Thursday, March 28, 2013

New report identifies why Wisconsin's economy is among the nation's worst

Wisconsin’s economy continues to be among the nation’s worst performing.  A new report by the Bureau of Economic Analysis reports that between 2011 and 2012 the state ranked 41st in nation in personal income growth.
The single largest contributor to this dismal performance was the dramatic decline in state and local government income, the direct result of Governor Walker’s austerity economic policies (See table 3).

Wisconsin’s state and local government employees’ incomes shrank by $529 million dollars, a 2.55% decline. Only Louisiana under the leadership of Tea Party favorite, Governor Booby Jindal, experienced as steep a decline according to the analysis.
The Milwaukee Journal Sentinel has repeatedly written that the state’s lack of job creation and weak economic and income growth is inexplicable. This report makes it clear that  Wisconsin's weak  economic performance is the direct result of Walker’s austerity economics- massive cuts in state aid to local governments, public schools, tech colleges and the UW system. It will be interesting to see if the Milwaukee Journal Sentinel reports that the economic mystery of Wisconsin’s subpar economic growth has been solved.  

Wednesday, March 27, 2013

Wisconsin for-profit college accountability effort killed

The effort to hold Wisconsin for-profit colleges accountable for graduation and employment outcomes was killed last week in response to strong opposition from for-profit colleges, influential Republican lawmakers and Governor Walker.

The Educational Approval Board, which decides whether for-profit colleges can operate in the state, shut down a committee charged with developing standards for for profit colleges almost as soon as it had convened.

It is hard to miss the hypocrisy of a Governor who insists on greater and greater accountability from public schools, colleges and universities, opposing accountability standards for for-profit colleges, many of whom have become notorious for exploiting low-income students, illegally paying recruiters by the head, and other unsavory practices.

For profit colleges, like Everest College in Milwaukee, have been accused of manipulating students into taking out huge loans for programs and credits that do not transfer or lead to employment,leaving students with little more than onerous debt. Milwaukee's Everest College had a job placement rate of only 5% and a graduation rate of less than 50% when it suddenly closed its doors after only two years of operations.

Nationally, several for-profit colleges have been sued for fraud by state governments and former students. And recently several prominent for-profits including Kaplan, the University of Phoenix, Everest and Sanford Brown have closed campuses.

The committee had met just once, on Feb. 22, a meeting dominated by testimony opposing the standards by representatives from numerous for-profit colleges. Earlier that month, Gov. Scott Walker replaced three members of the seven-member approval board. There is one vacancy.

Then on March 12, Rep. Steve Nass, chairman of the Assembly higher education committee and vocal and acerbic critic of the University of Wisconsin system, wrote in an email to the approval board that it should suspend the committee and work "in a more cooperative atmosphere" with the schools. "I believe this process is very premature," Rep. Nass wrote. He called the regulation efforts — which would have required the colleges to show that at least 60 percent of students who started programs finished and got jobs in their fields — well-intentioned but needing more study and input.

National observers took a different view, noting that similar measures throughout the country typically meet the same fate against the well-funded for-profit college industry. "The basic narrative is pretty much the same," said Barmak Nassirian, a Washington, D.C. independent education policy analyst who's studied for-profit colleges for two decades. "The industry obviously put a full-court press on and killed the effort."

For-profit colleges told the board last month the accountability standards were unreasonable. "You are proposing performance expectations that very few of your own public institutions could meet," said Vickie Schray, a senior vice president at Bridgepoint Education, parent company of Ashford University and University of the Rockies.

David Dies, the executive secretary of the EAB, said it's beside the point. EAB doesn't oversee public schools and Dies said the economic consequences of students not succeeding at for-profit schools can be far more dire since students tend to take on much bigger debt loads.

A federal report last August looked at 30 for-profit higher education companies and found they charge students up to four times the cost for some programs as publicly funded community colleges, resulting in heavy debt loads and spotty graduation and job placement outcomes. "Those individuals become a drag on the state's economy," Dies said.

In his email, Nass cited the concerns of colleges, saying the new measures came unexpectedly and without adequate input. He also referenced Walker's new appointments to the EAB. In early February, the governor announced three new appointees — Robert Hein of Janesville, a UW-Rock County math professor, William Roden of Grafton, an educational consultant, and Katie Thiry of Prescott, an online college teacher.

By removing three board members who backed establishing accountability standards, Walker effectively killed the effort to hold for-profit colleges accountable for their exploitation of Wisconsin residents.

Wednesday, March 13, 2013

Two year college grads earn more than bachelor’s degree holders


Berevan Omer graduated on a Friday in February with an associate’s degree from Nashville State Community College and started work the following Monday in his new job as a computer-networking engineer at a local television station, making about $50,000 a year.

That’s 15 percent higher than the average starting salary for graduates not only from community colleges, but for bachelor’s degree holders from four-year universities.

Nashville State Community College

“I have a buddy who got a four-year bachelor’s degree in accounting who’s making $10 an hour,” Omer says. “I’m making two and a half times more than he is.”

Omer, who is 24, is one of many newly minted graduates of community colleges defying history and stereotype by proving that a bachelor’s degree is not, as seems widely believed, the only ticket to a middle-class income.

Significant numbers of community-college grads are getting better jobs, and earning more at the start of their careers than people with bachelor’s degrees, a trend that surprises even the researchers who have noticed it in wage data that has started to become more available in the last year.

“There is that perception that the bachelor’s degree is the default, and, quite frankly, before we started this work showing the value of a technical associate’s degree, I would have said that too,” says Mark Schneider, vice president of the American Institutes for Research, which helped collect the numbers for some of the states that report them.

Omer’s friends with bachelor’s degrees “aren’t learning skills,” he says. “They’re just learning all this theory. I’ve got an applied degree. And I’m out there making a good amount of change.”

Nearly 30 percent of Americans with associate’s degrees now make more than those with bachelor’s degrees, according to Georgetown University’s Center on Education and the Workforce. In fact, new research into earnings shows that, on average, community-college graduates right out of school, as a group, make more than graduates of four-year universities.

The average wage for recent graduates of community colleges in Tennessee, for instance, is $38,948—more than $1,300 higher than the average wage for recent graduates from the state’s four-year institutions.

In Virginia, recent graduates of community-college occupational and technical degree programs make an average of $40,000. That’s almost $2,500 more than recent bachelor’s degree recipients.

And while by mid-career many bachelor’s degree recipients have caught up in earnings to community-college grads, “the other factor that has to be taken into account is that getting a four-year degree can be much more expensive than getting a two-year degree,” Schneider says.

A two-year community-college degree, at present full rates, costs about $6,262, based on research by the College Board. A bachelor’s degree from a four-year, private residential university goes for $158,072.

More coverage
 •As grads seek jobs, universities cut career services
 •New pressure on colleges to disclose grads’ earnings
 •Pressed to bridge the skills gap, colleges and corporations try to get along
 •Impatient employers step in to educate prospective workers

What’s driving up the wages of community-college grads is that, in spite of persistent high unemployment, there is high demand for people with so-called “middle-skills” that often require no more than an associate’s degree, such as lab technicians, teachers in early-childhood programs, computer engineers, draftsmen, radiation therapists, paralegals, and machinists.

“A good technical-oriented associate’s degree program at a good community college is actually turning out graduates whose skills meet the needs of the regional labor market,” says Schneider, a former U.S. commissioner of education statistics.

With a two-year community-college degree, air-traffic controllers can make $113,547, radiation therapists $76,627, dental hygienists $70,408, nuclear medicine technologists $69,638, nuclear technicians $68,037, registered nurses $65,853, and fashion designers $63,170, the online website reported in January.

“You come out with skills that people want immediately and not just theory,” Omer says.

The Georgetown center estimates that 29 million jobs paying middle-class wages today require an associate’s, but not a bachelor’s, degree.

“I would not suggest anyone look down their nose at the associate’s degree,” says Jeff Strohl, director of research at the Georgetown center.

“Sub-baccalaureate education suffers the stigma of the vocational-technical high school,” Strohl says. “That’s where other people’s kids went. People see those programs as tracking into something that’s dead end.”

In fact, he says, “It’s very clear that that perception does not hold up.”

The bad news is that not enough associate’s degree holders are being produced, even as many graduates with bachelor’s degrees appear to be ending up underemployed.

The United States ranks second among industrialized nations, after Norway, in the number of workers over 25 with a bachelor’s degree or better, according to the Organization for Economic Cooperation and Development. But it’s a distant 16th in the proportion of people with associate’s degrees and certificates.

Only 10 percent of American workers have the sub-baccalaureate degrees increasingly needed for middle-skills jobs, compared with 24 percent of Canadians and 19 percent of Japanese, the OECD reports.

Over the last 20 years, the number of graduates with associate’s degrees in the United States has increased barely three percent.  And while the Obama administration has pushed community colleges to increase their numbers of graduates, enrollment at these schools fell 3.1 percent this year, the National Student Clearinghouse Research Center reports. Graduation rates also remain abysmally low.

Meanwhile, many people with bachelor’s degrees are working in fields other than the ones in which they majored, according to a new report by the Center for College Affordability and Productivity.

“We have a lot of bartenders and taxi drivers with bachelor’s degrees,” says Christopher Denhart, one of the report’s coauthors.

Still, the salary advantage for associate’s degree holders narrows over time, as bachelor’s degree recipients catch up, says Schneider.

“It’s still true, on average, that the bachelor’s degree pays off more than the associate’s degree,” he says.

Although these figures vary widely by profession, associate’s degree recipients, on average, end up making about $500,000 more over their careers than people with only high-school diplomas, but $500,000 less than people with bachelor’s degrees, the Georgetown center calculates.

As for Omer, he’s already working toward a bachelor’s degree.

“Down the road a little further, I may want to become a director or a manager, and there’s still that stereotype” about associate’s degrees, he says.

“A bachelor’s degree will get me to that point.”


Accreditor puts Ashford on notice

Last week Bridgepoint Education Inc. announced that its Ashford University has been placed "on notice" by the for-profit college's regional accreditor, the Higher Learning Commission of the North Central Association of Colleges and Schools.

The sanction, which is less serious than probation, is based on the commission's concerns about Ashford's inability to meet new standards for accreditation, which the commission put into effect in January, as well as Ashford's current noncompliance with the accreditor's "substantial presence policy" (which requires institutions to have a meaningful physical presence in the agency's geographic region), according to a Bridgepoint corporate filing. Ashford last year had its bid rejected for accreditation with the Western Association of Schools and Colleges. And the commission's sanction follows a site team's recommendation last week that the University of Phoenix be put on probation.


Friday, March 1, 2013

Accreditors recommend probation for University of Phoenix

A team of accreditors reviewing the University of Phoenix has recommended that the school be placed on probation, the university's parent said Monday, jeopardizing the reputation of the nation's largest for-profit college and its ability to collect federal student aid dollars crucial to the school's bottom line.

 The University of Phoenix had a three-year default rate of more than 26 percent, according to the most recent federal data.

 The Apollo Group, which owns the 319,000-student university, said in a filing with the Securities and Exchange Commission that a regional accreditation review team determined that the University of Phoenix had "insufficient autonomy" from its corporate parent -– a development that may prevent the university from achieving its "mission and successful operation."

The Apollo Group controls the leadership of the University of Phoenix board. Apollo Group representatives said the company intends to appeal the recommendation. The probation recommendation is not final. The board of the Higher Learning Commission, a Midwest college accrediting body, will likely make a final decision in June. But the announcement signals that university accreditors are tightening reviews of for-profit colleges, which experienced explosive enrollment growth during the Great Recession as millions sought to improve their fortunes with a college degree.

All colleges must be accredited in order to remain eligible for federal student aid. Six regional accreditors collect fees from schools to consider them for approval, part of a peer-review process that dates back more than a century. Reviewers certify such things as academic courses and quality, and the accreditation standards are used in part to determine whether students can transfer credits from one institution to another. 

Members of Congress in recent years have criticized the accreditation system as a rubber-stamp regulatory process that does little to protect taxpayer investments in higher education.

 For-profit colleges such as the University of Phoenix get much of their revenue from federal aid programs, including subsidized student loans and Pell grants. The University of Phoenix last year received 84 percent of its revenue from federal financial aid programs, totaling more than $3.2 billion, according to company securities filings. The school's logo and advertisements can be seen on television commercials and highway billboards across the nation. 

The for-profit college industry has come under fire in recent years, as the Obama administration, state attorneys general and lawmakers have questioned high tuition, low graduation rates and high rates of student loan defaults at many schools. More than 22 percent of students at for-profit colleges defaulted on federal loans within three years -- nearly twice the rate of students at public institutions, according to federal data.

Despite Phoenix's high default rates, plummeting enrollments, multiple government investigations, and intense media scrutiny the Apollo Group Inc., recently rewarded its  retiring founder and CEO, John Sperling, what can only be characterized as a lavish retirement package. Sperling, who retired at the end of 2012 and now holds the title of chairman emeritus, will receive a $5 million “special retirement bonus” this month, according to a securities filing. He also gets a lifetime annuity—$70,833.33 a month— and ownership of the two company vehicles he used when serving as executive chairman. Apollo will also cover “reasonable out-of-pocket” medical- and dental-care coverage the 92-year-old incurs for the rest of his life.

 In the past year, regional accreditors have cracked down on some for-profit institutions, including Ashford University, which in seven years morphed from a 300-student Catholic school in Iowa into a massive online institution serving nearly 90,000 students. Regional accreditors on the West Coast denied Ashford's bid for accreditation last year, arguing that the school had low graduation rates and was spending much more money on new student recruitment than educating current students.

 The Higher Learning Commission has taken no formal action against the University of Phoenix. School officials said in the SEC filing on Monday that a review team found that the university's board was unable to "assure the university's integrity" and "make decisions necessary to achieve the institution's mission and successful operation."

The Apollo Group elects members of the University of Phoenix board of directors. The university's 11-member board includes four members who also serve on the parent company's board or senior leadership team. If the Higher Learning Commission board decides to place the University of Phoenix on probation, the university would have up to two years to remedy problems. The school would remain accredited while on probation, meaning it would not be disqualified from receiving federal aid dollars.

 Apollo Group executives mentioned the likelihood of negative findings from accreditors in a conference call with investors last month. The company wrote in Monday's public filing that if the school were placed on probation, its reputation "could be adversely affected, which in turn may negatively impact (the) ability to recruit and enroll students and to recruit and retain faculty and staff."

 As the Obama administration and Congress have stepped up scrutiny of for-profit colleges, University of Phoenix enrollment dropped to 356,000 in August from more than 460,000 two years earlier, according to company securities filings. A quarterly filing last month said enrollment was 319,000.