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 University of Phoenix. Show all posts
Showing posts with label University of Phoenix. Show all posts
Wednesday, March 27, 2013
Wednesday, March 13, 2013
Accreditor puts Ashford on notice
Last week Bridgepoint Education Inc. announced that its Ashford University has been placed "on notice" by the for-profit college's regional accreditor, the Higher Learning Commission of the North Central Association of Colleges and Schools.
The sanction, which is less serious than probation, is based on the commission's concerns about Ashford's inability to meet new standards for accreditation, which the commission put into effect in January, as well as Ashford's current noncompliance with the accreditor's "substantial presence policy" (which requires institutions to have a meaningful physical presence in the agency's geographic region), according to a Bridgepoint corporate filing. Ashford last year had its bid rejected for accreditation with the Western Association of Schools and Colleges. And the commission's sanction follows a site team's recommendation last week that the University of Phoenix be put on probation.
The sanction, which is less serious than probation, is based on the commission's concerns about Ashford's inability to meet new standards for accreditation, which the commission put into effect in January, as well as Ashford's current noncompliance with the accreditor's "substantial presence policy" (which requires institutions to have a meaningful physical presence in the agency's geographic region), according to a Bridgepoint corporate filing. Ashford last year had its bid rejected for accreditation with the Western Association of Schools and Colleges. And the commission's sanction follows a site team's recommendation last week that the University of Phoenix be put on probation.
Friday, March 1, 2013
Accreditors recommend probation for University of Phoenix
A team of accreditors reviewing the University of Phoenix has recommended that the school be placed on probation, the university's parent said Monday, jeopardizing the reputation of the nation's largest for-profit college and its ability to collect federal student aid dollars crucial to the school's bottom line.
The University of Phoenix had a three-year default rate of more than 26 percent, according to the most recent federal data.
The Apollo Group, which owns the 319,000-student university, said in a filing with the Securities and Exchange Commission that a regional accreditation review team determined that the University of Phoenix had "insufficient autonomy" from its corporate parent -– a development that may prevent the university from achieving its "mission and successful operation."
The Apollo Group controls the leadership of the University of Phoenix board. Apollo Group representatives said the company intends to appeal the recommendation. The probation recommendation is not final. The board of the Higher Learning Commission, a Midwest college accrediting body, will likely make a final decision in June. But the announcement signals that university accreditors are tightening reviews of for-profit colleges, which experienced explosive enrollment growth during the Great Recession as millions sought to improve their fortunes with a college degree.
All colleges must be accredited in order to remain eligible for federal student aid. Six regional accreditors collect fees from schools to consider them for approval, part of a peer-review process that dates back more than a century. Reviewers certify such things as academic courses and quality, and the accreditation standards are used in part to determine whether students can transfer credits from one institution to another.
Members of Congress in recent years have criticized the accreditation system as a rubber-stamp regulatory process that does little to protect taxpayer investments in higher education.
For-profit colleges such as the University of Phoenix get much of their revenue from federal aid programs, including subsidized student loans and Pell grants. The University of Phoenix last year received 84 percent of its revenue from federal financial aid programs, totaling more than $3.2 billion, according to company securities filings. The school's logo and advertisements can be seen on television commercials and highway billboards across the nation.
The for-profit college industry has come under fire in recent years, as the Obama administration, state attorneys general and lawmakers have questioned high tuition, low graduation rates and high rates of student loan defaults at many schools. More than 22 percent of students at for-profit colleges defaulted on federal loans within three years -- nearly twice the rate of students at public institutions, according to federal data.
Despite Phoenix's high default rates, plummeting enrollments, multiple government investigations, and intense media scrutiny the Apollo Group Inc., recently rewarded its retiring founder and CEO, John Sperling, what can only be characterized as a lavish retirement package. Sperling, who retired at the end of 2012 and now holds the title of chairman emeritus, will receive a $5 million “special retirement bonus” this month, according to a securities filing. He also gets a lifetime annuity—$70,833.33 a month— and ownership of the two company vehicles he used when serving as executive chairman. Apollo will also cover “reasonable out-of-pocket” medical- and dental-care coverage the 92-year-old incurs for the rest of his life.
In the past year, regional accreditors have cracked down on some for-profit institutions, including Ashford University, which in seven years morphed from a 300-student Catholic school in Iowa into a massive online institution serving nearly 90,000 students. Regional accreditors on the West Coast denied Ashford's bid for accreditation last year, arguing that the school had low graduation rates and was spending much more money on new student recruitment than educating current students.
The Higher Learning Commission has taken no formal action against the University of Phoenix. School officials said in the SEC filing on Monday that a review team found that the university's board was unable to "assure the university's integrity" and "make decisions necessary to achieve the institution's mission and successful operation."
The Apollo Group elects members of the University of Phoenix board of directors. The university's 11-member board includes four members who also serve on the parent company's board or senior leadership team. If the Higher Learning Commission board decides to place the University of Phoenix on probation, the university would have up to two years to remedy problems. The school would remain accredited while on probation, meaning it would not be disqualified from receiving federal aid dollars.
Apollo Group executives mentioned the likelihood of negative findings from accreditors in a conference call with investors last month. The company wrote in Monday's public filing that if the school were placed on probation, its reputation "could be adversely affected, which in turn may negatively impact (the) ability to recruit and enroll students and to recruit and retain faculty and staff."
As the Obama administration and Congress have stepped up scrutiny of for-profit colleges, University of Phoenix enrollment dropped to 356,000 in August from more than 460,000 two years earlier, according to company securities filings. A quarterly filing last month said enrollment was 319,000.
The University of Phoenix had a three-year default rate of more than 26 percent, according to the most recent federal data.
The Apollo Group, which owns the 319,000-student university, said in a filing with the Securities and Exchange Commission that a regional accreditation review team determined that the University of Phoenix had "insufficient autonomy" from its corporate parent -– a development that may prevent the university from achieving its "mission and successful operation."
The Apollo Group controls the leadership of the University of Phoenix board. Apollo Group representatives said the company intends to appeal the recommendation. The probation recommendation is not final. The board of the Higher Learning Commission, a Midwest college accrediting body, will likely make a final decision in June. But the announcement signals that university accreditors are tightening reviews of for-profit colleges, which experienced explosive enrollment growth during the Great Recession as millions sought to improve their fortunes with a college degree.
All colleges must be accredited in order to remain eligible for federal student aid. Six regional accreditors collect fees from schools to consider them for approval, part of a peer-review process that dates back more than a century. Reviewers certify such things as academic courses and quality, and the accreditation standards are used in part to determine whether students can transfer credits from one institution to another.
Members of Congress in recent years have criticized the accreditation system as a rubber-stamp regulatory process that does little to protect taxpayer investments in higher education.
For-profit colleges such as the University of Phoenix get much of their revenue from federal aid programs, including subsidized student loans and Pell grants. The University of Phoenix last year received 84 percent of its revenue from federal financial aid programs, totaling more than $3.2 billion, according to company securities filings. The school's logo and advertisements can be seen on television commercials and highway billboards across the nation.
The for-profit college industry has come under fire in recent years, as the Obama administration, state attorneys general and lawmakers have questioned high tuition, low graduation rates and high rates of student loan defaults at many schools. More than 22 percent of students at for-profit colleges defaulted on federal loans within three years -- nearly twice the rate of students at public institutions, according to federal data.
Despite Phoenix's high default rates, plummeting enrollments, multiple government investigations, and intense media scrutiny the Apollo Group Inc., recently rewarded its retiring founder and CEO, John Sperling, what can only be characterized as a lavish retirement package. Sperling, who retired at the end of 2012 and now holds the title of chairman emeritus, will receive a $5 million “special retirement bonus” this month, according to a securities filing. He also gets a lifetime annuity—$70,833.33 a month— and ownership of the two company vehicles he used when serving as executive chairman. Apollo will also cover “reasonable out-of-pocket” medical- and dental-care coverage the 92-year-old incurs for the rest of his life.
In the past year, regional accreditors have cracked down on some for-profit institutions, including Ashford University, which in seven years morphed from a 300-student Catholic school in Iowa into a massive online institution serving nearly 90,000 students. Regional accreditors on the West Coast denied Ashford's bid for accreditation last year, arguing that the school had low graduation rates and was spending much more money on new student recruitment than educating current students.
The Higher Learning Commission has taken no formal action against the University of Phoenix. School officials said in the SEC filing on Monday that a review team found that the university's board was unable to "assure the university's integrity" and "make decisions necessary to achieve the institution's mission and successful operation."
The Apollo Group elects members of the University of Phoenix board of directors. The university's 11-member board includes four members who also serve on the parent company's board or senior leadership team. If the Higher Learning Commission board decides to place the University of Phoenix on probation, the university would have up to two years to remedy problems. The school would remain accredited while on probation, meaning it would not be disqualified from receiving federal aid dollars.
Apollo Group executives mentioned the likelihood of negative findings from accreditors in a conference call with investors last month. The company wrote in Monday's public filing that if the school were placed on probation, its reputation "could be adversely affected, which in turn may negatively impact (the) ability to recruit and enroll students and to recruit and retain faculty and staff."
As the Obama administration and Congress have stepped up scrutiny of for-profit colleges, University of Phoenix enrollment dropped to 356,000 in August from more than 460,000 two years earlier, according to company securities filings. A quarterly filing last month said enrollment was 319,000.
Monday, February 11, 2013
U. of Phoenix rebrands in face of plummeting enrollment and stock price
“I am a Phoenix” is no more. The once-ubiquitous TV commercials touting student and faculty pride in the University of Phoenix have been replaced by a new ad campaign that its marketers hope will “project a hopeful, positive message for America.” It’s also designed to lay the ground for what one university executive called “a massive repositioning” of the institution.
The new ad push is hardly surprising. As The Chronicle reported this week, Phoenix and just about every other major for-profit college are scrambling to reverse more than a year and a half of enrollment declines.
Phoenix’s new “Let’s Get to Work” campaign, showcased here on the university’s YouTube feed, reflects market research that found that many Phoenix students don’t enroll for a degree per se. “They come,” said Barry Feierstein, the university’s chief operating officer, “for what the degree will do for them.”
The University of Phoenix, the nation’s largest for-profit university, is closing 115 of its brick-and-mortar locations, including 25 main campuses and 90 smaller satellite learning centers. The closings will affect some 13,000 students, about 4 percent of its student body of 328,000.
It is also laying off about 800 employees out of a staff of 17,000, according to Mark Brenner, senior vice president for communications at the Apollo Group, which owns the university and its stock price has lost nearly two-thirds of its market value in the past year.
The “hopeful, positive” part of the campaign began in September with a minute-long commercial narrated by Phylicia Rashad, whom many may remember for her portrayal of a successful working mother on The Cosby Show, a TV sitcom. Phoenix has been shifting its focus back to working adult students, who are more likely to succeed, after years of high-flying growth built on recruiting students who fared poorly in traditional colleges and left with high debts and no degrees.
Ms. Rashad’s script makes no mention of the university (its name comes on screen at the end) but does remind viewers that, “for every one of those 3.7 million unfilled jobs, there’s someone amazing out there who deserves a chance to show the world what they’re capable of.”
Additional ads made their debut in January, including one, dubbed “Lucky Socks,” that highlights the career connections students can forge through the university’s alumni network. Phoenix has bought 63,000 pairs of the bright-red University of Phoenix socks that appear on characters in the ad to send to alumni leaders. A new ad focused on the university’s corporate partnerships made its debut this Sunday, during the Grammy Awards broadcast, and another is scheduled to air during the Academy Awards, at the end of the month.
The university has not said what it’s spending on the campaign but told investment analysts last month that its overall spending on advertising would increase by 15 percent in the next quarter. The university’s parent company, the Apollo Group, spent more than $665-million annually on marketing in the 2012 fiscal year, a sum that accounted for about 15 percent of its revenues.
The initial ad’s soundtrack might strike some listeners as an interesting choice. It’s a slow, solo-piano version of the music for “Amazing Grace,” presumably chosen to complement the narrator’s description of those “amazing” students and not for its history as a hymn about redemption.
The new ad push is hardly surprising. As The Chronicle reported this week, Phoenix and just about every other major for-profit college are scrambling to reverse more than a year and a half of enrollment declines.
Phoenix’s new “Let’s Get to Work” campaign, showcased here on the university’s YouTube feed, reflects market research that found that many Phoenix students don’t enroll for a degree per se. “They come,” said Barry Feierstein, the university’s chief operating officer, “for what the degree will do for them.”
The University of Phoenix, the nation’s largest for-profit university, is closing 115 of its brick-and-mortar locations, including 25 main campuses and 90 smaller satellite learning centers. The closings will affect some 13,000 students, about 4 percent of its student body of 328,000.
It is also laying off about 800 employees out of a staff of 17,000, according to Mark Brenner, senior vice president for communications at the Apollo Group, which owns the university and its stock price has lost nearly two-thirds of its market value in the past year.
The “hopeful, positive” part of the campaign began in September with a minute-long commercial narrated by Phylicia Rashad, whom many may remember for her portrayal of a successful working mother on The Cosby Show, a TV sitcom. Phoenix has been shifting its focus back to working adult students, who are more likely to succeed, after years of high-flying growth built on recruiting students who fared poorly in traditional colleges and left with high debts and no degrees.
Ms. Rashad’s script makes no mention of the university (its name comes on screen at the end) but does remind viewers that, “for every one of those 3.7 million unfilled jobs, there’s someone amazing out there who deserves a chance to show the world what they’re capable of.”
Additional ads made their debut in January, including one, dubbed “Lucky Socks,” that highlights the career connections students can forge through the university’s alumni network. Phoenix has bought 63,000 pairs of the bright-red University of Phoenix socks that appear on characters in the ad to send to alumni leaders. A new ad focused on the university’s corporate partnerships made its debut this Sunday, during the Grammy Awards broadcast, and another is scheduled to air during the Academy Awards, at the end of the month.
The university has not said what it’s spending on the campaign but told investment analysts last month that its overall spending on advertising would increase by 15 percent in the next quarter. The university’s parent company, the Apollo Group, spent more than $665-million annually on marketing in the 2012 fiscal year, a sum that accounted for about 15 percent of its revenues.
The initial ad’s soundtrack might strike some listeners as an interesting choice. It’s a slow, solo-piano version of the music for “Amazing Grace,” presumably chosen to complement the narrator’s description of those “amazing” students and not for its history as a hymn about redemption.
Tuesday, January 22, 2013
University of Phoenix CEO gets lavish retirement package
For more than a decade public school teachers and college and university faculty have been demonized for negotiating modest pensions and retirement benefits even as private sector CEO's walked away with multi-million dollar retirement packages and funding for public education and higher education was slashed.
Now the Apollo Group Inc., owner of the University of Phoenix, the nation's largest for-profit college, has given its retiring founder and CEO, John Sperling, what can only be characterized as a lavish retirement package despite declining student enrollment, multiple government investigations, and intense media scrutiny.
Sperling, who retired at the end of 2012 and now holds the title of chairman emeritus, will receive a $5 million “special retirement bonus” this month, according to a securities filing Thursday, spotted by Footnoted’s Michelle Leder. He also gets a lifetime annuity—$70,833.33 a month— and ownership of the two company vehicles he used when serving as executive chairman. Apollo will also cover “reasonable out-of-pocket” medical- and dental-care coverage the 92-year-old incurs for the rest of his life.
Sperling's retirement package defines nepotism. Apollo's board chairman is John Sperling’s son, Peter Sperling.
It isn't as if the elder Sperling was underpaid. He received total compensation valued at $6.95 million in fiscal 2012, including salary, options and non-equity incentive pay, according to an earlier securities filing.
A Senate committee chaired by Senator Tom Harkin of Iowa has criticized the costs of for-profit colleges like University of Phoenix, arguing that too small a share of the taxpayer-funded loans on which the schools rely for most of their funding is being allocated to instruction and academic support and that their graduation and job placement rates are abysmally low. More than 90% of University of Phoenix’s net revenue in fiscal 2012 came from Title IV federal financial aid programs. For-profit colleges are notorious for investing more in marketing and recruitment than in education.
Nor can Sperling's exorbitant taxpayer funded retirement be justified by the University of Phoenix's financial performance or enrollments. Apollo lost nearly two-thirds of its market value in the past year, and on Jan 8 it reported that its fiscal first-quarter revenue had fallen nearly 10% to $1.06 billion as enrollment tumbled by more than 14%.
That doesn't mean that the Sperling's aren't fighting back.
The school rolled out a new marketing campaign last year to stress its offerings of practical, career-oriented courses. And earlier this week, WSJ reported, it unveiled an executive-education course on innovation, taught by top business-school faculty, as part of an effort to tap into the corporate-training market and diversify beyond its shrinking University of Phoenix revenue stream.
The school rolled out a new marketing campaign last year to stress its offerings of practical, career-oriented courses. And earlier this week, WSJ reported, it unveiled an executive-education course on innovation, taught by top business-school faculty, as part of an effort to tap into the corporate-training market and diversify beyond its shrinking University of Phoenix revenue stream.
To be sure, Sperling isn’t alone in getting cushy compensation upon retirement. The WSJ’s Joann Lublin wrote in November about some of the more generous consulting agreements for ex-executives at companies including IBM, First Cash Financial Services Inc. and elsewhere. Some, Lublin reported, even struck deals to get paid after their death. That doesn't appear to be part of Sperling's deal. But unlike the students who the University of Phoenix has preyed on and left with little more than shattered dreams and mountains of debt, John Sperling will have nothing to worry about for the rest of his life.
This blog is based on an article in the Wall Street Journal entitled "University of Phoenix retirement plan: nice work if you can get it" by Melissa Korn.
This blog is based on an article in the Wall Street Journal entitled "University of Phoenix retirement plan: nice work if you can get it" by Melissa Korn.
Monday, January 14, 2013
University of Phoenix placed "on notice" by accreditors
The University of Phoenix expects to be placed "on notice" by its regional accreditor, the Higher Learning Commission of the North Central Association. The commission recently conducted a comprehensive review of the university, and an official with the Apollo Group, which owns Phoenix, told investors last week that the commission had said it would soon issue a report identifying "several areas of concern" that arose from the review. Placing the university on notice is less serious than probation. Phoenix would have up to two years to correct issues that could affect its accreditation status.
Thursday, October 18, 2012
3 University of Phoenix campuses in Wisconsin will close
Yesterday the University of Phoenix announced that it was closing 115 locations across the country, a move that will affect 13,000 students. Three of these campuses are located in Wisconsin. The Madison, Brookfield and Grand Chute campuses have stopped enrolling students and eventually will close. At this point the Milwaukee campus will remain open.
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The closures come as parent company Apollo Group Inc. said earlier this week that its fourth-quarter net income tumbled 60%, hurt by higher costs and declining enrollment at the University of Phoenix. .
The University of Phoenix currently has about 328,000 students, down from a peak of more than 400,000. Following the closures, it will be left with 112 locations in 36 states, the District of Columbia and Puerto Rico.
Shares in the Phoenix-based company tumbled nearly 8% in after-hours trading.
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The closures come as parent company Apollo Group Inc. said earlier this week that its fourth-quarter net income tumbled 60%, hurt by higher costs and declining enrollment at the University of Phoenix. .
The University of Phoenix currently has about 328,000 students, down from a peak of more than 400,000. Following the closures, it will be left with 112 locations in 36 states, the District of Columbia and Puerto Rico.
Shares in the Phoenix-based company tumbled nearly 8% in after-hours trading.
University of Phoenix to close 115 locations
The University of Phoenix, the nation’s largest for-profit university, is closing 115 of its brick-and-mortar locations, including 25 main campuses and 90 smaller satellite learning centers. The closings will affect some 13,000 students, about 4 percent of its student body of 328,000.
It is also laying off about 800 employees out of a staff of 17,000, according to Mark Brenner, senior vice president for communications at the Apollo Group, which owns the university.
After the closings, which are to be completed next year, the University of Phoenix will be left with a nationwide network of 112 locations and a physical presence in 36 states, the District of Columbia and Puerto Rico.
Apollo stock closed Wednesday at $21.40, down $6.09, a 22 percent decline.
Enrollments at the University of Phoenix and in the for-profit sector over all have been declining in the last two years, partly because of growing competition from other online providers, including nonprofit and public universities, and a steady drumroll of negative publicity about the sector’s recruiting abuses, low graduation rates and high default rates.
In Milwaukee, Everest College, owned by Corinthian College Inc.announced it was closing less than two years after its controversial opening after regulators disclosed that the college had an abysmal 5% job placement rate and a drop out rate of more than 50%. Sanford Brown, another for-profit with a nefarious reputation, has also announced that it is closing its Milwaukee campus
Late last month, Kaplan Higher Education, a division of the Washington Post Company, announced that it was closing nine of its campuses and consolidating four others into nearby locations. The company did not give a reason, but in an August filing with the Securities and Exchange Commission it disclosed that an accrediting commission had warned that its campuses in Baltimore, Indianapolis and Dayton could lose their accreditation — and with it, eligibility for the federal student aid that makes up more than 80 percent of Kaplan’s revenues — for failure to meet student achievement requirements.
As the negative publicity about for-profits mounted — including many charges that the schools enrolled students who had almost no chance of succeeding, to get their federal student aid — both Kaplan and the University of Phoenix announced new programs, offering some form of free trial, to ensure that they enrolled only students who had a reasonable likelihood of success. Those programs cut substantially into their enrollment numbers.
“We’ve said publicly that about 20 percent of the students in our free three-week online orientation program either don’t complete the program or don’t enroll,” said Mr. Brenner.
To help boost enrollment, the University of Phoenix last week announced a tuition freeze for students who remain consistently enrolled.
Students affected by the University of Phoenix closings will have the option of transferring to the university’s online classes — about three-quarters of its students are online — or moving to a nearby site. Students are now being notified of the changes, and a hot line has been set up at (866) 992-3302 for those with questions.
Thursday, August 30, 2012
Follow the money: For-profit colleges pumping campaign money to foes of regulation
For-profit colleges and universities and their industry association gave at least $694,829 to political candidates through May 31, much of it to members of Congress who oppose greater regulation of the industry, including proposed curbs on aggressive recruiting of veterans with G.I. Bill benefits.
Among the industry’s principal givers are the Apollo Group (parent company of the University of Phoenix), which has contributed $259,901 to candidates; APSCU, which has given $184,500; and DeVry, Westwood College, Argosy and Art Institutes parent Education Management Corporation, and Everest parent Corinthian Colleges. The Art Institute and Everest have recently established operations in Milwaukee.
The for-profits have contributed to Republican presidential hopeful Mitt Romney and nothing to Barack Obama, whose administration has been largely seen as cracking down on them.
The Association of Private Sector Colleges and University, or APSCU, and its members gave to Senate and House members who have spoken out against the so-called gainful-employment regulation, under which educational programs would lose access to federal aid if their graduates fail to earn enough to repay their student loans. Last month, the federal government reported that five percent of career-training programs at both nonprofit and for-profit schools do not meet that test.
The rule is in limbo after a federal judge this month struck down the way the Department of Education calculated the ratio of debt to income, though he affirmed that it could proceed with the rest.
For-profit colleges gave financial support to lawmakers who wrote letters critical of the regulation or who attended a rally on the west lawn of the Capitol called to protest it, and to members of the Congressional Black Caucus, who said it would discriminate against nonwhite and low-income students.
Also receiving contributions were members of Congress who oppose restrictions on aggressive recruiting by for-profit colleges of veterans who use G.I. Bill benefits, criticized a General Accounting Office report about student-recruiting fraud, or voted against putting for-profits under the new Consumer Financial Protection Agency, and both Republican and Democratic members of the House and Senate education committees. In all, the for-profit schools backed at least 93 representatives and senators or candidates for Congress, 53 of them Republicans, according to federal disclosure forms.
Among those are Republicans George Allen and Josh Mandel, who are challenging Senator Jim Webb (D-Va.) and Senator Sherrod Brown (D-Ohio), respectively, both of whom have favored reforms to regulate the way veterans can be recruited by for-profit schools.
Members of the House who spoke at a 2010 rally against the gainful-employment regulation received campaign-finance contributions, however, including Robert Andrews (D-N.J.), Ted Deutsch (D-Fla.), Brett Guthrie (R-Ky.) and Glenn Thompson (R-Pa.). Guthrie and Thompson also criticized the GAO for an undercover investigation that found recruiting abuses at for-profit colleges, which the industry attacked for transcription errors and other problems, but whose conclusion was not changed.
House Oversight & Government Reform Chairman Darrell Issa (R-Calif.) also criticized the GAO report, as did House Education and the Workforce Committee Chairman John Kline (R-Minn.), and committee member Carolyn McCarthy (D-N.Y.). Issa, Kline and McCarthy also received campaign contributions from for-profit colleges or their industry association.
Other members of Congress who raised questions about the gainful-employment rule got money, too, including Jason Altmire (D-Pa.), Judy Biggert (R-Ill.), André Carson (D-Ind.), Gerry Connolly (D-Va.), Ron Kind (D-Wisc.), Tim Murphy (R-Pa.), former House Speaker Nancy Pelosi (D-Calif.) and Loretta Sanchez (D-Calif.) in the House, and, in the Senate, Minority Leader Mitch McConnell (R-Ky.), and Bill Nelson (D-Fla.).
Some members of the Congressional Black Caucus have attacked the gainful-employment proposal and other regulations as discriminatory, as for-profit colleges enroll disproportionate numbers of low-income students and nonwhites. Among Black Caucus members who got financial support from the for-profit colleges were Alcee Hastings (D-Fla.), Ed Pastor (D-Ariz.) and Edolphus Towns (D-N.Y.).
Members of the House Education and the Workforce Committee received donations, too, including Kline, Andrews, Biggert, McCarthy, Lou Barletta (R-Pa.), Virginia Foxx (R-N.C.), Trey Gowdy (R-S.C.), Joe Heck (R-Nev.), Duncan Hunter (R-Calif.), Mike Kelly (R-Pa.), Howard “Buck” McKeon (R-Calif.), Todd Rokita (R-Ind.), and Dennis Ross (R-Fla.).
So did members of the Senate Committee on Health, Education, Labor & Pensions, including Michael Bennet (D-Colo.), Orrin Hatch (R-Utah), Johnny Isakson (R-Ga.), Mark Kirk (R-Ill.) and Rand Paul (R-Ky.).
For-profits also gave to U.S. Rep. Jim Moran Jr. (D-Va.), whose brother Brian is chairman of the Virginia Democratic Party as well as APSCU’s vice president for government relations; Republican congressional candidate from Arizona Kirk Adams, an alumnus of the University of Phoenix; and Kristi Noem (R-S.D.), cofounder of the Congressional E-Learning Caucus.
At least one senator who’s been critical of for-profits received financial support anyway: Marco Rubio (D-Fla.) a potential vice-presidential running mate to Romney.
This post is based on an article by Jon Marcus in the Hechinger Report, July 12, 2012
Among the industry’s principal givers are the Apollo Group (parent company of the University of Phoenix), which has contributed $259,901 to candidates; APSCU, which has given $184,500; and DeVry, Westwood College, Argosy and Art Institutes parent Education Management Corporation, and Everest parent Corinthian Colleges. The Art Institute and Everest have recently established operations in Milwaukee.
The for-profits have contributed to Republican presidential hopeful Mitt Romney and nothing to Barack Obama, whose administration has been largely seen as cracking down on them.
The Association of Private Sector Colleges and University, or APSCU, and its members gave to Senate and House members who have spoken out against the so-called gainful-employment regulation, under which educational programs would lose access to federal aid if their graduates fail to earn enough to repay their student loans. Last month, the federal government reported that five percent of career-training programs at both nonprofit and for-profit schools do not meet that test.
The rule is in limbo after a federal judge this month struck down the way the Department of Education calculated the ratio of debt to income, though he affirmed that it could proceed with the rest.
For-profit colleges gave financial support to lawmakers who wrote letters critical of the regulation or who attended a rally on the west lawn of the Capitol called to protest it, and to members of the Congressional Black Caucus, who said it would discriminate against nonwhite and low-income students.
Also receiving contributions were members of Congress who oppose restrictions on aggressive recruiting by for-profit colleges of veterans who use G.I. Bill benefits, criticized a General Accounting Office report about student-recruiting fraud, or voted against putting for-profits under the new Consumer Financial Protection Agency, and both Republican and Democratic members of the House and Senate education committees. In all, the for-profit schools backed at least 93 representatives and senators or candidates for Congress, 53 of them Republicans, according to federal disclosure forms.
Among those are Republicans George Allen and Josh Mandel, who are challenging Senator Jim Webb (D-Va.) and Senator Sherrod Brown (D-Ohio), respectively, both of whom have favored reforms to regulate the way veterans can be recruited by for-profit schools.
Members of the House who spoke at a 2010 rally against the gainful-employment regulation received campaign-finance contributions, however, including Robert Andrews (D-N.J.), Ted Deutsch (D-Fla.), Brett Guthrie (R-Ky.) and Glenn Thompson (R-Pa.). Guthrie and Thompson also criticized the GAO for an undercover investigation that found recruiting abuses at for-profit colleges, which the industry attacked for transcription errors and other problems, but whose conclusion was not changed.
House Oversight & Government Reform Chairman Darrell Issa (R-Calif.) also criticized the GAO report, as did House Education and the Workforce Committee Chairman John Kline (R-Minn.), and committee member Carolyn McCarthy (D-N.Y.). Issa, Kline and McCarthy also received campaign contributions from for-profit colleges or their industry association.
Other members of Congress who raised questions about the gainful-employment rule got money, too, including Jason Altmire (D-Pa.), Judy Biggert (R-Ill.), André Carson (D-Ind.), Gerry Connolly (D-Va.), Ron Kind (D-Wisc.), Tim Murphy (R-Pa.), former House Speaker Nancy Pelosi (D-Calif.) and Loretta Sanchez (D-Calif.) in the House, and, in the Senate, Minority Leader Mitch McConnell (R-Ky.), and Bill Nelson (D-Fla.).
Some members of the Congressional Black Caucus have attacked the gainful-employment proposal and other regulations as discriminatory, as for-profit colleges enroll disproportionate numbers of low-income students and nonwhites. Among Black Caucus members who got financial support from the for-profit colleges were Alcee Hastings (D-Fla.), Ed Pastor (D-Ariz.) and Edolphus Towns (D-N.Y.).
Members of the House Education and the Workforce Committee received donations, too, including Kline, Andrews, Biggert, McCarthy, Lou Barletta (R-Pa.), Virginia Foxx (R-N.C.), Trey Gowdy (R-S.C.), Joe Heck (R-Nev.), Duncan Hunter (R-Calif.), Mike Kelly (R-Pa.), Howard “Buck” McKeon (R-Calif.), Todd Rokita (R-Ind.), and Dennis Ross (R-Fla.).
So did members of the Senate Committee on Health, Education, Labor & Pensions, including Michael Bennet (D-Colo.), Orrin Hatch (R-Utah), Johnny Isakson (R-Ga.), Mark Kirk (R-Ill.) and Rand Paul (R-Ky.).
For-profits also gave to U.S. Rep. Jim Moran Jr. (D-Va.), whose brother Brian is chairman of the Virginia Democratic Party as well as APSCU’s vice president for government relations; Republican congressional candidate from Arizona Kirk Adams, an alumnus of the University of Phoenix; and Kristi Noem (R-S.D.), cofounder of the Congressional E-Learning Caucus.
At least one senator who’s been critical of for-profits received financial support anyway: Marco Rubio (D-Fla.) a potential vice-presidential running mate to Romney.
This post is based on an article by Jon Marcus in the Hechinger Report, July 12, 2012
Wednesday, October 5, 2011
For-profit colleges target Britain despite being sued by the U.S. Department of Justice and fraud investigations in 18 states
By Hannah Richardson,BBC News education reporter
Minister David Willetts held at least 12 meetings with for-profit education firms before publishing his plans for university reform for England.
Meetings with representatives from two firms accused of recruitment or public loan fraud in the US were among them.
The universities minister published plans to make it easier for private providers to enter the sector in June.
The government said Mr Willetts had spoken to higher education providers "of all types" before doing so.
Mr Willetts has been up-front about his plans to open up England's higher education system to private providers to help increase the number and type of university places available and boost competition.
But his plans have drawn criticism from academics and opposition politicians who fear that it could lead to a fall in the quality of education available, with more learning being carried out online and in non-traditional ways.
Most of the meetings were revealed to the BBC in answer to a parliamentary question from Barry Gardiner MP.
He said the scale of the contact between these for-profit firms and Mr Willetts was "extraordinary and appalling".
In July 2010 Mr Willetts met one firm, the Education Management Corporation (EDMC), which is currently being sued for $11bn by the Department of Justice in the US over its alleged student recruitment practices.
The firm is accused of wrongly using federal education funds to pay bonuses to its student recruiters, a claim it vehemently denies.
Another firm Mr Willetts met, Apollo, has paid out millions of dollars over claims it improperly recruited students to the University of Phoenix.
Although Apollo admitted no liability in a whistleblower case in 2009, it settled saying it wanted to bring "closure to a long-running dispute" and avoid "uncertainty and further expense associated with protracted litigation".
Apollo is the parent company of BPP University College of Professional Studies, which gained university college status last year. It was the first private sector institution to gain this status for more than 30 years.
Vocational degrees
Mr Willetts met representatives of Apollo and BPP in May 2011. He also met BPP as part of wider meetings with higher education providers in December 2010 and January 2011.
A spokesman for BPP said of the meetings: "There was an exchange of views which centred on BPP University College's plans to grow its career-focused degree programmes."
Mr Willetts also met publishing giant Pearson five times. This includes three meetings in close succession in the run-up to the publication of White Paper on higher education in England, which pledged to "make it easier for new providers to enter the sector".
Mr Willetts, who spoke at a Pearson event in May 2010 about the future of higher education, also plans to allocate 20,000 places to degree course providers charging less than £7,500 a year.
These are expected to be mainly from further education colleges and the private providers, and have widely been seen as a means of addressing the fact that so many universities plan top-price fees of £9,000 a year.
Pearson, one of the world's biggest publishers, has made no secret of its plans to seek degree-awarding powers in England's education system.
After a meeting with Mr Willetts in December 2010, the firm announced that it was planning to start by offering four vocational degrees with a further education college at "very competitive" prices. These will be piloted from September 2012, when the new fees system beings.
It also said in June that it would be offering degrees in conjunction with Royal Holloway, part of the University of London, which would be the validating partner.
But it is still pursuing its aim of gaining degree-awarding powers itself, potentially working as a validating partner for England's further education colleges.
Continue reading the main story “Start QuoteThese are not chance meetings; they are ideologically driven ”
End Quote Barry Gardiner MP
A Pearson spokesman said: "Pearson provides and develops qualifications including BTecs, A-Levels and GCSEs as well as publishing support materials and offering technology products for schools, colleges and universities.
"As part of this work, we meet with teachers, education stakeholders and government representatives to discuss our plans and share ideas."
Mr Willetts also met a firm called Laureate, which has 55 higher education institutions in 27 countries. In England it runs online masters and doctoral degree courses accredited by the University of Liverpool.
A spokesman for the Department for Business, Innovation and Skills said its ministers complied with the rules regarding disclosure of their meetings.
"In the run-up to the publication of the higher education White Paper David Willetts spoke to higher education providers of all types," he added.
'Fraught with danger'
But Mr Gardiner, Labour MP for Brent North, said: "The fact that there have been at least 12 meetings just shows what the focus of the higher education minister is with private sector providers and undermining the existing public sector provision. This is not what he should be focusing on.
"These are not chance meetings; they are ideologically driven meetings about what this government sees as the future of higher education on this country.
"It is not a pretty sight and it is not what the British people recognise. They want to Americanise the system."
General secretary of the UCU lecturers' union Sally Hunt said: "Events in America have shown the for-profit model is fraught with danger for students and taxpayers alike.
"Rather than meeting with the privateers, we believe the government should tighten up existing regulations and abandon any proposals that would further encourage for-profit companies in the UK.
"The companies being sued and investigated by the US Congress are the very same ones who are now eyeing up the UK."
Minister David Willetts held at least 12 meetings with for-profit education firms before publishing his plans for university reform for England.
Meetings with representatives from two firms accused of recruitment or public loan fraud in the US were among them.
The universities minister published plans to make it easier for private providers to enter the sector in June.
The government said Mr Willetts had spoken to higher education providers "of all types" before doing so.
Mr Willetts has been up-front about his plans to open up England's higher education system to private providers to help increase the number and type of university places available and boost competition.
But his plans have drawn criticism from academics and opposition politicians who fear that it could lead to a fall in the quality of education available, with more learning being carried out online and in non-traditional ways.
Most of the meetings were revealed to the BBC in answer to a parliamentary question from Barry Gardiner MP.
He said the scale of the contact between these for-profit firms and Mr Willetts was "extraordinary and appalling".
In July 2010 Mr Willetts met one firm, the Education Management Corporation (EDMC), which is currently being sued for $11bn by the Department of Justice in the US over its alleged student recruitment practices.
The firm is accused of wrongly using federal education funds to pay bonuses to its student recruiters, a claim it vehemently denies.
Another firm Mr Willetts met, Apollo, has paid out millions of dollars over claims it improperly recruited students to the University of Phoenix.
Although Apollo admitted no liability in a whistleblower case in 2009, it settled saying it wanted to bring "closure to a long-running dispute" and avoid "uncertainty and further expense associated with protracted litigation".
Apollo is the parent company of BPP University College of Professional Studies, which gained university college status last year. It was the first private sector institution to gain this status for more than 30 years.
Vocational degrees
Mr Willetts met representatives of Apollo and BPP in May 2011. He also met BPP as part of wider meetings with higher education providers in December 2010 and January 2011.
A spokesman for BPP said of the meetings: "There was an exchange of views which centred on BPP University College's plans to grow its career-focused degree programmes."
Mr Willetts also met publishing giant Pearson five times. This includes three meetings in close succession in the run-up to the publication of White Paper on higher education in England, which pledged to "make it easier for new providers to enter the sector".
Mr Willetts, who spoke at a Pearson event in May 2010 about the future of higher education, also plans to allocate 20,000 places to degree course providers charging less than £7,500 a year.
These are expected to be mainly from further education colleges and the private providers, and have widely been seen as a means of addressing the fact that so many universities plan top-price fees of £9,000 a year.
Pearson, one of the world's biggest publishers, has made no secret of its plans to seek degree-awarding powers in England's education system.
After a meeting with Mr Willetts in December 2010, the firm announced that it was planning to start by offering four vocational degrees with a further education college at "very competitive" prices. These will be piloted from September 2012, when the new fees system beings.
It also said in June that it would be offering degrees in conjunction with Royal Holloway, part of the University of London, which would be the validating partner.
But it is still pursuing its aim of gaining degree-awarding powers itself, potentially working as a validating partner for England's further education colleges.
Continue reading the main story “Start QuoteThese are not chance meetings; they are ideologically driven ”
End Quote Barry Gardiner MP
A Pearson spokesman said: "Pearson provides and develops qualifications including BTecs, A-Levels and GCSEs as well as publishing support materials and offering technology products for schools, colleges and universities.
"As part of this work, we meet with teachers, education stakeholders and government representatives to discuss our plans and share ideas."
Mr Willetts also met a firm called Laureate, which has 55 higher education institutions in 27 countries. In England it runs online masters and doctoral degree courses accredited by the University of Liverpool.
A spokesman for the Department for Business, Innovation and Skills said its ministers complied with the rules regarding disclosure of their meetings.
"In the run-up to the publication of the higher education White Paper David Willetts spoke to higher education providers of all types," he added.
'Fraught with danger'
But Mr Gardiner, Labour MP for Brent North, said: "The fact that there have been at least 12 meetings just shows what the focus of the higher education minister is with private sector providers and undermining the existing public sector provision. This is not what he should be focusing on.
"These are not chance meetings; they are ideologically driven meetings about what this government sees as the future of higher education on this country.
"It is not a pretty sight and it is not what the British people recognise. They want to Americanise the system."
General secretary of the UCU lecturers' union Sally Hunt said: "Events in America have shown the for-profit model is fraught with danger for students and taxpayers alike.
"Rather than meeting with the privateers, we believe the government should tighten up existing regulations and abandon any proposals that would further encourage for-profit companies in the UK.
"The companies being sued and investigated by the US Congress are the very same ones who are now eyeing up the UK."
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.
Tuesday, June 7, 2011
For-Profit College Stocks Soar in Response to Weakened Federal Regulations
Shares of for-profit colleges surged the most in six years after the Obama administration eased rules that would cut off federal aid to schools whose students struggle the most to repay their government loans.
Under the rules published last Thursday, companies including University of Phoenix owner Apollo Group Inc. won't risk losing their federal funding until 2015, three years later than under a previous draft, the Education Department said.
Under the rules published last Thursday, companies including University of Phoenix owner Apollo Group Inc. won't risk losing their federal funding until 2015, three years later than under a previous draft, the Education Department said.
Shares of Phoenix-based Apollo, the largest for-profit college company, rose $4.71, or 11%, to $46.90. The Bloomberg U.S. For-Profit College Index of 13 stocks rose 12%, the most since January 2005.
Calling the proposed rules a threat to their existence, for-profit colleges spent $6.6 million last year on lobbying and generated thousands of letters to the government in protest. The final version was delayed seven months, and some provisions were deleted or altered to favor the industry, said Jarrel Price, an analyst at Height Analytics in Washington.
"This is good for certain schools, and it's a home run for certain schools," he said. "Apollo is a clear winner."
Under the earlier proposal, loan-repayment rates at Corinthian Colleges Inc., Strayer Education Inc., Washington Post Co.'s Kaplan education business, DeVry Inc. and ITT Educational Services Inc. would have put them at risk of losing eligibility, according to Price.
Shares of Corinthian, of Santa Ana, jumped $1.07, or a whopping 27%, to $5.06. Strayer, of Herndon, Va., advanced $23.08, or 19%, to $144.95. Washington Post gained $20.46, or 5%, to $426.42. DeVry, of Downers Grove, Ill., rose $7.87, or 15%, to $61.86. ITT Educational, of Carmel, Ind., rose $14.94, or 21%, to $85.67.
Congress and state attorneys general are investigating the education companies' recruitment practices and use of government aid, which totaled $30 billion last year. The Education Department developed the rules to try to curb loan default rates at for-profit colleges that are twice as high as at public institutions and three times as high as at private nonprofit colleges.
The regulations seek to ensure that for-profit college graduates get jobs that allow them to repay their student loans. Although the harshest measures are being delayed, the regulations protect students from "exploitative" college programs that leave them with government-backed debt they can't repay, the Education Department said.
The rules "reflect input from the industry, and they're designed to give for-profit colleges every opportunity to reform without letting them off the hook," Education Secretary Arne Duncan said.
Under the rules, programs would remain eligible for federal aid if they meet at least one of three tests in a given year: at least 35% of former students are repaying their loan balance; yearly educational-debt payments of typical graduates account for a maximum of 12% of their total income; and those payments account for no more than 30% of their discretionary income.
Programs would have to fail all three tests in the same year for three out of four years before losing aid eligibility. The earlier draft would have cut aid to failing programs beginning next year.
About 5% of for-profit college programs are expected to lose eligibility, compared with 16% under the previous proposal, which gave colleges less time to comply.
For-profit colleges enroll about 12% of U.S. higher-education students, but they use about one-quarter of federal student grants and loans and account for 46% of student loan dollars in default, the Education Department said.
Calling the proposed rules a threat to their existence, for-profit colleges spent $6.6 million last year on lobbying and generated thousands of letters to the government in protest. The final version was delayed seven months, and some provisions were deleted or altered to favor the industry, said Jarrel Price, an analyst at Height Analytics in Washington.
"This is good for certain schools, and it's a home run for certain schools," he said. "Apollo is a clear winner."
Under the earlier proposal, loan-repayment rates at Corinthian Colleges Inc., Strayer Education Inc., Washington Post Co.'s Kaplan education business, DeVry Inc. and ITT Educational Services Inc. would have put them at risk of losing eligibility, according to Price.
Shares of Corinthian, of Santa Ana, jumped $1.07, or a whopping 27%, to $5.06. Strayer, of Herndon, Va., advanced $23.08, or 19%, to $144.95. Washington Post gained $20.46, or 5%, to $426.42. DeVry, of Downers Grove, Ill., rose $7.87, or 15%, to $61.86. ITT Educational, of Carmel, Ind., rose $14.94, or 21%, to $85.67.
Congress and state attorneys general are investigating the education companies' recruitment practices and use of government aid, which totaled $30 billion last year. The Education Department developed the rules to try to curb loan default rates at for-profit colleges that are twice as high as at public institutions and three times as high as at private nonprofit colleges.
The regulations seek to ensure that for-profit college graduates get jobs that allow them to repay their student loans. Although the harshest measures are being delayed, the regulations protect students from "exploitative" college programs that leave them with government-backed debt they can't repay, the Education Department said.
The rules "reflect input from the industry, and they're designed to give for-profit colleges every opportunity to reform without letting them off the hook," Education Secretary Arne Duncan said.
Under the rules, programs would remain eligible for federal aid if they meet at least one of three tests in a given year: at least 35% of former students are repaying their loan balance; yearly educational-debt payments of typical graduates account for a maximum of 12% of their total income; and those payments account for no more than 30% of their discretionary income.
Programs would have to fail all three tests in the same year for three out of four years before losing aid eligibility. The earlier draft would have cut aid to failing programs beginning next year.
About 5% of for-profit college programs are expected to lose eligibility, compared with 16% under the previous proposal, which gave colleges less time to comply.
For-profit colleges enroll about 12% of U.S. higher-education students, but they use about one-quarter of federal student grants and loans and account for 46% of student loan dollars in default, the Education Department said.
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.
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.
Wednesday, November 24, 2010
New study blasts for-profit colleges
A new report on graduation rates at for-profit colleges by a nonprofit research and advocacy group reports that:
" As with the collapse of the subprime lending industry, the showdown between for-profit colleges and the government shows how the aspirations of the underserved, when combined with lax regulation, make the rich, richer and the poor, poorer. For-profit colleges provide highcost degree programs that have little chance of leading to high-paying careers, and saddle the most vulnerable students with heavy debt. Instead of providing a solid pathway to the middle class, they pave a path into the subbasement of the American economy."
The report by the Education Trust concludes that for-profit colleges deliver “little more than crippling debt,” citing federal data that suggests only 9 percent of the first-time, full-time bachelor’s degree students at the University of Phoenix, the nation’s largest for-profit college, graduate within six years.
The report, “Subprime Opportunity,” found that in 2008, only 22 percent of the first-time, full-time bachelor’s degree students at for-profit colleges over all graduate within six years, compared with 55 percent at public institutions and 65 percent at private nonprofit colleges.
Among Phoenix’s online students, only 5 percent graduated within six years, and at the campuses in Cleveland and Wichita, Kan., only 4 percent graduated within six years. The Milwaukee campus was only slightly better with an 8% graduation rate.
Since the first-time, full-time students tracked in the federal statistics are the most likely to graduate, the report said, these figures may actually overstate the graduation rates.
“For-profits proudly claim to be models of access in higher education because they willingly open their doors to disadvantaged, underprepared students.” said José L. Cruz, a vice president for the trust. “But we must ask the question, ‘Access to what?’ ”
The report concludes;" If there is one thing that the for-profitts can virtually guarantee their students, it’s years and years of student loan debt.
In a separate study also released Tuesday, the Pew Research Center reported that almost one-quarter of those who received bachelor’s degrees at for-profit schools in 2008 borrowed more than $40,000, compared with 5 percent at public institutions and 14 percent at not-for-profit colleges. Over all, the Pew report found that students who earned a bachelor’s degree in 2008 borrowed 50 percent more, in inflation-adjusted dollars, than those who graduated in 1996. Those who earned an associate degree or certificate in 2008 borrowed more than twice as much as their 1996 counterparts.
The Education Trust is financed partly by the Bill and Melinda Gates Foundation. This month, Melinda Gates resigned from the board of the Washington Post Company, which gets most of its revenues from its for-profit higher-education unit, Kaplan Inc.
The entire Education Trust report is linked here.
" As with the collapse of the subprime lending industry, the showdown between for-profit colleges and the government shows how the aspirations of the underserved, when combined with lax regulation, make the rich, richer and the poor, poorer. For-profit colleges provide highcost degree programs that have little chance of leading to high-paying careers, and saddle the most vulnerable students with heavy debt. Instead of providing a solid pathway to the middle class, they pave a path into the subbasement of the American economy."
The report by the Education Trust concludes that for-profit colleges deliver “little more than crippling debt,” citing federal data that suggests only 9 percent of the first-time, full-time bachelor’s degree students at the University of Phoenix, the nation’s largest for-profit college, graduate within six years.
The report, “Subprime Opportunity,” found that in 2008, only 22 percent of the first-time, full-time bachelor’s degree students at for-profit colleges over all graduate within six years, compared with 55 percent at public institutions and 65 percent at private nonprofit colleges.
Among Phoenix’s online students, only 5 percent graduated within six years, and at the campuses in Cleveland and Wichita, Kan., only 4 percent graduated within six years. The Milwaukee campus was only slightly better with an 8% graduation rate.
Since the first-time, full-time students tracked in the federal statistics are the most likely to graduate, the report said, these figures may actually overstate the graduation rates.
“For-profits proudly claim to be models of access in higher education because they willingly open their doors to disadvantaged, underprepared students.” said José L. Cruz, a vice president for the trust. “But we must ask the question, ‘Access to what?’ ”
The report concludes;" If there is one thing that the for-profitts can virtually guarantee their students, it’s years and years of student loan debt.
In a separate study also released Tuesday, the Pew Research Center reported that almost one-quarter of those who received bachelor’s degrees at for-profit schools in 2008 borrowed more than $40,000, compared with 5 percent at public institutions and 14 percent at not-for-profit colleges. Over all, the Pew report found that students who earned a bachelor’s degree in 2008 borrowed 50 percent more, in inflation-adjusted dollars, than those who graduated in 1996. Those who earned an associate degree or certificate in 2008 borrowed more than twice as much as their 1996 counterparts.
The Education Trust is financed partly by the Bill and Melinda Gates Foundation. This month, Melinda Gates resigned from the board of the Washington Post Company, which gets most of its revenues from its for-profit higher-education unit, Kaplan Inc.
The entire Education Trust report is linked here.
Sunday, November 14, 2010
For-profit college presidents make billions while default rates soar and graduation rates fall
Strayer Education Inc., a chain of for-profit colleges that receives three-quarters of its revenue from U.S. taxpayers, paid Chairman and Chief Executive Officer Robert Silberman $41.9 million last year. That’s 26 times the compensation of the highest-paid president of a traditional university.
Top executives at the 15 U.S. publicly traded for-profit colleges, led by Apollo Group Inc. (Phoenix University) and Education Management Corp. (the Arts Institute of Wisconsin), also received $2 billion during the last seven years from the proceeds of selling company stock. At the same time, the industry registered the worst loan-default and four-year-college dropout rates in U.S. higher education. Since 2003, nine for-profit college insiders sold more than $45 million of stock apiece. Peter Sperling, vice chairman of Apollo’s University of Phoenix, the largest for-profit college, collected $574.3 million.
Education corporations, which receive as much as 90 percent of their revenue from federal financial-aid programs, are “private enterprise that’s almost entirely publicly funded,” Henry Levin, director of Columbia University’s National Center for the Study of Privatization in Education, said in a telephone interview.
While there is a growing movement that bases teacher compensation on student acheivement, for profit college CEO pay has no discernable relationship to student performance.
Students at for-profit colleges are defaulting on their loans at three times the rate of those at private, nonprofit institutions, according to data from the U.S. Department of Education, which is tightening regulation of the industry. 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 and 65 percent at private nonprofit universities.
‘Public Trough’
“For-profit colleges are reaching into the public trough to finance luxurious lifestyles at the expense of people who are going to have to pay back loans,” said Levin, a professor at Columbia University’s Teachers College in New York.
John G. Sperling, Apollo’s 89-year-old founder and executive chairman, received $263.5 million from stock sales during the last seven years. Robert B. Knutson, retired CEO and chairman of Pittsburgh-based Education Management, the second- largest for-profit college chain by enrollment, got $132.4 million. Dennis Keller and Ronald Taylor, former co-CEOs of DeVry Inc., a Downers Grove, Illinois-based for-profit higher education company, together collected $110.4 million in stock proceeds.
For more read the Bloomberg News investigative report, Executives Collect $2 Billion Running U.S. For-Profit Colleges, by John Hechinger and John Lauerman.
Top executives at the 15 U.S. publicly traded for-profit colleges, led by Apollo Group Inc. (Phoenix University) and Education Management Corp. (the Arts Institute of Wisconsin), also received $2 billion during the last seven years from the proceeds of selling company stock. At the same time, the industry registered the worst loan-default and four-year-college dropout rates in U.S. higher education. Since 2003, nine for-profit college insiders sold more than $45 million of stock apiece. Peter Sperling, vice chairman of Apollo’s University of Phoenix, the largest for-profit college, collected $574.3 million.
Education corporations, which receive as much as 90 percent of their revenue from federal financial-aid programs, are “private enterprise that’s almost entirely publicly funded,” Henry Levin, director of Columbia University’s National Center for the Study of Privatization in Education, said in a telephone interview.
While there is a growing movement that bases teacher compensation on student acheivement, for profit college CEO pay has no discernable relationship to student performance.
Students at for-profit colleges are defaulting on their loans at three times the rate of those at private, nonprofit institutions, according to data from the U.S. Department of Education, which is tightening regulation of the industry. 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 and 65 percent at private nonprofit universities.
‘Public Trough’
“For-profit colleges are reaching into the public trough to finance luxurious lifestyles at the expense of people who are going to have to pay back loans,” said Levin, a professor at Columbia University’s Teachers College in New York.
John G. Sperling, Apollo’s 89-year-old founder and executive chairman, received $263.5 million from stock sales during the last seven years. Robert B. Knutson, retired CEO and chairman of Pittsburgh-based Education Management, the second- largest for-profit college chain by enrollment, got $132.4 million. Dennis Keller and Ronald Taylor, former co-CEOs of DeVry Inc., a Downers Grove, Illinois-based for-profit higher education company, together collected $110.4 million in stock proceeds.
For more read the Bloomberg News investigative report, Executives Collect $2 Billion Running U.S. For-Profit Colleges, by John Hechinger and John Lauerman.
Wednesday, September 8, 2010
For-Profit Colleges Step Up Lobbying Against New Rules
The New York Times' Tamar Lewin reports:
For-profit colleges have increased their lobbying against proposed Education Department rules to cut off federal financial aid to programs whose students take on too much debt for training that provides little likelihood of leading to a well-paying job.
In addition to making personal visits to Capitol Hill, executives at the colleges have provided employees with “personalized” letters to send to Washington and urged students to speak out against the proposals.
So far, the department has received about 45,000 letters on the proposed “gainful employment” regulations, in the comment period that ends Thursday.
Last week, John Sperling, the founder of the nation’s largest for-profit college, the University of Phoenix, e-mailed every member of Congress, seeking help opposing the regulations, and attached a sample letter to be sent to Education Secretary Arne Duncan, asking him to withdraw them.
Donald Graham, the chairman and chief executive of The Washington Post Company, which gets most of its revenue from its Kaplan education business, visited Senator Tom Harkin, Democrat of Iowa, whose Health, Education, Labor and Pensions Committee is holding hearings on the for-profit education industry.
Under the proposed regulations, announced July 23, for-profit education programs would qualify for federal student aid only if enough former students were repaying their student loans, or if graduates generally earned enough to repay their debts.
Many for-profit colleges have urged students, professors and administrators to send in criticisms of the proposals.
The Education Management Corporation (owned by Goldman Sachs), the second-largest for-profit company, hired DCI Group, a public relations firm, to contact its employees for information that would be used to create a personalized letter, which would then be delivered back to the employee for signature, along with a stamped, addressed envelope.
“EDMC believes it is important, that during this public-comment period on the proposed Federal Gainful Employment Rule, that our students, faculty and staff have the opportunity to voice their opinion, if they choose to do so,” said Jacquelyn Muller, a spokeswoman for the company.
EDMC also has a Web site, the Higher Education Action Center, guiding students or employees to oppose the regulations, offering “pre-crafted” letters. Argosy, a unit of EDMC, said last month in an e-mail soliciting more comments that more than 2,000 people had used the site in the previous week. It is unclear how many comments were generated by for-profit colleges’ campaigns.
Some of the letters show little familiarity with the proposed regulations. For example, a Education Department official said, students at a particular school sent in dozens of hand-written letters asking for continued aid to for-profit colleges, but never mentioning the regulations. He said he called a letter-writer to ask whether the letter was intended as a comment on the regulations, and was told, “This is what the school asked us to write.” He would not identify the school.
The department said the new regulations would protect students from programs that saddled them with heavy debts and gave them credentials that proved to be of little value in finding a good job.
Last month, the Government Accountability Office said an investigation found fraud or deceptive practices at all 15 of the for-profit locations it visited.
Students at for-profit colleges, about 10 percent of those enrolled in higher education, are far more likely to default on their loans.
For-profit colleges have increased their lobbying against proposed Education Department rules to cut off federal financial aid to programs whose students take on too much debt for training that provides little likelihood of leading to a well-paying job.
In addition to making personal visits to Capitol Hill, executives at the colleges have provided employees with “personalized” letters to send to Washington and urged students to speak out against the proposals.
So far, the department has received about 45,000 letters on the proposed “gainful employment” regulations, in the comment period that ends Thursday.
Last week, John Sperling, the founder of the nation’s largest for-profit college, the University of Phoenix, e-mailed every member of Congress, seeking help opposing the regulations, and attached a sample letter to be sent to Education Secretary Arne Duncan, asking him to withdraw them.
Donald Graham, the chairman and chief executive of The Washington Post Company, which gets most of its revenue from its Kaplan education business, visited Senator Tom Harkin, Democrat of Iowa, whose Health, Education, Labor and Pensions Committee is holding hearings on the for-profit education industry.
Under the proposed regulations, announced July 23, for-profit education programs would qualify for federal student aid only if enough former students were repaying their student loans, or if graduates generally earned enough to repay their debts.
Many for-profit colleges have urged students, professors and administrators to send in criticisms of the proposals.
The Education Management Corporation (owned by Goldman Sachs), the second-largest for-profit company, hired DCI Group, a public relations firm, to contact its employees for information that would be used to create a personalized letter, which would then be delivered back to the employee for signature, along with a stamped, addressed envelope.
“EDMC believes it is important, that during this public-comment period on the proposed Federal Gainful Employment Rule, that our students, faculty and staff have the opportunity to voice their opinion, if they choose to do so,” said Jacquelyn Muller, a spokeswoman for the company.
EDMC also has a Web site, the Higher Education Action Center, guiding students or employees to oppose the regulations, offering “pre-crafted” letters. Argosy, a unit of EDMC, said last month in an e-mail soliciting more comments that more than 2,000 people had used the site in the previous week. It is unclear how many comments were generated by for-profit colleges’ campaigns.
Some of the letters show little familiarity with the proposed regulations. For example, a Education Department official said, students at a particular school sent in dozens of hand-written letters asking for continued aid to for-profit colleges, but never mentioning the regulations. He said he called a letter-writer to ask whether the letter was intended as a comment on the regulations, and was told, “This is what the school asked us to write.” He would not identify the school.
The department said the new regulations would protect students from programs that saddled them with heavy debts and gave them credentials that proved to be of little value in finding a good job.
Last month, the Government Accountability Office said an investigation found fraud or deceptive practices at all 15 of the for-profit locations it visited.
Students at for-profit colleges, about 10 percent of those enrolled in higher education, are far more likely to default on their loans.
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