Prep School Scam: Chinese Students Exploited by Endowment-Hungry American Schools

Static Chaos's picture

Static Chaos


With growing wealth and the long cultural belief that values higher education above almost everything else, it is  easy to understand why more and more Chinese parents want to send their kids to the United States hoping to get a better education leading to a brighter future.


This trend has created a strong, yet hard to fill niche demand.  As we learn from Econ101, someone (an agent, for example) will eventually squeeze out some supply from somewhere to meet that demand, along with a potential to exploit the gap when the good quality supply falls short of demand.


According to Bloomberg,

"...[U.S.] Colleges are prohibited from paying incentives to recruit U.S. students who qualify for federal financial aid. While American schools use agents worldwide, the practice is especially common in China because agents are ingrained in its culture."

In their quest for a world class education in the U.S., some Chinese students as well as parents have been exploited by some of the American schools hungry for endowments in an economy still reeling from the Great Recession.  From Bloomberg:

"Boarding schools with small endowments and less selective admissions policies are boosting their revenue and enrollment by recruiting thousands of Chinese students who pay full freight. As the weak economy has shrunk the pool of well-off U.S. applicants, many of these schools are using agents with misleading sales pitches to tap a growing number of wealthy families in China eager for the prestige of an American degree.

The number of Chinese students at U.S. private high schools soared more than 100-fold to 6,725 in 2010-11 from 65 in 2005- 06, according to the U.S. Department of Homeland Security. China has displaced South Korea as the top source of international students at boarding schools, with the smallest schools having the biggest increases in Chinese enrollment, said Peter Upham, executive director of the Association of Boarding Schools in Asheville, North Carolina.

In addition to agency's cut, Bloomberg quoted a couple of schools that these Chinese families paid first year tuition in the $55,000 range, plus additional international student fees such as English as A Second Language (ESL) classes. A headmaster at a New York school says, 

"The ESL fee is justified because classes are smaller, and price isn’t an issue because China has a lot of multimillionaires." 

But instead of the promised elite college-prep experience by agents, these Chinese students often find that over-enrollment of Chinese students has resulted in one-third or more of their dorm mates are also Chinese, which is non-conducive to their English leaning and studying progress, while many of the U.S. students in the same schools have leaning disability / difficulties such as ADHD or ADD.  Reportedly, these conditions were not disclosed to the Chinese families since the disclosure would be “counter-productive,” as one school puts it.


So with this unusual student demographic mix, the end result has turned out to be quite interesting:

"The schools end up segregated academically and socially into full-paying Chinese students, many of whom rise to the top of their classes, and American teenagers who fell behind in public schools."

Meanwhile, Bloomberg describes how parents in China are clamoring to pay up to $300 USD a pop to just learn about prep-school education in the U.S.  And Chinese student enrollment remains a big "budget balancer" to many prep schools, as another headmaster at a school in Connecticut told Bloomberg that

“You can turn the valve on and off.... If you need another 20 kids at 50 grand a pop, you get them from China.”

Since this is a commercial activity in the traditional mostly "non-profit" education sector (which is a total joke if you look at how much tuition and book costs have gone up over the years),  there's no clear governing standard or regulation around the student recruiting and enrollment diversity, which is unlikely to change any time soon.


So unfortunately, the best thing the Chinese families wanting to send their kids to the U.S. could do is "buyer beware" by doing a lot of research and on-campus visits if possible, so not to waste precious time, money or worse yet, disrupting the learning progress of your young.  


Static Chaos

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meatball's picture

Chinese getting scammed for once? :D


Anyway, they worship brand names more so than the rest of the world. Having an Ivy League education would do wonders for them back home.

kappa's picture

Even so it's not ethical for the schools to take advantage of them like that. At some point these students will have to prove their international education skills and when that time comes they will realize that their education was just a waste of money. Students and parents world-wide should be able to make the difference between quality education and education that only wastes their money. I preferred to have an online mba degree just because I assessed my options locally and I couldn't find something to stand up to my expectations. Doing some research before applying for an university really pays off.

byteshredder's picture

I don't see the fraud.

The Chinesee recruiters said "your child will get a "special education" with other "special" students and that's what they got.

It makes me smile to see the Progressive usurpation of language coming back to bite them in their socialist asses.


lilimarlene1's picture

Doesn't Schumer want to give citizenship to any foreigner who comes in and spends 500k on our real estate?


bigwavedave's picture

Hey you. American Looser. Buy my plastic crap to give your kids and I buy your house and your kids place at school. Deal? ROTFL

Its_the_economy_stupid's picture

Nest up: Chinese student bubble.

PulauHantu29's picture

Sad our nation is becoming one Big Fraud.

bigwavedave's picture

Move over. Gonna buy a shitty 250k house and get a visa. American losers!

Escapeclaws's picture

Interesting article. I heard the opposite--that the Chinese are sending these kids to "infiltrate" America by learning its language and culture--probably paranoid nonsense.

In any case, significant numbers of rich American students take a coctail of meds each day. I hate to think of what the long term effects of this will be on their developing brains. I have a real issue with these meds, which I believe are based on false "science" with little or no controls or accountability by big pharma. But for some reason--misplaced trust in experts perhaps, their parents buy into the psychological/psychiatric meme. You would think they would know better since many of them play a big role as "experts" in trashing the world economy.

I would imagine the Asian students who come are probably not saturated with meds. Whether that or their work ethic explains their superior performance, they at least do the work and do not have to be "gently persuaded" or coddled. This completing of assignments, keeping up with the daily homework, and studying in advance for tests gives them an incredible advantage. Many of them also display amazing virtuosity in musical performance. They really raise the bar for American students, only a few of whom are at the same level. From a purely student perspective, ours is a degenerate culture of entitlement soon to be buried by these go-getters who really know the score. Pity for America, with its tradition of anti-intellectualism, but richly deserved. America's getting-something-for-nothing mentality is proving to be our undoing.

lilimarlene1's picture

You may not be THAT paranoid. And, everything else you mentioned is spot on, too!

Escapeclaws's picture

Thanks...regarding meds, I recall reading an article several years ago in Der Spiegel which implicated ritalin in early onset Parkinson's disease. It always made me wonder if Michael J Fox, bless his heart, was given ritalin as a prepubescent child.

lilimarlene1's picture

I can't speak to Hero's experience, but I can speak to my own. Speaking from personal experience, the private schools engaging in this behavior are truly in essence scams. The bottom line you will find in common with all is that they possess no endowment. They are broke. They are 501c3's that have escaped notice by the IRS which is not assuring that governance and stewardship is occurring.

Therefore, since these schools are essentially bankrupt and have usually done very little in the last forty years to upgrade facilities or build modern and innovative structures for science and lab work and the like, they totter from year to year hoping to get "heads on beds" in order to pay operating expenses.

The Boards at well run private schools spend a lot of time doing governance and making sure that money is raised. So, there are plenty of private schools with endowments of 10 million and more.

Those endowments then provide specific monies for professional development and student programs as well as capital monies to fix the campus.

At prep schools which are scamming the Asians, typically you have an over staffed administration; lots of duplication of staffing across departments; heads of schools pulling down fat salaries and living rent free and traipsing about the world supposedly raising money but actually merely on a lark.

The IRS should look into schools that are failing to raise money. That's why they get to be called a 501c3 and not a for profit. But they have to demonstrate ample fund raising. If they can't, pull their status.

I predict that will begin to happen sooner rather than later.

Sadly. Because some very fine old places that were mismanaged will close.

laomei's picture

Pretty much the only people who send their kids over to the US are ones with money who either:

1) Have dumbass kids who failed to get into good schools here

2) Have kids who's potential failure to get into a a good school over here was be a major loss of face


For high school enrollment, it's basically because they want to get out of gaokao requirements and have the money to do so... or again, they failed to get into the major high schools and see a US educational background as preferable to a no-name school over here.


The only thing worthwhile in US education anymore is grad and post-grad... but even that is starting to shift now.  In hiring decisions, local applicants with overseas education are pretty much straight into the circular file as far as my decisions go unless it's a MS or PHD.  Been burned too many times in the past by dumbass rich kids who have no idea what they are doing, while locals with local education have the basics down more times than not.

Tompooz's picture

Smarter Chinese and Korean families send their children to Canada, Australia and New Zealand. Even India and nearby Philippines are good for immersion in  English speaking environments.  English language schools are good business.

And the best American Universities have now opened branches in China itself.

lamont cranston's picture

Dook opened in China this summer, and they sent Coach K & the basketball team over to play exhibitions.

Just got the annual report from the prep school in NC where my oldesst daughter went to. Valedictorian was from Seoul. He got a full ride to that other well known basketball power, Cal Tech.

sethstorm's picture

How about milking these internationals, and then using that to give a merit blind free ride to US citizens?  If you want to see our own educated, take these families to the cleaners and use the money towards a first class education for US citizens.

Schmuck Raker's picture

>How about milking these internationals, and then using that to give a merit blind free ride to US citizens?<

"The number of Chinese students at U.S. private high schools... 6,725 in 2010-11"

  1. How many US students do you think will be 'helped'?
  2. What benefit would students, or society at large, derive from giving kids a 'merit blind free ride'?
sethstorm's picture

How many US students do you think will be 'helped'?

The more international students that pay in full to US universities(public and privately funded), the more US students will be helped. 


What benefit would students, or society at large, derive from giving kids a 'merit blind free ride'?

The reason I say merit blind is to keep the US open admissions system intact - where one number doesn't tell you how much freedom you will have - versus a less open system like those found outside the US.

Keeping it merit blind for all US universities, outside of US citizenship and completing secondary education, improves access. 


In short, make a good situation out of it by giving more opportunity to US citizens, instead of handing slots exclusively to internationals.

Sathington Willougby's picture


Let's give all "merit blind free riders" what they deserve.  A swift kick in the ass daily.

e-recep's picture

The Chinese middle class is rising. They now have spare money to throw away. A growing manufacturing base makes everything look rosy. The middle class Chinese entrepreneur is optimistic about the future. That's what this article tells me.

hero HNL's picture

I can tell you endless stories of corruption in the US educational system. I used to frequent Princeton Review's site 10 yrs ago to give prospective grad students tips on scoring high on the GRE, LSAT, etc & I heard so many stories of outright corruption in the US educational system.

Concenring the article about preying on foreign students, it's been going for the last 40 yrs as far as I know & this article is only the tip of the iceberg. I will be more than happy to write articles for ZeroHedge or even publish a book on this subject. Feel free to contact me. But from my personal observation, there's too much greed & profit-generating mentality in Western international schools, most prominently in catholic schools. I learned the hard way why state & church are separated for a good reason. They are cash cows for the American education industry & you are educated to become cheerleaders of Bush.....The mentality was like "It's OK to kill Arabs & steal their oil as long as you don't get caught ( shoplifting).


But as a side note, the story is a bit more complex than the above article claims...There's fraud actually on both sides - the students & the school (from elementary school to graduate universities.)



VyseLegendaire's picture

And the best part is, these kids aren't learning jack! And there's no jobs for them! The divine comedy continues.

hero HNL's picture

Preying on international students is nothing new.....I went to a catholic high school run my missionaries & it was so corrupted.


Bribing teachers (especially Indian female students) & corruption were so rampant that the principal was kicked out of school. The guy was such a d**khead he liked money & touching women more than eductional & Indian girls took advantage of him in exchange of higher grades.


I can tell you endless tales of corruption.



Chicken_Little's picture

I can tell you in the late 70's this crap didn't happen/



Buck Johnson's picture

This is so funny, truly funny.  Pretty soon nobody will want to come to the US because they can't trust anything in the country.  We are a third world nation.

macro-economist's picture

Yes, this is eventually what will happen - once the US degrees' value depreciates on account of such practices, word will spread quickly around the continents and except for the top 10% or 20% of institutions, the rest will be seen with suspicion.

In Europe they are touting the same to Asia but from what I have seen, at least their screeninng and selection process is pretty intact and uniform so that only those who meet the benchmark and have money get in.



PulauHantu29's picture

There's a Sucker born every minute...with 1.5 billion people, maybe five suckers born every minute.

Hey, how about the sucker ads on TV for colleges of every description that will train you do become CEO earning Bookoos money upon graduation...even better, it's all online! You don't even have to go to class....

Yes, just fill out these loan papers here....lets see.....


Georgesblog's picture

The higher education system has been the place where people learn about extortion and influence peddling. The system turns out good little corporate widgets, for a fee. These are the situations that "
The Four Money questions" deal with very well.


Earl of Chiswick's picture

I am not sure of the point of this other than a bunch of well off Chinese parents are sending their kids to America and may be overpaying.  The reality is that Asians are more and more the dominant demographic on University campuses in the West; US, Canada, UK etc. Have you reviewed the last names of the class of 2011? undergrad, grad, meds etc. 


Your comment

(Typically, I'm not a conspiracy theorist, but this whole thing looks at least in part like some kind of an effort to retard China's progression to a developed economy starting from the next generation, but to no avail.)

is, to use your words, retarded.

sethstorm's picture

That's a problem of admissions policy and Affirmative Action not applying for white students not already covered.


Optimusprime's picture

Your Bradshaw link does not show the huge overrepresentation of Jews at the elite colleges.  Combining this with the strong asian presence and the ongoing efforts to load up on minorities leaves a shrinking place for white European-descended non-Jews.


Higher education is a big player in anti-white policy.

ClassicalLib17's picture

The only thing this tells me is the chinese must use phonics reading instruction rather than the whole language model that most U.S. public schools use.  My local public schools traditionally produce 8th graders that test at 2-3 grade levels below reading comprehension.  75% of our high school juniors fail the state high school exam, and 40% drop out.  The NIH, Eunice Kennedy Schriver Institute says that explicit, systematic, phonics is the way that our k-3 students should be taught to read.  Yet, our teachers colleges continue to train prospective elementary school teachers whole language instruction.  How many more generations of children will be lost do to this progressive nonsense before the American public finally wakes up.  I'm 57 and my grade school teachers were women in there 50's and 60's and phonics is what they used.  I'm am so disappointed with the people I speak to about this issue, when while presenting these facts their eyes just seem to glaze over.   I think it is time to start buying gold. 

sun tzu's picture

The dumbing down of America is intentional. It's easier to control a population that is illiterate and can't perform basic math. There were people in my MBA classes that belonged in remedial math class. My MBA school is a top 50 in the country

macro-economist's picture

I used to think this was a conspiracy theory but lately I have met people who know people who work for people in "public office" and it was startling: with all the fiscal mess the US finds itself, tax revenues will be hard to increase unless the economy comes into a growth trajectory (growth that starts to lower unemployment), and big business is already a lean, mean fighting machine having cut jobs in great quantities in 2008 and increasing productivity and work loads for those who are lucky to keep their jobs. Meanwhile the population keeps ticking higher but hard times are causing drop-outs from high schools and universities -  so there are morons in the USA who say that this is like an "equalizing mechanism" - less skilled jobs opportunities mean less skilled people needed and so as youth drop out of universities, they will be less educated and "easier to keep busy" while we need a decade or half to shrugg off the impact of all this in short: we'll cross that bridge when we get there - for now let these "self-correcting mechanisms kick in".


saiybat's picture

Illiterate people are a lot smarter than you think. They haven't been indoctrinated and have oral stories stored in their brain instead of on paper. If they could take an I.Q. test they'd put all of us to shame. They're very creative people and can recite just about any thing. It's quite the opposite because it's literacy that has dumbed us down. Similar to how copy and paste has dumbed me down. This quote is true because I could only remember the context of it. North Koreans are the most literate people in the world and the most oppressed. Now you know what the war on illiteracy is all about.

"for this discovery of yours will create forgetfulness in the learners' souls, because they will not use their memories; they will trust to the external written characters and not remember of themselves. The specific which you have discovered is an aid not to memory, but to reminiscence, and you give your disciples not truth, but only the semblance of truth; they will be hearers of many things and will have learned nothing; they will appear to be omniscient and will generally know nothing; they will be tiresome company, having the show of wisdom without the reality." - Plato on Phaedrus

Overflow-admin's picture



Illiterate people are a lot smarter than you think, IF they aren't brainwashed by TV and other artifacts.

saiybat's picture

You mean Fahrenheit 451? I've read it. The end implies a new renaissance where people store knowledge in their minds rather than on paper. The message of the book is the same. Anything, though, is better than watching television which is a very efficient brainwashing machine. You could give people the most aggressive brainwashing at an institution and still in most cases they wouldn't live in fantasy like the television does to people. Television is degenerative and puts people in a suggestive state of mind which is ripe for implanting new beliefs.

URZIZMINE's picture

Wall Mart Dollars coming back to us.