Friday, August 27, 2010

Building a Nation of Know Nothings

Timothy Eagan of the New York Times writes:

It’s not just that 46 percent of Republicans believe the lie that Obama is a Muslim, or that 27 percent in the party doubt that the president of the United States is a citizen. But fully half of them believe falsely that the big bailout of banks and insurance companies under TARP was enacted by Obama, and not by President Bush.

Take a look at Tuesday night’s box score in the baseball game between New York and Toronto. The Yankees won, 11-5. Now look at the weather summary, showing a high of 71for New York. The score and temperature are not subject to debate.

Yet a president’s birthday or whether he was even in the White House on the day TARP was passed are apparently open questions. A growing segment of the party poised to take control of Congress has bought into denial of the basic truths of Barack Obama’s life. What’s more, this astonishing level of willful ignorance has come about largely by design, and has been aided by a press afraid to call out the primary architects of the lies.

The Democrats may deserve to lose in November. They have been terrible at trying to explain who they stand for and the larger goal of their governance. But if they lose, it should be because their policies are unpopular or ill-conceived — not because millions of people believe a lie.

The entire essay is linked.

Thursday, August 26, 2010

Corinthian College's shares tumble in response to default rates

Corinthian College's technical college subsidiary, Everest College, will open its new Milwaukee campus in October one block north of the Milwaukee Area Technical College's flagship downtown campus.

This should be good news for Corinthian's stockholders. But last week, shares of Corinthian fell precipitously after Corinthian Colleges Inc. said its already low student loan repayment rates were deteriorating, putting it at risk of losing access to federal financial aid for some programs, its main revenue source.

The Department of Education (DOE) can suspend a school's access to federal financial aid if the default rate is 25 percent or greater for three years in a row. That aid makes up the bulk of Corinthian and other for-profit education companies' revenue.

The DOE study released last Friday showed Corinthian students repay loans at one of the lowest rates among those who attend publicly traded companies' schools. Everest College students had a repayment rate of only 19.2%. The proposed federal regulation would establish a repayment rate standard of 45%.

None of Corinthian's 88 Everest campuses met that standard and eight were below 10%

Corinthian offered a first-quarter forecast Friday that fell below analyst expectations and said it was unable to forecast its fiscal 2011 performance because of uncertainty about the impacts of regulatory changes and its decision to limit student enrollments to improve graduation and loan repayment rates.

Its shares tumbled 86 cents, or 16 percent, to $4.54 in Friday afternoon trading. The stock, which has lost two-thirds of its value in 2010, had not traded below $5 between August 2000 and this week.

Corinthian's bad news pulled down other stock in other for-profit education companies, many of which have made changes to accommodate new regulation and lawmakers' concerns.

For-profit education companies' shares have fallen this year as regulators and lawmakers, led by Senator Tom Harkin, address soaring student loan defaults, aggressive and often fraudulent recruiting by enrollment counselors and concerns about the quality of education the companies provide.

Corinthian expects that the number of its schools with student loan default rates above 25 percent will be "substantially higher" for students beginning to pay in 2009 fiscal year than for the 2008 group. Up to three of the company's schools could become ineligible with the 2009 data, joining 49 already ineligible, Corinthian said.

The company also said it is stopping enrollment of students more likely to default on loans and drop out, who make up 15 percent of its student population. Corinthian expects this change to result in flat new student growth for the year, down substantially from the double-digit growth of the last few years.

Several companies have cut their outlooks when reporting quarterly results recently, saying regulatory changes and efforts to improve the school experience for students will slow enrollments.

The sector's biggest decliners were Education Management Corp. which is also opening a Milwaukee campus, The Arts Institute in the Third Ward, and Lincoln Educational Services, which both tumbled 5 percent.

DeVry Inc., ITT Educational Services Inc. and Career Education Corp. slid about 4 percent.Bridgepoint Education Inc. fell 3 percent, while Strayer Education Inc., Capella Education Co. and Grand Canyon Education Inc. all shed about 1 percent.

Apollo Group Inc., which owns the largest school chain in the country, the University of Phoenix, fell 18 cents to $40.41.

Wednesday, August 25, 2010

A letter to my students

The following "Letter to My Students" was written by Michael O'Hare, professor of public policy at the University of California, Berkeley.

Welcome to Berkeley, probably still the best public university in the world. Meet your classmates, the best group of partners you can find anywhere. The percentages for grades on exams, papers, etc. in my courses always add up to 110% because that’s what I’ve learned to expect from you, over twenty years in the best job in the world.

That’s the good news. The bad news is that you have been the victims of a terrible swindle, denied an inheritance you deserve by contract and by your merits. And you aren’t the only ones; victims of this ripoff include the students who were on your left and on your right in high school but didn’t get into Cal, a whole generation stiffed by mine. This letter is an apology, and more usefully, perhaps a signal to start demanding what’s been taken from you so you can pass it on with interest.

The entire letter is linked here.

Saturday, August 21, 2010

Policy elite writes off American workers!

Nobel Prize winning economist Paul Krugman warns that a bipartisan consensus is emerging that writes off American workers by accepting high levels of unemployment as a structural characteristic of the global economy.

He warns:

I’m starting to have a sick feeling about prospects for American workers — but not, or not entirely, for the reasons you might think.

Yes, growth is slowing, and the odds are that unemployment will rise, not fall, in the months ahead. That’s bad. But what’s worse is the growing evidence that our governing elite just doesn’t care — that a once-unthinkable level of economic distress is in the process of becoming the new normal.

And I worry that those in power, rather than taking responsibility for job creation, will soon declare that high unemployment is “structural,” a permanent part of the economic landscape — and that by condemning large numbers of Americans to long-term joblessness, they’ll turn that excuse into dismal reality.

The article is linked.

Tuesday, August 17, 2010

SE Asian workers strike for justice

SE Asian workers are in revolt against low wages, exploitation and corporate race to the bottom economic development strategies.

First, Chinese workers struck at major transnational corporations like Honda and Foxconn Technology (a major supplier of companies like Apple, Dell and Hewlett-Packard), winning significant wage increases and other improvements.

Now garment workers in Bangladesh, employed by suppliers of WalMart and H & M have risen up, demanding a higher minimum wage and in opposition to attempts to lure garment production to Bangladesh through low wages.

The courage of these workers to stand up for their humanity illustrates what Dr Martin Luther King meant when he said: "The arc of the moral universe is long, But it bends toward justice."

Thursday, August 12, 2010

For-profit colleges accused of widespread systemic fraud

Inside Higher Ed reports:

Leaders in for-profit higher education have historically tried to deflect criticism of the institutions by pointing to a few misbehaving "bad actors" who aggressively recruit unqualified students, keep them enrolled for as long as possible while burying them in debt and, if students stick it out long enough, award them worthless degrees.
But the events of last week -- most notably the findings of the Government Accountability Office's undercover investigation of recruiting at for-profit colleges that included inducements to commit fraud at four institutions, and the highly critical Senate hearing at which the findings were aired -- challenged the validity of that argument and put advocates of the sector on the defensive in a way that they have not been for years. The developments emboldened critics, saying that the week's events prove what they've been saying about the systemic nature of the sector's problems.

With the GAO's findings suggesting that evidence of for-profit recruiters encouraging students to commit fraud was fairly widespread and that questionable or misleading practices were identified at all 15 for-profit colleges that investigators visited, “the world changed this week,” said Terry W. Hartle, senior vice president of government and public affairs at the American Council on Education. “There should be no doubt that the world of federal student aid policy changed this week," certainly for for-profit colleges but perhaps for nonprofit institutions, too.

The article is linked.