Monday, August 25, 2014

Study: for-profit college degrees have no value in labor market

A recent study conducted by the National Center for Analysis of Longitudinal Data in Education Research found that students who graduated from for-profit colleges with thousands of dollars in student loan debt have the same chances of getting called back for an interview as a peer who has no college experience at all and zero student loan debt.

According to a report released in 2012, the average cost for a two-year associate’s degree at a for-profit college is $35,000 compared to $8,300 for a similar degree at a community college. The same study also shows that roughly 60%of for-profit college students take out a student loan versus just 13% of community college students.

Researchers of the study sent nearly 9,000 fake résumés to job openings in six different career categories and compared those responses to the responses of applicants that had community college experience or no college experience at all. font-family:

Hopefully, studies like these will have scholars thinking twice before they fall for the next for-profit college commercial seen on television.

Tuesday, July 29, 2014

Governor Walker praises predatory for profit college

In 2010, Wisconsin Governor Scott Walker slashed technical college funding by 30%, reducing state funding to levels last seen in the 1980's. Walker also cut the University of Wisconsin system's funding by $250 million. 

These cuts lead to increased tuition and reduced sections and services to students. 
Yesterday, Walker toured and praised a predatory for-profit college, ITT Tech, that is currently under investigation for fraud by the federal Consumer Financial Protection Bureau. 
MATC instructors are well aware of ITT because so many of our students are former ITT students who are saddled with huge debts and worthless ITT Tech credits. Joriah Siemann was one such student. When Milwaukee Magazine interviewed Joriah in 2012, the 39-year-old still owed $20,000 to ITT Tech in Greenfield, the very college Walker praised. 
 Joriah earned an associate degree from ITT in computer networking in 2004 after learning about the program online. After an entry exam, Siemann told Milwaukee Magazine, he felt pressured by his admissions representative to enroll on the spot. He acquiesced, not realizing he’d also taken out $35,000 in loans to pay for his tuition. To top it off, he says the school’s job-placement efforts were subpar. “They didn’t help me find a job at all,” Siemann says. “I’m kicking myself for going to ITT.”  

The United States Senate report (see below) on for profit colleges suggests that ITT’s priorities are not educating or helping place students in jobs. It found that nationwide in 2010, ITT employed one recruiter for every 34 students, but one career counselor for every 204 and one student services employee for every 807.  

Siemann was working two jobs – as a systems administrator and a restaurant server – and was enrolled at MATC while paying off his ITT degree when he was interviewed by Milwaukee Magazine in 2012.

Walker claims that ITT Tech in Greenfield has a good record. But the experience of students like Joriah contradict the Governor's talking points.

Saul Newton, an Afghanistan army veteran and a UW Waukesha student wrote the following op ed in the Milwaukee Journal Sentinel in response to Walker's visit to ITT:

 Governor Scott Walker expressed his support for a for-profit college under investigation in multiple states and by the federal Consumer Financial Protection Bureau, claiming their track record has been positive.

The Governor’s comments came during an official tour at the ITT Technical Institute Center for Career Development in Greenfield on Monday afternoon. Walker toured the facility and spoke with students and faculty. 

“The track record they’ve had in the Milwaukee area, at least, has been a positive one,” said Walker.

ITT Technical Institute is a for-profit technical college operating 144 campuses in 35 states. According to the Consumer Financial Protection Bureau, ITT’s tuition costs are among the highest in the nation. In Wisconsin, an Associate’s degree program can cost up to $44,000, and a Bachelor’s degree program can cost over $89,000.

In 2012 the Educational Approval Board, the state agency charged with overseeing for-profit and independent colleges, foundthat 51% of ITT students in Wisconsin drop out before completion of their program. Only two other institutions had a higher drop out rate. One Wisconsin based ITT program saw 93% of students drop out. 

ITT Tech relies heavily on veterans to pad its revenues. According a scathing report by the U.S. Senate Committee on Health, Education, Labor and Pensions, Sen. Tom Harken (D-IA) found that ITT focused specifically on recruiting military veterans and service members. 

ITT Technical Institute collected $178 million in veterans benefits from 2009-2011. ITT was the second highest recipient of revenue from military educational benefits among institutions the HELP Committee examined. The report alleged highly deceptive and fraudulent recruiting practices toward veterans and active duty military members.

When asked about ITT’s recruiting practices toward the military, Governor Walker defended the college.

“That may be the experience they’ve had in other places, but the experience we’ve seen with folks working in this state has been pretty positive. We actually have a stronger GI Bill in the state of Wisconsin than they do nationally.”

In February, the CFPB filed a lawsuit in federal court alleging ITT Technical Institute pushed students into predatory high-interest student loans and mislead them about job prospects and salaries upon graduation.

"ITT marketed itself as improving consumers' lives but it was really just improving its bottom line," said CFPB Director Richard Corday. "We believe ITT used high-pressure tactics to push many consumers into expensive loans destined to default.”

ITT is also under investigation by thirteen state Attorneys General for predatory and fraudulent recruiting practices. 

An estimated 26,000 students attend for-profit colleges in Wisconsin, paying $155 million every year in tuition to mostly out of state companies.

In 2010, following the unexpected closure of several campuses in the Milwaukee area, a state committee was established to set performance standards at for-profit schools like ITT. After meeting just one time, Walker replaced three members of the seven members serving on the committee. It was dissolved shortly thereafter.

The for-profit college industry has been a significant factor in the explosion of student loan debt across the country. ITT collected $586 million in federal student loans. The HELP Committee report concluded more than 1 in 5 students who attended a for-profit college but did not graduate defaulted on their student loans within three years, more than three times the rate of student attending other types of institutions. 

Student loan debt is a serious drag on our state's economy. Research from One Wisconsin Institute, a liberal advocacy organization in Madison, showed that those with a student loan are twice as likely to rent or live with others than owning their own home and they are twice as likely to own a used, rather than new car. New cars are the driving force for the American auto industry. One Wisconsin's research shows we lose over $200 million every year in Wisconsin in new car purchasing power directly attributable to student loan debt.
For-profit colleges like ITT Technical Institute continue to operate in Wisconsin with no standards for student achievement. Given the Governor’s comments, that trend is likely to continue.

Thursday, July 17, 2014

R.I.P. James Shay Stear Swinford

Shay was a 2nd year culinary arts student at MATC, a victim of the mindless gun violence that is too prevalent in our country.  He was shot on July 8th. He died on July 12, 2014.

His death like that of any young person is a parent’s worst nightmare. 

It is reminder that for many of our students, like Shay, we are their only hope for a better future. They place their trust, fears and dreams in our hands. We and they don’t always succeed. Tragically, Shay did not. But we and they do more often than not. And all of us need to redouble our efforts in Shay’s name to help Milwaukee’s young people fulfill their potential and dreams.  
Shay is the son of Amy Stear who helped lead the successful paid sick days campaign that was eventually vetoed. 

Here is what she wrote about her son’s death:

On Tuesday, July 8th my son Shay was shot in Milwaukee.  He struggled to survive while being cared for at Froedtert Hospital for three days but finally succumbed to a massive stroke on Friday.  His father and I accepted we had to remove life support on Saturday and let him go. It was the hardest thing I have ever done in my life and I will live the rest of my life unafraid of anything because nothing can ever hurt me beyond what I can bear after experiencing this.

Shay wanted what most kids his age wanted - to have a path to a better future.  He was starting his second year at MATC in the culinary arts program.  He had wanted to be a chef since he was in grade school so this program fit his interests, his creativity and his desire to find work doing something he enjoyed.  He took school seriously and regularly called me to go over his assignments, he wanted to do well.

But he also wanted to have fun, hang out with his friends and enjoy being young.  We all know that feeling, we've all been there.  Sadly, in his case in Milwaukee that came with a real risk that was ultimately realized last Tuesday night.

I have lost my only son.  I will never get over this.  And I don't want anyone else to ever face this but I know that's not how the world works.  So we change the world.  That is on all of us, whatever way we can.

I have been asked about memorials for Shay and my suggestion is that anyone who is interested in honoring Shay and reaching other kids like him make donations of either volunteer time or financial support to Campaign Against Violence Milwaukee or Urban Underground.  Both organizations are committed to kids like Shay and their contact information can be found online.  Please remember my child and please think of all the other children who need to find a way into a peaceful, happy life.

Here is Shea's obituary that appeared in the Milwaukee Journal Sentinel.

Friday, June 27, 2014

Twelve Senators say Corinthian should stop enrolling students

A dozen U.S. senators, all Democrats, are pushing Corinthian Colleges Inc. to stop accepting new students in a letter to the Department of Education.
Corinthian owns the Everest College, Heald College and WyoTech schools and has about 75,000 students. Its Milwaukee campus closed after less than two years of opening with drop out rates of more than 50% and job placement rates of less than 6%.
The Education Department this week worked out a deal with Corinthian that gives it $16 million in federal student aid funds to keep the company running as it figures out a plan to sell or close many schools over the next six months. Corinthian, which has more than 100 campuses, said it will look for new owners for most of its schools and hopes to have sales agreements in place within about six months.
Santa Ana, California-based Corinthian had warned last week that it could go out of business after U.S. regulators limited its access to federal funds. The government is scrutinizing the company over allegations that it altered grades, student attendance records and falsified job placement data used in ads.
In the letter addressed to Education Department head Arne Duncan Thursday, the 12 senators said students need to be protected from the company. Iowa Senator Tom Harkin, who is also the chairman of the Senate Health, Education, Labor, and Pensions Committee, was one of the politicians who signed the letter.
"Corinthian has shown itself to be one of the worst actors in the for-profit college industry," the letter said.
Representatives from Corinthian and the Education Department did not immediately respond to a request for comment.
The letter also wants the Education Department to make sure the company explains to students its plans and to stop any for-profit education company that's under investigation from purchasing from or taking on students from Corinthian.

Tuesday, June 24, 2014

Corinthian reaches deal with Feds to remain open

Moving to head off a cash shortfall, the consequence of the Corinthian College's failure to comply with federal reporting regulations, the controversial for-profit college announced on Monday that it had reached an agreement with the federal Department of Education that would allow it to continue operating, at least temporarily.

 Under the memorandum of understanding, Corinthian, a publicly traded company based in Santa Ana, Calif., will immediately receive $16 million in federal student aid funds — the amount it said it needed to keep operating through Friday. By July 1, the company and the government plan to agree on a transitional operating plan, specifying which schools will be sold and which will be phased out.

 The company operates 107 campuses of the Everest, Heald and WyoTech institutions, as well as online programs. It's controversial Milwaukee campus closed slightly more than a year ago, less than two years after it had opened after its job placement rates of less than 6% and drop out rates of more than 50% were revealed. 

Even with the agreement, Corinthian’s future remains shaky at best. How this will play out is uncharted territory, said Terry Hartle, senior vice president of the American Council on Education. “This avoids a precipitous closure, but it’s not a long-term or even medium-term solution,” Mr. Hartle said. “It’s a short-term agreement to see what kind of arrangement they can reach to avoid the biggest closure we have ever had, throwing 72,000 students into the street.”

 In the government’s statement, Under Secretary of Education Ted Mitchell said, “We will continue to closely monitor the teach-out or sale of Corinthian’s campuses to ensure that students are able to finish their education without interruption and that employees experience minimal disruption to their lives.”

 Corinthian has been battered by declining enrollments and a rush of federal and state investigations and lawsuits accusing it of preying on low-income students, falsifying job placement rates and leaving too many students with crippling debt and no useful job credentials. Like other for-profit higher education companies,

Corinthian receives most of its revenues from federal student aid programs — about $1.4 billion a year, the government says, from federal student loans and Pell grants for students who enroll in its programs, including health care, business, criminal justice and transportation technology.

The department warned that it could revoke some of the company’s eligibility to receive federal funding. Usually, the money arrives a few days after a student enrolls. But the Department of Education pushed Corinthian into a financial bind on June 12 by imposing a 21-day delay in the disbursement of the federal aid funds. This “heightened cash monitoring,” the department said, was a response to the company’s failure to address “ongoing concerns over the company’s practices, including falsifying job placement data used in marketing claims to prospective students and allegations of altered grades and attendance.” Under the agreement, an independent monitor approved by the federal agency will review matters related to Corinthian’s operations, with full access to the company’s financial and operating records.

While Corinthian will be allowed to continue enrolling new students, it will have to reimburse any students who enroll in a campus found to be ineligible for federal student aid after the department’s review. “I find it disturbing that at a time when Corinthian is close to going out of business, they’re still going to allow new students to come to the ones they’re trying to sell,” said Stephen Burd, a senior policy analyst at the New America Foundation in Washington.

 Corinthian is under investigation by the Consumer Financial Protection Bureau and the Securities and Exchange Commission. It is also being sued by a number of attorneys general, including those in California and Massachusetts.

 Under the Obama administration, the Education Department has been increasing its oversight of for-profit institutions, whose students are more likely to take on large student debt and default on their student loans. The industry and the administration have been battling for several years over proposed “gainful employment” regulations, which would cut off eligibility for federal student loans for programs with too many graduates who default or earn too little money to make loan repayment realistic.