather timely stock selloffs on behalf of his family’s trusts.
But you won’t see these things reported in the Washington Post.
Other items not reported regarding the Post/Kaplan relationship can be summed up in my Accuracy in Media investigative report, including:
- Kaplan University maintains a consistent dropout rate of over 70 percent; while graduates earn well below the national average.
- The Post Company’s Washington lobbyists have fought to weaken a regulation that keeps Kaplan from receiving more than 90 percent of its income from federal student loan programs.
- Kaplan aggressively recruits military veterans, since GI Bill and Dept. of Defense funds are exempt from the ’90 percent’ regulation.
- Kaplan recruiters are encouraged to seek “true pain and fear” advantages over potential students as motivation to enroll.
- The Post and Kaplan have successfully lobbied for regulations allowing for-profit colleges to a have a student loan default rate of 40 percent per year.
- Post CEO Donald Graham has openly lobbied Congress to accept regulation changes by threatening tuition hikes on the financially threatened student body.
- The Graham family has sold over $40 million worth of Washington Post stock since 2008, immediately prior to severe market drops.
The Washington Post article on student loans becoming the 'next debt bomb' on the U.S. economy is yet another example of a willingness to report on an industry-wide problem, while ignoring the role of one of their own in the process. They speak of the perils of student loan defaults without ever mentioning the company's personal lobbying efforts to allow default rates at for-profit colleges, such as Kaplan, to rise as high as 40 percent annually.
Despite student loan default rates currently over 30 percent, recruiting tactics which prey on an individual’s "pain and fear", and a history of generating massive profits while saddling their most vulnerable students with massive debt, Kaplan University continues to escape scrutiny by their parent company.
What is worse here, the fraudulent tactics and questionable lobbying efforts, or the journalistic malpractice being exercised in failing to report on Kaplan?
Only the Washington Post can answer that question.
Cross-posted at The Mental Recession
