Thursday, December 23, 2010

Kaplan accused of deceptive registration leaving students deeply in debt

Managers at Kaplan--the highly profitable educational arm of the Washington Post Co.-- have for years pressured academic advisors to use guerrilla registration to boost enrollment numbers, according to former employees, offering accounts consistent with dozens of complaints filed by former students with the Florida Attorney General's Office and reviewed by The Huffington Post.

Guerrilla registration has been part of a concerted effort by the university to keep students enrolled as long as possible in order to harvest more of the federal financial aid dollars that make up nearly all of the company's higher education revenues, according to former Kaplan academic advisor Sheldon Cobbler, who described the practice in detail.

Most advisors had access to a company database that allowed them to view students' e-mail correspondence without their knowledge, said Cobbler, who worked at Kaplan's Fort Lauderdale, Fla., corporate office from 2007 through July of this year. The advisors routinely searched through students' e-mails to look up their user names and passwords for Kaplan's enrollment system, and then they used that information to sign in using multiple student identities, enrolling them in classes they never intended to join, he said.

"The company didn't want students to withdraw," Cobbler said. "They wanted them to stay in class by any means."

The entire Huffington Post expose is linked here.

Monday, December 20, 2010

Free market fundamentalists have been wrong about everything

Nobel Prize winning economist Paul Krugman writes in today's Times:

Free-market fundamentalists have been wrong about everything — yet they now dominate the political scene more thoroughly than ever.

The column is linked here.

Thursday, December 16, 2010

Tax deal saves bailed out CEOs millions

Jamie Dimon, chairman and CEO of JPMorgan Chase & Co., praised the President's agreement with Republicans to extend the Bush tax cuts.

"If we're going to strengthen our economy and grow jobs, this type of outreach - and cooperation between the administration, Congress, and the private sector - are critical," says Dimon.

It is no wonder Dimon liked the tax bill which extended the Bush era high income tax cuts for another two years. Dimon's compensation over the last three years has averaged $21,991,394 a year. The tax deal agreed to between President Obama and the Republicans will give Dimon and extra $1,179,000 next year, according to an analysis by Citizens for Tax Justice.

The bank Dimon heads was also the beneficiary of the giant Wall-Street bailout of 2007 and 2008. JPMorgan Chase & Co, along with other Wall Street banks, also poured millions of dollars into a lobbying campaign to water down the financial reforms Congress considered earlier this year.

Tuesday, December 14, 2010

College, Jobs and Inequality

In an editorial today the New York Times writes that a college education is not a cure-all for joblessness and income inequality, although it does correlate with higher incomes and lower unemployment.

Searching for solace in bleak unemployment numbers, policy makers and commentators often cite the relatively low joblessness among college graduates, which is currently 5.1 percent compared with 10 percent for high school graduates and an overall jobless rate of 9.8 percent. Ben Bernanke, the chairman of the Federal Reserve, cited the data recently on “60 Minutes” to make the point that “educational differences” are a root cause of income inequality.

A college education is better than no college education and correlates with higher pay. But as a cure for unemployment or as a way to narrow the chasm between the rich and everyone else, “more college” is a too-easy answer. Over the past year, for example, the unemployment rate for college grads under age 25 has averaged 9.2 percent, up from 8.8 percent a year earlier and 5.8 percent in the first year of the recession that began in December 2007. That means recent grads have about the same level of unemployment as the general population. It also suggests that many employed recent grads may be doing work that doesn’t require a college degree.

Even more disturbing, there is no guarantee that unemployed or underemployed college grads will move into much better jobs as conditions improve. Early bouts of joblessness, or starting in a lower-level job with lower pay, can mean lower levels of career attainment and earnings over a lifetime.Graduates who have been out of work or underemployed in the downturn may also find themselves at a competitive disadvantage with freshly minted college graduates as the economy improves.

When it comes to income inequality, college-educated workers make more than noncollege-educated ones. But higher pay for college grads cannot explain the profound inequality in the United States. The latest installment of the groundbreaking work on income inequality by the economists Thomas Piketty and Emmanuel Saez shows that the richest 1 percent of American households — those making more than $370,000 a year — received 21 percent of total income in 2008. That was slightly below the highs of the bubble years but still among the highest percentages since the Roaring Twenties.

The top 10 percent — those making more than $110,000 — received 48 percent of total income, leaving 52 percent for the bottom 90 percent. Where are college-educated workers? Their median pay has basically stagnated for the past 10 years, at roughly $72,000 a year for men and $52,000 a year for women.

A big reason for the huge gains at the top is the outsize pay of executives, bankers and traders. Lower on the income ladder, workers have not fared well, in part because health care has consumed an ever-larger share of compensation and bargaining power has diminished with the decline in labor unions.

College is still the path to higher-paying professions. But without a concerted effort to develop new industries, the weakened economy will be hard pressed to create enough better-paid positions to absorb all graduates.

And to combat inequality, the drive for more college and more jobs must coincide with efforts to preserve and improve the policies, programs and institutions that have fostered shared prosperity and broad opportunity — Social Security, Medicare, public schools, progressive taxation, unions, affirmative action, regulation of financial markets and enforcement of labor laws.

College is not a cure-all, but it will certainly take the best and brightest minds to confront those challenges.

Monday, December 13, 2010

New House education chair opposes for-profit regulations

The incoming Republican chairman of the House of Representatives education committee said that he would oppose any bill tightening rules on for-profit schools, and hoped the Education Department would ease a planned rule that could cost some schools critical federal funding.

The schools have been in a battle with the department and Democratic Senator Tom Harkin, who had reiterated on Thursday that legislation might be needed next year to rein in the schools, under fire for high student loan default rates and low graduation percentages.

"I would push back really hard against a bill that might come out of Chairman Harkin's committee," said Representative John Kline, a Minnesota Republican who takes over the Education and Labor Committee next month.

Asked if such a bill could succeed, Kline told Reuters: "I don't think so."

The industry is fighting the Education Department's plan for a rule that would bar federal loans to students in programs where fewer than 35 percent of former students are paying back loans or are capable of doing so. A final rule on repayment rates is due out early next year.

Asked if the final version of the rule would be eased, Kline said, "I certainly hope so."

For-profit education stocks include Corinthian Colleges, Strayer Education and ITT Education.

Friday, December 10, 2010

For-Profit Colleges Face Beefed-Up Aid Audits From Education Dept.

The U.S. Department of Education plans to increase its scrutiny of how colleges award federal grants and loans to their students, and a department official told The Chronicle it will pay particular attention to for-profit colleges owned by publicly traded companies and on all institutions with large distance-education programs.

The department, which has been beefing up the compliance-office staffing in its Office of Federal Student Aid, expects to conduct about 300 program reviews of student-aid operations next year, in contrast to about 200 this year. Program reviews are audit-like examinations of student-aid operations designed to ensure that students receive only the grants and loans they are entitled to and that institutions make refunds in accordance with the law in cases where students withdraw.

With the focus on the nation's deficit, the Obama administration wants to be sure the billions of dollars in new federal funds for student-aid programs are serving students, said James Kvaal, deputy under secretary of education, speaking on Friday at a meeting of the Association of Private Sector Colleges and Universities. "People are taking the budget very, very seriously."

Mr. Kvaal said the administration also wanted to protect Pell Grants from cuts. Some members of Congress have proposed reducing federal spending to 2008 levels. "The White House is calling that 'economic unilateral disarmament,'" Mr. Kvaal said.

That was welcome news to people in the audience, many of them operators of for-profit colleges. About 30 percent of all Pell Grant funds now go to students in the for-profit sector. Mr. Kvaal said colleges that educate such needy students with good programs are performing "a service to those students and a service to the country." But he said then, and at several other times during his talk, that the department remained very concerned about for-profit colleges that rely on "deceptive and high-pressure sales tactics" to enroll students or leave them with unreasonable levels of student debt.

He said the department's proposed "gainful employment" rule, aimed at curbing such abuses, was designed not as an attack on the for-profit industry but as a means to deal with some of the "worst-performing programs."

For-profit colleges have undertaken a vast lobbying and public-relations campaign that assails the rule as an ill-conceived approach that will hurt students and their own companies. At the session on Friday, Mr. Kvaal said that the proposal, as released in July, "was not perfect" and that the department would consider the criticisms, including more than 90,000 comments pro and con, before issuing a final version of the rule in early 2011.

By Goldie Blumenstyk , Chronicle of Higher Education

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

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

Friday, December 3, 2010

Republicans demand assistance for the rich; slam door on the unemployed

All indications are that the Obama administration will cave into Republican demands to extend the Bush era tax cuts for the rich, people making over $250,000 a year.
Not only only will this increase the deficit by $700 billion over the next decade, but it will do virtually nothing to promote economic growth since there is no evidence that high income tax cuts result in economic growth.
At the same time, the Republicans stopped Congress from extending unemployment benefits to 2 million Americans who have been unemployed for more than 26 weeks.
Not only is it cruel to deny financial support to American families who have lost their jobs, but it hurts the economy since unemployment benefits are a very effective form of promoting economic growth since the unemployed spend virtually every dollar they receive.
Rather than stand up for the nation's unemployed and for fiscal responsibility, President Obama has announced that he will freeze the pay of federal employees for two years. These public servants earn less than their private sector counterparts. More importantly freezing their pay has virtually no impact on the deficit since employee compensation is a very small component of federal expenditures. And it will actually weaken the economy since it will reduce spending at a time when the lack of demand threatens the very weak recovery.
In a little noticed blog a few weeks ago David Leonhardt, the New York Times economics reporter, asked: Why should we believe that extending the Bush tax cuts will provide a big lift to growth?

Those tax cuts passed in 2001 amid big promises about what they would do for the economy.

What followed?

The decade with the slowest average annual growth since World War II. Amazingly, that statement is true even if you forget about the Great Recession and simply look at 2001-7. (See chart above that is adjusted for inflation)

The competition for slowest growth is not even close, either. Growth from 2001 to 2007 averaged 2.39 percent a year (and growth from 2001 through the third quarter of 2010 averaged 1.66 percent). The decade with the second-worst showing for growth was 1971 to 1980 — the dreaded 1970s — but it still had 3.21 percent average growth.

The picture does not change if you instead look at five-year periods. Here’s a chart ranking five-year periods over the past 50 years, in descending order of average annual growth:

I mean this as a serious question, not a rhetorical one: Given this history, why should we believe that the Bush tax cuts were pro-growth?

Is there good evidence the tax cuts persuaded more people to join the work force (because they would be able to keep more of their income)? Not really. The labor-force participation rate fell in the years after 2001 and has never again approached its record in the year 2000.

Is there evidence that the tax cuts led to a lot of entrepreneurship and innovation? Again, no. The rate at which start-up businesses created jobs fell during the past decade.

The theory for why tax cuts should create growth and jobs is a strong one. When people are allowed to keep more of each dollar they earn, they are likely to work longer and harder. The uncertainty is the magnitude of this effect. With everything else that’s happening in a $15 trillion economy, how large of an effect on growth do tax cuts have?

Every available piece of evidence seems to suggest that the Bush tax cuts did little to lift growth. I have yet to hear a good argument to the contrary, but I’d be fascinated to see another blogger or an economist take a crack at it.
While no one has stepped up to answer Leonhardt's challenge, the Republican demand that the richest Americans be given a budget busting tax break has become a virtual certainty.

Wednesday, December 1, 2010

Corinthian College CEO replaced

Corinthian Colleges Inc., one of the country's biggest and most controversial for-profit higher education businesses and a company in the thick of the effort to challenge the Education Department's proposed new regulatory approach to the sector, has replaced its chief executive officer with its former leader.

Jack Massimino, who headed Corinthian from 2005 to 2009 and since has served as chairman of its board, announced on Tuesday that he would re-take the company's reins from Peter Waller, who succeeded him as CEO in July 2009.

Massimino insisted that despite a series of regulatory and legal difficulties for the company, Waller's departure had "nothing to do with the company, performance, compliance, anything.... Things happen, personalities are personalities." The board "concluded that a different management style was needed to guide the company at this time, and it asked for, and Peter tendered, his resignation. It does not signal broader problems at the company."

Monday, November 29, 2010

Talgo asks business leaders for help-don't hold your breath

Talgo Inc., the Spanish train manufacturer that recently established operations in Milwaukee, has sent a letter to Milwaukee's corporate spokesmen seeking their assistance in persuading Governor-elect Walker to reverse his decision to return an $810 million federal high speed rail grant. The investment is projected to create 13,700 jobs in Wisconsin.

Talgo selected Milwaukee's former Tower Automotive site to house its U.S. manufacturing facility because Wisconsin was the first state to order trains from the firm.

The letter asks Tim Sheehy, the Executive Director of the Metropolitan Milwaukee Association of Commerce (MMAC) and Jim Paetsch, who directs corporate relocation for the Milwaukee 7, to speak to the Governor elect on behalf of Talgo and other suppliers related to the project.

Don't hold your breath waiting for Mr. Sheehy to help.

Not only did Sheehy's organization contribute $381,500 to Walker's gubernatorial campaign , but Sheehy has already said he will not use any chips protecting Talgo's investment in Wisconsin. "Why beat a dead train," Sheehy told the MJS. His focus is on ensuring that Walker cuts taxes.

The MMAC and its Executive Director were more than willing to take credit for Talgo when Governor Doyle announced the company was coming to Milwaukee. ""We're Not Just in the Game - We're Winning!" read an announcement from the MMAC. Sheehy bragged that the M-7 was attracting new industries despite some of the gloomiest economic conditions in decades and claimed that Talgo's decision to locate in Milwaukee would help attract additional manufacturing firms to the city. Sheehy, standing to Governor Doyle's far left in the photo above, teased that a third deal with an unnamed firm was in the works.

But as recent events demonstrate the the only thing that really matters to Mr. Sheehy and the MMAC is cutting corporate taxes, despite the fact that corporate profits are the highest they have every been and Wisconsin's business taxes are among the nation's lowest.

The MMAC's narrow focus on lowering corporate tax rates trumps every other concern including creating 13,700 jobs, securing investment in manufacturing, and revitalizing Milwaukee's central city.

Don't hold your breath waiting for Mr. Sheehy to use any chips for Talgo or Milwaukee's unemployed. As long as Walker delivers corporate cut taxes, Sheehy will remain silent.

Workers seek new skills at community colleges, but classes are full

The Washington Post's Peter Whoriskey reports that two-year college enrollments have surged as unemployed and underemployed people seek new skills in an effort to get back to work.

But just as workers have turned to two-year colleges, states have cut their budgets, forcing the institutions to turn away legions of students and stymieing efforts to retrain the workforce.

The entire article is linked here.

Where there's smoke there's fire: another Everest College accused of unscrupulous recruiting tactics

Salt Lake City's Desert News reports that:

" Admissions representatives at for-profit Everest College were instructed to make prospective students feel hopeless about their lives in an effort to convince them to enroll, according to a court filing by a former employee.

In a 13-page declaration filed in a lawsuit against the school's West Valley City campus, the former admissions officer details a recruiting process centered on aggressive, scripted sales pitches. The document was filed this month after the college's California-based parent company, Corinthian Colleges Inc., had the suit transferred into federal court.

Three former students sued the company in September, alleging fraudulent misrepresentations about the cost of its programs and their ability to transfer credits to other schools...

In the declaration, Shayler White said he worked for Everest College from December 2009 until September 2010, when he was laid off for failing to meet enrollment quotas. He said admissions workers could receive a $5,000 salary bump for enrolling 36 students in six months.

They were instructed to use "power words" like "career," "professional" and "successful" to sway potential recruits, White said.

"The tactics also included questions designed at putting down the prospective student, making them feel hopeless, bad about their current situation and stuck at a dead end, in order to make enrolling in school look like the best solution to the problem," he wrote...

White said Everest College would buy "leads," or contact information of potential students, for $80 apiece. He was required to call each new lead three times a day for a week, then once a day for the next month. White made up to 600 phone calls each week. He said his managers told him not to delete the numbers of people who asked not to be contacted anymore.

According to White, prospective students who came in for a face-to-face interview were rushed through enrollment paperwork, including the lawsuit waiver the students signed. He said of all the students he signed up in 10 months, only three or four actually read through the agreement.
White said he was tasked with pushing students to defer their loans, often by taking on new loans, to lower the school's default rate. He also said he was not instructed until August 2010 to tell students that credits would not transfer...

The entire article is linked here.

Saturday, November 27, 2010

Class war in the U.S.A.

New York Times columnist Bob Herbert writes:

The class war that no one wants to talk about continues unabated.

Even as millions of out-of-work and otherwise struggling Americans are tightening their belts for the holidays, the nation’s elite are lacing up their dancing shoes and partying like royalty as the millions and billions keep rolling in.

Recessions are for the little people, not for the corporate chiefs and the titans of Wall Street who are at the heart of the American aristocracy. They have waged economic warfare against everybody else and are winning big time.

The ranks of the poor may be swelling and families forced out of their foreclosed homes may be enduring a nightmarish holiday season, but American companies have just experienced their most profitable quarter ever. As The Times reported this week, U.S. firms earned profits at an annual rate of $1.659 trillion in the third quarter — the highest total since the government began keeping track more than six decades ago.

The corporate fat cats are becoming alarmingly rotund. Their profits have surged over the past seven quarters at a pace that is among the fastest ever seen, and they can barely contain their glee. On the same day that The Times ran its article about the third-quarter surge in profits, it ran a piece on the front page that carried the headline: “With a Swagger, Wallets Out, Wall Street Dares to Celebrate.”

The entire column is 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.

Sunday, November 21, 2010

Kaplan University's profits compromise the Washington Post's integrity

Kaplan Higher Education owns a chain of for-profit colleges like Kaplan University that are under intense scrutiny for misleading students about their future success in order to rake in federal student loans - loans that students often default on.

Kaplan Higher Education is also the highly profitable subsidiary of the Washington Post Company which is ever-more reliant on those profits to support its money-losing newspaper.

Kaplan has lobbied against the U.S. Department of Education's "gainful employment" regulation that would make programs with a student loan repayment rate of less than 45% ineligible for federal financial aid. Kaplan University's average repayment rate is 28%.

The Washington Post has editorialized against the regulation and its Chairman has lobbied against it on Capitol Hill.

In the audio below Tamar Lewin of the New York Times explains how Kaplan’s business interests are compromising the Post’s journalistic integrity.

Saturday, November 20, 2010

Minnesota AFL-CIO urges Walker to invest federal high speed rail money

Minnesota AFL-CIO Stands in Solidarity for Regional Rail Jobs

Citing the huge economic impact and job creation potential of high speed rail, leaders of the Minnesota AFL-CIO sent an open letter to Wisconsin Governor-elect Scott Walker urging him to reconsider his plans to refuse $810 million federal dollars that Wisconsin had received for this project.

The section between Madison and Milwaukee would be part of a larger regional high speed rail system linking Minneapolis/St. Paul and Chicago. In the letter, Minnesota AFL-CIO President Shar Knutson and Secretary-Treasurer Steve Hunter reminded Walker that refusing these funds won’t just hurt Wisconsin, but the entire Midwest.“The larger Midwest high speed rail initiative would put tens of thousands of more people back to work, and make the upper Midwest an even more lucrative place to do business. If Wisconsin says no to this section of the line, it is likely Minnesota will not see any rail dollars in the future,” he wrote.

Click here to read the full letter.

“High speed rail is critical to the economic future of this entire region, and therefore, we are especially grateful for the vocal support of the Minnesota AFL-CIO,” said Wisconsin State AFL-CIO President Phil Neuenfeldt. “This type of action builds the strength of the entire labor movement and brings us one step closer to saving and creating family-supporting union jobs.”The Minnesota AFL-CIO has sent a strong message to Governor-elect Walker, now it is your turn to let him know how badly this region needs quality rail jobs.

Click here to sign the Wisconsin State AFL-CIO’s online petition in support of high speed rail.

You can also show your support by attending the Candlelight Vigil for Jobs this Tuesday at 5 p.m. outside of the Talgo train facility in Milwaukee.

Click here for details about the Candlelight Vigil.

“Other areas of the country are clamoring to get their hands on the $810 million dollars in federal funding designated for our rail line,” observes Wisconsin State AFL-CIO Secretary-Treasurer Stephanie Bloomingdale. California, New York, Illinois and North Carolina have all said they would take the money of Governor elect Scott Walker follows through on his promise to reject the investment. “The Midwestern labor movement is adamantly urging Governor-elect Walker to reconsider before it is too late."

Monday, November 15, 2010

Local 212 rallies with hundreds for high speed rail jobs

Local 212 leadership rallied with hundreds of people outside the Talgo Inc. train manufacturing plant on Milwaukee's north side Monday hoping to persuade Gov.-elect Scott Walker to change his mind and endorse the construction of a high-speed rail line through Wisconsin as a way to create jobs and keep the state competitive.

Surrounded by supporters chanting "Trains mean jobs!" and "Jobs, jobs, jobs!" leaders from a broad range of organizations, including State Representative and Local 212 member Barbara Toles, stressed the project's importance as a catalyst for redevelopment at the city's former Tower Automotive site and the creation of new jobs, especially in Milwaukee's central city.

"Talgo represents a resurrection for many people in this state, and especially in this city," the Rev. Ken Wheeler, pastor of Cross Lutheran Church and Milwaukee Inner-City Congregations Allied for Hope told the crowd.

The Spanish firm Talgo moved to the Tower site as part of a plan to build a regional high-speed rail network that connects Milwaukee and Madison to Chicago and Minneapolis, funded with $810 million in federal stimulus dollars.

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.

Friday, November 12, 2010

The Hijacked Commission

Nobel prize winning economist Paul Krugman asks how did a deficit-cutting commission become a commission whose first priority is cutting high income tax rates, with deficit reduction literally at the bottom of the list?

For his answer, read the column which is linked.

Thursday, November 11, 2010

Milwaukee Alderman annouce support for high speed rail

A majority of members of the Milwaukee Common Council have signed a letter to U.S. Department of Transportation Secretary Ray LaHood, expressing their continued support for building a Midwest high-speed rail network that would include an extension of the Chicago-Milwaukee Hiawatha service to Madison.

The letter is below:

Dear Secretary LaHood:

We are writing to express our continued support for President Obama’s vision to develop a Midwest High-Speed Rail Network that would initially involve an extension of the Chicago-Milwaukee Hiawatha service to Madison. We continue to believe that this network will improve mobility and provide more travel choices for our constituents and will serve to create wealth and promote economic development in Milwaukee.

In addition, our city is in desperate need of the employment opportunities that will be generated by the $810 million federal investment in the development of the Milwaukee-to-Madison extension. Moreover, as you know, this federal investment requires no state or local matching funds. This is a benefit to Wisconsin that is not even afforded under federal highway investments, which require state matches of 20 percent or more. In other words, this investment will not require any expenditure from Wisconsin’s Highway Trust Fund, thereby enabling those resources to remain fully available for Wisconsin highway and bridge work.

Our Common Council is on record in support of these rail infrastructure investments. For example, we invested $6.2 million in city funds to renovate and expand the Milwaukee Intermodal Station, and we have invested $6 million in city funds to acquire and renovate an industrial building in Milwaukee for the rail car manufacturer, Talgo, Inc. We overwhelmingly defeated a resolution that would have put the city on record as opposing the renovation of the platform areas of the intermodal station. We have also passed resolutions urging state and federal transportation officials to consider investments in upgraded inter city rail service between Chicago and Milwaukee instead of investing in the expansion of the ISH-94 between Chicago and Milwaukee.

In short, we are on board!


President Willie L. Hines, Jr. Ald. Michael Murphy Ald. Willie C. Wade
Ald. Ashanti Hamilton Ald. Nik Kovac Ald. Joe Davis, Sr.
Ald. Robert J. Bauman Ald. Terry Witkowski Ald. Tony Zielinski
Ald. Milele A. Coggs

Walker's RR cancellation threatens 15,000 jobs and $100 million

Canceling high-speed rail is economic treason

by Robert Kraig

Governor-elect Scott Walker’s ill-advised campaign posture to cancel the high-speed rail project that is already under construction would cost Wisconsin up to 15,000 family supporting jobs and up to $100 million at a time when both jobs and revenue are desperately needed.

Walker got a lot of campaign mileage out of this issue as a supposed example of wasteful government spending, but now that he actually will have to govern, cancelling the project at this stage makes absolutely no sense, even if you believe his arguments against the project.

Walker’s campaign posturing now threatens thousands of construction and permanent jobs, and will cost Wisconsin much more money to cancel than continue. Given the desperate need for jobs in Wisconsin, and the severe fiscal crisis the state faces, cancelling the high speed rail line amounts to economic treason.

Not surprisingly, other governors are already beginning to line up to request the job-creating money for their own states. Governor-elect Andrew Cuomo in New York has already put out a statement asking for the money to create good high-speed rail jobs for New Yorkers.

First, let’s review the jobs that will not be created if Walker cancels the high-speed rail project. If it is cancelled, it will cost Wisconsin an estimated 4,732 construction jobs. In addition, research on the economic impact of high-speed rail concludes that when the full project is completed, including the link from Madison to Minneapolis, that 9,570 permanent jobs will be created.

Governor-elect Walker has defended cancellation of the high-speed rail project on fiscal grounds, but returning the $810 million in federal funding that is paying for construction of the project would actually cost the state a great deal of money. As the money can only be used for high-speed rail, and the project is already underway, Wisconsin would have to pay back the federal government and contractors for work already done.

Policymakers estimate it will cost Wisconsin between $57 million and $100 million to buy out of the project. The maintenance costs Walker railed against in the campaign are substantially lower than this! Walker projected $7.5 million per year during the campaign, but most analysts think it will be much less. If the federal government pays the same percentage of maintenance costs it now pays for the Hiawatha line between Milwaukee and Chicago, the cost to Wisconsin will only by $750,000 per year, which is a tiny fraction of the state transportation budget.

In addition, the City of Milwaukee spent $10 million to buy the blighted Milwaukee site where the high speed trains are being built by Spanish manufacturer Talgo, and has invested an additional $6 million to upgrade the facility. Talgo has made it clear that they are unlikely to stay in Milwaukee if the Wisconsin high speed train project is cancelled. As a result, Milwaukee would lose the anchor manufacturing facility needed to spur re-development of the blighted Tower Automotive/A.O. Smith site on the near north side.

Given the nearly 15,000 construction and permanent jobs that would be created by the federal investment in Wisconsin in high-speed rail, and the high fiscal cost of cancellation, it would be incredibly short-sighted for Governor elect-Walker to follow through on his campaign posture just to provide more red meat for right-wing talk radio audiences. It amounts to economic treason at a time when everyone, regardless of political and ideological perspective, should be working together to bring desperately needed family supporting jobs back to Wisconsin.

Wednesday, November 10, 2010

Kaplan University charged with fraudulent practices

An article in today's New York Times explores the pressures on Kaplan University which is under investigation for misleading and exploiting students in several states at the same time that its parent company, The Washington Post Co., is increasingly relying on it for revenue and spending hundreds of thousands of dollars to defeat proposed federal regulation.

The entire article is linked here.

Below are key excerpts:

Kaplan is facing several legal challenges. The Florida attorney general is investigating eight for-profit colleges, including Kaplan, for alleged misrepresentation of financial aid and deceptive practices regarding recruitment, enrollment, accreditation, placement and graduation rates.

Kaplan is also facing several federal whistle-blower lawsuits whose accusations dovetail with the findings of an undercover federal investigation of the for-profit industry this summer, including video of high-pressure recruiting and unrealistic salary promises...

...This summer Senator Tom Harkin’s committee, in oversight hearings on the industry, watched undercover videos about high-pressure recruiting tactics that Kaplan and others used to sign up students.

Using hidden cameras, investigators from the
Government Accountability Office found deception or fraud at 15 for-profit colleges, including two Kaplan campuses.

The undercover videos showed Kaplan recruiters in Florida and California making false or questionable statements to prospective students — suggesting for example, that massage therapists earn $100 an hour, and that student loans need not be paid back.

...the bad publicity, and growing scrutiny, have taken their toll. Since its recent high last spring, Washington Post Company stock has dropped by more than a quarter. Other for-profit education companies, including Corinthian Colleges, in which the Post owns an 8 percent stake, fell even further...

...dozens of current and former Kaplan employees said the videos painted a representative picture.

“They are not outliers; they are in the middle of the field, the middle of the bell curve,” said William Wratten, a former Kaplan admissions adviser in Chicago, who resigned after a year and a half because he disagreed with company practices. “Maybe not the exact same activities, but the mind-set was the same: Do whatever it takes to get the sale, to keep your job.”

Mr. Wratten and other admissions representatives said they were trained to “emphasize that Kaplan is owned by The Washington Post, one of the best newspapers in the country, and that
Warren Buffett, and Bill Gates’s wife, Melinda Gates, were on our board of directors.”

...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.

But many current and former Kaplan employees and students — including those, like Mr. Wratten, not involved in the lawsuits — said in interviews that they believed the company was concerned most with getting students’ financial aid, and that Kaplan’s fast-growing revenues were based on recruiting students whose chances of succeeding were low.

They cite, for example, a training manual 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.

Admissions advisers, past and present, say the pressure to recruit students leads to aggressive, and sometimes misleading, sales tactics.

Carlos Urquilla-Diaz, a former Kaplan instructor and administrator who is one of the Miami whistle-blowers, recalled a PowerPoint presentation showing African-American women who were raising two children by themselves as the company’s primary target.

Such women, Mr. Urquilla-Diaz said, were considered most likely to drop out before completing the program, leaving Kaplan with the aid money and no need to provide more services.

“The idea was, we’ll take anybody, and I mean anybody,” he said.

Victoria Gatsiopoulos, a former instructor and director of career services at a Kaplan College in Pittsburgh, said in her complaint that the school made promises to students of “how their lives will magically change” if they attended Kaplan classes.

One prospective student with financial difficulties, the complaint said, was promised in writing that “in five years she would have a job in a hospital, a big house in Florida, enough money to go to Disney World with her family and a new Lexus.”

Ms. Gatsiopoulos said Kaplan representatives routinely misled prospective students about the jobs they could get after graduation.

“One of our biggest programs was criminal justice,” she said. “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. But those jobs all require advanced training.”

In reality, Ms. Gatsiopoulos said, graduates would often get the same $8 to $9-an-hour security guard jobs they could have had without Kaplan training.

Ms. Gatsiopoulos’s complaint said that Kaplan also manipulated its reported placement rates so that a graduate employed in sales at Wal-Mart, for example, would be reported as working in accounting management, and that a telemarketer was reported as working in “business administration fashion merchandising.”

She also charges that Kaplan would raise instructors’ grades for students so they remained eligible for federal aid. Former Kaplan instructors not involved in the litigation made similar claims.

“More than once, when I refused to inflate a student’s grade, they went ahead and did it on their own,” Ms. Gatsiopoulos said...

Nine years after graduating from high school, Rebecca Masci, a single mother with four young children to support, enrolled in a surgical-technology program in 2004 at Kaplan/CCI in Broomall, Pa., to improve her job prospects.

She took out student loans, lined up her parents to baby-sit, and for three terms, excelled in her classes in anatomy, physiology and pharmacology. But to complete the fourth term and graduate, students need a placement to give her hands-on experience in an operating room. She did not get one.

“When I signed up, they sounded all positive, about plenty of placements, plenty of jobs,” said Ms. Masci, now 32 and with five children. “But after I finished the classes, they told me to go home and wait and they’d call when they found something. I was in limbo for more than a year.”

Eventually, she said, she was given one short placement, not enough to graduate. Now she has $14,000 of debt, but no surgical-technology certification.

“I’m further behind than I was before I started,” she said.

David Goodstein, who was the school’s director of education for nine months in 2006, said Ms. Masci’s experience was not uncommon.

Mr. Goodstein, who has filed a federal whistle-blower suit against Kaplan, said 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.

Mr. Goodstein’s lawsuit, filed four years ago, is under seal. But the Post Company’s securities filings disclosed an investigation of the program.

In the Las Vegas case, Charles Jajdelski, an admissions adviser at Kaplan’s Heritage College, said that while cleaning up after an October 2003, graduation ceremony, he found five boxes of diplomas sitting off to the side.

When he asked colleagues about the boxes, his complaint said, they told him they were for phantom students, kept on the books even though they never attended class. The more questions he asked, Mr. Jajdelski said, the more he was told to drop it.

“When I called Kaplan’s Western regional assistant director, he told me he knew all about it, I shouldn’t worry about it, and we didn’t ever need to have this conversation again,” Mr. Jajdelski said. “I called the human resources guy in Atlanta, and he said, ‘Charles, we need you to be a team player here.’ That knocked my socks off.”

Mr. Jajdelski reported the situation to the Education Department hot line in November 2003, his complaint said. He was fired weeks later. Kaplan officials said the company was unaware of Mr. Jajdelski’s accusations until his lawsuit was unsealed in 2008.

The broadest complaint against Kaplan is the one from Florida, in which the former dean of paralegal studies, Ben Wilcox, is one of three plaintiffs...

“They’ll tell you all sorts of terrible things about me,” Mr. Wilcox said, adding that Kaplan is intent on discrediting him because of his access to incriminating evidence. “But the bottom line is that Kaplan is a cold-hearted scam to make money by taking student loans from the government, and leaving students with debt that they’ll never be able to pay off.”

The other two plaintiffs, Mr. Urquilla-Diaz and Jude Gillespie, have both brought unsuccessful discrimination complaints against Kaplan.

Mr. Graham and Mr. Rosen emphasize that Kaplan has made important changes, including its new “Kaplan Commitment,” which allows students to enroll, risk free, for several weeks — thereby eliminating any incentive to recruit unqualified students.

During that period, either the student, or Kaplan, could decide that the program was not a good fit, and end the enrollment.

“Allowing students four or five weeks of conditional enrollment is quite a bold step,” Mr. Graham said. “Plainly, in the short term, it will lead to a shrinkage of enrollment, but we don’t know how much.”

Despite the lawsuits and negative attention, Kaplan remains lucrative. The Times said that Kaplan’s revenue in the last quarter was up 9 percent - to $743.3 million -- and that revenue from higher education is four times greater than revenue from test-prep, the company's original service.

Tuesday, November 9, 2010

Milwaukee Journal Sentinel wages war on middle class

The Milwaukee Journal Sentinel's editorial board is waging an unrelenting attack on Wisconsin's middle class.

While supporting an extension of all of the Bush era tax cuts, including for those making over $250,000, it continues to demand more cuts in Milwaukee County workers' very modest wages and benefits.

In a recent editorial the editorial board opinied: Private employees have been required to take pay cuts, furlough days, cuts in their companies' contributions to retirement benefits and have made other sacrifices. They see no reason why public employees shouldn't feel some of the pain. That's one of the messages voters sent Tuesday. Union leaders and county supervisors who fail to recognize that have blinders on.

Surely the MJS editorial board knows that County workers are already saddled with 26 furlough days, an avergae salary cut of $5,000 annually.

And surely the editorial board knows that more than one thousand middle class County jobs have been eliminated, including 65 layoffs last year, contributing to Milwaukee's soaring poverty rate which the board routinely bemoans.

It is gross dishonesty for the MJS editorial board to imply that County employees and other public sector workers haven't made sacrifices because they have.

The MJS editorial board has consistently supported demands for employee concessions by firms like Mercury Marine and Harley Davidson without ever exploring whether the firms' financial position requires these concessions. Now that private sector employees have been forced to accept the destruction of their middle class wage and benefit structures that took generations to build, the editorial board is using these concessions to whipsaw public sector employees into even more concessions.

But to imply as the editorial did that County workers haven't made concessions is either dishonest journalism or misinformed reporting.

Either way, the MJS editorial board is waging a dishonest and one-sided class war against the state's hard working, middle class while urging tax breaks for millionaires.

How much do middle class workers need to give up to satisfy the MJS editors?

How much of a pay cut is enough?

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

Friday, November 5, 2010

Walker's job killing decision

A day after Governor-elect Scott Walker vowed to carry out his campaign promise to kill the Milwaukee to Madison high-speed rail, he called Talgo, the Spanish train company that has set up shop in Milwaukee, asking them to stay.

So Walker wants the jobs, but not the product.

Walker claims he will use the $810 million in federal stimulus funds on roads, although under the terms of the grants, such a use of the funds is prohibited.

Walker's decision is a job killer.

The New York Times reports that if Walker follows through on his promise the $810 million and jobs building the high speed railroad will leave the state.

So much for making job creation the focus of the new administration.

For the entire story read the New York Times article.

No fireworks at public hearing on for-profit colleges

Inside Higher Education reports:

There were no fireworks Thursday as the U.S. Department of Education hosted the first of two days of public hearings on its much-debated proposed regulatory metrics aimed at defining "gainful employment" for most for-profit-college offerings and certificate programs at nonprofit institutions. The department received more than 90,000 written comments on the proposal this summer and postponed the release of the regulations, which were originally planned for Nov. 1, to allow for more feedback, in the public hearings and in small meetings with stakeholders.

The hearings are a rare move for a federal agency in the midst of finalizing regulations but seemed like little more than public policy theater as a string of speakers took the stage for five minutes each in an auditorium at the department's headquarters. In all, 31 pre-approved speakers -- most representing the for-profit sector -- of about 50 who'd been scheduled (some had canceled in advance, others were "no shows," a department spokesman said) shared their views -- extracted largely from their written comments -- on the regulations.

Some commenters asked the department to withdraw the rules, but the vast majority acknowledged that the department appears determined to move ahead with the regulations and is more interested in receiving specific, constructive comments than hearing broad denunciations of the proposals. For-profit investors (and, admittedly, reporters) hoped for some hint of the department's current line of thinking on the rules but officials in the room, including Eduardo M. Ochoa, assistant secretary for postsecondary education, asked no questions of the speakers over the course of the hearings.

In all, close to 100 people registered to speak on Thursday or today, the second day of hearings. All the institutions, groups and individuals that requested a spot on the agenda were given one, the department said.

Tuesday, November 2, 2010

How a Republican victory would affect higher education

If, as anticipated, the Republican Party wins control of the United States House of Representatives, federal higher education policy will be radically transformed.

An article in today's Inside Higher Education suggests at least four significant changes:

1) Given the Republican pledge to cut non-defense discretionary spending, research and education funding will be cut;

2) Representative John Boehner, who is expected to emerge as the next Speaker of the House, has close ties to private student lenders. As a result, the costly Federal Family Education Loan Program, which guaranteed private lenders high rates of return on risk free student loans, may be revived. The middle man role of private lenders had been eliminated by the 110 Congress;

3) The Pell Grant program, which provides low-income students federal grants to pay for higher education will almost certainly experience either direct cuts or be reduced through restricting student eligibility.

4) The effort to regulate for-profit diploma mills will almost certainly be limited to requiring them to disclose costs and graduation and repayment rates. The "gainful employment initiative," a quality control measure designed to tie federal funding to performance, will die.

The Inside Higher Education article is linked here.

Sunday, October 31, 2010

Japan's stagnation a cautionary tale for the U.S.

The New York Times' Martin Fackler and Steve Lohr write that Japan's experience in responding to a financial crisis is that you need to restore economic growth before you worry about deficits.

Japan failed to restore growth. The result has been two decades of stagnation.

This is a cautionary tale for U.S. policy makers from both parties who have all but abandoned any attempt to jump start the economy.

I blogged about this in response to a Milwaukee Journal Sentinel op ed piece almost two years ago.

The entire NYT's article is linked.

Wednesday, October 27, 2010

For-profit colleges exploit low-income students

By Arnold L. Mitchem

The current policy debate over federal regulation of for-profit higher-education institutions has generated a lot of heat, but very little light. I believe the object of concern is misplaced. We should not be focusing on whether for-profits are being unfairly targeted by policymakers--especially those who may be looking to exploit a hot-button issue just prior to Election Day. Rather, we should give thoughtful consideration to the broader issue of educational equity at these institutions.

Here are the facts: Low-income Americans are disproportionately represented at for-profit institutions. This class (and sometimes racial and ethnic) stratification is troubling for two reasons. First, there is little evidence that this stratification is the result of the informed choice of students or their families. Second, in far too many cases, students who enroll in programs at proprietary institutions do not improve their life chances or increase their social mobility. In actuality, these students graduate at very low rates and with few or no viable employment options.

I write on the basis of my own experience of nearly 30 years as head of the nation's only organization representing the interests of low-income students as well as minority and first-generation students and students with disabilities. I personally know the circumstances under which they encounter challenges to access and success in postsecondary education.

Low-income families know very little about the range of postsecondary options and the college admissions process. If discussions of college rankings, the sticker price of college versus the actual price, the transferability of credits, and the vagaries of financial aid confuse families with resources, imagine how low-income youth and adults with no college experience feel. In short, when low-income, first-generation students enter the college marketplace, they do not do so as informed consumers equipped to negotiate with sales representatives. Rather students often believe the "salesperson"--individuals serving as an "admissions counselor" at for-profits--who encourage them to take on high-interest loans likely to be defaulted.

The sophisticated marketing and recruiting techniques of many for-profit institutions thereby take on a predatory nature, similar to what we have seen in the subprime mortgage crisis in the mortgage industry. These high-pressure transactions, in which institutions promise quick degrees and jobs in exchange for high tuition, are deeply dishonorable because there is an inherent inequity in the relationship between the low-income consumer and the industry. Students often have no knowledge of comparable programs offered by public colleges in their communities at lower cost so they are unable to judge the true value of the for-profit certificate or degree program.

As troubling as such an unequal relationship between buyer and seller may be, it might be justified if the seller's product offered the promised outcome. But in too many cases, students leave for-profit institutions in worse circumstances than they were before they enrolled.

There are several scenarios for students enrolled in for-profit institutions that I have seen played out and that I described to members of Congress in September:

(1) The school holds out the lure of high-paying jobs in a field, but either no such jobs exist or they require education or experience beyond what the school provided;
(2) students enroll in a program that requires skills they do not have at the time of matriculation, so, in short order, they drop out with no degree or certificate and left still saddling a large loan obligation;
(3) students enroll in a program under the assumption that credits are transferable to a public or nonprofit, but they aren't, so they pay twice to attain their ultimate academic goals;
(4) and finally, students are badly served by for-profits when their education does not provide a real or significant boost in earnings.

Paying back student loans over a long period of time sometimes rules out the possibility of making other financial investments that will create a better life for an individual's family such as buying a house, or saving for retirement or for one's children's education.

The federal government, in particular the U.S. Department of Education, is right to be concerned that for-profit institutions are preying on low-income students, and as recipients of federal grants and loans, they are doing so at taxpayers' expense. There is both a fiscal and fiduciary responsibility--a moral obligation--to see that these students are protected from abuse and that federal funds are being expended properly.

I question, too, the rising proportion of federal grant aid that is being channeled to the private sector. Analysts and policymakers alike are rightly scrutinizing the "privatization" of education and the rapid growth of the for-profit institutions whose revenue streams are supported by public dollars.

But policymakers must also address the larger questions of access and equity that the well-publicized cases of unsavory practices illuminate. If the playing field is to be truly leveled, low-income students must have access to the full range of postsecondary institutions--not just the ones that are savvy enough to get their recruiting information into students' hands. Ensuring college opportunity for all requires that the nation make a substantial investment in pre-college counseling and advising for low-income, first-generation students and their families--a much larger effort than we have undertaken to date.

Arnold Mitchem of Milwaukee is president of the Council for Opportunity in Education, the only national organization dedicated to furthering the expansion of postsecondary opportunities for low-income and first-generation students.

Tuesday, October 26, 2010

Stem cell research, Galileo and the November election

Many of you know Helen Robertson, my ex-wife and retired MATC English instructor. Helen suffers from Multiple Sclerosis (MS) and Parkinson's disease. Her mobility is impaired and her independence compromised.

These diseases have robbed her of the things that give life meaning. When our youngest daughter graduated from college, Helen was simply too ill to attend her graduation ceremony. She was also unable to attend Parents Day when Ohio State University honored our oldest daughter. Helen will never be able to walk her children down the aisle on their wedding day or take her grandchildren to the park. It forced her to retire prematurely from MATC and abandon her passion for writing and teaching. Her loss was also our students' and community's loss. . Helen’s illness has even robbed her of the joy of reading.

Helen's life has been destroyed by this disease. In one of her more despondent moments, she recently asked: "Why did this happen to me?" and said:" Sometimes, I think I would be better off dead."

Embryonic stem cell research, scientists believe, may provide a cure for illnesses like MS, Parkinson's, Alzheimer's, Juvenile Diabetes and spinal cord injuries.

It might be too late for this research to help Helen. Her diseases may have progressed too far too fast. But it is nothing less than immoral to oppose or limit this important research that provides so much hope to so many who have suffered so much.

The opposition to embryonic stem cell research has historic parallels. Galileo Galilei, the great Italian scientist, was called to Rome in 1633, and tried for the crime of heresy for teaching that the earth revolves around the sun. The aged Galileo, in his 70's, was imprisoned in a church dungeon and threatened with torture if he did not recant. Fearing torture, and the fate of Giordano Bruno, whom the church burned at the stake a generation earlier for the same crime, Galileo recanted. He was confined to his home under house arrest, neither allowed to leave or to receive visitors, for the rest of his life.

The persecution of Galileo, however, did not end with his death. His heirs were refused permission to bury the great scientist in his family tomb at Santa Croce.

It wasn't until 1832 that Galileo's work was removed from the list of banned books that Catholics were forbidden to read. 200 years after the trial... and well after Sir Isaac Newton established the truth of the theory!

In 1992, Pope John Paul II formally apologized for the persecution of Galileo.

Those like Scott Walker who oppose embryonic stem cell research are no more right or moral than those who attempted to silence Galileo centuries ago. They are extremists pure and simple. Their Twenty-First Century inquisition against researching potential cures for debilitating diseases is immoral and must be stopped..

Tom Barrett has consistently supported all forms of stem cell research. The University of Wisconsin Madison has been a leader in this area of research which demonstrates tremendous economic as well as medical potential. Nancy Reagan, whose husband, President Reagan, suffered from Alzheimer's, is a strong, proponent of embryonic stem cell research.

When you vote on November 2nd, please remember that Tom Barrett has consistently supported embryonic stem cell research which his opponent would ban. And think about what has happened to Helen. If that doesn't convince you, think about an old Italian scientist named Galileo and watch the sun set. Then do the right thing.

Thursday, October 21, 2010

Cap Times: Vote yes on MATC, invest in Wisconsin's future

Yesterday the Cap Times ran an editorial supporting Madison Area Technical College's (MATC) $131 million building referendum. So far Senator Darling has not issued a press release about the need for elected boards and no one has attacked MATC's employee compensation.

The editorial is linked here and appears below:

Cap Times editorial Thursday, October 21, 2010 5:00 am

The Greater Madison Chamber of Commerce and the South Central Federation of Labor are not always on the same page.

But turbulent economic times and the question of how to confront them in the most effective way have focused business and labor, rural and urban communities, Republicans and Democrats, even the Wisconsin State Journal and The Capital Times on the same principle: The Madison Area Technical College is a vital force in our local economy that must be strengthened if we are going to meet the challenges of the future.

There’s broad support for a “yes” vote on the Nov. 2 MATC referendum.

If the referendum is approved, the college, which maintains campuses and facilities throughout the region, would be able to borrow $133.8 million for new construction.

The bonds would take 20 years to pay off, and property taxpayers would feel a pinch. The owner of a $200,000 home would pay $27.52 a year for the first 10 years; the amount would drop over the following decade.

We can understand that some residents of Madison and communities across the 12-county region served by the school would be ill at ease with the prospect of a tax hike. MATC officials worried about whether this was the right time to make the request. But they made the right decision in going to referendum.

The current economic troubles resulted from many factors but one of the most serious of these was a failure to invest in the infrastructure of education, technological development and job training during the 1990s and the first years of the 21st century. Other countries made sounder and stronger investments, and they are paying off today. The United States needs to catch up. But the process of catching up will not be an even one. Some regions will be ahead of others. South-central Wisconsin, a traditional education and innovation powerhouse, needs to be in the forefront.

We do not always agree with MATC officials when it comes to their approaches. But they have, to our view, plotted this initiative with an eye toward achieving that goal while making rapid, practical and positive improvements in the circumstances of the communities that are served by the college.

Much of the money, $43 million, would go to build a health education center at the Truax campus on Madison’s east side. The center would include classrooms and a health clinic designed to serve the public. The nurses, technicians and health aides trained at the center would serve the entire region, addressing critical health care personnel shortages.

Other projects in communities across the region are similarly designed to ensure that MATC does not merely construct new facilities -- although the job creation potential in this aspect of the plan ought not be underestimated -- but also makes a tangible and immediate impact on the social and economic condition of south-central Wisconsin.

In other words, voting “yes” on the Nov, 2 MATC referendum is the smartest investment residents of this region can make in their future.

Share your opinion on this topic by sending a letter to the editor to Include your full name, hometown and phone number. Your name and town will be published. The phone number is for verification purposes only. Please keep your letter to 250 words or less.

Wednesday, October 20, 2010

Leader of Oshkosh teachers: Ron Johnson's views on education are a nightmare

Dear Fellow Educator,

My name is Len Herricks and for those of you who don't know, I'm the President of the Oshkosh Education Association. I'm writing to you today because I know Republican Ron Johnson well. I served as a co-chair with him on the Oshkosh Chamber Partners in Education Council for two years. So when, during the first U.S. Senate debate in Milwaukee recently, Mr. Johnson used my name as an example of him working across ideological lines to get things done, I was more than surprised seeing he knows very well from our time serving on the Council together that I believe his type of divisive and polarizing views on education would be a nightmare for our public schools.

Contrary to Mr. Johnson's description of his Council work as consensus building, he spent his time pitting parochial schools against public schools, and demonstrated a unique ability to turn off and eliminate the morale of those employed in public education - while leaving the entire council in shambles following his departure.

His extreme views on education have followed him on the campaign trail. Ron's idea of saving money on public education starts and ends with eliminating programs for students. He forgets that public schools educate students of all levels and ability including those who don't have the means to afford a private education.

When asked by a right-wing radio host in July, Ron Johnson said he opposed saving the jobs of teachers. This extremist claim that no taxpayer money should be used to save the jobs of teachers would have drastically increased the size of classes. Ron Johnson's statement means he also opposed the 2010-2011 Jobs Act which will create or retain 3,000 teaching jobs across Wisconsin, including 38 teaching jobs in Oshkosh.

Ron Johnson also opposed the Recovery Act, which has created or saved more than 7,390 teaching jobs in Wisconsin, keeping classroom sizes manageable making sure students in danger of failing to meet basic standards can get the help they need.

I know Ron Johnson and I know that Wisconsin teachers and students can't afford to have him represent us in Washington. I support Russ Feingold because he's always fought for us.

Len Herricks, President
Oshkosh Education Association

Monday, October 18, 2010

Wisconsin State Journal says invest in MATC

A recent Wisconsin State Journal (WSJ) editorial in support of MATC entitled "MATC deserves priority this fall" was in sharp contrast to the Milwaukee Journal Sentinel's (MJS) over the top coverage of MATC a week ago.

The catch-the WSJ piece was about Madison Area Technical College, while the MJS's was about Milwaukee Area Technical College, the Wisconsin Technical College System's large flagship campus with 55,000 students and 125 associate degree and diploma programs.

The MJS recently ran two front page, above the fold articles that inaccurately claimed MATC was facing a "looming financial crisis" and implied that bloated faculty salaries were the cause. The WSJ, in contrast, editorialized about the important role Madison Area Technical College is playing in providing dislocated workers with retraining and reviving the Wisconsin economy and endorsed a $131 million investment in the college.

Differences in Madison and Milwaukee faculty compensation, however, are minimal.

Madison's instructional cost per full time equivalent (FTE) student was 7th lowest in the 16 district system at $9,416, while Milwaukee's was 6th lowest at $9,485.

Madison total costs per FTE was 9th at $12,921, while Milwaukee's was 8th at $13,367.

Both have exceptionally high and stable bond ratings.

So if faculty compensation and fiscal management don't explain the differences in editorial tone and analysis, what does?

Perhaps the MJS's hostility to pubic employees and their unions explains their coverage. The former is evidenced by its on-going series of front page articles on public employee pay without a similar focus on exorbitant CEO compensation and or corporate corruption. The later is demonstrated by the papers treatment of its own employees who have experienced layoffs and salary cuts and the MJS's universal support for concessions.

Over the last five years from Harley Davidson to Mercury Marine, from the auto industry to the County, from MPS to MATC, the Journal Sentinel editorial Board has never editorialized about an employer demand for concessions it didn't support. In the case of MATC it proposes them even after acknowledging that the faculty union has given major concessions including voluntarily giving up a negotiated salary increase and agreeing to health care concessions.

The MJS's skewed coverage of MATC was also in startling contrast to its coverage of recent Public Policy Forum reports on the City and the County's budgets. Both studies documented real financial challenges, much more challenging than MATC's. In fact, the County's financial situation is so perilous that the Greater Milwaukee Committee says it is on the verge of bankruptcy and has proposed dissolving the County. The MJS has endorsed that proposal. Yet, its articles on the City and the County were buried on the third page of the local section.

While the Great Recession has intensified financial pressures on all units of local government, the single biggest cause of their structural financial problems is the rapid decline in state support. The City of Milwaukee's shared revenue has declined from 46% of its budget ten years ago to only 34% today. MATC's state aid has declined from 30% in 1990 to 13% today. Yet the MJS's articles fail to even mention unfunded state mandates and declining state revenues.

The WSJ editorial in support of a $131.7 million referendum begins:

Madison Area Technical College is on the front lines of putting people back to work and helping others keep their jobs in this challenging economy.

The community college is training — and re-training — tens of thousands of workers in south-central Wisconsin each year. And a slew of them are well past the age of traditional students.

It concludes: unit of government is in a better position to address those needs than the local community college.

Vote “yes” for MATC on Nov. 2.

The entire editorial is linked .