The effort to hold Wisconsin for-profit colleges accountable for graduation and employment outcomes was killed last week in response to strong opposition from for-profit colleges, influential Republican lawmakers and Governor Walker.
The Educational Approval Board, which decides whether for-profit colleges can operate in the state, shut down a committee charged with developing standards for for profit colleges almost as soon as it had convened.
It is hard to miss the hypocrisy of a Governor who insists on greater and greater accountability from public schools, colleges and universities, opposing accountability standards for for-profit colleges, many of whom have become notorious for exploiting low-income students, illegally paying recruiters by the head, and other unsavory practices.
For profit colleges, like Everest College in Milwaukee, have been accused of manipulating students into taking out huge loans for programs and credits that do not transfer or lead to employment,leaving students with little more than onerous debt. Milwaukee's Everest College had a job placement rate of only 5% and a graduation rate of less than 50% when it suddenly closed its doors after only two years of operations.
Nationally, several for-profit colleges have been sued for fraud by state governments and former students. And recently several prominent for-profits including Kaplan, the University of Phoenix, Everest and Sanford Brown have closed campuses.
The committee had met just once, on Feb. 22, a meeting dominated by testimony opposing the standards by representatives from numerous for-profit colleges.
Earlier that month, Gov. Scott Walker replaced three members of the seven-member approval board. There is one vacancy.
Then on March 12, Rep. Steve Nass, chairman of the Assembly higher education committee and vocal and acerbic critic of the University of Wisconsin system, wrote in an email to the approval board that it should suspend the committee and work "in a more cooperative atmosphere" with the schools.
"I believe this process is very premature," Rep. Nass wrote.
He called the regulation efforts — which would have required the colleges to show that at least 60 percent of students who started programs finished and got jobs in their fields — well-intentioned but needing more study and input.
National observers took a different view, noting that similar measures throughout the country typically meet the same fate against the well-funded for-profit college industry.
"The basic narrative is pretty much the same," said Barmak Nassirian, a Washington, D.C. independent education policy analyst who's studied for-profit colleges for two decades. "The industry obviously put a full-court press on and killed the effort."
For-profit colleges told the board last month the accountability standards were unreasonable.
"You are proposing performance expectations that very few of your own public institutions could meet," said Vickie Schray, a senior vice president at Bridgepoint Education, parent company of Ashford University and University of the Rockies.
David Dies, the executive secretary of the EAB, said it's beside the point. EAB doesn't oversee public schools and Dies said the economic consequences of students not succeeding at for-profit schools can be far more dire since students tend to take on much bigger debt loads.
A federal report last August looked at 30 for-profit higher education companies and found they charge students up to four times the cost for some programs as publicly funded community colleges, resulting in heavy debt loads and spotty graduation and job placement outcomes.
"Those individuals become a drag on the state's economy," Dies said.
In his email, Nass cited the concerns of colleges, saying the new measures came unexpectedly and without adequate input. He also referenced Walker's new appointments to the EAB.
In early February, the governor announced three new appointees — Robert Hein of Janesville, a UW-Rock County math professor, William Roden of Grafton, an educational consultant, and Katie Thiry of Prescott, an online college teacher.
By removing three board members who backed establishing accountability standards, Walker effectively killed the effort to hold for-profit colleges accountable for their exploitation of Wisconsin residents.
Showing posts with label Kaplan College. Show all posts
Showing posts with label Kaplan College. Show all posts
Wednesday, March 27, 2013
Monday, October 1, 2012
Kaplan to close 9 campuses
Kaplan higher-education division will close nine campuses and consolidate four others into existing nearby locations, the company said in a Securities and Exchange Commission filing.
The company, owned by the Washington Post, said it would stop new enrollments at the nine campuses it is closing, but that it would continue teaching the students currently enrolled there.
Kaplan's decision comes only a month after Everest College announced that it would close its Milwaukee campus less than two years after it opened. Everest's job placement rate in Milwaukee was a dismal 5% and its drop out rate over 50%. Everest has agreed to pay off the federal loans of all of its Milwaukee students who dropped out without completing their program of study.
Kaplan's parent company did not give a reason for its decision to close the campuses or identify them, but in an Aug. 7 SEC filing it disclosed that an accrediting commission had warned three campuses (in Baltimore, Indianapolis and Dayton, Ohio) that they could lose accreditation “for failure to meet certain student achievement threshold requirements” and had asked for the school to respond by September.
The loss of accreditation would mean the Kaplan campuses would no longer be eligible for Title IV loans from the Education Department, the source of nearly 90 percent of Kaplan higher-education revenue.
Kaplan was still a test-prep company when the Washington Post Company bought it in 1984, after Richard D. Simmons, the president, convinced Katharine Graham of its potential for expansion and profits.
Over the last decade, Kaplan has moved aggressively into for-profit higher education, acquiring 75 small colleges and starting the huge online Kaplan University. Now, Kaplan higher education revenues eclipse not only the test-prep operations, but all the rest of the Washington Post Company’s operations.
The Washington Post's Company chairman, Donald Graham, has emerged as the highest-profile defender of for-profit education. Together, Kaplan and the Post Company spent $350,000 on lobbying in the third quarter of 2010, more than any other higher-education company. And Mr. Graham has frequently gone to Capitol Hill to argue against the regulations in private visits with lawmakers, the first time he has lobbied directly on a federal issue in a dozen years. His newspaper, too, has editorialized against the regulations.
Four whistle-blower suits against Kaplan under the federal False Claims Act have been made public in the last few years, all making accusations that the company used deceptive practices in its quest for profits, including enrolling unqualified students and paying recruiters for each student enrolled, a practice forbidden by federal law.
In addition, the suits allege, Kaplan kept students on the books after they dropped out, inflated students’ grades and manipulated placement data to continue receiving financial aid. Three of the suits, from Pittsburgh, Milwaukee and Miami, have been consolidated for trial in Miami. A fourth, from Las Vegas, is pending there.
The company said revenue at the campuses to be closed represent approximately 4 percent of total revenue for Kaplan higher education and 2 percent of the total Kaplan division, which includes other educational operations. The Post Co. said Kaplan expects to incur an estimated $18 million in restructuring costs, a portion of which would be recorded in third-quarter earnings, with the remainder recorded through the end of 2013.
Kaplan has about 70 campuses, and about a third of the division’s 67,605 students as of June 30 were on Kaplan higher-education campuses, with most of the rest of them studying through online programs.
The company, owned by the Washington Post, said it would stop new enrollments at the nine campuses it is closing, but that it would continue teaching the students currently enrolled there.
Kaplan's decision comes only a month after Everest College announced that it would close its Milwaukee campus less than two years after it opened. Everest's job placement rate in Milwaukee was a dismal 5% and its drop out rate over 50%. Everest has agreed to pay off the federal loans of all of its Milwaukee students who dropped out without completing their program of study.
Kaplan's parent company did not give a reason for its decision to close the campuses or identify them, but in an Aug. 7 SEC filing it disclosed that an accrediting commission had warned three campuses (in Baltimore, Indianapolis and Dayton, Ohio) that they could lose accreditation “for failure to meet certain student achievement threshold requirements” and had asked for the school to respond by September.
The loss of accreditation would mean the Kaplan campuses would no longer be eligible for Title IV loans from the Education Department, the source of nearly 90 percent of Kaplan higher-education revenue.
Kaplan was still a test-prep company when the Washington Post Company bought it in 1984, after Richard D. Simmons, the president, convinced Katharine Graham of its potential for expansion and profits.
Over the last decade, Kaplan has moved aggressively into for-profit higher education, acquiring 75 small colleges and starting the huge online Kaplan University. Now, Kaplan higher education revenues eclipse not only the test-prep operations, but all the rest of the Washington Post Company’s operations.
The Washington Post's Company chairman, Donald Graham, has emerged as the highest-profile defender of for-profit education. Together, Kaplan and the Post Company spent $350,000 on lobbying in the third quarter of 2010, more than any other higher-education company. And Mr. Graham has frequently gone to Capitol Hill to argue against the regulations in private visits with lawmakers, the first time he has lobbied directly on a federal issue in a dozen years. His newspaper, too, has editorialized against the regulations.
Four whistle-blower suits against Kaplan under the federal False Claims Act have been made public in the last few years, all making accusations that the company used deceptive practices in its quest for profits, including enrolling unqualified students and paying recruiters for each student enrolled, a practice forbidden by federal law.
In addition, the suits allege, Kaplan kept students on the books after they dropped out, inflated students’ grades and manipulated placement data to continue receiving financial aid. Three of the suits, from Pittsburgh, Milwaukee and Miami, have been consolidated for trial in Miami. A fourth, from Las Vegas, is pending there.
The company said revenue at the campuses to be closed represent approximately 4 percent of total revenue for Kaplan higher education and 2 percent of the total Kaplan division, which includes other educational operations. The Post Co. said Kaplan expects to incur an estimated $18 million in restructuring costs, a portion of which would be recorded in third-quarter earnings, with the remainder recorded through the end of 2013.
Kaplan has about 70 campuses, and about a third of the division’s 67,605 students as of June 30 were on Kaplan higher-education campuses, with most of the rest of them studying through online programs.
Thursday, July 21, 2011
For-Profit College CEOs Reap Rewards of Weak Regulation
In the six weeks since the Obama administration issued weaker-than-expected rules governing student debt at for-profit colleges, the University of Phoenix's founder and executive board chairman has cashed out more than $59 million of the school's parent company’s stock, according to filings with the Securities and Exchange Commission. The company's share prices on Wall Street have climbed to the highest levels in more than six months.
John G. Sperling's sale of 1.8 million shares comes as the stocks at many for-profit college companies have surged in the wake of the Department of Education's issuance of "gainful employment" rules, which the for-profit college industry had been aggressively fighting for more than a year.
And Sperling isn't alone. Donald Graham, the main stakeholder in Kaplan University, reaped a gain of $12.5 million over the last month. Andrew Clark, the CEO of Bridgepoint Education, made a $2.5 million profit on his stock holdings. Dennis Keller of Devry University made $27.6 million.
As enrollments at for-profit colleges have swelled over the past decade, along with the federal financial aid dollars that deliver as much as 90 percent of their revenues, scrutiny has intensified on students' outcomes. Hundreds of thousands of students at for-profit colleges have emerged with enormous debts and meager job prospects, resulting in a disproportionate share of student loan defaults at for-profit colleges.
The Obama administration's new rules were expected to rein in schools that aggressively recruited students but did little for their academic and employment outcomes once they were in the door. Many industry executives and Wall Street investors anticipated stricter rules that could have barred certain underperforming programs from accessing lucrative federal student aid dollars.
Beginning last summer, when the Department of Education released a draft version of the regulations, stocks at the Apollo Group, the University of Phoenix's parent company, and many other higher education corporations began to tumble. But the resulting rules essentially gave the industry carte blanche to continue as usual, taking a more lenient approach that gives schools an additional three years to come into federal student aid compliance. One former Department of Education official said the administration "caved in" to the industry’s pressure.
The market certainly signaled that the rules changed little, as stocks at many of those schools' parent companies soared and have remained strong ever since.
The weakening of the rules came after an extensive yearlong battle in Washington waged by the for-profit college industry that included substantial lobbying and campaign finance money from the Apollo Group and Sperling himself.
John G. Sperling's sale of 1.8 million shares comes as the stocks at many for-profit college companies have surged in the wake of the Department of Education's issuance of "gainful employment" rules, which the for-profit college industry had been aggressively fighting for more than a year.
And Sperling isn't alone. Donald Graham, the main stakeholder in Kaplan University, reaped a gain of $12.5 million over the last month. Andrew Clark, the CEO of Bridgepoint Education, made a $2.5 million profit on his stock holdings. Dennis Keller of Devry University made $27.6 million.
In total, the CEOs of the 15 publicly traded American for-profit colleges have collected $2 billion from selling company stock over the last seven years.
Many for-profit schools have been shown to aggressively recruit low-income and minority students—in some cases providing false information about accreditation and the prospects for salary and job opportunities after graduation—raising the question of whether the recent gains of for-profit CEOs like Sperling are being made on the backs of the most vulnerable students.
As enrollments at for-profit colleges have swelled over the past decade, along with the federal financial aid dollars that deliver as much as 90 percent of their revenues, scrutiny has intensified on students' outcomes. Hundreds of thousands of students at for-profit colleges have emerged with enormous debts and meager job prospects, resulting in a disproportionate share of student loan defaults at for-profit colleges.
The Obama administration's new rules were expected to rein in schools that aggressively recruited students but did little for their academic and employment outcomes once they were in the door. Many industry executives and Wall Street investors anticipated stricter rules that could have barred certain underperforming programs from accessing lucrative federal student aid dollars.
Beginning last summer, when the Department of Education released a draft version of the regulations, stocks at the Apollo Group, the University of Phoenix's parent company, and many other higher education corporations began to tumble. But the resulting rules essentially gave the industry carte blanche to continue as usual, taking a more lenient approach that gives schools an additional three years to come into federal student aid compliance. One former Department of Education official said the administration "caved in" to the industry’s pressure.
The market certainly signaled that the rules changed little, as stocks at many of those schools' parent companies soared and have remained strong ever since.
The weakening of the rules came after an extensive yearlong battle in Washington waged by the for-profit college industry that included substantial lobbying and campaign finance money from the Apollo Group and Sperling himself.
Friday, May 27, 2011
For-Profit Colleges Spend Much Less On Educating Students Than Public Universities
Chris Kirkham reports:
For-profit colleges devote less than a third of what public universities spend on educating students, even though the for-profit institutions charge nearly twice as much as their public counterparts for tuition, according to new federal government data released Thursday...
On average, for-profit schools spent $2,659 per student on instructional costs during the 2008-09 school year, compared with $9,418 per student at public universities and $15,289 per student at private non-profit colleges.
Meanwhile, the average cost for an undergraduate student at a for-profit college was nearly $31,000, after factoring in grants received. The average cost for private non-profit colleges was $26,600, while students at public universities paid on average $15,600.
The entire article which first appeared in the Huffington Post is linked here.
For-profit colleges devote less than a third of what public universities spend on educating students, even though the for-profit institutions charge nearly twice as much as their public counterparts for tuition, according to new federal government data released Thursday...
On average, for-profit schools spent $2,659 per student on instructional costs during the 2008-09 school year, compared with $9,418 per student at public universities and $15,289 per student at private non-profit colleges.
Meanwhile, the average cost for an undergraduate student at a for-profit college was nearly $31,000, after factoring in grants received. The average cost for private non-profit colleges was $26,600, while students at public universities paid on average $15,600.
The entire article which first appeared in the Huffington Post is linked here.
Tuesday, May 24, 2011
New York AG subpoenas Corinthian and 4 others for-profit colleges
Erica Perez, the higher education reporter for California Watch writes:
The New York state attorney general's office has subpoenaed five for-profit college companies, including two California-based operations, Bridgepoint Education of San Diego and Corinthian Colleges of Santa Ana.
The New York Times and Bloomberg reported the investigation, which makes New York one of six states where attorneys general are known to be investigating for-profits' business practices. Attorneys general in Florida, Iowa, Illinois, Kentucky and Massachusetts have launched similar probes (see chart below). The New York attorney general's office is also looking into Career Education Corporation, Lincoln Educational Services and Trump Entrepreneur Services.
Corinthian Colleges spokesman Kent Jenkins said the company had received a request for documents on Thursday and plans to comply with the demand. He described the request as wide-ranging and general, saying it did not make specific references to the company's one campus in the state of New York – Everest Institute in Rochester.
Corinthian runs more than 120 campuses in 26 states and Canada under the Everest, Heald and WyoTech brands.
Then-California Attorney General Jerry Brown spent three years investigating Corinthian Colleges and filed a lawsuit [PDF] in 2007 alleging the company inflated its job-placement statistics, lied about how much students could expect to earn upon graduation, and offered programs that failed to meet minimum legal standards.
The company that year paid a settlement of about $6.5 million to the attorney general's office for consumer education and protection, and debt forgiveness for former students, among other uses. The company also agreed to stop enrolling students in 11 programs in nine California campuses, according to its 2007 annual report. But Corinthian admitted no wrongdoing, and some describe the sanctions as a slap on the wrist.
A spokeswoman for Bridgepoint Education said the company would comply with the subpoena, but she did not provide additional details about the request. Bridgepoint enrolls about 78,000 students in mostly online programs under the Ashford University and University of the Rockies brands, according to its most recent annual report. The company also has two campus locations in Colorado and Iowa.
Bridgepoint was the focal point of a March 2011 hearing of the Health, Education, Labor, and Pensions Committee. As the Huffington Post chronicled, Bridgepoint executives built the multimillion-dollar company by buying up small colleges that had regional accreditation but were financially strapped.
The company brought in $600 million in federal financial aid in 2010, while nearly two-thirds of students who had enrolled in 2008-09 had dropped out by September 2010.
“In the world of for-profit higher education, spectacular business success is possible despite an equally spectacular record of student failure,” Sen. Tom Harkin, D-Iowa, said at the hearing, according to a Bloomberg report.
Earlier this month, Kentucky Attorney General Jack Conway said he is also leading a joint investigation into for-profit colleges by 10 state attorneys general.
State attorneys general investigate for-profit college companies | ||
| State | Company | Focus |
| Florida | Education Management Corporation's Argosy University | Determine whether colleges have violated Florida law prohibiting deceptive or unfair business practices |
| Corinthian Colleges' Everest College | ||
| Kaplan University | ||
| MedVance Institute | ||
| University of Phoenix | ||
| Keiser University | ||
| Concorde Career College | ||
| Career Education Corporation's Sanford Brown College | ||
| Illinois | Kaplan University | Unclear |
| Iowa | Bridgepoint Education's Ashford University | Possible violations of the Iowa's Consumer Fraud Act |
| Kentucky | Education Management Corporation's Brown Mackie College (and five other unnamed universities) | Student loan default rates, recruitment practices and job placements |
| Massachusetts | University of Phoenix | Recruitment and student loan practices |
| Corinthian Colleges' Everest College | ||
| Kaplan University's Kaplan Career Institute | ||
| New York | Career Education Corporation | Unclear |
| Corinthian Colleges | ||
| Lincoln Educational Services | ||
| Bridgepoint Education | ||
| Trump Entrepreneur Initiative | ||
Sources: News reports and filings with the U.S. Securities and Exchange Commission
Wednesday, March 30, 2011
Everest, Kaplan, Phoenix and Education Development Management Corp under investigation
Florida is investigating five private, for-profit colleges, several of which have operations in Milwaukee, to determine if they've engaged in unfair or deceptive practices in recruitment and other areas, the state attorney general's office said Friday.
The office is also looking into whether the colleges misled students about financial aid, the main source of revenue for these institutiions.
Ryan Wiggins, a spokeswoman for Attorney General Bill McCollum, confirmed Friday his office was conducting a civil investigation.
Wiggins said the investigation began in response to consumer complaints and a federal report that accused some for-profit schools of encouraging fraud and engaging in deceptive marketing practices.
"It's all in its infancy right now," Wiggins said. She said officials are unsure how long the civil investigation will take.
According to McCollum's office, the colleges being examined are Kaplan Inc. of Alpharetta, Ga.; University of Phoenix Inc. of Arizona; Argosy University of Florida Inc.; Everest College, a subsidiary of Corinthian Colleges Inc. of Santa Ana, Calif., and Medvance Institute Inc., of Miami.
There is more information linked here.
The office is also looking into whether the colleges misled students about financial aid, the main source of revenue for these institutiions.
Ryan Wiggins, a spokeswoman for Attorney General Bill McCollum, confirmed Friday his office was conducting a civil investigation.
Wiggins said the investigation began in response to consumer complaints and a federal report that accused some for-profit schools of encouraging fraud and engaging in deceptive marketing practices.
"It's all in its infancy right now," Wiggins said. She said officials are unsure how long the civil investigation will take.
According to McCollum's office, the colleges being examined are Kaplan Inc. of Alpharetta, Ga.; University of Phoenix Inc. of Arizona; Argosy University of Florida Inc.; Everest College, a subsidiary of Corinthian Colleges Inc. of Santa Ana, Calif., and Medvance Institute Inc., of Miami.
There is more information linked here.
Thursday, January 20, 2011
Bloomberg News: For-Profit College Grads Earn a Life of Debt
Ronnie Franklin borrowed to pay his tuition at a for-profit college that advertised its success in preparing graduates for better jobs. The decision still haunts him. Despite graduating from RETS Technical Center in Boston in 2000, he found himself so strapped for money that he and his two sons lived in a homeless shelter last year. Frustrated that his degree didn't lead to work in electronics, Franklin—now a $12-an-hour housepainter—decided to go to a community college this year. He can't qualify for a federal grant that would pay the cost because he has defaulted on $20,000 of his earlier U.S. student loans.
Students seeking to move up in life by getting a degree from a for-profit college are being trapped in a growing underclass of education debtors. Under U.S. law, their loan obligations can rarely be discharged in bankruptcy, making them more onerous than credit-card debt or subprime mortgages. Defaults can subject students to government confiscation of salaries, tax refunds, and Social Security payments—and disqualify them for aid to get more marketable degrees.
Students at for-profit colleges carry the biggest loans in U.S. higher education. Bachelor's degree recipients at for-profits have median debt of $31,190 compared with $17,040 at private, nonprofit institutions and $7,960 at public colleges, according to Washington-based nonprofit Education Trust.
While currently enrolling one in eight U.S. students, for-profit colleges account for almost one in two federal-loan defaults. The Obama Administration wants to curb rising default rates and the threat of student destitution by cutting off federal funds to for-profit college programs whose students have the worst loan-repayment rates and lowest incomes relative to debt, which suggests their degrees aren't translating into higher salaries. That's if a degree is earned: The graduation rate for first-time, full-time candidates for four-year degrees at for-profit colleges is 22 percent, compared with 55 percent at state colleges.
For-profit colleges have higher student-loan default rates and dropout rates because they serve lower-income students, minorities, immigrants, and working adults, says Harris Miller, president of the Association of Private Sector Colleges and Universities, a trade group.
Don Harris, president of RETS at the time Franklin attended, says 80 percent of RETS graduates succeeded in finding jobs related to their fields within 60 days of graduating. Washington Post's (WPO) Kaplan Higher Education bought RETS in 2002. About 20 percent of students at the school, now called Kaplan Career Institute, default in the first two years they're required to make payments—more than three times the rate at public colleges. That figure reflects the low-income backgrounds of Kaplan students, spokeswoman Melissa Mack says. "Most Americans are willing to take some risk with a student loan, knowing the payoff for them individually can be quite significant," Miller says.
The degree didn't pay off for Franklin. "I got an outstanding student loan, I got no job, and I'm further and further in debt," he says. "It's basically crippling me from doing a lot of things to improve my living condition."
The bottom line: Students at for-profit colleges graduate with higher debt loads and loan default rates than those who attend conventional schools.
John Hechinger is a reporter for Bloomberg News.
Students seeking to move up in life by getting a degree from a for-profit college are being trapped in a growing underclass of education debtors. Under U.S. law, their loan obligations can rarely be discharged in bankruptcy, making them more onerous than credit-card debt or subprime mortgages. Defaults can subject students to government confiscation of salaries, tax refunds, and Social Security payments—and disqualify them for aid to get more marketable degrees.
Students at for-profit colleges carry the biggest loans in U.S. higher education. Bachelor's degree recipients at for-profits have median debt of $31,190 compared with $17,040 at private, nonprofit institutions and $7,960 at public colleges, according to Washington-based nonprofit Education Trust.
While currently enrolling one in eight U.S. students, for-profit colleges account for almost one in two federal-loan defaults. The Obama Administration wants to curb rising default rates and the threat of student destitution by cutting off federal funds to for-profit college programs whose students have the worst loan-repayment rates and lowest incomes relative to debt, which suggests their degrees aren't translating into higher salaries. That's if a degree is earned: The graduation rate for first-time, full-time candidates for four-year degrees at for-profit colleges is 22 percent, compared with 55 percent at state colleges.
For-profit colleges have higher student-loan default rates and dropout rates because they serve lower-income students, minorities, immigrants, and working adults, says Harris Miller, president of the Association of Private Sector Colleges and Universities, a trade group.
Don Harris, president of RETS at the time Franklin attended, says 80 percent of RETS graduates succeeded in finding jobs related to their fields within 60 days of graduating. Washington Post's (WPO) Kaplan Higher Education bought RETS in 2002. About 20 percent of students at the school, now called Kaplan Career Institute, default in the first two years they're required to make payments—more than three times the rate at public colleges. That figure reflects the low-income backgrounds of Kaplan students, spokeswoman Melissa Mack says. "Most Americans are willing to take some risk with a student loan, knowing the payoff for them individually can be quite significant," Miller says.
The degree didn't pay off for Franklin. "I got an outstanding student loan, I got no job, and I'm further and further in debt," he says. "It's basically crippling me from doing a lot of things to improve my living condition."
The bottom line: Students at for-profit colleges graduate with higher debt loads and loan default rates than those who attend conventional schools.
John Hechinger is a reporter for Bloomberg News.
Wednesday, December 8, 2010
How Much Evidence of Career College Abuses Do They Need?
Stephen Burd writes in High Ed Watch:
As we wrote last week, the incoming Republican leaders of the House of Representatives have assured for-profit college lobbyists that they plan to go to bat for the industry in the next Congress. But these leaders -- such as the soon-to-be House Speaker John Boehner (R-OH) and House education committee chairman John Kline (R-MN) -- have also made clear that their willingness to do so could be tempered by further revelations of abuses in the sector.
“I get told every time I’m around Boehner or Kline or whoever that ‘we’re going to make certain all sectors get a fair treatment if we’re back in control, but we will not give you cover if you’re doing the wrong thing,’” Bruce Leftwich, a top lobbyist with the group formerly known as the Career College Association, said during a post-election wrap-up the organization held with its members.
The question we have at Higher Ed Watch is how much evidence of abuses do they need?
Just consider what we have learned over the last several weeks from reports in The New York Times and BusinessWeek about The Washington Post’s Kaplan Inc :
According to BusinessWeek, Kaplan’s recruiters use the company’s online Concord Law School as a selling point to attract students -- telling them that once they earn their bachelor’s degree, they can pursue a career in law at Concord. However, these enrollment counselors, the article states, typically leave out one pertinent detail: that Concord graduates are only eligible to take the bar exam in California since the school is not accredited by the American Bar Association.
When asked about this omission, a company spokeswoman said that it would be inappropriate for undergraduate admissions advisers to provide details about the law school's programs. “It isn’t their job,” the magazine paraphrased her as saying, adding that those who specifically seek out more information about Concord are referred to the law school’s staff.
In a front-page article last week, The New York Times reported that it had talked to “dozens of current and former Kaplan employees” who raised serious concerns about the company’s recruiting practices. Many of these individuals said that Kaplan specifically targeted financially needy students “whose chances of succeeding were low” so that the schools could get access to their federal financial aid. These current and former employees specifically cited a training manual that was “used by recruiters in Pittsburgh whose ‘profile’ of Kaplan students listed markers like low self-esteem, reliance on public assistance, being fired, laid off, incarcerated, or physically or mentally abused,” the newspaper wrote. A Kaplan spokeswoman acknowledged that the manual exists but said that it hadn’t been used since 2006.
According to The New York Times, one major area of concern is how the company markets its criminal justice program. “Students who were recruited were led to believe that they could get into the C.I.A. or F.B.I. or Border Patrol or crime-scene investigation when they graduated, and earn $40-$50,000,” a former Kaplan instructor and administrator, who is involved a lawsuit against the company, stated. “But those jobs all require advanced training.” Most graduates end up working as security guards, earning $8 to $9-an-hour -- jobs they could have gotten without
Kaplan’s expensive training programs, she said. [Meanwhile, an undercover, hidden-camera investigation by ABC News revealed last week that Remington College, a privately-held chain of for-profit schools, had enrolled people with prior felony convictions into its criminal justice program, even though former felons are generally barred from working in law enforcement, including as security guards.]
The New York Times article also reported that for several years, one Kaplan campus in Broomall, PA, aggressively recruited students into its surgical-technology program even though the school knew full well that it didn’t have enough placement opportunities at hospitals to provide them with the hands-on training that was required of them to earn their degrees. One student, a single mother with four kids, said she was “in limbo for more than a year” after she completed her courses, waiting for the school to place her. She was finally “given one short placement,” which was “not enough to graduate.” According to the newspaper, she is now $14,000 in debt but without a degree. The school’s former director of education, who has filed a False Claims lawsuit against the company, said that the student’s experience was common. In his complaint, he stated, “that although the school had not had enough placement opportunities for the surgical-technology program since 2002, it kept enrolling new students, taking their federal student aid, leaving them stranded without a placement and then dropping them from the program, which was phased out in 2007,” the newspaper reported.
Although these news accounts focus on Kaplan, it’s pretty clear that the alleged abuses described in these articles are not isolated to one company’s institutions. In fact, according to the recent undercover investigation by the Government Accountability Office (GAO), they appear to be fairly widespread at the nation’s largest for-profit higher education corporations.
In August, the GAO revealed that it had found (and secretly recorded) “fraudulent, deceptive, or otherwise questionable marketing practices” at every single one of the 15 for-profit schools it visited. These campuses included ones owned by Alta Colleges, the Apollo Group, Corinthian Colleges, Education Management Corporation, as well as Kaplan.
Meanwhile, in the three hearings it has held this year on for-profit higher education, the Senate Health, Education, Labor and Pensions Committee has heard troubling testimony from several of its witnesses. These include:
Yasmine Issa, a single mother who completed a training program in ultrasound technology at Career Education Corporation’s Sanford Brown University only to find out later that the program was not accredited. Recruiters, who had stressed the school’s accreditation to Issa, apparently had forgotten to mention that the sonography program lacked the necessary specialized accreditation. As a result, Issa, who paid $32,000 for the program (including $15,000 in federal loans), wasn’t eligible to sit for the licensing exam or to find work as a sonographer.
Joshua Pruyn, a former admissions director at Alta’s Westwood College, testified that the schools’ recruiters regularly misled prospective students about the total cost of their programs (which he said was $75,000 for a bachelor’s degree.) Often they would tell students the per-term cost (around $4,800) without making clear that there were five terms a year, he said. He also told the Senate committee that recruiters were directed to deceive students about the institutional private loans it was providing them. According to his testimony, enrollment counselors were to refer to the high interest loans as “student supplemental funding,” without revealing their terms or conditions. Far from discouraging the deceit, he said, his corporate bosses rewarded it. “The most appalling example,” he stated, “was when the assistant director of admissions on my team was presented with a “Best Liar” award at a team celebration.”
Kathleen Bittel, who was a career service advisor in the online division of EDMC’s Art Institute of Pittsburgh when she testified. As we reported, she told the committee of the tricks that EDMC has allegedly used to inflate its official job placement numbers. She revealed that graduates had to work at their jobs for only one day to be considered successfully placed. In addition, she said that employees were pressured to inflate the schools’ job placement numbers by counting students who were clearly not working in the field in which they had trained. “Employees were expected to convince graduates that skills they used in jobs such as working as waiters, payroll clerks, retail sales, and gas station attendants were actually related to their course of study in areas like graphic design and residential planning,” she stated.
At Higher Ed Watch, we do not understand how any member of Congress -- Democrat or Republican -- could hear these allegations without taking pause, let alone how they could rush to the industry’s defense. If these schools did not shower lawmakers with campaign contributions and spend millions of dollars each year on high-powered Washington lobbyists, would there even be a question of whether more scrutiny was warranted?
Suggested Reading
Three Steps House Repubs May Take to Shield For-Profit Colleges
Breaking News: A Key Witness at Senate Hearing Will Reveal How For-Profit Colleges Cook the Books on Job Placements
Heads Will Roll at For-Profit Colleges -- But Not the Right Ones
A Long Overdue Examination of For-Profit Higher Education
As we wrote last week, the incoming Republican leaders of the House of Representatives have assured for-profit college lobbyists that they plan to go to bat for the industry in the next Congress. But these leaders -- such as the soon-to-be House Speaker John Boehner (R-OH) and House education committee chairman John Kline (R-MN) -- have also made clear that their willingness to do so could be tempered by further revelations of abuses in the sector.
“I get told every time I’m around Boehner or Kline or whoever that ‘we’re going to make certain all sectors get a fair treatment if we’re back in control, but we will not give you cover if you’re doing the wrong thing,’” Bruce Leftwich, a top lobbyist with the group formerly known as the Career College Association, said during a post-election wrap-up the organization held with its members.
The question we have at Higher Ed Watch is how much evidence of abuses do they need?
Just consider what we have learned over the last several weeks from reports in The New York Times and BusinessWeek about The Washington Post’s Kaplan Inc :
According to BusinessWeek, Kaplan’s recruiters use the company’s online Concord Law School as a selling point to attract students -- telling them that once they earn their bachelor’s degree, they can pursue a career in law at Concord. However, these enrollment counselors, the article states, typically leave out one pertinent detail: that Concord graduates are only eligible to take the bar exam in California since the school is not accredited by the American Bar Association.
When asked about this omission, a company spokeswoman said that it would be inappropriate for undergraduate admissions advisers to provide details about the law school's programs. “It isn’t their job,” the magazine paraphrased her as saying, adding that those who specifically seek out more information about Concord are referred to the law school’s staff.
In a front-page article last week, The New York Times reported that it had talked to “dozens of current and former Kaplan employees” who raised serious concerns about the company’s recruiting practices. Many of these individuals said that Kaplan specifically targeted financially needy students “whose chances of succeeding were low” so that the schools could get access to their federal financial aid. These current and former employees specifically cited a training manual that was “used by recruiters in Pittsburgh whose ‘profile’ of Kaplan students listed markers like low self-esteem, reliance on public assistance, being fired, laid off, incarcerated, or physically or mentally abused,” the newspaper wrote. A Kaplan spokeswoman acknowledged that the manual exists but said that it hadn’t been used since 2006.
According to The New York Times, one major area of concern is how the company markets its criminal justice program. “Students who were recruited were led to believe that they could get into the C.I.A. or F.B.I. or Border Patrol or crime-scene investigation when they graduated, and earn $40-$50,000,” a former Kaplan instructor and administrator, who is involved a lawsuit against the company, stated. “But those jobs all require advanced training.” Most graduates end up working as security guards, earning $8 to $9-an-hour -- jobs they could have gotten without
Kaplan’s expensive training programs, she said. [Meanwhile, an undercover, hidden-camera investigation by ABC News revealed last week that Remington College, a privately-held chain of for-profit schools, had enrolled people with prior felony convictions into its criminal justice program, even though former felons are generally barred from working in law enforcement, including as security guards.]
The New York Times article also reported that for several years, one Kaplan campus in Broomall, PA, aggressively recruited students into its surgical-technology program even though the school knew full well that it didn’t have enough placement opportunities at hospitals to provide them with the hands-on training that was required of them to earn their degrees. One student, a single mother with four kids, said she was “in limbo for more than a year” after she completed her courses, waiting for the school to place her. She was finally “given one short placement,” which was “not enough to graduate.” According to the newspaper, she is now $14,000 in debt but without a degree. The school’s former director of education, who has filed a False Claims lawsuit against the company, said that the student’s experience was common. In his complaint, he stated, “that although the school had not had enough placement opportunities for the surgical-technology program since 2002, it kept enrolling new students, taking their federal student aid, leaving them stranded without a placement and then dropping them from the program, which was phased out in 2007,” the newspaper reported.
Although these news accounts focus on Kaplan, it’s pretty clear that the alleged abuses described in these articles are not isolated to one company’s institutions. In fact, according to the recent undercover investigation by the Government Accountability Office (GAO), they appear to be fairly widespread at the nation’s largest for-profit higher education corporations.
In August, the GAO revealed that it had found (and secretly recorded) “fraudulent, deceptive, or otherwise questionable marketing practices” at every single one of the 15 for-profit schools it visited. These campuses included ones owned by Alta Colleges, the Apollo Group, Corinthian Colleges, Education Management Corporation, as well as Kaplan.
Meanwhile, in the three hearings it has held this year on for-profit higher education, the Senate Health, Education, Labor and Pensions Committee has heard troubling testimony from several of its witnesses. These include:
Yasmine Issa, a single mother who completed a training program in ultrasound technology at Career Education Corporation’s Sanford Brown University only to find out later that the program was not accredited. Recruiters, who had stressed the school’s accreditation to Issa, apparently had forgotten to mention that the sonography program lacked the necessary specialized accreditation. As a result, Issa, who paid $32,000 for the program (including $15,000 in federal loans), wasn’t eligible to sit for the licensing exam or to find work as a sonographer.
Joshua Pruyn, a former admissions director at Alta’s Westwood College, testified that the schools’ recruiters regularly misled prospective students about the total cost of their programs (which he said was $75,000 for a bachelor’s degree.) Often they would tell students the per-term cost (around $4,800) without making clear that there were five terms a year, he said. He also told the Senate committee that recruiters were directed to deceive students about the institutional private loans it was providing them. According to his testimony, enrollment counselors were to refer to the high interest loans as “student supplemental funding,” without revealing their terms or conditions. Far from discouraging the deceit, he said, his corporate bosses rewarded it. “The most appalling example,” he stated, “was when the assistant director of admissions on my team was presented with a “Best Liar” award at a team celebration.”
Kathleen Bittel, who was a career service advisor in the online division of EDMC’s Art Institute of Pittsburgh when she testified. As we reported, she told the committee of the tricks that EDMC has allegedly used to inflate its official job placement numbers. She revealed that graduates had to work at their jobs for only one day to be considered successfully placed. In addition, she said that employees were pressured to inflate the schools’ job placement numbers by counting students who were clearly not working in the field in which they had trained. “Employees were expected to convince graduates that skills they used in jobs such as working as waiters, payroll clerks, retail sales, and gas station attendants were actually related to their course of study in areas like graphic design and residential planning,” she stated.
At Higher Ed Watch, we do not understand how any member of Congress -- Democrat or Republican -- could hear these allegations without taking pause, let alone how they could rush to the industry’s defense. If these schools did not shower lawmakers with campaign contributions and spend millions of dollars each year on high-powered Washington lobbyists, would there even be a question of whether more scrutiny was warranted?
Suggested Reading
Three Steps House Repubs May Take to Shield For-Profit Colleges
Breaking News: A Key Witness at Senate Hearing Will Reveal How For-Profit Colleges Cook the Books on Job Placements
Heads Will Roll at For-Profit Colleges -- But Not the Right Ones
A Long Overdue Examination of For-Profit Higher Education
Kaplan Will Eliminate 770 Positions
Kaplan Higher Education announced Tuesday that it is eliminating 770 positions, about 5 percent of its work force.
Jeff Conlon, president and CEO of Kaplan Higher Education, said: "Our enrollments have slowed recently, as they have at other proprietary schools. More importantly, we have made a strategic decision to become more selective in the students we enroll, focusing on students who are most likely to thrive in a rigorous academic environment and meet their financial obligations. These factors have led to a shift in our personnel
Jeff Conlon, president and CEO of Kaplan Higher Education, said: "Our enrollments have slowed recently, as they have at other proprietary schools. More importantly, we have made a strategic decision to become more selective in the students we enroll, focusing on students who are most likely to thrive in a rigorous academic environment and meet their financial obligations. These factors have led to a shift in our personnel
Monday, November 8, 2010
NPR correspondent predicts defeat of for-profit college regulations
On Friday, Cokie Roberts, senior news analyst at NPR, predicted that Democratic lawmakers, in particular, will be reluctant to aggressively regulate for-profit colleges because of their ties to the Washington Post, one of the nation’s most powerful newspapers. The Washington Post Co. owns Kaplan University, among other for-profits.
“But I have to tell you, the biggest objection to [regulation] has come from the fact that The Washington Post would go out of business if Kaplan went out of business – yes, I see Peter Smith waiving,” Roberts said with a chuckle. “Because The Washington Post money all comes from Kaplan and the Democrats don’t want The Washington Post to go out of business, so I think there are a lot of forces militating against those rules at the moment.”
While the Post maintains the independence of its newsroom, its editorial page has argued against new rules such as the "gainful employment" regulation proposed by the U.S. Department of Education.
The gainful employment rule is a quality measure that restricts federal financial aid to those for-profits that have a student repayment rate of 45% or better in an effort to ensure that the education students pay for results in employment with adequate compensation.
Currently, many for-profit colleges such as Everest College, do not meet this standard. As a result, students who are frequently paying $20,000 to $70,000 for their educations graduate with debts they have no possibility of repaying.
Iowa Senator Tom Harkin and Milwaukee Congresswoman Gwen Moore are among those who support the gainful employment regulation
“But I have to tell you, the biggest objection to [regulation] has come from the fact that The Washington Post would go out of business if Kaplan went out of business – yes, I see Peter Smith waiving,” Roberts said with a chuckle. “Because The Washington Post money all comes from Kaplan and the Democrats don’t want The Washington Post to go out of business, so I think there are a lot of forces militating against those rules at the moment.”
While the Post maintains the independence of its newsroom, its editorial page has argued against new rules such as the "gainful employment" regulation proposed by the U.S. Department of Education.
The gainful employment rule is a quality measure that restricts federal financial aid to those for-profits that have a student repayment rate of 45% or better in an effort to ensure that the education students pay for results in employment with adequate compensation.
Currently, many for-profit colleges such as Everest College, do not meet this standard. As a result, students who are frequently paying $20,000 to $70,000 for their educations graduate with debts they have no possibility of repaying.
Iowa Senator Tom Harkin and Milwaukee Congresswoman Gwen Moore are among those who support the gainful employment regulation
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