Tuesday, September 25, 2012

Barrett calls on Everest to pay off jobless grads loans. What will happen to the campus?

The Milwaukee Journal Sentinel reports that Milwaukee Mayor Tom Barrett has sent a letter to Everest College's parent company, Corinthian College Inc., requesting that it pay off the loans of its jobless Milwaukee graduates.

Corinthian, which is abandoning its Milwaukee operations after less than two years in operation, has already agreed to pay off the loans of those students who had dropped out, more than 50% of the students that it enrolled.

Barrett is right to insist that Corinthian  also pay for those who graduated with Everest's worthless degrees and credits that do not transfer.

Corinthian spokepersons are disingenuous when they blame their pathetically low job placement rate, not  quite 6%, on the poor economy. The Milwaukee Area Technical College has a job placement rate of 89% in the very same economy.

In addition to demanding that Corinthian pay off the jobless students' loans, the Mayor should help MATC secure favorable terms to occupy the former Everest Campus so that MATC can expand its services to students.

Dan Druml, the developer who the city assisted in developing the 6th and Mckinley site with $11
million in interest free bonds, recruited Everest to Milwaukee and defended the predatory diploma mill vigorously, calling them the right organization when he secured city approval for them to occupy his development. He needs to make amends for the problems he helped cause, including driving hundreds of very poor people even deeper into poverty, by recruiting Everest as his anchor tenant.

Mr. Druml can help rectify the damage he has inflicted on the city and its people by inviting MATC to occupy the former Everest campus. Corinthian has a nine year lease. MATC could move into the property, pay for utilities, maintenance and improvements and expand its services to students.

Druml does a lot of business in the city with the Department of City Development. He helped create the Everest problem. He should be part of the solution.

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.

Thursday, September 13, 2012

Everest's Milwaukee campus to close

Less than two years after it opened its doors, Everest College is closing its Milwaukee campus.

AFT Local 212, Alderwoman Milele Coggs, the Hillside Residence Council and MATC's District Board Chairwoman, Ann Wilson, fought to prevent Everest from setting up shop in Milwaukee because it preys on low-income students.

We warned the city officials courting Everest that it had abysmal job placement, drop-out  and graduation rates; that its student financial aid default rate was among the nation's worst; and that its credits did not transfer to most legitimate colleges and universities.

But there was too much money at stake, for Everest headquarters, Corinthian College Inc. and its stock holders, the Milwaukee developer, Dan Druml, and the lawyers and public relations firms that  made money on the Everest Project.

Rather than heed our warnings Everest boosters accused us of fearing competition. But Everest never posed a threat to MATC or any other legitimate institution of higher education because it is nothing more than a diploma mill.

Everest was a danger, however, to the students that it lured into taking out huge loans for inadequate programs and a job placement record of less than 10%. Our opposition to Everest was motivated by a sincere desire to protect the low income and minority students it sought to exploit.

In the end, a lot of folks made money off Everest short-lived stay. But its students, as we predicted, were the losers. They are left with little more than broken dreams, huge debts and credits that do not transfer.

There is much more about this sordid affair than appeared in the Milwaukee Journal Sentinel article. It will come out shortly. So stay tuned.

Dan Bice's article on the closing is linked here.

Tuesday, September 11, 2012

For-Profit College Claims Are 'Nonsense,' Obama Administration Says

By  for the Huffington Post 9/10/12

For-profit college representatives say they shouldn't have to tell prospective students whether they are likely to afford their debts after attending school, arguing the disclosures wouldn't be helpful.
But the Department of Education says this is "nonsense," according to a filing last week, the latest round in a federal court battle between the Obama administration and a key for-profit college trade group.

At issue are rules that would require for-profit colleges to disclose statistics on how students cope with their debts after graduating or dropping out of school. The data would indicate how many students are repaying loans, and how their loan debts will compare to earnings after graduation.

For nearly three years, the administration has attempted to rein in abuses at for-profit institutions that leave students with huge debts and few job prospects. Because the industry gets most of its revenue from the federal government, in the form of Pell grants and student loans, the Department of Education has tried to gauge whether such schools are preparing students for careers that will allow them to repay debts.

In a federal court filing last month, the Association of Private Sector Colleges and Universities (APSCU) argued that the student debt disclosures would not provide "any meaningful information to prospective students."

Last week, the Department of Education replied: "Plaintiff's assertion that… information on a program's repayment rate and debt-to-income ratios will not be meaningful to students, is nonsense."
The department went on to say the measurements provide "valuable information that many – if not all – prospective students considering whether to enroll in a program would like to have."
The disclosures could cast many for-profit colleges in a negative light. According to preliminary data released by the Department of Education this summer, many for-profit colleges fared poorly on the student debt measurements. Nearly two-thirds of all programs failed to meet expectations in at least one of three tests.

Read the entire article here.