Friday, September 21, 2012

Will city leaders learn from Everest College debacle?

By Charlie Dee

Thank goodness Everest College is closing. This means no more Milwaukeeans will suffer from Everest selling jobless students dreams of success but delivering only crushing debt.

The Everest debacle leaves many questions, chief among them: Have public officials learned anything from Everest's failure, and do Milwaukee "leaders" owe anything to the students they helped rip off?

Clearly, Everest's business plan was to use its proximity to Milwaukee Area Technical College and its massive advertising budget to lure low-income students to maximize their federal loans, making huge profits for the college.

But it failed. Everest's job placement rate in Milwaukee was 6%, consistent with its abysmal record at other campuses across the country. Since MATC's placement rate is 89%, Everest apparently couldn't attract enough students to please its stockholders.

What makes this situation such a farce is that public officials were warned repeatedly that Everest was not a good corporate citizen and that the social costs associated with bringing Everest to Milwaukee would far outweigh any short-term economic benefit.

Ald. Milele Coggs, the Residents' Council of the nearby Hillside Neighborhood as well as MATC faculty leaders all warned Mayor Tom Barrett, Department of City Development chief Rocky Marcoux and the Board of Zoning Appeals about Everest's track record.

We documented that Everest in other states preyed on low-income students to take out huge loans, yet its student default rates were among the nation's highest while its job placement rates were among the lowest.

We explained that despite its promises to students, Everest was not properly accredited, so students couldn't transfer Everest's credits to regionally accredited institutions such as MATC, the University of Wisconsin-Milwaukee, Alverno College or Marquette University.

We offered city leaders examples of Everest's corporation being sued in numerous states, including paying $6.5 million to California to settle allegations of deceptive practices.

Despite this information, city leaders ignored the record and fell for the sales pitch of public relations firms. Everest first hired Evan Zeppos' firm to make the pitch, then later Carl Mueller's firm - big wheels in Democratic Party and corporate circles.

Big money buys strategic advice and influence with powerful people. Metropolitan Milwaukee Association of Commerce's Tim Sheehy hosted a reception to promote Everest.

The Journal Sentinel Editorial Board weighed in, urging BOZA to approve Everest's zoning request, arguing that educational quality should not determine what was a simple land use issue.

With those ducks lined up, getting city help was easy. The Milwaukee Redevelopment Authority granted $11 million in interest-free bonds to Dan Druml, the developer who recruited Everest.

Barrett remained tactfully quiet, but the people under him in City Hall did their jobs to grease the skids for Everest. Marcoux championed the project as a beneficial real estate deal until the 11th hour when he became officially "neutral."

At the BOZA meeting where the zoning was approved, board member Henry Szymanski voted for Everest's request and called it a "good plan."

However, Everest never created anywhere near the 100 full-time jobs it promised. While state regulators recently demanded that Everest pay off loans for dropouts and abandoned students, graduates are left with worthless degrees and huge debts.

Have our city's movers and shakers learned any lessons from this? Will they more critically evaluate developers' promises of jobs in the future?

And how about the lobbyists and lawyers Everest paid to provide the respectability it needed to snow City Hall? Have they learned to reject clients who are not healthy for the community, or will they go back to representing anyone who can pay their fees?

Most of all, will Congress finally pass strong federal regulations on the profit-making education industry? The Obama administration has proposed regulations while vice presidential candidate Paul Ryan opposes them.

Reprinted from the Milwaukee Journal Sentinel.

Charlie Dee recently retired from teaching at MATC and executive vice president of AFT Local 212, the faculty union.


Mike Jelich said...

Sir Charles:

Great stuff! It's about time that Everest College get exposed for the colossal sham that they perpetrated on Milwaukee's community. Tim Sheehy's rather cavalier response to its closing is also telling.

Mike Jelich - Physical Education Instructor - MATC

Linda Baehr said...

Thugs like this usually wear a ski mask when they prey on innocent people.
This pack of opportunistic jackals should hang their heads in shame.