Tuesday, May 25, 2010

AFT organizes Art Institute of Seattle

Inside Higher Ed reports:

Instructors at the Art Institute of Seattle on Friday filed signatures with the National Labor Relations Board seeking a union election with the goal of affiliating with the American Federation of Teachers.(The Art Institute of Seattle and other art institute campuses including one planned for Milwaukee's Third Ward are owned by the Education Management Corporation, a major player in for-profit higher ed, which also operates Argosy University, Brown Mackie College, and South University.)

The move could be significant for several reasons. The major unions that organize faculty members in the United States (the AFT, the American Association of University Professors and the National Education Association) have largely stayed away from the growing for-profit sector. Officials of both the AAUP and NEA said that they have no organizing drives going on in for-profit higher ed. If the AFT is successful, some labor experts believe that academic unions could find fertile ground in for-profit higher education (and plenty of academics in nonprofit higher education would like to see that happen).

Also of note are the issues that union organizers are stressing. There is little talk of wages and benefits. Rather, the campaign is being built around allegations that faculty members are not being permitted to uphold academic quality. Faculty members say that they are pressured to give (undeserved) high grades and to pass some students who should fail. These charges come at a time of increasing scrutiny of for-profit higher education and mirror themes from a much-discussed "Frontline" documentary and from advocates for tougher federal regulation of the for-profit sector, suggesting that some for-profit colleges encourage students to enroll not because they are qualified or will benefit, but for their student aid dollars...

The "universal concerns" of faculty members...are "student-related issues." ... "the students are being treated like cattle," and that the institute's "focus is to get the numbers in, get them on financial aid, and to get the money back to shareholders ... and to do this, they want to make sure that regardless of what happens in the classroom, the student passes."

Faculty members have been going to open houses that the art institute holds to listen to what recruiters say, and ...students are being promised that the courses will be easy and will lead to good jobs. As a result, students have "weird expectations" and faculty members are caught in the middle when they try to enforce academic standards that the students aren't prepared for. "What the faculty have said that they hate so much is that they feel that the school is stealing from the students and we are in the middle of that..."

"I think this could be a test case for a whole class of institutions," said Richard Boris, director of the National Center for the Study of Collective Bargaining in Higher Education and the Professions, at the City University of New York’s Hunter College. For-profit higher education is booming, Boris noted, but faculties are heavily part time, without protections of tenure or unions. "You have this cohort of the academic dispossessed," he said.

The entire Higher Ed article is linked here.

Friday, May 21, 2010

Dilpoma mills spend millions to stop regulation

In response to for-profit colleges' escalating student loan default rates and deceptive recruitment practices the federal government has proposed tough new regulations.

In response,these lucrative diploma mills like Corinthian College Inc. and the Education Development Management Corporation (EDMC) which have announced plans to begin operations in Milwaukee are spending millions of dollars on lobbyists to undermine the legislation.

The Chronicle of Higher Education reports that:

For-profit lobbyists and executives are swarming Capitol Hill and federal agencies...

For-profit colleges, faced with the threat of program closures, have gone on a lobbying and public-relations blitz, spending hundreds of thousands of dollars in an attempt to beat back an Education Department proposal to cut off federal student aid to for-profit programs whose graduates carry high debt-to-income loads.

In the five months since the department offered its controversial "gainful-employment proposal," for-profit colleges and their chief association have spent at least $620,000 lobbying members of Congress, the Education Department, and the Office of Management and Budget, which is reviewing the department's proposed rule (see related article, with tables). The University of Phoenix, the nation's largest for-profit institution, has taken out ads in major publications, including The Chronicle, defending the sector and arguing against the rule, while for-profit colleges are urging their students to sign on to a petition opposing the plan.

Last year, Corinthian alone spent $460,000 and the EDMC $270,000. In 2009-2010Proprietary colleges spent a total of $3.1 million on lobbying.

Lobbying by For-Profit College Groups, 2009-10

Apollo Group Inc. $560,000
Corinthian Colleges Inc. $460,000
DeVry Inc. $460,000
Career Education Corp. $360,000
Bridgepoint Education $270,000
Education Management Corp. $270,000
Career College Association $250,000
American Public University System $240,000
Kaplan Inc. $200,000
Capella University $60,000
ITT Educational Services Inc. $30,000
Concorde Career Colleges Inc. $20,000
Total $3,180,000

Notes on lobbying expenditures: Figures are approximate because federal rules do not require reporting of actual amounts of lobbying expenditures. To avoid double-counting of outside lobbyist expenses, The Chronicle took into account that organizations employing in-house lobbyists must include the costs of outside lobbyists in their quarterly reports. Figures show spending for all of the 2009 calendar year and the first quarter of 2010.
Source: Chronicle analysis of Lobbying Disclosure Act Database, U.S. Senate

Thursday, May 20, 2010

Suit filed against diploma mill that MEDC is planning to finance

By Brian BowlingPITTSBURGH TRIBUNE-REVIEWFriday, May 7, 2010
A former employee of South University Online claims in a federal lawsuit unsealed Thursday that the subsidiary of Downtown-based Education Management Corp. fraudulently obtained student loans.

Brian T. Buchanan of Squirrel Hill filed the lawsuit in 2007 seeking return of the student loan money under a federal law that allows private citizens to file such actions on behalf of the government.

He claims that while working for the school from December 2005 until May 2007, he observed the company paying salaries to admissions representatives based on the number of students they signed up for courses. That violates the federal law that made South University Online eligible to accept federal student aid, he says in the lawsuit.

Jacquelyn Muller, spokeswoman for Education Management Corp., said the publicly held company doesn't comment on pending litigation, but it plans to file a shareholder notice about the lawsuit today with the Securities and Exchange Commission. Such notices typically advise shareholders about the potential impact a damage award could have on the company's finances.

The law under which Buchanan sued requires the case to be sealed for at least 60 days until the government decides whether it wants to take over the case. The government repeatedly asked for extensions of the deadline. U.S. District Judge Arthur Schwab told the government on March 4 that it had to make a decision by April 15. The government decided to let Buchanan continue with the case but may still intervene, according to court documents.

"We're still investigating the case," said acting U.S. Attorney Bob Cessar. He declined further comment.

The lawsuit accuses the company of submitting fake proctor forms that are supposed to ensure students who took admissions tests online were observed by a nonfamily member who verified they didn't look up the answers. Prospective students are not allowed to take the admissions test more than three times in a year, but South University Online allowed students to repeatedly take the tests until they passed it, the lawsuit says.

The company provided free trips, iPods and gift cards to admissions representatives who signed up the highest numbers of students, the lawsuit says.

If Buchanan proves his claims, South University Online would be liable for three times the amount it defrauded from the government plus a fine of $5,000 to $10,000 for each false claim it submitted.

If the government doesn't intervene in the case, Buchanan would receive about 25 to 30 percent of the damages, according to a 2009 report on citizen lawsuits by the Congressional Research Service. If the government intervenes, his share would be at least 10 percent and as high as 25 percent, depending on how crucial his information was in winning the lawsuit.

Wednesday, May 19, 2010

In a landslide, UW-Eau Claire faculty vote “Union Yes!”

Eau Claire, Wis. – Earlier today, faculty at the University of Wisconsin-Eau Claire voted 233-87 in a unit of 368 in favor of union representation through AFT-Wisconsin, a statewide labor federation representing professional public employees.

UW-Eau Claire faculty join their colleagues at UW-Superior, who voted overwhelmingly in favor of collective bargaining last week. The two campuses are the first to form collective bargaining unions since their right to do so was established under the 2009-2011 state budget.

According to Bryan Kennedy, president of AFT-Wisconsin, faculty unions in the UW System have been decades in the making. “The UW-Eau Claire and UW-Superior elections are the culmination of a forty-year campaign to extend collective bargaining rights to UW academic staff and faculty,” stated Kennedy. “Academic professionals throughout the UW System who have led this campaign are no doubt reflecting on these elections with a great sense of pride.”

UW-Eau Claire English Professor Stephanie Turner believes that the implications of today’s election are far reaching. “Today my faculty colleagues sent a strong message not just on collective bargaining, but on our place in the university,” stated Turner. “There is no question that, along with academic staff, faculty are the stewards of the campus community. Now, for the first time, we will be able to advocate for the betterment of that community through collective bargaining.”

Turner states that issues faculty may address in their first set of negotiations directly affect the students of UW-Eau Claire. “One major issue that affects all UWEC faculty is our ever-increasing workload. When we are able to address this issue through collective bargaining, we can ensure that each of our students gets the individual attention that they need not just to graduate, but to thrive.”

Contract negotiations are expected to begin soon. UW-Eau Claire academic staff continue to explore the possibility of forming a collective bargaining union.

Kennedy indicates that organizing drives continue on campuses throughout the UW System. “AFT-Wisconsin’s academic staff and faculty activists have been organizing around the issue of collective bargaining rights for the past forty years. We look forward to continuing to work with UW faculty and academic staff in helping them to establish a meaningful voice on campus.”

Sunday, May 16, 2010

The Journal Sentinel is wrong-the U.S. is not Greece

In a recent editorial the MJS editors implied that America’s deficit problems were caused by the same “out-of-control spending on government programs for aging populations”as Greece's. Social Security, Medicare and Medicaid were specifically cited. “Take heed” warned the state’s largest daily as it called for “new austerity” measures, presumably including cutting Social Security, Medicaid and Medicare.

Before we begin slashing our senior citizens' hard earned benefits we ought to take a closer look at the facts. As Noble Prize winning economist Paul Krugman wrote:

The truth, however, is that America isn’t Greece — and, in any case, the message from Greece isn’t what these people would have you believe.

So, how do America and Greece compare?

Both nations have lately been running large budget deficits, roughly comparable as a percentage of G.D.P. Markets, however, treat them very differently: The interest rate on Greek government bonds is more than twice the rate on U.S. bonds, because investors see a high risk that Greece will eventually default on its debt, while seeing virtually no risk that America will do the same. Why?

One answer is that we have a much lower level of debt — the amount we already owe, as opposed to new borrowing — relative to G.D.P. True, our debt should have been even lower. We’d be better positioned to deal with the current emergency if so much money hadn’t been squandered on tax cuts for the rich and an unfunded war. But we still entered the crisis in much better shape than the Greeks.

Even more important, however, is the fact that we have a clear path to economic recovery, while Greece doesn’t.

The U.S. economy has been growing since last summer, thanks to fiscal stimulus and expansionary policies by the Federal Reserve. I wish that growth were faster; still, it’s finally producing job gains — and it’s also showing up in revenues. Right now we’re on track to match Congressional Budget Office projections of a substantial rise in tax receipts. Put those projections together with the Obama administration’s policies, and they imply a sharp fall in the budget deficit over the next few years.

Greece, on the other hand, is caught in a trap. During the good years, when capital was flooding in, Greek costs and prices got far out of line with the rest of Europe. If Greece still had its own currency, it could restore competitiveness through devaluation. But since it doesn’t, and since leaving the euro is still considered unthinkable, Greece faces years of grinding deflation and low or zero economic growth. So the only way to reduce deficits is through savage budget cuts, and investors are skeptical about whether those cuts will actually happen.

It’s worth noting, by the way, that Britain — which is in worse fiscal shape than we are, but which, unlike Greece, hasn’t adopted the euro — remains able to borrow at fairly low interest rates. Having your own currency, it seems, makes a big difference.

In short, we’re not Greece. We may currently be running deficits of comparable size, but our economic position — and, as a result, our fiscal outlook — is vastly better.

That said, we do have a long-run budget problem. But what’s the root of that problem? “We demand more than we’re willing to pay for,” is the usual line. Yet that line is deeply misleading.

First of all, who is this “we” of whom people speak? Bear in mind that the drive to cut taxes largely benefited a small minority of Americans: 39 percent of the benefits of making the Bush tax cuts permanent would go to the richest 1 percent of the population.

And bear in mind, also, that taxes have lagged behind spending partly thanks to a deliberate political strategy, that of “starve the beast”: conservatives have deliberately deprived the government of revenue in an attempt to force the spending cuts they now insist are necessary.

Meanwhile, when you look under the hood of those troubling long-run budget projections, you discover that they’re not driven by some generalized problem of overspending. Instead, they largely reflect just one thing: the assumption that health care costs will rise in the future as they have in the past. This tells us that the key to our fiscal future is improving the efficiency of our health care system — which is, you may recall, something the Obama administration has been trying to do, even as many of the same people now warning about the evils of deficits cried “Death panels!”

So here’s the reality: America’s fiscal outlook over the next few years isn’t bad. We do have a serious long-run budget problem, which will have to be resolved with a combination of health care reform and other measures, probably including a moderate rise in taxes. But we should ignore those who pretend to be concerned with fiscal responsibility, but whose real goal is to dismantle the welfare state — and are trying to use crises elsewhere to frighten us into giving them what they want.

Wednesday, May 5, 2010

For-profit colleges fight tough new rules, cuts in federal aid

By John Hechinger and Daniel Golden, Bloomberg News

The Obama administration is preparing to produce tougher regulations that could reduce the amount of federal financial aid flowing to for-profit colleges, cutting the companies’ annual revenue growth by as much as a third.

In response, the $29 billion industry and its supporters have enlisted top Washington lobbyists and are courting black and Hispanic legislators to fight the proposed rules, which could be released as early as this month. The companies draw students from low-income and minority communities.

Federal aid to for-profit colleges has become an issue because it jumped from $4.6 billion in 2000 to $26.5 billion in 2009, according to the Education Department, prompting concern that these students are taking on too much debt.
The tougher rules would require ITT Educational Services, Career Education, and Apollo Group’s University of Phoenix to show that their graduates earn enough money to pay off their student loans. If for-profit colleges can’t meet the standard, they could lose federal financial aid, which typically makes up three-quarters of their revenue.

The proposed rules may disqualify for-profits from receiving federal financial aid if their graduates must spend more than 8 percent of their starting salaries on repaying student loans.The regulations may slow or even halt tuition increases at ITT, Education Management Corp., Lincoln Educational Services, Universal Technical Institute, and Career Education because many graduates take low-paying jobs in criminal justice, cooking, and medical office work, Trace Urdan, an analyst at Signal Hill Capital Group in San Francisco, said.

Education companies have increased revenue by as much as 15 percent and enrollment by 8 percent to 10 percent on an annual basis, while raising tuition about 4 percent to 6 percent a year, Urdan said. The new rules may slow their revenue growth by one-third by limiting their ability to raise tuition.The Education Department plans to issue the regulations without congressional approval, unlike the student-loan legislation that passed in March. Several Republicans in Congress objected to the changes.

Senator Lamar Alexander, a Tennessee Republican who chairs the Senate Republican Conference, is trying to persuade Education Secretary Arne Duncan to reconsider the regulations, said a Republican aide on the Education Committee.The new regulations would shut 300,000 students out of classes and eliminate 2,000 educational programs, according to a study commissioned by the Washington-based Career College Association, which represents for-profit colleges.

Tuesday, May 4, 2010

Pheonix Suns (Los Suns) condemn Arizona's immigration law

A New Era: Here Come The Suns!
By Dave Zirin

A battle has been joined for the very soul of Arizona. On one side, there are the Minutemen, the craven state Republican lawmakers, Governor Jan Brewer, and the utterly unprincipled John McCain, all supporting SB 1070, a law that codifies racial profiling of immigrants in the state. On the other are the Sun Belt residents who protested on May 1st, the students who have engaged in walkouts, and the politicians and civic leaders calling for an economic boycott of their own state.

This battle has also been joined in the world of sports. On one side is Major League Baseball’s Arizona Diamondbacks. Owned by state Republican moneyman Ken Kendrick, the team has drawn protestors to parks around the country. On the other side, we now have the Phoenix Suns. On Tuesday the news came forth that tomorrow on Cinco de Mayo, the team would be wearing jerseys that say simply Los Suns. Team owner Robert Sarver said, after talking to the team, that this will be an act of sartorial solidarity against the bill. Their opponent, the San Antonio Spurs have made clear that they support the gesture.

In a statement released by the team, Sarver said, "The frustration with the federal government's failure to deal with the issue of illegal immigration resulted in passage of a flawed state law. However intended, the result of passing this law is that our basic principles of equal rights and protection under the law are being called into question, and Arizona's already struggling economy will suffer even further setbacks at a time when the state can ill-afford them."

He followed up the statement by saying to reporters, “I looked around our plane and looked at our players and the diversity in our organization. I thought we need to go on record that we honor our diversity in our team, in the NBA and we need to show support for that. As for the political part of that, that's my statement. There are times you need to stand up and be heard. I respect people's views on the other side but I just felt it was appropriate for me to stand up and make a statement."

After Sarver spoke out, the team chimed in against the passage and signing of SB 1070. Two-time MVP point guard Steve Nash, who in 2003 became the first athlete to go on record against the Iraq war said, "I think the law is very misguided. I think it is unfortunately to the detriment to our society and our civil liberties and I think it is very important for us to stand up for things we believe in. I think the law obviously can target opportunities for racial profiling. Things we don't want to see and don't need to see in 2010."

All-Star power forward Amare Stoudamire, who has no political reputation, also chimed in saying, "It's going to be great to wear Los Suns to let the Latin community know we're behind them 100%.”

After the story broke, I spoke on the phone with NBA Players Association Presdient Billy Hunter about the Suns audacious move.

“It’s phenomenal,” he said. “This makes it clear to me that it’s a new era. It’s a new time. Athletes can tend to be apolitical and isolated from the issues that impact the general public. But now here come the Suns. I would have expected nothing less from Steve Nash who has been out front on a number of issues over the years. I also want to recognize Amare. I know how strident Amare can be and I’m really impressed to see him channel his intensity. It shows a tremendous growth and maturity on his part. And I have to applaud Bob Sarver because he is really taking a risk by putting himself out there. I commend them. I just think it’s super.”

He said that the union would have their own statement out by the end of the week.

This kind of political intervention by a sports team is without precedent and now every athlete and every team has an opening to stand up and be heard. Because when it’s all said and done, this isn’t just a battle for the soul of Arizona. It’s a battle for the soul of the United States. Here come the Suns indeed.

Monday, May 3, 2010

Diploma mills recruit at halfway houses and homeless shelters

Bloomberg Businessweek reports that for-profit schools are recruiting students at homeless shelters and halfway houses, enticing them into huge debts to pay for overpriced programs and sticking taxpayers with the bill.

The article also notes that Goldman Sachs, the high profile investment firm and bailout recipient whose CEO recently testified before Congress about alleged improprieties, owns (38%) the Education Management Corporation, the owner of the Art Institute of Milwaukee which is seeking a public subsidy (new market tax credits) to anchor a redevelopment project in Milwaukee's 3rd ward.

Have these billionaires no shame?

The expose is linked.