Monday, April 20, 2015

NY Times wants help for students of predatory schools

The New York Times ran a very strong editorial criticizing for-profit schools for their predatory practices and supporting debt relief for the students who have been victimized by what the editors called :crooked schools." It is reprinted below in its entirety:

State attorneys general have long served on the front lines of the struggle to control and discipline predatory for-profit colleges that saddle students with crippling debt while granting them useless degrees, or no degrees at all. On April 9, nine of them who know firsthand how people can be deceived and bled dry sent a letter to the Department of Education, asking it to provide restitution — and help fix the problem — by forgiving the federal student loans of people harmed by crooked schools. The letter makes a strong case for prompt action.

The problem of for-profit schools received national exposure last year when Corinthian Colleges, one of the nation’s largest operators of for-profit colleges and trade schools, collapsed in the midst of a federal investigation. The company agreed to shut down or sell about 100 campuses. Earlier this week, the Department of Education fined Corinthian $30 million for misrepresenting job placement rates in one of the chains it owns, saying that the company had “violated students’ and taxpayers’ trust.”

Corinthian was already facing a lawsuit brought by the California attorney general, Kamala Harris, who accused the company of a host of wrongs, including lying to students and investors about job placement programs. The federal Consumer Financial Protection Bureau subsequently sued Corinthian on grounds that it had “lured tens of thousands of students to take out private loans to cover expensive tuition costs by advertising bogus job prospects and career services.”

The idea of forgiving these loans altogether gained traction when a group of former Corinthian students refused to repay their loans, which they claimed were often the product of a predatory private lending scheme. The group, part of an organization called the Debt Collective, noted that the Department of Education had broad authority to forgive debt in cases where schools had committed wrongdoing. The department could then force the offending schools to reimburse the government.

In December, 13 Senate Democrats urged the department to immediately forgive loans for Corinthian borrowers covered by lawsuits filed at the federal or state levels. In the April 9 letter to Education Secretary Arne Duncan, state attorneys general from California, Connecticut, Illinois, Kentucky, Massachusetts, New Mexico, New York, Oregon and Washington lent their voices to the forgiveness campaign, urging the department to “immediately relieve borrowers of the obligation to repay federal student loans that were incurred as a result of violations of state law by Corinthian Colleges, Inc.”

The letter said: “These cases against Corinthian have unmasked a school that relentlessly pursued potential students — including veterans, single parents, and first-time higher education seekers — promising jobs and high earnings, and preying on their hopes in an effort to secure federal funds.” The complaint from the attorneys general went beyond Corinthian to a systemwide problem: “Our greatest concern comes from certain large, predatory for-profit schools that are actively undermining our federal loan programs, depriving students of the education they promise and that the students deserve. These institutions seem to exist largely to capture federal loan dollars and aggressively market their programs to veterans and low-income Americans.”

  The attorneys general promised to help the federal government recoup loan balances from schools that violated state laws or benefited from unlawful deception. Over the last 20 years, the Department of Education has received only a handful of requests from borrowers seeking to escape repayment on grounds of wrongdoing by schools. Evaluating many such requests will be difficult. But the evidence shows that such a system is needed and that relief is long overdue.

Wednesday, April 15, 2015

New Study: unionization pays off for community college instructors

A recently released study found that "being represented by a union pays big financial dividends for full-time instructors at community colleges." 
Peter Schmidt writing in the Chronicle of Higher Education reports:
Depending on the size, location, and public-financing sources of their institution, unionized full-time instructors earn from about 5 to 50 percent more in pay and benefits than do their nonunionized peers at similar community colleges, says a paper summarizing the study’s results.
"The differences are stunning," says Stephen G. Katsinas, a professor of higher education at the University of Alabama at Tuscaloosa who is one of the study’s three co-authors.
Among the forces influencing how much community colleges pay their instructors, "collective bargaining, in itself, matters," says Mr. Katsinas, who plans to present the study’s findings in New York on Sunday, at an annual conference held by the National Center for the Study of Collective Bargaining in Higher Education and the Professions.
Other research on the impact of collective bargaining on faculty pay has struggled to quantify how much differences in instructors’ earnings were attributable to unionization versus other contributing factors, such as differences in institutional size or in the regions that colleges served.
Mr. Katsinas and other scholars reached conclusions similar to the new study’s in a 2006 analysis of community-college data, but that effort was hampered by a reliance on outdated data on where unions existed. It also failed to take into account 113 institutions — among them, large community-college districts such as Miami-Dade — that could not be factored into an analysis of community colleges under the classification scheme used by the Carnegie Foundation for the Advancement of Teaching.
The new analysis uses a modified classification scheme to factor in the previously excluded institutions, which include community colleges that either offer four-year degrees or are offshoots of four-year public institutions, as well as public baccalaureate colleges that primarily offer associate degrees. It uses federal data on faculty earnings from the 2010-11 academic year, the last for which the Education Department collected information on benefits.
"There are amazing differences in monetary compensation of full-time faculty across the landscape of community colleges when geography, collective bargaining, and local appropriations are all accounted for," the new study concludes.
On average, it found, unionized full-time faculty members annually received pay and benefits amounting to about $95,000 at community colleges that received a significant share of their funds from local governments and about $77,000 at community colleges that lacked such a local source of financial support. Nonunionized faculty members received less than $68,000 in pay and benefits, on average, regardless of where their community college derived its tax revenue.
The size of the community college where a faculty member worked and the type of community it served also made a big difference.
At the top of the pile, full-time faculty members at suburban, multicampus, locally financed community colleges annually earned an average of nearly $106,000 in pay and benefits. At the bottom, such faculty members at small, rural, locally financed community colleges earned total compensations averaging just over $61,000.
The other authors of the new study were Nathaniel J. Bray, an associate professor of higher-education administration at the University of Alabama, and Barry R. Mayhall, a doctoral student in higher education at Alabama and a mathematics instructor at Snead State Community College, in Boaz, Ala. The paper on their findings will be released after next week’s conference.

Peter Schmidt writes about affirmative action, academic labor, and issues related to academic freedom. Contact him at peter.schmidt@chronicle.com.

Saturday, April 4, 2015

Bobby Kennedy's speech on the assassination of Dr. King

Dr Martin Luther King Jr. was assassinated today, April 4th, 1968 in Memphis Tennessee.

Dr. King went to Memphis to support the right of public employees', Memphis' sanitation workers', right to engage in collective bargaining, the same right that Governor Walker and the Republican legislation eliminated in Wisconsin!

Robert Kennedy, the U.S. Attorney General, was in Indianapolis about to give a speech in an inner city neighborhood when King's murder occurred. Here is his announcement. Bobby Kennedy was assassinated 68 days later.  


Friday, April 3, 2015

Dr. King: "I've been to the mountain top"

Forty-seven years ago today, Dr. Martin Luther King Jr. returned to Memphis to stand with sanitation workers striking for union recognition, the very same rights Governor Walker and the Wisconsin Republican legislature eliminated in 2010. That evening, April 3rd, Dr. King delivered his famous "I've Been to the Mountaintop" speech in a church packed with union members and their supporters. The following day he was murdered!

Monday, January 26, 2015

The strike of Milwaukee's packinghouse workers that changed Milwaukee


Forty years ago the owners of Milwaukee’s meat packing plants launched a war on unions. Milwaukee’s working class is still suffering from losing that war.

On January 25, 1975, over 700 members of Local 248, Meat and Allied Foodworkers Union, struck Milwaukee area meatpacking plants in response to a proposal that would cut their wages.

For generations, Milwaukee boasted of a large, unionized, blue-collar middle class. It was a place to put down roots and raise a family. Neighborhood culture was often defined by industrial bowling leagues and neighborhood taverns owned by former factory workers seeking to be “their own boss” and escape assembly line drudgery.

While highly segregated, economic inequality was at historic lows. Milwaukeeans enjoyed the nation’s second highest median household income in 1969. The black poverty rate was 22% lower than the U.S. average in 1970, and African American median family income was 19% higher than the U.S. African American median.

As the 70’s began the Wall Street Journal dubbed the city the “Star of the Snowbelt.” In large part, this reflected the high rates of unionization among workers laboring in Milwaukee’s foundries, tanneries, meatpacking plants, and at manufacturing firms like A.O. Smith and Allis Chalmers.

Skilled tradesmen and foundrymen, teachers, retail clerks, unskilled and semi-skilled workers were represented by unions at the bargaining table, on the job and in elections. Because of union wages and benefits, they could buy their own homes and maybe a cabin up north or a fishing boat. While neither management nor workers sought strikes, they were tolerated as a legitimate, although undesirable, part of contract negotiations.

In the late 60s and early 70s, Milwaukee unions participated in a national strike wave as workers sought salary increases in response to war-induced inflation. In 1969 Schlitz workers and MATC’s faculty union struck. In 1973 workers from A.O. Smith, Briggs and Stratton and Harley Davidson, three of Milwaukee’s manufacturing elite, struck at the same time. These strikes were eventually resolved, new contracts signed, and none of these companies attempted to bust the unions.

All of this changed in 1975 with the Meatcutters’ strike. The very day the strike began, the eight companies represented by the Milwaukee Independent Meatpackers Association began hiring replacement workers, some recruited from as far away as Nebraska and Texas.

In response to this first attempt by Milwaukee employers to bust a union since World War II, the Menominee Valley filled with angry picketers, black, Latino and white, rallying to protect their jobs.


After 15 months the employers association had their victory and decertified the union. Hundreds of hard-working union men lost their jobs. Full-time permanent employees were replaced by low-wage workers frequently hired through temp agencies.

The strike legitimized replacement workers, beginning waves of attacks on unions and the city’s working class. When UAW workers struck Master Lock in 1979, Milwaukee police officers escorted replacement workers across the picket line. Two years later A.O. Smith built a non-union plant in Tennessee, the first nail in the coffin of its Milwaukee Automotive Works, which had dominated the city’s north side since the early 1920s.

Briggs and Stratton experienced another strike in 1983 after its local unions refused demands for concessions in wages, benefits and work rules. Following the 13 week strike, the company asserting that it would never be held hostage again began to relocate work to the low-wage, non-union south.


While many associate the war against labor with President Reagan’s firing of the nation’s striking air traffic controllers in 1981, it actually began much earlier.

In 1971, Lewis F. Powell Jr., a Republican corporate lawyer, called the business community to arms with his memorandum to the National Chamber of Commerce. He wrote: “The American system is under attack. Business must learn ... that political power must be assiduously cultivated…and used aggressively and with determination -- without embarrassment.”

Powell urged “American business” to demand “equal time” on college campuses and the nation’s airwaves. His memorandum inspired the founding of conservative think tanks like the Heritage Foundation, Milwaukee’s Bradley Foundation, and the Cato Institute. Wealthy businessmen like the Koch Brothers poured tens of millions of dollars into right-wing initiatives.

Business Week put it bluntly when it declared in its October 12, 1974 issue: “Some people will obviously have to do with less….it will be a bitter pill for many Americans to swallow the idea of doing with less so that big business can have more.”

Milwaukee’s meatcutters had the misfortune of being Milwaukee’s first victims in this war to redistribute income. Subsequently, replacement workers were used at Master Lock and to break the union at Patrick Cudahy in 1987. After these bitter defeats Milwaukee area union membership plummeted, and so did real hourly wages.

Bernie Peck, the owner of the largest meatpacker, Peck Meat Packing, bought up most of the smaller meatpacking companies during the strike. He eventually sold them to Emmber Foods and became a celebrated philanthropist. While the community enjoys the buildings named after him, Milwaukee’s working class paid  such a very heavy price that many cannot afford to buy a home much less a cabin up north.

The corporate class war against Milwaukee’s workers that began with Local 248’s defeat is one of the principle reasons Milwaukee has declined from a relatively prosperous, blue-collar, middle class town to one of the nation’s poorest cities.

Since 1979 private sector union membership has plummeted while   Milwaukee’s median household income has fallen by a staggering 25.4 percent.

Milwaukee's African American poverty rate is now 49% higher than the African American national average, and median income is 30% lower.

Local 248 was one of many industrial unions organized by the Greatest Generation that turned low-paying jobs into stable, middle class employment. Today, many of Milwaukee’s large unionized, manufacturing plants are gone, replaced by low-paying big box retail and service sector jobs.


If Milwaukee is to enjoy a broadly shared renaissance, the current generation of underpaid workers will need to learn from history and create 21st century unions that turn low-paying employment into middle class jobs.

Monday, December 8, 2014

Debt-Collecting Agency Will Buy For-Profit Corinthian College Chain

By Diane Ravitch 

One of the nation’s largest for-profit providers of college degrees has been sold, according to Inside Higher Ed, to a debt-collection agency.

The ECMC Group, a nonprofit organization that runs one of the largest student-loan guaranty agencies, announced Thursday that it will purchase 56 campuses from Corinthian Colleges, a crumbling, controversial for-profit chain.

ECMC will create a nonprofit subsidiary, called the Zenith Education Group, to run the campuses, which enroll more than 39,000 students. The sale price is $24 million, according to a corporate filing from Corinthian. After having absorbed more than half of Corinthian’s enrollment and assets, Zenith will operate the nation’s largest chain of nonprofit career-oriented campuses.

Corinthian’s Everest, Heald and Wyotech chains include 107 campuses, which in July enrolled 72,000 students and employed 12,000. The company has been attempting to sell 85 U.S. and 10 Canadian locations, while gradually closing 12 campuses.

The sale announced Thursday includes 53 Everest College and three WyoTech campuses. 

Corinthian had been teetering even before a 21-day freeze on federal aid payments pushed it over the edge earlier this year. The company, which is one of the sector’s largest, had been hit hard by slumping enrollment and revenue, as well as investigations, lawsuits and bad publicity.

The for-profit higher education industry has long been under investigation for defrauding students, but it survives nonetheless because it hires the top lobbyists in both parties to protect it against regulation. Senator Tom Harkin of Iowa (who just retired) issued a scathing report on the industry in 2012 that unfortunately went nowhere. This story appeared in the New York Times:

“According to the [Harkin] report, which was posted online in advance, taxpayers spent $32 billion in the most recent year on companies that operate for-profit colleges, but the majority of students they enroll leave without a degree, half of those within four months.

“In this report, you will find overwhelming documentation of exorbitant tuition, aggressive recruiting practices, abysmal student outcomes, taxpayer dollars spent on marketing and pocketed as profit, and regulatory evasion and manipulation,” Mr. Harkin, an Iowa Democrat who is chairman of the Senate Health, Education, Labor and Pensions Committee, said in a statement on Sunday. “These practices are not the exception — they are the norm. They are systemic throughout the industry, with very few individual exceptions….

Over the last 15 years, enrollment and profits have skyrocketed in the industry. Until the 1990s, the sector was made up of small independent schools offering training in fields like air-conditioning repair and cosmetology. But from 1998 to 2008, enrollment more than tripled, to about 2.4 million students. Three-quarters are at colleges owned by huge publicly traded companies — and, more recently, private equity firms — offering a wide variety of programs.
Enrolling students, and getting their federal financial aid, is the heart of the business, and in 2010, the report found, the colleges studied had a total of 32,496 recruiters, compared with 3,512 career-services staff members.

Among the 30 companies, an average of 22.4 percent of revenue went to marketing and recruiting, 19.4 percent to profits and 17.7 percent to instruction.

Their chief executive officers were paid an average of $7.3 million, although Robert S. Silberman, the chief executive of Strayer Education, made $41 million in 2009, including stock options.

With the Department of Education seeking new regulations to ensure that for-profit programs provide training for “gainful employment,” the companies examined spent $8 million on lobbying in 2010, and another $8 million in the first nine months of 2011.

The bulk of the for-profit colleges’ revenue, more than 80 percent in most cases, comes from taxpayers. The report found that many for-profit colleges are working desperately to find new strategies to comply with the federal regulation that at least 10 percent of revenue must come from sources other than the Department of Education. Because veterans’ benefits count toward that 10 percent even though they come from the federal government, aggressive recruiting of students from the military has become the norm.

The amount of available federal student aid is large and growing. The Apollo Group, which operates the University of Phoenix, the largest for-profit college, got $1.2 billion in Pell grants in 2010-11, up from $24 million a decade earlier. Apollo got $210 million more in benefits under the Post-9/11 G.I. Bill. And yet two-thirds of Apollo’s associate-degree students leave before earning their degree….

On average, the Harkin report found, associate-degree and certificate programs at for-profit colleges cost about four times as much as those at community colleges and public universities.
And tuition decisions seem to be driven more by profit-seeking than instructional costs. An internal memo from the finance director of a Kaplan nursing program in Sacramento, for example, recommended an 8 percent increase in fees, saying that “with the new pricing, we can lose two students and still make the same profit.” Similarly, the chief financial officer at National American University wrote in an e-mail to executives that the university had not met its profit expectation for the summer quarter, so “as a result” it would need a midyear tuition increase.

Advocates for the for-profit higher education industry complained that their institutions were under attack solely for partisan reasons.
Given this background, one might expect that the U.S. Department of Education would vigorously oppose these for-profit institutions that cost so much and deliver so little to students. 

But, no, when Corinthian Colleges teetered close to bankruptcy, the U.S. DOE gave it a bridge loan to help the chain stay in business until a buyer for the distressed corporation emerged. More than half of the Corinthian chain of for-profitcolleges has been purchased at a bargain basement price of $24 million by a debt-collection agency called ECMC (the Educational Credit Management Corporation). Corinthian was once valued at $3.4 billion. The negotiations were handled by Undersecretary of Education Ted Mitchell, who previously was CEO of NewSchools Venture Fund (which funds charter schools, charter chains, and education technology startups). Consumer advocates were upset that ECMC was taking over a chain of colleges, in light of the fact that it has no experience running educational institutions:
“A chorus of consumer and student advocacy groups said they had serious concerns about the sale. They expressed concern that the campuses would be run by an organization that has not previously managed academic institutions.

“ECMC has no experience running a college, let alone one of this scale, and is instead known for ruthless and abusive student loan operations,” the Institute for College Access and Success, known as TICAS, said in a statement. “With so many other colleges offering lower price, higher quality career education programs, it’s unclear why this agreement is in the interests of either students or taxpayers.”

Higher Ed Not Debt, a coalition of progressive organizations and unions that focuses on student loan issues, similarly took issue with ECMC’s “storied history of harshly preventing the discharge of students’ loans in bankruptcy.”

“While bailing out 56 schools, the sale treats the more than 30,000 students like financial assets,” Maggie Thompson, the group’s campaign manager, said in a statement. “All students should have the opportunity to opt-out of the sale and receive full refunds including full loan discharges of both federal and private loans.”

Durbin, the top-ranking Democratic Senator, has relentlessly criticized Corinthian in recent months. He did not directly praise or criticize Thursday’s agreement, saying only that the sale of the campuses “should focus on sparing the students who have been victimized and the taxpayers who continue to be on the hook.” 


This was an opportunity for the U.S. Department of Education to close down some of the lowest-performing colleges in the nation. This was an opportunity to take a stand against the entire for-profit sector. But the Department of Education structured a deal to save what should have been closed. A lost opportunity. But it does refute those critics from the for-profit sector who claim that their online institutions are unfairly targeted by Democrats.

Wednesday, October 29, 2014

Civil rights orgs seek strong gainful employment rule

 A coalition of eight civil rights organizations released a policy brief today urging the U.S. Department of Education to release a strong gainful employment regulation to protect students, particularly African-American and Latino students, from substandard career education programs.

The brief, “Gainful Employment: A Civil Rights Perspective,” documents the adverse outcomes that African-American and Latino students experience as a result of policies and practices implemented at for-profit colleges.  Students at for-profit colleges are much less likely to graduate, more likely to default, and more likely to incur debt than students at public and non-profit schools. The brief details how a strong gainful employment rule will provide much needed protections to both students and taxpayers.

In Milwaukee, for-profit colleges have targeted low-income and minority students with promises of job placement and a career, but delivered little more than huge debts. Yesterday, the Wisconsin Attorney General sued Everest College for its fraudulent practices, including a job placement rate of 5%. But others like Globe University, ITT, Kaplan and the Art Institute continue to game the federal financial aid system, a source of 90% of for-profit college revenues, and enroll unsuspecting students.
 
“Stronger oversight is desperately needed to tackle the problems of poor outcomes and high debt within career education programs,” the brief urges. “Currently, even when better and lower cost options are available, African-American and Latino students are disproportionately enrolled in schools where they are both likely to borrow and unlikely to succeed, and there are few incentives for schools to improve poorly performing programs.” font-family: arial, sans-serif; font-size: 12px;">

Click here to download the brief.

The brief was released by the Center for Responsible Lending, the Children’s Defense Fund, the Lawyers’ Committee for Civil Rights Under the Law, The Leadership Conference on Civil and Human Rights, MALDEF, the NAACP, the NAACP Legal Defense and Educational Fund, and the National Council of La Raza.