Audit Notes: Students Drop For-Profit Colleges, Foreclosures, Hospital Mergers (UPDATED)

The Wall Street Journal has an interesting report on the much-deserved business woes hitting the for-profit college industry.

Enrollment of new students at Corinthian Colleges dropped 22 percent earlier this year. It fell 26 percent at DeVry and 36 percent at Capella Education.

Washington Post Company cash cow Kaplan, which has helped keep the newspaper afloat, saw its enrollment plummeted 47 percent in the “June quarter”, whatever that is. The Post needs a new sugar daddy, pronto. Its parent’s education arm accounted for 61 percent of both the Post’s Company’s total revenue and operating income last year. News was just 14 percent of revenue and lost money on an operating basis.

No word from the WSJ on numbers for University of Phoenix, whose owner Leon Black just threw a million-dollar birthday party for himself, and which “has been criticized for targeting injured veterans and homeless adults to fill seats.” (UPDATE: Embarrassing correction here. Leon Black runs Apollo Global Management, not Apollo Group, which owns the University of Phoenix. Thanks to commenter Jack Cooke for catching me on that)

— The St. Petersburg Times tells the story of a Bank of America borrower who got the bank to modify her mortgage only to see it take away her house—for paying her note early.

One of Moynihan’s aides, Ana Olivera, told Bullington the foreclosure could not be stopped. She wrote in a two-page letter that the payment due on Jan. 1, 2011, had been made in December.

“In accordance with the Trial Payment Letter dated December 15, 2010, it indicates that if you are not able to make each payment in the month in which it is due, you will not be eligible for a modification under the Home Affordable Modification Program,” the letter said.

Olivera told Bullington she could avoid a foreclosure by selling the home in a short sale or by signing it over to the bank. The letter said the bank values Bullington’s business and strives to provide exceptional customer service.

— Avik Roy points to hospital consolidation as one big factor in soaring healthcare costs. He looks specifically at the merger of two Harvard hospitals in Massachusetts:

With the two most prestigious hospitals in the state locking arms, insurers were hosed. The new hospital monolith, Partners HealthCare, could deny access to the beneficiaries of any insurer who dared not accept whatever they wanted to charge. After all, who would want to be on an insurance plan that didn’t have access to the two most prestigious hospitals in Boston?

In 2008, the Boston Globe ran an important exposé on the “handshake that made healthcare history”: Partners’ secret agreement in 2000 with Blue Cross Blue Shield of Massachusetts, in which Blue Cross would give Partners more money, in exchange for Partners’ promise that they would demand the same rate increases from everyone else. The growth rate of individual insurance premiums in the state doubled.

I get that there are certain areas of health care where there will always be philosophical differences. But, in theory, both liberals and conservatives oppose monopolies. So why can’t we all get together and launch a crusade against exploitative hospital mergers? I mean, how often do I get to agree with Martha Coakley?

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.