Wednesday, April 17, 2013

For-profit university settles Pell Grant fraud case

The United States University, a California based for-profit college,has agreed to a $686,720 civil settlement over federal financial aid fraud charges.

The school’s former financial aid director pleaded guilty to falsifying student records and could face up to a year of prison time, according to the local U.S. Attorney's office.

Between 2008 and 2011, Christina Miller filed falsified Pell Grant applications for students of United States University, a school with online and in-person programs.

Miller pleaded guilty to filing more than $300,000 worth of fraudulent Pell Grant applications on behalf of the school’s students, said Assistant U.S. Attorney Christopher Tenorio, who handled Miller's prosecution. The case was unusual for resulting in a civil case against the university as well as criminal charges.

“A lot of times if there is a indication that there are false applications for financial aid, it’s usually by an individual," Tenorio said. "And in this case, it was a financial aid director. There were many, many applications under her control and many false applications we suspect she made.”

Joseph Price, the assistant U.S. attorney who handled the civil case against the university, said there has likely been an uptick in these kind of cases of financial aid fraud with the proliferation of for-profit universities that has taken place in recent year.

The cases against the university and Miller were the result of a whistleblower suit filed by Veronica Glaser, a former student and employee of the university. Under the federal False Claims Act, Glaser could receive 15 percent to 25 percent of the university's settlement payment, according to Price.

According to its website, tuition at United States University ranges between $7,800 and $15,600 a year for a full-time student depending on the program. The school offers teacher credential, nursing and other programs. Its enrollment was 326 students during the 2009-10 school year, the most recent year for which enrollment information is available on the school's website.

University representatives have not yet responded to requests for comment.

Tuesday, April 2, 2013

What CAT's layoffs say about Wisconsin's skilled worker shortage

So much for Bucyrus International’s alleged shortage of skilled welders.

Last Friday the iconic South Milwaukee firm, now owned by Caterpillar, announced that it was laying off 40% of its hourly workforce, including many highly skilled welders.

For the past four years Tim Sullivan, Bucyrus International’s retired CEO, has criticizedthe Milwaukee Area Technical College (MATC) for not producing enough skilled welders to meet his firm’s production needs. Sullivan even claimed that a shortage of welders in the Milwaukee area forced him to build a plant in Kilglore, Texas.

Sullivan’s complaints were echoed by a chorus of others including the Executive Director of the Metropolitan Milwaukee Association of Commerce, Tim Sheehy, who ominously declared: "We shouldn't fool ourselves that if companies cannot find labor in Milwaukee that they won't look elsewhere. The message for Milwaukee is to fix the workforce or die."

The Milwaukee Journal Sentinel (MJS) has dutifully, almost breathlessly, covered speeches lamenting the skilled labor shortage by area CEOs. Most recently it covered one by Briggs and Stratton’s Todd Teske, despite the fact that Briggs’ employment has plummeted from 11,000 to 500 as it outsourced jobs to Alabama, Georgia and China.

It is likely that Caterpillar's announcement, coming just days before the beginning of contract negotiations, is part of a cynical negotiations strategy. But whether the layoff threat is real or simply hardball bargaining, it demonstrates why Wisconsin manufacturing firms are having difficulty attracting skilled workers.

Wisconsin's skilled workers are tired of being treated as disposable liabilities. After decades of outsourcing and job loss, they seek employment with firms that value their work ethic, skills and commitment. To put it bluntly Wisconsin’s manufacturing CEOs won't get loyalty from Wisconsin’s workers unless the loyalty is reciprocated.

More than a year ago I wrote in In a MJS op ed:”The list of companies that have offshored or outsourced production reads like a who's who of Wisconsin's manufacturing: Briggs & Stratton Corp., A.O. Smith , Rockwell, Badger Meter - and many more.

Milwaukee's working families have had their lives turned upside down by plant closings, downsizings, outsourcings and offshoring. Their experience in manufacturing has meant job loss, declining wages and benefits and economic insecurity.

Take my former student, John. He did everything we ask young workers to do, earning two journeyman cards while working and attending Milwaukee Area Technical College full time. John left Briggs when it began moving jobs to low-wage states and Mexico. But his new employer, Rockwell, began outsourcing to nonunion, low-wage plants even before it eliminated all hourly workers last year. So John started over again at Harley-Davidson. But, a year and a half ago, Harley laid John off.

John's experience is unfortunately not unique. Almost everyone with roots in this community has a father or mother, aunt, cousin or uncle who has experienced the instability that characterizes manufacturing employment.

Nationally, manufacturers shed 2 million jobs during the Great Recession. Wisconsin lost 58,300 manufacturing jobs, 11.6% of its total, between December 2007 and June 2009, the official end of the recession. The state continued to lose manufacturing jobs for several months even after the recession ended. By September 2010, Wisconsin had lost 69,800 manufacturing jobs, 14% of its total.

Laid-off manufacturing workers have summed up this experience with their kids, nieces and nephews. As Mario, a nursing student now after being laid off from a foundry after 16 years, told me, "I have a family, and I need a job with security."

His attitude is reinforced by the occupational programs at MATC that are most popular and have waiting lists: culinary arts, automotive, heating and air-conditioning, physical therapy, barber and cosmetology, occupational therapy and nursing.

What do they all have in common? These are jobs that cannot be offshored.

Our working-class students are voting with their feet by choosing careers that provide more secure employment. They'll continue to do so until manufacturers offer the same level of security they find in other occupations or sufficient compensation to justify the insecurity that has characterized manufacturing employment."