Here’s a little quiz for you today, folks:
What’s the name of the non-governmental entity in Virginia that receives more support from federal taxpayers than any other?
It’s unlikely that you guessed Liberty University in Lynchburg, which was founded by the late Rev. Jerry Falwell. He once wrote that he looked forward to the day when there were no longer any public schools in the United States.
But if you did, give yourself a pat on the back.
In 2010, the proudly private, conservative, evangelical university received $445 million in federal student financial aid, in the form of grants and taxpayer-guaranteed loans. Most of that supports the education of students who have enrolled in LU’s online education programs.
You see, in recent years, Liberty has hopped on the for-profit online university bandwagon. That’s largely a scam, and it’s growing so quickly that last year, for the first time, student loans beat out credit cards as the number one form of debt in this nation.
The scam works like this: online universities hire recruiters, aka telemarketers, who sit in cubicles and make cold calls. Each day, the telemarketers are furnished a list of people who have recently earned their General Equivalency Diploma. Which means in most cases they are high-school dropouts.
The telemarketers call up these dropouts with slick sales pitches about their futures, and how much better off they will be with a college degree. Then they offer to sign them up for college, AND, at the same time, the recruiters sign up the students for government grants and loans that cover the cost of their tuition.
The money goes from lender banks to these universities. Rarely if ever does it pass through the students’ hands. But they are on the hook for the loans.
Later, most of these students drop out. And most of them default on their loans. And the government — i.e. taxpayers — pays off those the banks that made the loans, then the government goes after the dropouts.
This is the setup under which Liberty University has grown, in just a few years, from 12,000 students to more than 60,000. At least 52,000 of those are enrolled online.
It’s also one of the reasons that the formerly debt-plagued university is able to create snowless ski slopes on mountains in Lynchburg, and why it’s buying up former shopping centers in that city.
Liberty University, the private, evangelical, bastion of conservatism, is awash in government (taxpayer) cash.
You’ve got to wonder what the late Rev. Jerry Falwell would say about that.
UPDATE: This blog post was based on the story (linked to above) in the The (Lynchburg) News & Advance. Liberty University Chancellor Jerry Falwell Jr. responded to that story with this statement. Below is a partial excerpt:
“Falwell decided to issue his statement after numerous agenda-driven websites and news outlets drew erroneous conclusions based on data provided by The News & Advance report.
Falwell said several attempts by Liberty to persuade the newspaper to publish follow-up information on the data have been unsuccessful.
“The News & Advance and its parent company, Media General, refused to do a follow-up article on the March 27 report, which appeared on the newspaper’s front page and was circulated nationwide by the Associated Press,” Falwell said.
“Due to factual omissions in the newspaper’s research, some misimpressions could be reasonably drawn from the data provided,” Falwell wrote in a May 5 letter to Terry H. Jamerson, the newspaper’s publisher, and Donna M. Reed, Media General’s Vice President of Content.
“The article never indicated that 86 percent of the federal money provided to Liberty students is in the form of loans that are repaid to the federal government with interest,” Falwell wrote.
In addition, Falwell said the article omitted the fact that approximately $200 million of the $445 million is refunded to students, who spend it in their local communities to cover living expenses while attending college.
The article also omitted the fact that the student loan default rate for Liberty graduates is about half the national average.
“Liberty students finance their education just like college students do at every other university in the nation, except our students receive slightly less than the average student in federal need-based grants like Pell, and our students pay off their student loans better than the average college student does nationally,” Falwell said.
Liberty students financed their education through private lenders before the student loan industry was nationalized by the Obama administration in recent years.
Lynchburg, Va. is a relatively small city and the economic impact of Liberty University on the city is significant.
In addition to rent and local purchases by students, Liberty University spends tens of millions of the tuition dollars paid by the students with the proceeds of their federal loans with local businesses, including The News & Advance.
“Last year, Liberty spent approximately $76,000 with the newspaper,” Falwell said.
Liberty University Online students spend proceeds from their federal student aid in communities across the nation, Falwell said. Liberty University Online educates students in all 50 states.