Moody’s Investors Service has further downgraded a seedy, George Soros-backed for-profit college chain with deep ties to both Bill and Hillary Clinton.
The company is Laureate Education, an international conglomerate of aggressive, telemarketing-happy, for-profit colleges that is ensnared in controversy all over the globe.
Moody’s now rates Laureate at an investment grade of B3. The definition of a B3 rating is “highly speculative.” The bond rating giant advises that unfavorable economic circumstances “will likely impair” Laureate’s “capacity or willingness to meet its financial commitments.”
The B3 rating is the lowest incremental rating step above a group of “C” ratings, which Moody’s defines as “extremely speculative.”
“Laureate’s aggressive growth has created persistently-high leverage and has strained the company’s liquidity,” Moody’s analyst David Berge said in a statement last week.
Laureate, America’s largest private education company, is on a downward spiral with Moody’s. Last year, the ratings service downgraded the corporation to a B2 rating.
The company has been beset by charges of financial instability and unethical practices.
Recently, the U.S. Department of Education announced that four of Laureate’s six U.S.-based schools are on an official list of colleges and universities at which regulators have uncovered notable financial problems. Schools on the list are penalized by having restricted access to federal funds.
The $3.4 billion-per-year, for-profit education syndicate scored a marketing coup in 2010 when it hired Bill Clinton as its global pitchman. In his position as honorary chancellor, Clinton has gone around the world over a dozen times — to places such as Peru, Malaysia and Spain — to hawk the company. (RELATED: Why Are The Clintons Hawking A Seedy, Soros-Backed For-Profit College Corporation?)
For his globetrotting efforts, the 800,000-student, for-profit education juggernaut pays Clinton a secret sum of money. Neither Clinton nor Laureate will disclose exactly how much it is.
The former president gets other perks as well as cash. In 2012, for example, Laureate Education was one of a handful of sponsors of the Clinton Global Initiative’s CGI University.
Democratic presidential hopeful Hillary Clinton has also been squarely in cahoots with Laureate. As secretary of state, she helped legitimize Laureate in the eyes of the world by making the for-profit education behemoth part of her State Department Global Partnership.
The State Department Global Partnership exists to “strengthen and deepen U.S. diplomacy and development around the world.”
Additionally, in January 2013, during Clinton’s last month at the State Department, the World Bank’s investment unit invested $150 million in Laureate.
Douglas L. Becker, Laureate’s CEO, has donated generously to Hillary Clinton’s various political campaigns. He gave $4,600 in 2007 and $2,000 in 2005.
The huge Baltimore-based company has also enthroned a small armada of old Clinton administration hands in significant board and executive positions. Among them are Henry Cisneros, former secretary of housing and urban development, and former education secretary Richard Riley.
Laureate is the successor to Sylvan Learning Systems Inc. The basic business model is to buy struggling private colleges. The company then aggressively sacks professors and increases the number of paying students by massively lowering admission standards. Another core company practice is obscene expenditures — in the hundreds of millions — on advertising and (where it’s legal) hardcore telemarketing.
Many of Laureate’s schools are located in Latin America.
Laureate’s investors include Soros Fund Management LLC, which is chaired by billionaire progressive leftist George Soros; SAC Capital Advisors LP, a hedge fund that recently settled insider trading allegations to the tune of $1.2 billion; and KKR, a private-equity firm based in New York.
Laureate is one of 30 large American companies criticized in a scathing 2012 report by Iowa Democratic Sen. Tom Harkin on for-profit colleges. These companies absorb well over $30 billion each year from U.S. taxpayers. Most students never get a degree, though. Many drop out within a couple months.
The Harkin report cites many problems with the Clinton-associated for-profit college company.
For example, the report found, almost 80 percent of all cash flow at Laureate-owned Walden University comes from federal coffers. In 2009, the school devoted $101 million to a vast array of marketing efforts and another $101 million to profit. Together, these spending categories constituted close to 60 percent of the for-profit school’s total annual outlays.
Internal Walden documents “reveal an enrollment-driven culture.” Used car-salesman-esque tactics used by the sales staff included “overcoming objections’ scripts that anticipate and rebut” doubts about cost, credibility and lack of face-to-face instruction.
In April, Hillary Clinton disparaged America’s troubled for-profit college industry despite the close ties she and her husband enjoy with Laureate. (RELATED: Hillary Clinton’s Sweet, Cozy Connection To For-Profit College Industry She Now Attacks)
Clinton made the comments in her first campaign appearance since rolling into Iowa.
The setting was a carefully-staged roundtable event with a half dozen students and faculty members at a community college in Monticello, Iowa. In the school’s auto shop, the Wellesley College-educated Democrat sketched out the populist-progressive principles of her 2016 presidential campaign and discussed educational policy with the students and teachers.
“Some of the for-profit schools, some of the scandals that have arisen in these places where they take all this money and put all these young people and their families into debt, even if they graduate they don’t have credentials that can get them those jobs,” Clinton said during her trip to Iowa, which involved a luxurious black Chevy Express Explorer Limited SE conversion van.
Hillary Clinton is worth $21.5 million, according to Celebrity Net Worth.