New studies: performance based funding doesn't work

In his first budget, Wisconsin Governor Scott Walker slashed the Wisconsin Technical College System's (WCTS) state funding by 30% or $70 million. This year he restored $5 million that will be allocated on "performance measures."

Performance based funding has become a national trend. Across the country Governors and legislatures are rushing to adopt systems that allocate funds to colleges based partly or heavily on performance indicators rather than enrollment, as has historically been the case.

But a new round of research on such programs suggests that these programs generally do not work.

According to Inside Higher Ed: 

Several papers presented at the annual meeting of the Association for the Study of Higher Education explored what Michael McLendon of Southern Methodist University called the performance-based funding "craze," which has become a widely embraced and copied strategy for governors and legislators trying to improve the effectiveness and efficiency of their public higher education systems at a time when they lack either the money (or the will) to spend more on them....  

The session at which three papers were presented broadcast their overall findings in its title: "The Myth of Performance-Based Funding." One paper, by Tiffany Jones of the Southern Education Foundation, examined the extent to which historically black colleges are especially likely to be hurt by state policies that link funding to simple metrics (like graduation rates) that don't take into account the academic preparation of colleges' students and their levels of institutional funding.

Another, prepared by a group of scholars affiliated with the Community College Research Center at Columbia University's Teachers College, examined the goals and policy approaches of performance-based funding systems and concluded that they are sometimes ill-defined and overly narrow, and that they too rarely anticipate (and try to guard against) unintended consequences that can result.

A third paper looked much more directly at what the performance-based programs are accomplishing. The authors, David Tandberg and Mohamed Barakat of Florida State University and Nicholas Hillman of the University of Wisconsin at Madison, examined performance-based systems in 19 states and found that while those programs were largely designed to increase the number of students completing associate degrees, it did so in only four of them. In six states completions actually declined, and in nine others, the patterns were inconclusive.

Another study by the same authors uncovered similar results for bachelor's degree productivity, with a positive impact in four states, a negative effect in four, and no effect whatsoever in 12 others.

"There is no meaningful evidence of effectiveness, but we see a rush toward adoption," said Tandberg, an assistant professor of higher education at Florida State. "It seems as though there is something other than evidence at work here."

What may be at play, said Kevin J. Dougherty, an associate professor of higher education at Teachers College, is that states may be feeling pressure to "jump on the bandwagon" so as not to appear to be "laggards in the competition for effective policy."

That is especially true, he and others said, given that outside groups like Complete College America and the National Center for Higher Education Management Systems are aggressively advocating for performance funding, framing it as an "attractive policy that seems to fit this time of constrained finances."

"...if these authors have it all right, the weight of the evidence is against performance funding," McLendon said. At a time when policy makers are expressing a desire to make decisions based on data, and "increasingly asking researchers like those at ASHE to give them research that has real-world policy consequences, it will be an interesting collision of wills when research about the failure of performance funding meets the ideological commitment of states to move forward with it."

Read the entire Inside Higher Ed article here: http://www.insidehighered.com/news/2013/11/18/studies-question-effectiveness-state-performance-based-funding#ixzz2lNwF8BsJ
Inside Higher Ed 

Federal Trade Commission clamps down on for-profit colleges

By Paul Fain
Inside Higher Ed

The Federal Trade Commission is getting tougher with for-profit colleges, opening a new front in the latest Obama administration-led attempt to crack down on the sector.

The independent agency functions as the federal government's primary consumer cop. Last week it released stricter guidelines on deceptive marketing practices by for-profit colleges that feature vocational programs. The commission advised colleges against misrepresentations about their accreditation status, transferability of credits, job placements, graduation rates or salaries of graduates.

The new standards followed a tip sheet the commission put out last month to help veterans and members of the military better scrutinize for-profits before enrolling.

Both releases included strong language.

“Not every school has got your back. Some for-profit schools may care more about boosting their bottom line with your VA education benefits,” Carol Kando-Pineda, a lawyer with the commission, wrote in a blog entry. “Some may even stretch the truth to persuade you to enroll, either by pressuring you to sign up for courses that don’t suit your needs or to take out loans that will be a challenge to pay off."

The commission’s recent actions are the culmination of a process that began in 2009, with a request for public comments about its vocational school guidelines, which had not been updated in more than a decade. Several consumer groups responded by describing the fraudulent and deceptive marketing practices of some for-profit institutions.

Agency officials apparently heard the message, said Maura Dundon, senior policy counsel for the Center for Responsible Lending. She said the guidelines should serve as a warning to the entire industry.

“We’d really like to see the FTC actually go after some of these guys,” Dundon said. “The FTC has a much stronger enforcement capability than does the Education Department.”

Eight groups submitted comments to the commission. The Association of Private Sector Colleges and Universities, which is the primary for-profit trade group, was the sole commenter to argue that the guidelines are unnecessary and create additional burdens for institutions.

A spokesman for the association declined to comment for this article.

The revised guidelines cite “problematic practices by a range of for-profit colleges,” and mention the scathing report on the sector that Sen. Tom Harkin, an Iowa Democrat, released last year.

In addition, Kando-Pineda’s blog entry said 70 percent of the fraud investigations the U.S. Department of Education’s Office of Inspector General is currently pursuing focus on for-profits.

The commission’s guidelines technically apply only to vocational programs at for-profits that do not offer degrees. That means mostly small, mom-and-pop institutions, like cosmetology schools.

However, the agency has a broad jurisdiction. It generally creates guidelines rather than legally binding rules, said Dundon. And those guidelines can be applied more broadly than the specific language suggests.

“Although the guides specifically address only for-profit institutions that provide vocational and distance education,” the commission said in its guidelines, “the commission believes that the guides can also provide useful guidance to any for-profit colleges that engage in similar practices.”

The commission said it has the authority to dial up law enforcement on deceptive or unfair practices, regardless of whether a college is covered under the language.

The guidelines are designed to address several specific forms of misrepresentations. Those broad categories include deception about licensing exams, availability of financial aid, transferability of credits and in the student recruiting process, such as with bogus depictions of graduation rates or job prospects.

For example, the commission said it is deceptive for a college to use any promotional materials that misrepresent the “availability of employment after graduation from a school or program of instruction.” That includes false descriptions of the type of employment available, graduates’ success in landing those jobs and their salary ranges.

Likewise, the commission spelled out eight questions for veterans and military students to ask about an academic program they may be considering at a for-profit. Those questions revolve around cost of attendance, average debt levels, accreditation status and transfer credits. The commission also provided links for students to find some of that information.  

David Hawkins is director of public policy and research for the National Association for College Admission Counseling. His group submitted comments about the commission’s guidelines.

He said the revised language is a “substantial re-entry” for the commission in overseeing for-profits, and he hopes it will be a “positive force for compliance.”

Read more: http://www.insidehighered.com/news/2013/11/14/federal-trade-commission-steps-scrutiny-profit-colleges#ixzz2kccnnEXK 

For-profit colleges hire former critic

Michael Stratford

November 8, 2013

Inside Higher Ed

The former head of Student Veterans of America, who previously criticized some for-profit colleges, is now working for the trade association that represents those institutions -- a move that has riled some veterans’ advocates and illustrates the high-stakes battle the industry is facing when it comes to veterans' education.

The Association of Private Sector Colleges and Universities, the main group that lobbies in Washington on behalf of for-profit institutions, announced this week that it had hired Michael Dakduk as its vice president for military and veterans affairs, a newly created position. Dakduk previously served as the executive director of Student Veterans of America, a nonprofit organization with more than 900 chapter affiliates.

Under his leadership over the past several years, SVA tangled with the for-profit industry on several occasions. For instance, the national organization in 2012 suspended 40 of its chapters at for-profit colleges for improperly promoting the universities and not being sufficiently student-run.

Dakduk's move to APSCU comes as veterans' issues at for-profit colleges are once again heating up on Capitol Hill. And just in his first week, Dakduk found himself in the position of lobbying against policies he promoted in his previous capacity at the veterans' advocacy group.

On Wednesday, for example, a handful of Democratic senators who have been vocal critics of for-profit colleges reintroduced legislation that would tighten the so-called “90/10 rule” that applies to for-profit institutions. That law caps colleges’ receipt of federal student aid money at 90 percent of their total revenue.

But federal educational benefits for veterans and active-duty service members don’t count toward the limit.

Dakduk, in 2012, referred to that exception in the 90/10 law as a “loophole” that needed to be closed.

“By not counting military tuition assistance and GI Bill benefits in the equation, some for-profit institutions are using the loophole to aggressively and deceptively recruit veterans,” he said in a statement, echoing the language that critics of for-profit colleges have used in describing the rule. Those critics argue that the current 90/10 law leaves a perverse incentive for for-profit schools to aggressively recruit veterans, since every dollar in veterans' benefits that a school receives effectively raises, by nine dollars, its ability to accept other forms of federal student aid, such as Pell grants or government loans.

Testifying before Congress in 2012, Dakduk also pushed for legislation that would tighten the 90/10 rule.
“Quite frankly any business that complains about having to compete for 10 percent of their customers should not be in business,” he said in written testimony to the House veterans' committee.

This week, though, Dakduk said in a statement released by APSCU that the renewed effort to tighten the 90/10 rule would “harm postsecondary access and opportunity” for veterans and active duty service members.

“The 90/10 rule is not a measure of institutional quality,” he said. “It is a measure of the socioeconomic position of the student population served.”

For APSCU, the hiring of Dakduk gives the organization a boost on veterans' issues at its institutions, which are increasingly under scrutiny from lawmakers, state attorneys general, and some veterans and consumer advocacy groups. At stake for the industry is a huge market of veterans and active-duty service members, who are turning to higher education as they return home from two wars.

The industry group has taken steps in recent months to be more aggressive about self-regulation and to focus on best practices among its institutions. APSCU, for instance, convened a blue ribbon taskforce -- on which Dakduk served as a special adviser -- to develop recommendations on how to best serve veterans at for-profit colleges.

Dakduk said in an email that he chose to join APSCU because he believes its members “play a critical role in the transition of service members into postsecondary education and ultimately onto career pathways.”

“I found in my previous career that it is too easy for people to be critics,” he added. “Anybody can talk about problems; what I am focused on is rolling up my sleeves and working with people on the frontlines of education to address the challenges our service members and veterans may face.”

Still, news of Dakduk’s departure to APSCU was greeted with disappointment by some in the veterans advocacy community, according to Ted Daywalt, the president of VetJobs, another advocacy groups. The leaders of several other groups expressed similar feelings but declined to speak publicly.

“I know that his decision is very disappointing to many people in the veteran community," Daywalt said. "Because some people see the organization he is joining as not having had the concern they should for the way the predatory for-profits have been taking advantage of and ripping off veterans."

“However," he continued, "I hope he will use his new position coupled with his understanding of the problems that veterans and their families have had with predatory for-profit schools, to educate the predatory for-profit schools to change their ways.”

Dakduk's successor at Students Veterans of America, D. Wayne Robinson, said in an interview Thursday that the organization would continue pushing for stricter rules on for-profit colleges, such as tightening the 90/10 law. But he said he also wanted the group to take a balanced approach to the issue.
“We’re very hesitant to paint the entire industry with a broad stroke," he said. "But I certainly want to use our voice and advocacy on behalf of veterans that have been preyed upon.”


Read more: http://www.insidehighered.com/news/2013/11/08/veterans-advocate-changes-jobs-and-positions#ixzz2k3oZN2jK
Inside Higher Ed

California Attorney General Sues Corinthian

SAN FRANCISCO -- Attorney General Kamala D. Harris today filed a lawsuit against Corinthian Colleges, Inc. (CCI) and its subsidiaries that operate Everest, Heald and WyoTech colleges for false and predatory advertising, intentional misrepresentations to students, securities fraud and unlawful use of military seals in advertisements.

The complaint alleges that CCI intentionally targeted low-income, vulnerable Californians through deceptive and false advertisements and aggressive marketing campaigns that misrepresented job placement rates and school programs. CCI deployed these advertisements through persistent internet, telemarketing and television ad campaigns. The complaint further alleges that Corinthian executives knowingly misrepresented job placement rates to investors and accrediting agencies, which harmed students, investors and taxpayers.

“The predatory scheme devised by executives at Corinthian Colleges, Inc. is unconscionable. Designed to rake in profits and mislead investors, they targeted some of our state’s most particularly vulnerable people—including low income, single mothers and veterans returning from combat,” Attorney General Harris said.

“My office will continue our investigation into the for-profit college industry and will hold accountable those responsible for these illegal, exploitative practices.”

According to Harris’ complaint, CCI’s predatory marketing efforts specifically target vulnerable, low-income job seekers and single parents who have annual incomes near the federal poverty line. In internal company documents obtained by the Department of Justice, CCI describes its target demographic as “isolated,” “impatient,” individuals with “low self-esteem,” who have “few people in their lives who care about them” and who are “stuck” and “unable to see and plan well for future.”

According to the complaint, CCI advertised job placement rates as high as 100% for specific programs when, in some cases, there is no evidence that a single student obtained a job during the specified time frame.

The complaint further alleges that CCI runs millions of online and mobile ads offering ultrasound, x-ray, radiology, and dialysis technician programs at their California campuses—when, in fact, CCI does not offer those programs. CCI’s call center agents are disciplined if they tell callers that CCI does not offer these programs. Additionally, according to the complaint, CCI includes official Army, Navy, Air Force, Marine Corps, and Coast Guard seals in mailings and on web sites without authorization and in violation of California law.

The complaint alleges that CCI committed securities fraud by reporting a nationwide job placement rate of 68.1% in presentations to investors, when senior executives knew this percentage was false. The complaint describes internal audits emailed to CCI executives that show job placement data error rates between 53% and 70%. The complaint references an email from a CCI executive which explains that in 2011, two Everest College campuses (Hayward and San Francisco) paid a temporary employment agency “to place students to meet the accreditation deadline and minimum placement %.” The complaint also states that CCI double-counted job placements and failed to maintain required records of reported job placements.

According to a recent CCI securities filing, the average tuition for a CCI associate’s degree is $40,000 and the average tuition for an online CCI associate’s degree is $34,000. The average tuition for CCI’s non-degree healthcare programs is $17,000.

CCI is based in Santa Ana and currently operates 24 Everest, Heald and WyoTech campuses in California, 111 total campuses in North America and three online programs. Out of the 81,000 students who attend CCI colleges, approximately 27,000 (33%) are in California.

Corinthian opened a controversial Everest campus in Milwaukee, Wisconsin in 2011. The city provided the campuses' developer with $11 million in interest free bonds. Milwaukee's Everest campus closed a year and one half later with a  drop out rate of more than 50% and a job placement rate of less than 6%. CCI promised to pay off the federal financial aid loans of the students who had not completed their degrees.

CCI is a publicly traded corporation with assets of over $1 billion. Federal funds account for almost all of CCI’s annual revenue.

In July 2013, Attorney General Harris filed a separate lawsuit in Sacramento Superior Court to enforce an investigative subpoena against Bridgepoint Education Inc., operator of Ashford University, as part of an investigation of that company’s practices.

A copy of the complaint is attached to the electronic version of this release at: http://oag.ca.gov/news

How For-Profit Colleges Stay in Business Despite Horrible Track Records

Last week the Huffington Post ran an in-depth expose on how for-profit colleges like Everest College (Corinthian College Inc.) and Sanford Brown (Career Education Corp.), who recently closed Milwaukee campuses, have created an accreditation system that ensures their continued operation and access to billions in federal funds despite dismal job placement and graduation rates.

It's a classic case of the fox guarding the chicken coup or, as they say in more polite company, a blatant conflict of interest that allows the hucksters who open these diploma mills to rake in millions while leaving students with nothing but broken dreams, credits that don't transfer and life-long debt.

It's worth the read:

Over the past decade, Corinthian's schools have remained fully accredited, enabling the publicly traded company to tap federal student aid coffers for nearly $10 billion, or more than 80 percent of its total revenues, according to a Huffington Post review of securities filings and disciplinary records maintained by its accreditors.

By every available indication, Corinthian Colleges Inc., one of the country's largest chains of for-profit colleges, stands out as an institution whose students face especially long odds of success.  At nearly half of Corinthian's schools, more than 30 percent of students default on their federal loans within three years of leaving campus, according to the most recent federal data. 

California last year cited excessively high default rates in denying access to state tuition grants at 23 of the company's campuses. Over the last three years, attorneys general in eight states and the federal Consumer Financial Protection Bureau have probed Corinthian's recruitment claims and financial aid practices, raising the prospect of lawsuits. Yet by the reckoning of the accrediting bodies that are supposed to scrutinize Corinthian's 97 U.S. campuses, its schools are meeting standards on student debt and adequately preparing graduates for jobs. 

Corinthian's success in maintaining accreditation even as its students sink into default typifies the state of play in the for-profit college industry and underscores both the incentives and the provenance of the people doing the accrediting work: Accrediting agencies receive their funding from fees paid by the very colleges they monitor. The review teams they dispatch to visit and rate schools are composed of volunteers from other schools accredited by the same agencies. 

 During a congressional hearing on higher education policy held earlier this year, one expert likened this arrangement to the cozy practices that fueled the last financial crisis, when Wall Street banks hired credit-rating agencies to certify the sanctity of the bonds they forged from risky mortgages. "This is like bond ratings firms giving AAA ratings to mortgage-backed securities sold by the same firms that pay their fees," Kevin Carey, the director of education policy at the New America Foundation, said at the hearing. "It does not work out well in the long run." 

The entire expose is linked here.

Politifact aims and misses on Wisconsin Minnesota economic comparison

Politifact did it again. Minnesota is superior to Wisconsin on all economic performance measures except business climate indices.

So how does Politifact rate a Minnesota Legislator’s claim that Minnesota is outperforming Wisconsin?

Rather than acknowledge that Minnesota is experiencing faster growth (3.5% to 1.5%) with higher incomes (Minnesota's per capita income is $4500 more than Wisconsin's), more jobs (between July 2012 and July 2013 Minnesota created twice as many jobs as Wisconsin) , and lower unemployment (5.2 percent, nearly one-quarter lower than Wisconsin’s 6.8 percent.), Politifact rates the statement half true because Wisconsin scores better on some business climate and competitiveness indices.

 Since Minnesota leads Wisconsin in all the economic measures that matter. what this really tells us is that business climate and competitive measures which are subjective and heavily weighted toward states with low tax rates and minimal regulations are of virtually no value.

Assembly's leadership threatens shared governance

by Colleen Flaherty

A meeting between the University of Wisconsin Board of Regents and state legislators last week was designed mainly to find common ground in the wake of recent disputes over cash reserves. But discussions during the meeting about rethinking shared governance had some faculty feeling like they were left holding the bag for administrators' actions – and that their decision-making authority within the system was under threat.

The conference, “Finding Common Ground: Regent Governance, Funding, and Partnerships for Wisconsin’s Public University System,” was initiated by the board, following a state audit this spring that showed the university system had cash reserves of $648 million, about a quarter of its annual appropriation. The funds were distributed among many accounts across the system and the funds had gone virtually unmentioned to state officials. While many state higher education systems use reserves, the issue highlighted legislative-board relations. System President Kevin Reilly, who has been in office since 2008, recently announced that he will be stepping down in January.

Mchael Falbo, the board's president, told legislators they needed to “reboot” the longstanding partnership between Wisconsin and its public universities.“We need to remember that we are all in this together, and we need to look at ways to strengthen that partnership.”

During a panel discussion on board governance, however, legislators took the opportunity to start a discussion about the role of the faculty in decision making.

General Assembly Speaker Robin Vos, a Republican, said governance changes within the system were a matter of “when, not if,” and that university chancellors should be empowered to “truly be the chief executive officers.”

Vos added: "Does the role of allowing faculty to make a huge number of decisions help the system or hurt the system?"

Some faculty advocates present, including Sara Goldrick-Rab, associate professor of educational policy studies and sociology at the Madison campus, where the meeting took place, called those statements troubling.

“Vos, in his remarks, very explicitly stated that we need to look into this issue of perceived inefficiency,” stemming from faculty involvement in decision making, she said. “I attended this meeting very interested to hear the conversation, but I did not expect to hear any of that.”

Taking faculty out of the decision-making process to save time and money is misguided, she said, citing a 2012 American Enterprise Institute study that will be included in a forthcoming volume from Harvard Education Press on stretching the higher education dollar. The study, by Robert E. Martin, Centre College emeritus professor of economics, shows that college costs continued to grow even as faculty say in institutional priorities declined, nationwide, from 1987 to 2008.

It’s also against tradition, said Goldrick-Rab, noting that Wisconsin professors have long enjoyed a strong governance "partnership" with administrators and students, thanks to state statute, under which faculty are guaranteed active participation in shaping institutional policy and responsibility for academic and personnel matters.

"The reason I've stayed at Wisconsin is shared governance," Goldrick-Rab said. "It's really important to faculty worklife and quality of education."

But the principle has eroded over time, Goldrick-Rab said. And the current political environment in Wisconsin, in which Governor Scott Walker, a Republican, has proposed linking funding for higher education to "performance," doesn't bode well for its future.

In public remarks last year, Walker said: "In higher education, that means not only degrees, but are young people getting degrees in jobs that are open and needed today, not just the jobs that the universities want to give us, or degrees that people want to give us?"

William Tracy, professor of agronomy at Madison and president of Madison's Public Representation Organization of the Faculty Senate, said he was concerned about Vos's comments, and blamed them in part on what he called a "misunderstanding" of the faculty role in governance.

"We've been effective in many, many ways," he said, including increasing graduation rates and decreased time-to-degree for graduate students in recent years. "It's hard to see that we're being inefficient or inflexible or not 'nimble,' or stodgy, if you will."

Like Goldrick-Rab, Tracy said that while including faculty in governance can slow down the decision-making process, it often leads to better decisions.

Randy Olson, professor of astronomy and chair of the Stevens Point campus Faculty Senate, said in an e-mail that Madison faculty members "are not the only ones that are upset."

"Most of my colleagues believe that one of the real strengths of the University of Wisconsin System is its shared governance where we have a collaborative approach with faculty and administrators in providing our students the best education possible," he said, adding that the legislature -- "in its earlier days" -- agreed.

He compared Vos's wish to make chancellors more like CEOs to making governors more like CEOs, diminishing the role of the legislature in governance.

Julie Schmid, chief of the staff for the American Federation of Teachers in Wisconsin, including its higher education component, said in an e-mail that the state law enshrining faculty governance in the university system has "been in both University of Wisconsin System administration's and the Republican lawmakers' sights for a while now."

Proposed changes need to be seen as "part and parcel" of Walker's 2011 overturning of collective bargaining for public employees, including faculty and staff, said Schmid, who will soon be the head administrator of the American Association of University Professors. "This is all about the further corporatization of public higher ed in this state and the further privatization of a common good [...] and it puts the [university] outside of the norm for U.S. higher ed."

Tracy said he believed that Wisconsin's system of shared governance wouldn't let faculty down, and that he was looking forward to a dialogue with legislators and administrators going forward.

Following Thursday's meeting, Falbo said: “We will organize our administration in a way that strengthens the institutions, and enhances their service to students, families, businesses, and communities." In doing so, he added, "we will focus on effective resource management, high-quality education, and competitive compensation for the faculty and staff who deliver the goods.”

Vos did not immediately respond to requests for comment. Reilly could not immediately be reached for comment.

State Senator Sheila Harsdorf, chair of the body's Committee on Universities and Technical Colleges, last week agreed with Vos that governance practices needed to be reexamined and that "the system needs to be driven by the campuses with the campuses driving what services the system provides." In an interview, she said that she was more interested in rethinking the higher education funding model than the role of the faculty in governance, but that better systems of "accountability and measurement" are needed.

Lots of communication between on and off-campus constituencies, including "those who are creating the jobs and providing job opportunities for graduates," is needed to develop those systems, Harsdorf said.

Some of the board's meeting pertained to links between universities and businesses. Keynote speaker Charles Reed, chancellor emeritus of the California State University System, said, "[We] want to understand what employers need from our graduates and what legislators expect from our institutions so we can prepare our students to be successful in their workplace." Goldrick-Rab and others said they believed it was an unofficial endorsement of a more outcomes-based curriculum that focuses on job preparation at the expense of the liberal arts.

State Rep. Janet Bewley, a Democratic member of the Assembly’s Education Committee, challenged some of her fellow legislators' opinions last week, saying to those gathered: "What I want to prevent is a whole new set of cooks going into your kitchen, people who are not academics trying to run your campuses."

In an interview, Bewley said Walker's vision for higher education enjoys more than marginal support in the legislature, and that shared governance -- along with support for the liberal arts -- is potentially vulnerable. She didn't know of any specific threats, she said, but "I think right now all of us are going to be wise enough to carefully watch what happens in the months to come."

Some faculty advocates praised Richard Wells, chancellor of the Oshkosh campus, for telling those gathered last week that campuses are communities, not corporations. In an e-mail, Wells said shared governance "is and will be increasingly under threat in Wisconsin and throughout the nation in large part because the higher education financial model is broken resulting in, among other things, the affordability and student debt crises. "
Faculty, staff, students and administrators must defend the principle through efficient and effective service of the system's mission and values, he said. "I am confident we will be successful together in the long run because we have a long Wisconsin legacy of addressing very difficult challenges," Wells said. "However, the short run ride is going to be tough. Stay tuned."


Read more: http://www.insidehighered.com/news/2013/09/09/wisconsin-faculty-object-idea-shared-governance-should-change#ixzz2eOjCr122
Inside Higher Ed

U.S economic policy: a horrifying failure

Five years after Lehman Brothers collapsed, Nobel Prize winning economist, Paul Krugman concludes that: ".. by any objective standard, U.S. economic policy since Lehman has been an astonishing, horrifying failure."

Read his column here.

Dr. King's' "I have a dream" speech and Labor Day

50 years ago today, 250,000 Americans marched for jobs and freedom. When Dr King gave "the speech," the unemployment rate was 5% for whites and 10.9% for blacks, Today, it is officially 6.6% for whites and 12.6% for blacks. Middle class union jobs are vanishing. The fastest growing jobs pay poverty wages.

In the tradition of Dr. King and those who marched fifty years ago, fast food workers will conduct a national strike for higher wages and a union tomorrow, Thursday, August 29. And immigrant workers and youth, dreamers, are engaged in a righteous struggle for immigration reform with a path to citizenship. And Wisconsin's public sector workers are fighting to restore their basic rights at work.

We have unfinished business in this country. Dr. King understood that "without struggle there is no progress."

That is no less true today than it was fifty years ago.

One way to honor the legacy of the march on Washington is to support the low wage, public sector and immigrant workers today by attending the Milwaukee march and picnic on Labor day, Monday, September 2nd. There are two marches. One leaves from South 5th Street and Washington, the Voces de la Frontera offices, and will march across the viaduct to Zeidler Park, 6th and Michigan. The other leaves from Martin Luther king Drive and Vine and also ends at the picnic at Zeidler Park. The struggle continues. Both begin at 11 am.

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Sanford Brown's parent company agrees to $10 million settlement

One of the largest U.S. for-profit college corporations agreed to pay more than $10 million Monday to settle the state of New York's claim that the company systematically deceived students by advertising bogus job placement rates at its career-oriented schools.

New York Attorney General Eric Schneiderman announced a $10.25 million settlement agreement with Career Education Corp., which includes a $1 million penalty and assurances that the school will establish a $9.25 million restitution fund for students who were misled from the 2009-2010 school year to 2011-2012.

The company which owns Sanford Brown which closed its West Allis campus in the spring admitted no wrongdoing.

Monday's announcement concludes a more than two-year investigation by the New York Attorney General's office into what it said were misleading advertisements and inflated job placement statistics at Career Education Corp., a Chicago-area company that operates more than 90 college campuses across the world.

The company and other for-profit colleges have come under intense government scrutiny in recent years, amid evidence that many students are left with crushing debts and poor job prospects.

Sanford Brown was one of the Milwaukee area's most notorious diploma mills. Several  Milwaukee Area Technical College students' compelling testimonies regarding Sandford Brown's exploitative practices were presented at the U.S. Department of Education's Minneapolis Gainful Employment hearing in June.

According to the findings in Monday's settlement document, Career Education lied to prospective students and to regulators when advertising the percentage of students successfully placed in jobs after graduation -- a marketing technique that allowed the company to boost enrollments and revenues to record highs in recent years. The settlement claims that the company advertised job placement rates of 55 percent to 80 percent at its schools in New York, when the placement rates were actually 24 percent to 64 percent.

In addition to Sanford Brown, the schools included Briarcliffe College and online enrollments through American Intercontinental University and Colorado Technical University, according to the settlement.

Career services employees at the company received bonuses if they could achieve certain job placement rates, creating incentives for employees to cut corners when documenting how many students got jobs after graduation, according to the settlement documents.

For example, some career services employees counted students as being "placed" if they participated in a one-day community health fair, even if they weren't hired by companies at the fair. A criminal justice graduate who worked as a data processor for a company that handled parking ticket data was counted as being employed in that "field" because the graduate dealt "with the courts" when processing parking ticket data, according to the settlement documents.

The settlement alleges that "high-level" career services managers at the company's headquarters "explicitly condoned and even encouraged" such gimmicks to boost placement rates.

By inflating the job numbers, Career Education Corp. avoided scrutiny from outside college accrediting groups, which require schools to meet certain thresholds. Accreditation is a key requirement for colleges to remain eligible to receive federal student loan and grant money -– crucial revenue for the for-profit firms.

The settlement also said that Career Education Corp. failed to tell students that degrees from certain programs would not allow them to take state licensing exams after graduation, significantly hindering a student's ability to get jobs in fields like medical ultrasound.

The job placement scandal has led to significant changes at Career Education Corp. After the New York Attorney General's office issued a subpoena in 2011, the company hired an outside legal firm to audit its career placement office. Auditors found widespread problems, which led to the resignation of the company's chief executive, Gary McCullough, in November 2011, and the firing of 15 career services employees.
McCullough nevertheless received more than $3.6 million in severance.

A spokesman for Career Education Corp., Mark Spencer, wrote in an email Monday that the company was "pleased to have reached a settlement."

"This agreement closes an important chapter and allows us to move forward with a heightened focus on student outcomes," Spencer said. "We remain committed to continually advancing our culture of adherence to legal, regulatory and accreditor requirements, and we're a stronger organization for having addressed these concerns."

In addition to the financial penalties, Career Education Corp. agreed to hire an outside auditor to independently verify all job placement rates for three years at its New York schools and report back to the New York Attorney General's office. The company must provide new disclosures for its New York programs that clearly state job placement rates, and must phase out any New York programs in which degrees do not allow students to take licensing exams after graduation.

The company will provide a list of students who attended certain New York programs from the 2009 through 2012 school years, and they will be eligible to claim money from the $9.5 million settlement fund the company is creating.

The settlement is one of the largest restitution funds created for students allegedly defrauded by a for-profit college. The California Attorney General's Office reached a settlement with Corinthian Colleges Inc. in 2007 that resulted in a $5.8 million restitution fund.

Enrollments at Career Education Corp. schools have plummeted over the last two years, from more than 114,000 at the end of 2010 to 76,000 at the end of last year, according to securities filings.

We knew FDR and Scott Walker is no FDR

Don't insult our intelligence, Scott Walker.

We knew FDR and you are no FDR.

FDR created the New Deal: Social Security and AFDC, the minimum wage, workers comp., the 8 hour day,unemployment compensation and the National Labor Relations Act. He asserted that: "It is now beyond partisan controversy that it is a fundamental individual right of a worker to associate himself with other workers and to bargain collectively with his employer." Address at San Diego Exposition, October 2, 1935

He regulated industries from finance to trucking to communications. Roosevelt stood up to corporate power, labeling them economic royalists warning, “The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than the democratic state itself. That in its essence is fascism: ownership of government by an individual, by a group, or any controlling private power.”


FDR created the Civilian Conservation Corps to preserve the environment and put people back to work. He created the Works Progress Administration because he believed that government had an obligation to its citizens to provide jobs when the market system failed to.

FDR understood that the demand for goods and service stimulates investment and job creation, not high income and corporate tax breaks.

Roosevelt's New Deal and America's post WWII prosperity was based on progressive social programs, regulation of industry and unionization. Scott Walker opposes all three.

Scott Walker can claim that black is white, but that doesn't make it so.

Obama Administration Revisits For-Profit College Student Debt Regulations

By Chris Kikham

The Obama administration has resumed efforts to rein in abuses by for-profit colleges that leave students deep in debt and unable to find decent jobs, renewing a 2-year-old battle over regulations that has produced little more than bitterness and litigation.

The so-called gainful employment regulations are intended to judge the effectiveness of for-profit and other vocational programs by examining whether students are able to manage their debts after leaving school. Programs that leave students with unsustainable debts would face sanctions, including disqualification from federal student loan and grant programs -- the source of nearly 90 percent of revenue at some for-profit colleges.

"This is really designed to weed out the worst of the worst actors," said Mamie Voight, assistant director for higher education research and policy at the Education Trust, a student advocacy group. "It's intended to remove those as options from the table for students, and to make sure that we're not investing taxpayer dollars in college programs that are not providing students with even a minimal level of value."

Representatives of the for-profit college industry, which mounted a $13 million lobbying campaign to weaken the rules in 2011 and convinced a federal judge to strike down the regulations last year, struck a defiant tone earlier this month when the administration announced it was revisiting the regulations. Steve Gunderson, the president and chief executive of the Association of Private Sector Colleges and Universities, said in a statement that the group was "extremely disappointed," calling the effort a "faulty and confrontational process."

The trade group declined to comment beyond a statement and other public comments submitted in recent months. But those in support of tighter regulations say they expect the industry to mount a pressure campaign similar to the one two years ago, when for-profit colleges hired prominent Democratic lobbyists, such as former House Majority Leader Dick Gephardt and Tony Podesta, to buttonhole administration officials and congressional Democrats.

"I think it will be a fight again; that's inevitable," said Robyn Smith, a former deputy attorney general in California who works on student loan issues with the National Consumer Law Center. "A lot of it depends on the will of the department to stand firm, and its willingness to enact a strong rule."

The Department of Education declined to comment on the rulemaking process, beyond describing how negotiators will be selected and when public hearings will be scheduled.

State attorneys general, veterans organizations and consumer advocacy groups have submitted dozens of comments to the administration in recent months, calling for Department of Education officials to come up with a much stronger version of the rules they released in 2011. Those regulations were widely viewed as being watered down in the face of industry lobbying, allowing subpar programs far too much leeway to remain in compliance.

A security training program in Miami, for example, would have dodged the stiffest sanctions even though 85 percent of its students were unable to pay minimal amounts on loans and had debts that consumed 70 percent of their discretionary income.

"Right now there is no accountability," said Lauren Asher, president of the Institute for College Access & Success, a student advocacy group that has pushed for stronger government oversight of for-profit colleges. "Programs that routinely leave students with debts they cannot repay still have unlimited access to federal funds."

The Obama administration began examining troubles at for-profit colleges in 2009, convening panels to gauge whether career college programs -- both for-profit and non-profit -- were satisfying a federal law that required such schools to show they prepare students for "gainful employment in a recognized occupation."

Consumer advocates had long pointed out that the for-profit college sector was taking in a disproportionate amount of federal aid dollars: Despite educating only about 10 percent of students, for-profit colleges receive nearly a quarter of federal loan and grant money and contribute to about 47 percent of federal loan defaults.
The Department of Education determined that programs with high numbers of students who were unable to repay loans, or who had excessive debt burdens compared to income, would be subject to sanctions, including disqualification from federal student loan and grant programs.

The final gainful employment rules released by the administration two years ago were significantly weakened from an earlier proposed version, after vigorous lobbying from the industry. The most significant change was that schools had to fail three student debt measurements -- a student loan repayment rate and two measurements of debt compared to income -- in three out of four years to be disqualified. The original version of the rule would have disqualified programs that failed all three measurements in just one year.

The Department of Education released a test batch of data last summer showing that only a tiny fraction of programs -- just 5 percent of those subject to the rules -- would have failed all three measurements. Yet the data showed abysmal student outcomes for hundreds of programs that would have remained eligible because they passed one of the tests.

In more than 500 programs, fewer than 20 percent of students were repaying at least a portion of their student loan debt, according to the data.

At one of those programs, a securities services and management degree from Everest Institute in Miami, only 15 percent of students were repaying at least one dollar of their loans within a year. More than 70 percent of graduates' discretionary income was eaten up by debt from the program, indicating that students were unable to find jobs with decent wages. But the program was still able to pass the third test, the measurement of debt to total annual income: The ratio was 11.92 percent, just under the 12 percent threshold that would have been a third strike.

Kent Jenkins, a spokesman for Corinthian Colleges Inc., which owns Everest, pointed out that the Department of Education's data was several years old, saying the Miami program is "one of 637 that were evaluated; the data you cite is five years old, and the metrics you are applying have been struck down in court." He said the company is eliminating programs that don't meet standards on job placement and completion rates. "We are working hard to make sure our programs offer our students solid educational and economic value," he wrote in an email.

The snapshot of data released last summer is the only one that exists, after U.S. District Judge Rudolph Contreras struck down central parts of the administration's gainful employment rules last year as part of a federal lawsuit filed by the for-profit college trade association.

Although Contreras's ruling forced the administration to redo the process, the judge specifically stated that the Department of Education had the right to craft such regulations -- something the industry's lobbyists had contested for years.

"Concerned about inadequate programs and unscrupulous institutions, the Department has gone looking for rats in ratholes -- as the statute empowers it to do," Contreras wrote in his decision last summer.

The issue was technical: Contreras said the administration had not conducted studies to back up its student loan repayment threshold of 35 percent.

Going forward, the Department of Education is looking for representatives of colleges, student groups, consumer advocacy organizations and state attorneys general to serve on a committee to craft the rules. The committees will meet in September and October to hash out specifics and forward decisions on to the department.

Over the last two years, fortunes have significantly shifted for the industry. Increased government scrutiny, including the formation of a 32-state working group of attorneys general and investigations by the Consumer Financial Protection Bureau, has caused stock prices and enrollments to tumble. Shares for the Apollo Group, which owns the University of Phoenix, have tumbled more than 77 percent from a high in 2009.
Enrollments at Apollo schools have fallen 22 percent since 2010, and enrollments at ITT Educational Services have fallen more than 27 percent over the same period, according to securities filings.
Tom Tarantino, a chief policy officer with Iraq and Afghanistan Veterans of America, said he is glad there is more consumer awareness of unscrupulous programs, but he thinks further regulations are needed to encourage systemic change in the business model.

"They're spending a lot of money defending their industry, as opposed to spending money to improve their industry," said Tarantino, whose group has criticized some for-profit college programs for targeting veterans and GI Bill money. "If they had invested as much money in improving their educational programs as they have in lobbying and marketing and recruiting, there would be some really outstanding programs."

Securities and Exchange Commission investigates Everest College's parent company

The Securities and Exchange Commission is investigating Corinthian Colleges Inc., the for-profit chain disclosed Monday in a corporate filing. Corinthian is the parent company to Everest College, a for-profit chain of technical colleges that has abysmal graduation and job placement rates.

In a subpoena, the commission requested documentation relating to student recruitment, attendance, completion, placement and defaults on loans, according to the company, as well as information about compliance with U.S. Department of Education financial requirements.

Decline of Unions Redistributes Income; Corporate Profits Soar

By Jillian Berman

Corporate profit has been soaring for years at workers' expense and a decline in union membership is to blame -- not a rise in technology, a new study found.

The jump in corporate profit over the past few decades can be explained largely by a decline in union membership over the same period, according to a study by Tali Kristal, a sociologist at the University of Haifa in Israel. The boost in companies’ bottom line comes at workers’ expense, Kristal wrote in an email to The Huffington Post.

“It’s a zero sum game: whatever is not going to workers, goes to corporations,” Kristal said. “Union decline not only increased wage gaps among workers, but also enabled capitalists to grab a larger slice of the national income pie at the expense of all workers, including the highly skilled.”

The findings, published Thursday in the American Sociological Review, add a new dimension to the debate over income inequality in the U.S., suggesting that policies aimed at boosting unions may help. Corporate profit soared to a record high share of the economy earlier this year, according to Bloomberg, while workers' wages have remained largely stagnant. The rise in profit comes as union membership has dropped to a record low.

Kristal’s findings contradict claims that increased computerization largely accounts for the boost in corporate profit at the expense of workers. Kristal argued that the rise of machines is only indirectly to blame, because technology has reduced union workers by replacing some union jobs with automation, directly increasing corporate profit.

“If we want all workers to benefit from the economic growth, then policymakers can initiate some steps to strengthen unions, such as pro-union reforms of labor law, and deterioration with employers' illegal anti-union tactics that increasingly spread over the last decades,” Kristal wrote.

Indeed, other analyses, including one from the left-leaning Economic Policy Institute, have found that that the drop in union membership in recent decades correlates with the rise in inequality during the same period.
“The decline in union members is directly related to the stagnation of wages for working people,” Brandon Rees, acting director of the Office of Investment at the AFL-CIO, an umbrella labor organization for many unions, told HuffPost. “Economic growth has been going somewhere and its been going to the top 1 percent.”

That dynamic could be problematic for the U.S. economy as a whole, Rees said, as middle-class Americans burdened by debt and slow wage growth buy less and hold back the recovery.

“One of the reasons why we are suffering from anemic growth today is because consumers have been reducing their debt levels, but wages are not keeping up with productivity growth,” Reese said. “The rights of workers to join a union has helped create the middle class in this country and the middle class has been hammered in the past 20 years as unions have declined.”

This article originally appeared in The Huffington Post on June 9, 2013

For-Profit School to Pay U.S. up to $2.5 Million for Submitting False Federal Student Financial Aid Claims

American Commercial Colleges Inc. (ACC) has agreed to pay the United States up to $2.5 million, plus interest, to resolve allegations that it violated the civil False Claims Act by falsely certifying that it complied with certain eligibility requirements of the federal student aid programs, the Justice Department announced today.

To maintain eligibility to participate in federal student aid programs authorized by Title IV of the Higher Education Act of 1965, for-profit colleges such as ACC must obtain no more than ninety percent of their annual revenues from Title IV student aid programs. At least ten percent of their revenues must come from other sources, such as payments from students using their own funds or private loans independent of Title IV.

Congress enacted this “90/10 Rule” based on the belief that quality schools should be able to attract at least a portion of their funding from private sources, and not rely solely upon the Federal Government.

The civil settlement resolves allegations that ACC violated the law when it orchestrated certain short-term private student loans that ACC repaid with federal Title IV funds to artificially inflate the amount of private funding ACC counted for purposes of the 90/10 Rule. The short-term loans at issue in this case were not sought or obtained by students on their own; rather, ACC orchestrated the loans for the sole purpose of manipulating its 90/10 Rule calculations.

“American taxpayers have a right to expect federal student aid to be used as intended by Congress -- to help students obtain a quality education from an eligible institution,” said Stuart F. Delery, Acting Assistant Attorney General for the Department of Justice’s Civil Division. “The Department of Justice is committed to making sure that for-profit colleges play by the rules and that Title IV funds are used as intended.”

Under the False Claims Act settlement, ACC, a privately-owned college operating several campuses in Texas, will pay the United States $1 million, plus interest, over five years, and could be obligated to pay an additional $1.5 million under the terms of the agreement.

“Misuse of taxpayers’ dollars cannot be tolerated – not only for the sake of taxpayers, but especially in the case of innocent individuals who seek to improve their lives through a quality education,” said U.S. Attorney for the Northern District of Texas Sarah R. Saldaña.

Today’s settlement resolves allegations brought by Shawn Clark and Juan Delgado, former directors of ACC campuses in Odessa and Abilene, respectively, under the whistleblower, provisions of the False Claims Act, which permit private citizens with knowledge of fraud against the government to bring an action on behalf of the United States and to share in any recovery. Messrs. Clark and Delgado will receive $170,000 of the $1 million fixed portion of the government’s recovery, and would receive an additional $255,000 if ACC becomes obligated to pay the maximum $1.5 million contingent portion of the settlement.

This case was handled by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Northern District of Texas; and the Department of Education’s Office of Inspector General and Office of General Counsel.

The lawsuit is captioned United States ex rel. Clark, et al., v. American Commercial Colleges, Inc., No. 5:10-cv-00129 (N.D. Tex.). The claims settled by this agreement are allegations only, and there has been no determination of liability.

Fed says Wisconsin's economic performance one of nation's worst!

The Federal Reserve Bank of Philadelphia has released its six-month economic forecast for the nation's 50 states.

Wisconsin is one of only five state's (Alaska, Louisiana, North Dakota, Wisconsin, and Wyoming) whose coincident indexes are projected to decrease. Forty-five states, including Illinois and Minnesota, both of which raised tax rates on high income earners recently, are projected to grow.

Walker's austerity economic policies are not working.

Rosen's U.S Depart. of Ed testimony in support of gainful employment rule

Good Morning.

My name is Michael Rosen and I have been an economics professor at Milwaukee Area Technical College for twenty-six years.  MATC is one of the largest two- year colleges in the nation with 50,000 students, the majority students of color and economically disadvantaged.

I am appearing before you today to urge you to develop a strong gainful employment rule to ensure that students who attend college with noble academic and employment aspirations are not left unemployed or underemployed with huge debts they have no possibility of paying back.

I have become an advocate for a gainful employment regulation based on my own experience and that of literally dozens of former for-profit college students I have met.

Three years ago I read an article in Milwaukee’s local paper about a new technical college that was planning to open a block and half from MATC. That piqued my interest because I wondered why Everest College, which I had never heard of, would want to locate so close to the state’s largest, public technical college.

So I did some research and was shocked to learn that Everest, a subsidiary of Corinthian College Inc., was mired in controversy over poor graduation and job placement rates; that its credits didn’t transfer to most colleges and universities; and that its students had incredibly high student loan default rates. I also learned that Everest was the subject of several lawsuits and investigations and had recently settled with the state of California for almost $7 million.

I contacted the city council person, Milele Coggs, who represented the district Everest wanted to locate in. She was equally concerned and asked me to testify at a Board of Zoning Appeals hearing on Corinthian’s request for a zoning change so they could begin construction.

Upon hearing our concerns about Everest’s record, the Board held their decision over for a full public hearing. Corinthian representatives threatened that if they did not receive immediate approval the redevelopment deal would die. That proved to be an idle threat, but representative of their corporate culture.

A hearing was finally called for February 2010.  Corinthian spared no expense, hiring one of the city’s most expensive public relations firms andpressuring the Chamber of Commerce to hold a public meeting to promote their venture.  Their representative asked me what Corinthian could do for me to get me to stop opposing their project.

Opposition to Everest had grown, including the resident’s council representing the housing project next to Everest’s desired location, the NAACP, seven aldermen, the MATC District Board and a local Latino organization, Voces de la Frontera.

Nonetheless, the Board of Zoning Appeals approved the project, which was subsidized with $11 million in interest free bonds. But a spotlight was now on Everest when it opened in the fall of 2010.

Less than two years after Everest opened it quietly announced it was closing. But because its opening had been so controversial, the decision became big news. Immediately the local media learned that our worst fears had been realized. As it had in other cities, Everest enticed low-income students with the promise they would find gainful employment after they completed their studies, encouraged and sometimes coerced them to take out huge loans to pay tuition for programs that cost four times what they would have paid for the same courses at MATC, and had more students drop out than graduate from their programs. An article in Milwaukee Journal Sentinel lists the damage:

More than half of the 1,585 students who enrolled since October 2010 when the school opened dropped out.

Everest placed only 95 students by the end of July—less than 6 percent of enrollees and 25 percent of its graduates.

By comparison, according to the Wisconsin Technical Colleges’ annual Graduate Follow-up Report, 88 percent of the 2011 graduates were employed within six months of graduation and 71 percent were employed directly in their field of study.

At the time its closing became public, Everest had only 300 studentsenrolled. At the behest of the Education Approval Board, a Wisconsin regulatory body, it agreed to pay the educational loans of the 827 dropouts, assuming they can be located, and those of any of the 300 students who didn’t make it to the end of March. The debt is estimated at $3.7 million.

The mayor sent a letter requesting that Everest pay the loans of those who had graduated. But Everest did not agree. The school is now closed and there are hundreds of former Everest students who are left with broken dreams, no jobs and huge debts.

One of them is Michelle Reise whose full testimony I have supplied to this committee. Her experience is like many others who have been lured into attending for-profit colleges by the promise of an accelerated academic program that will lead to immediate and gainful employment.

As Michelle wrote: “I graduated with a 4.0 GPA and was an Everest  Ambassador. My credentials speak for themselves. I have only had 3 interviews for offices in my field, all of which I found on my own with no help from Everest. They promised me, based on their advertising, a better life and that they would place me in my desired field of study. Everest was not the start of a better life, but more of a beginning of a long still unfinished nightmare, leaving me with a large amount of debt ($10-15,000) and no new start.”

Or Carron Kilpatrick, an Everest grad, wrote: “Everything they promised was a lie. I could talk all day about how my decision to go to this career college ruined my life but unfortunately I don’t have enough time in my day because I am working two jobs as a housekeeper and personal aid and have two children to take care of. My intentions were to give my children a better future by bettering myself through education. Everest ripped that dream away from me and is the reason I am struggling today with a $12,000 debt. “

Or listen to Antonia Fuentes:” I enrolled into the Criminal Justice degree program at Sanford Brown… My recruiter embellished on the career outlook, promising a bright future with a favorable career. From the salary level of $40,000 annually to the success stories plastered all over the walls, it was all an advertisement strategy to recruit vulnerable students to enroll in their bogus programs. The credits I earned were nontransferable to any four year degree program… I found myself stuck with close to $30,000 in loans that I may never be able to pay back… It has been almost four years since I graduated and I am without a job in my field of study.”

Or Kyla Morrison: “I was a good student with good grades. When I finally had an interview with Aurora Health Care the lady confided in me that this school had a bad reputation and no one wanted to hire anyone from this school, from their bad experiences.  I started talking to other graduates and they too were having the same issues. I went back to the school where they had people who helped find you jobs. This again was no help… This school was a total disappointment and I wasted so much money on a school that got me nowhere.”

These are just a sample of the testimonies I have submitted. But all of them indicate that students, many of whom have no experience with higher education, are lured into enrolling in for-profit colleges by aggressive recruiting and marketing techniques, the promise of accelerated classes and effective job placement services, and high paying employment. Yet they wind up with their dreams destroyed, credits that do not transfer, huge debtsthey cannot possible pay back, and no gainful employment.

The reason there are so many dissatisfied students, multiple lawsuits, andthirty-two state Attorney General investigations is that their business model is focused on misleading and aggressive advertising and recruitment, paid for by procuring government loans for students.  It is confirmed by the Department of Education that for-profits enroll only 9.6% of higher education students, but capture almost a quarter of all federal financial aid. Equally alarming, they are responsible for almost half of all student loan defaults.

Because for-profit colleges’ goal is profit not placement, their primary concern is getting students signed up, not educating them, securing internships or clinical experiences, or finding them jobs. They have a sordid history of promising jobs and transferability to students, but not delivering anything but crushing debt.

Several of the students I have spoken with were counseled to forbear their loans, regardless of their individual financial situation and despite the fact that, depending on the loan, interest could continue to accrue and other repayment plans were available. This widespread practice along with  investor reports from for-profits schools like Corinthian suggest a strategy of abusing forbearances to manipulate cohort default rates and thus avoid gainful employment sanctions. I urge the Department of Education to consider this possibility and other evasion tactics documented by groups like The Institute for College Access and Success when writing new gainful employment regulations.   

A gainful employment rule that ensures that former students, both grads and non- completers, obtain a meaningful education to qualify them for jobs that pay enough for them to pay back their loans without significant hardshipwill protect both students and taxpayers. A debt to income metric will measure whether grads have excessive public and private debt. Both the repayment rate and debt to income standard are reasonable and necessary measures of institutional quality and student success. They protect students in their roles as consumers and as taxpayers.

Gainful employment regulations will help ensure that the nation’s Antonias,Carrons, Kylas and Micheles and millions like them who are willing to juggle school, work and family to secure a better life for themselves and their children will not be taken advantage of by unscrupulous career collegesthat provide them no career at all.

For-profit university settles Pell Grant fraud case

The United States University, a California based for-profit college,has agreed to a $686,720 civil settlement over federal financial aid fraud charges.

The school’s former financial aid director pleaded guilty to falsifying student records and could face up to a year of prison time, according to the local U.S. Attorney's office.

Between 2008 and 2011, Christina Miller filed falsified Pell Grant applications for students of United States University, a school with online and in-person programs.

Miller pleaded guilty to filing more than $300,000 worth of fraudulent Pell Grant applications on behalf of the school’s students, said Assistant U.S. Attorney Christopher Tenorio, who handled Miller's prosecution. The case was unusual for resulting in a civil case against the university as well as criminal charges.

“A lot of times if there is a indication that there are false applications for financial aid, it’s usually by an individual," Tenorio said. "And in this case, it was a financial aid director. There were many, many applications under her control and many false applications we suspect she made.”

Joseph Price, the assistant U.S. attorney who handled the civil case against the university, said there has likely been an uptick in these kind of cases of financial aid fraud with the proliferation of for-profit universities that has taken place in recent year.

The cases against the university and Miller were the result of a whistleblower suit filed by Veronica Glaser, a former student and employee of the university. Under the federal False Claims Act, Glaser could receive 15 percent to 25 percent of the university's settlement payment, according to Price.

According to its website, tuition at United States University ranges between $7,800 and $15,600 a year for a full-time student depending on the program. The school offers teacher credential, nursing and other programs. Its enrollment was 326 students during the 2009-10 school year, the most recent year for which enrollment information is available on the school's website.

University representatives have not yet responded to requests for comment.

What CAT's layoffs say about Wisconsin's skilled worker shortage

So much for Bucyrus International’s alleged shortage of skilled welders.

Last Friday the iconic South Milwaukee firm, now owned by Caterpillar, announced that it was laying off 40% of its hourly workforce, including many highly skilled welders.

For the past four years Tim Sullivan, Bucyrus International’s retired CEO, has criticizedthe Milwaukee Area Technical College (MATC) for not producing enough skilled welders to meet his firm’s production needs. Sullivan even claimed that a shortage of welders in the Milwaukee area forced him to build a plant in Kilglore, Texas.

Sullivan’s complaints were echoed by a chorus of others including the Executive Director of the Metropolitan Milwaukee Association of Commerce, Tim Sheehy, who ominously declared: "We shouldn't fool ourselves that if companies cannot find labor in Milwaukee that they won't look elsewhere. The message for Milwaukee is to fix the workforce or die."

The Milwaukee Journal Sentinel (MJS) has dutifully, almost breathlessly, covered speeches lamenting the skilled labor shortage by area CEOs. Most recently it covered one by Briggs and Stratton’s Todd Teske, despite the fact that Briggs’ employment has plummeted from 11,000 to 500 as it outsourced jobs to Alabama, Georgia and China.

It is likely that Caterpillar's announcement, coming just days before the beginning of contract negotiations, is part of a cynical negotiations strategy. But whether the layoff threat is real or simply hardball bargaining, it demonstrates why Wisconsin manufacturing firms are having difficulty attracting skilled workers.

Wisconsin's skilled workers are tired of being treated as disposable liabilities. After decades of outsourcing and job loss, they seek employment with firms that value their work ethic, skills and commitment. To put it bluntly Wisconsin’s manufacturing CEOs won't get loyalty from Wisconsin’s workers unless the loyalty is reciprocated.

More than a year ago I wrote in In a MJS op ed:”The list of companies that have offshored or outsourced production reads like a who's who of Wisconsin's manufacturing: Briggs & Stratton Corp., A.O. Smith , Rockwell, Badger Meter - and many more.

Milwaukee's working families have had their lives turned upside down by plant closings, downsizings, outsourcings and offshoring. Their experience in manufacturing has meant job loss, declining wages and benefits and economic insecurity.

Take my former student, John. He did everything we ask young workers to do, earning two journeyman cards while working and attending Milwaukee Area Technical College full time. John left Briggs when it began moving jobs to low-wage states and Mexico. But his new employer, Rockwell, began outsourcing to nonunion, low-wage plants even before it eliminated all hourly workers last year. So John started over again at Harley-Davidson. But, a year and a half ago, Harley laid John off.

John's experience is unfortunately not unique. Almost everyone with roots in this community has a father or mother, aunt, cousin or uncle who has experienced the instability that characterizes manufacturing employment.

Nationally, manufacturers shed 2 million jobs during the Great Recession. Wisconsin lost 58,300 manufacturing jobs, 11.6% of its total, between December 2007 and June 2009, the official end of the recession. The state continued to lose manufacturing jobs for several months even after the recession ended. By September 2010, Wisconsin had lost 69,800 manufacturing jobs, 14% of its total.

Laid-off manufacturing workers have summed up this experience with their kids, nieces and nephews. As Mario, a nursing student now after being laid off from a foundry after 16 years, told me, "I have a family, and I need a job with security."

His attitude is reinforced by the occupational programs at MATC that are most popular and have waiting lists: culinary arts, automotive, heating and air-conditioning, physical therapy, barber and cosmetology, occupational therapy and nursing.

What do they all have in common? These are jobs that cannot be offshored.

Our working-class students are voting with their feet by choosing careers that provide more secure employment. They'll continue to do so until manufacturers offer the same level of security they find in other occupations or sufficient compensation to justify the insecurity that has characterized manufacturing employment."