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 .

Thursday, October 14, 2010

For-profit stocks tumble

By TALI ARBEL and JANNA HERRON AP Business Writers

NEW YORK (AP) -- Investors fled for-profit college stocks on Thursday after the sector's bellwether predicted a 40-percent drop in student enrollment next quarter and withdrew its forecast for next year. The news chilled an industry facing increased government scrutiny over concerns about soaring student loan defaults.

Enrollments at for-profit schools surged during the recession. Big advertising budgets drew students trying to bolster their resumes as a hedge against high unemployment. But critics claim the schools are not helping students find better jobs and say enrollment counselors sign up many students who are unprepared for higher education. When they drop out, they are still stuck paying back their student loans.

Apollo Group Inc., which runs the University of Phoenix, attributes its expected enrollment decline to changing practices aimed at satisfying new government regulations. Apollo will no longer pay its counselors bonuses based on how many students they enroll. It also will provide new students with a free three-week trial program to see if they are ready for school, weeding out those at risk of leaving school before earning degrees.

Meanwhile, the industry is facing a proposed new rule from the Department of Education that could limit schools' access to federal financial aid - the bulk of their revenue - if graduates' debt levels are too high or too few students repay loans.
And, many schools are close to maxing out how much revenue they can receive from federal financial aid resources. Federal regulations cap that amount at 90 percent. The industry averages 83 percent, largely because they focus on recruiting lower-income students who qualify for federal Pell Grants.

"Now, they have to slow down enrollment and be less active in targeting these students. They have to go back to the more traditional students who are working adults," said Matt Snowling, an analyst at FBR Capital Markets.
In afternoon trading, shares of Apollo tumbled $12.64, or 26 percent, to $36.86. The rest of the sector followed suit.

Education Management Corp. shares lost $2.70, or 20 percent, to $10.57. DeVry Inc. fell $8.67, or 17 percent, to $41.90; Corinthian Colleges Inc. decreased $1.16, or 19 percent, to $4.86; ITT Educational Services Inc. dropped $10.58, or 16 percent, to $55.34; Career Education fell $3.29, or 16 percent, to $16.898; Strayer Education Inc. declined $21.21, or 14 percent, to $135.84.

Monday, October 11, 2010

Education should lead students out of poverty, not into it

Jeremy Dehn who teaches film and video production at the University of Denver, the for-profit Art Institute of Colorado and the University of Colorado at Denver calls for cracking down on for-profits and investing in two-year colleges. He writes in a New York Times opinion piece:

Of course we should crack down on for-profit colleges that exploit students and taxpayers. Education should lead students out of poverty, not into it. But that’s not enough. We need to quit subsidizing for-profit colleges, and instead devote our resources to expanding and improving the system of state and community colleges that work more effectively for a small fraction of the cost.

The entire article is linked

Thursday, October 7, 2010

The Milwaukee Journal Sentinel ignores rally of thousands against corporate greed

Did you know that union workers in Wisconsin held their largest rally in years this week?

Don't blame yourself if you didn't because the Milwaukee Journal Sentinel didn't cover it.
Apparently the editors of the largest daily in the state didn't think the mobilization of thousands of workers and their supporters against the Kohler Company's demands for draconian concessions was worth covering even though a day earlier it dedicated an entire article to explaining the company's position.

Fortunately other media did cover the protest.

The Green Bay Gazette reported:

Several thousand Kohler Co. union employees and their supporters spent more than two hours picketing outside company headquarters Wednesday, following a day of labor negotiations that union officials said had taken on a slightly more positive tone.

The United Auto Workers Local 833 organized the "informational" picket — the union isn't on strike — to draw attention to what union members feel are unjust concessions asked for by Kohler as the two sides attempt to work out a new labor contract.

"Under their proposal, they could lay me off and bring me back and pay me the same wages I made in 1997, but it's not 1997," said Tim Tolman, 47, a 15-year employee who became a temporary Kohler worker last year following a companywide layoff. "I think it's totally unfair."

The state AFL-CIO blog ran a lengthy article:

Enough is enough. Kohler Company is taking advantage of the poor economy to demand extreme and unnecessary concessions from their workforce, including a wage freeze, a two tier wage system and the use of more temporary employees.

Nearly 2,000 people turned out yesterday to stand in solidarity with workers from UAW Local 833, as they fight to put the needs of working families ahead of corporate greed. Workers and community members picketed side by side in order to send a united message to Kohler management.

“During times of economic prosperity, the leadership of UAW Local 833 has always taken a reasonable and responsible approach to negotiations. Unfortunately, Kohler Company chose to exploit the current recession as evidenced by its present proposals,” says UAW Local 833 President Dave Bergene.

Kohler harps about high labor costs. They conveniently forget to mention that the quality and productivity of Kohler workers is second to none in their global empire. Build it elsewhere, rework it here,” adds Dave Boucher, a full-time Kohler Foundry worker and an Executive Board member of UAW Local 833.

The contract fight at Kohler is part of a larger trend affecting all workers, union and non-union. As companies sitting on huge cash reserves consistently put profits above people, the Wisconsin labor movement is mobilizing to fight on behalf of the middle-class and all working families.

“This pattern of ‘restructuring’ is becoming all too frequent, with successful companies demanding huge concessions from workers; not because they have to, but because they can,” according to Phil Neuenfeldt, President of the Wisconsin State AFL-CIO. “This is happening at non-union facilities too, but you simply don’t hear about it, because those workers don’t have a democratic structure though which to fight back.”

Neuenfeldt and newly elected Wisconsin State AFL-CIO Secretary-Treasurer Stephanie Bloomingdale attended yesterday’s rally in Kohler in order focus statewide attention on the growing cancer of corporate greed which threatens to consume Wisconsin’s middle-class.

According to Bloomingdale, “It’s time to take a stand. This madness has to stop somewhere. If companies like Kohler want people to be able to buy their products, they must provide reasonable compensation in order to make it possible.”

“All too often the retirees that toiled to create a strong company are forgotten and thrown under the bus, all in the name of greater ‘competiveness.’ We’re not willing to let that happen here,” vows Pete Behrensprung, UAW International Representative and former Local 833 President.

“Maybe the company should focus less on improving their golf tournaments and more on improving their operations; then they wouldn’t have to extract huge concessions from the workers,” remarked Bruce Krueger, rank and file member of UAW Local 833.

In order to successfully fight the battles that lie ahead, working people will have to unite across sectors to support each others’ struggles. Thor Backus, AFSCME Council 40 Organizer, sees the larger picture and is speaking out in support of his UAW brothers and sisters. “If Kohler gets its way, workers and retirees in the area won’t be able to afford a pot to piss in, much less the company’s toilets.”

Unlike the Milwaukee Journal Sentinel media outlets around the state covered yesterday’s informational picket.

Tuesday, October 5, 2010

Empowering teachers key to academic achievement

Earlier in this decade the Milwaukee Journal Sentinel and its allies on the Milwaukee Public School Board, Bruce Thompson, Jeff Spence and Ken Johnson, promoted small schools as the key to improving the academic performance of Milwaukee's public schools.

This was part of a national initiative funded with hundreds of millions of dollars by Microsoft's Bill Gates. Gates himself has now concluded that the effort was ill conceived. He acknowledged this when he told the delegates at the American Federation of Teachers national convention in Seattle that he now understands that empowering teachers is the key to reforming urban education. "If reforms aren't shaped by teachers' knowledge and experience, they're not going to succeed, "he said.

Members of the Gates Foundation staff later met with AFT executives, and the two teams discussed ways to collaborate.

The MJS editors have not been as self-critical as Gates, although their constant advocacy of a mayoral takeover of MPS suggests that they recognize that simply changing the size of schools has little to do with engaging and educating students.

Unlike Gates, however, the MJS continues to promote solutions like the mayoral takeover that at best leave teachers on the sidelines and at worse make them the enemy of education reform.

In Brockton, Massachusetts a different approach was taken. Rather than breaking up a large school, linking teachers' compensation to student performance or firing "bad" teachers, faculty were empowered to take ownership over their school and its curriculum. The results: a failing public school with 4100 students has become one of Massachusetts highest performing schools.

According to of the New York Tines:

A decade ago, Brockton High School was a case study in failure. Teachers and administrators often voiced the unofficial school motto in hallway chitchat: students have a right to fail if they want. And many of them did — only a quarter of the students passed statewide exams. One in three dropped out.

Then Susan Szachowicz and a handful of fellow teachers decided to take action. They persuaded administrators to let them organize a schoolwide campaign that involved reading and writing lessons into every class in all subjects, including gym.

Their efforts paid off quickly. In 2001 testing, more students passed the state tests after failing the year before than at any other school in Massachusetts. The gains continued. This year and last, Brockton outperformed 90 percent of Massachusetts high schools. And its turnaround is getting new attention in a report, “How High Schools Become Exemplary,” published last month by Ronald F. Ferguson, an economist at Harvard who researches the minority achievement gap.

What makes Brockton High’s story surprising is that, with 4,100 students, it is an exception to what has become received wisdom in many educational circles — that small is almost always better.

The Times goes on to point out;

Brockton never fired large numbers of teachers, in contrast with current federal policy, which encourages failing schools to consider replacing at least half of all teachers to reinvigorate instruction....

Teachers unions have resisted turnaround efforts at many schools. But at Brockton, the union never became a serious adversary, in part because most committee members were unionized teachers, and the committee scrupulously honored the union contract.

An example: the contract set aside two hours per month for teacher meetings, previously used to discuss mundane school business. The committee began dedicating those to teacher training, and made sure they never lasted a minute beyond the time allotted.

“Dr. Szachowicz takes the contract seriously, and we’ve worked together within its parameters,” said Tim Sullivan, who was president of the local teachers union through much of the last decade.

There is a lesson here. Are the MPS board and the Milwaukee Journal Sentinel paying attention?

The entire article is linked.

Sunday, October 3, 2010

Hearing on for-profit colleges reveals partisan split

Last week a Senate Committee chaired by Senator Tom Harkin (D, Iowa) held its third hearing on the plight of students enrolled at for-profit colleges. In refuting a Republican colleague's defense of for-profit colleges Harkin noted that only 16% of two year college students take out loans while an incredible 95% of those attending for-profit colleges do.

Inside Higher Education reports that:

he increasing divisiveness of the debate over the federal government’s role in the oversight of for-profit colleges (and the growing likelihood that nonprofit higher education will get roped into the scuffle) was on full display Thursday as a Senate committee convened for its third hearing examining the sector.

Framing his concerns about the sector’s $24 billion stake in the federal financial aid program and what he called "misleading, deceptive, overly aggressive or fraudulent" practices that lead students to enroll at for-profit colleges, Senator Tom Harkin (D-Iowa), chairman of the Health, Education, Labor and Pensions Committee, singled out the institutions for scrutiny. “They figured out how to be profitable even when the students are not successful,” he said. “There’s irrefutable evidence now that something’s gone wrong with this industry. I’m not saying that everybody’s bad in the industry, I’m just saying that the system has gone wrong.”

Harkin reiterated his pledge to sponsor legislation relating to for-profit colleges early next year. But he conceded the need for further investigation and more hearings, because “I don’t know exactly what needs to be done.” He also announced that the next hearing on the sector would be in early December and focus in part on the increasing share of funding going to for-profit colleges from the tuition assistance programs for veterans, active duty military and their families.

At the start of the hearing – which was devoid of the startling revelations that some in the sector and investors had feared -- Harkin unveiled a report analyzing some of the data submitted to the committee by 30 for-profit colleges as part of his staff’s investigation of the sector. The report focuses entirely on the for-profit sector and does not include data on nonprofit colleges and universities as a basis for comparison.

That, said Senator Michael B. Enzi (R-Wyo.), was problematic. “I agree there is clearly a problem in higher education -- now you’ll notice I didn’t limit that comment to for-profit schools,” he said. “It’s na├»ve to think these problems are limited to just the for-profit sector. We’ve been looking at this in a vacuum.”

Harkin countered: “The point is that only 16 percent of community college students borrow money; 95 percent of [students at] the for-profits borrow money and they borrow money at a higher amount than they do at the community colleges.” Tuition for for-profit programs can be significantly higher than for comparable programs at community colleges, he said, pointing to findings from the Government Accountability Office’s August report on the sector. To him, the examination was not one done in a vacuum but one focused on the most pressing area of concern.

The entire article is linked.

Friday, October 1, 2010

Everest College sued; for-profit colleges under fire

Everest College's Milwaukee campus on North 6th Street, a block north of Milwaukee Area Technical College's flagship downtown campus, is bustling with activity as the newly established for-profit college plans to open its doors.

The Everest development was the subject of controversy last year when it received $13 million in interest free bonds from the City of Milwaukee.

Across the country Everest and its parent corporation, Corinthian College inc., continue to be the target of harsh criticism for extraordinarily high student loan default rates and for misleading students about job placements and credit transferability.

Corinthian is one of the most active for-profit colleges in opposing proposed federal regulations that would require proprietary colleges to meet quality standard's to remain eligible for federal financial aid.

Yesterday, USA Today's education reporter, Mary Beth Marklein reported that Everest had been sued because credits it promised would transfer did not.

Marhlein writes:

For Chelsi Miller, the wake-up call came when University of Utah officials said her credits wouldn't transfer from her old school.

Utah's flagship public university accepted her to its pre-med program last fall but said her courses at Everest College, a national for-profit institution with a campus in Salt Lake City, wouldn't count toward her bachelor's degree. That left Miller with a 3.9 grade-point average for an associate's degree that she says did nothing to advance her education and career goals. And, she has more than $30,000 in student-loan debt.

She says Everest misled her when it suggested her credits would transfer and misrepresented what it would cost her.

"I feel as if I had been sold a college experience from a used-car salesman," says Miller, 26, of Midvale, Utah, who last week filed a class-action lawsuit in state court with two other students accusing Corinthian Colleges, Everest's owner, of fraud.

The rest of the story is linked.