Monday, September 23, 2013

How For-Profit Colleges Stay in Business Despite Horrible Track Records

Last week the Huffington Post ran an in-depth expose on how for-profit colleges like Everest College (Corinthian College Inc.) and Sanford Brown (Career Education Corp.), who recently closed Milwaukee campuses, have created an accreditation system that ensures their continued operation and access to billions in federal funds despite dismal job placement and graduation rates.

It's a classic case of the fox guarding the chicken coup or, as they say in more polite company, a blatant conflict of interest that allows the hucksters who open these diploma mills to rake in millions while leaving students with nothing but broken dreams, credits that don't transfer and life-long debt.

It's worth the read:

Over the past decade, Corinthian's schools have remained fully accredited, enabling the publicly traded company to tap federal student aid coffers for nearly $10 billion, or more than 80 percent of its total revenues, according to a Huffington Post review of securities filings and disciplinary records maintained by its accreditors.

By every available indication, Corinthian Colleges Inc., one of the country's largest chains of for-profit colleges, stands out as an institution whose students face especially long odds of success.  At nearly half of Corinthian's schools, more than 30 percent of students default on their federal loans within three years of leaving campus, according to the most recent federal data. 

California last year cited excessively high default rates in denying access to state tuition grants at 23 of the company's campuses. Over the last three years, attorneys general in eight states and the federal Consumer Financial Protection Bureau have probed Corinthian's recruitment claims and financial aid practices, raising the prospect of lawsuits. Yet by the reckoning of the accrediting bodies that are supposed to scrutinize Corinthian's 97 U.S. campuses, its schools are meeting standards on student debt and adequately preparing graduates for jobs. 

Corinthian's success in maintaining accreditation even as its students sink into default typifies the state of play in the for-profit college industry and underscores both the incentives and the provenance of the people doing the accrediting work: Accrediting agencies receive their funding from fees paid by the very colleges they monitor. The review teams they dispatch to visit and rate schools are composed of volunteers from other schools accredited by the same agencies. 

 During a congressional hearing on higher education policy held earlier this year, one expert likened this arrangement to the cozy practices that fueled the last financial crisis, when Wall Street banks hired credit-rating agencies to certify the sanctity of the bonds they forged from risky mortgages. "This is like bond ratings firms giving AAA ratings to mortgage-backed securities sold by the same firms that pay their fees," Kevin Carey, the director of education policy at the New America Foundation, said at the hearing. "It does not work out well in the long run." 

The entire expose is linked here.

Thursday, September 19, 2013

Politifact aims and misses on Wisconsin Minnesota economic comparison

Politifact did it again. Minnesota is superior to Wisconsin on all economic performance measures except business climate indices.

So how does Politifact rate a Minnesota Legislator’s claim that Minnesota is outperforming Wisconsin?

Rather than acknowledge that Minnesota is experiencing faster growth (3.5% to 1.5%) with higher incomes (Minnesota's per capita income is $4500 more than Wisconsin's), more jobs (between July 2012 and July 2013 Minnesota created twice as many jobs as Wisconsin) , and lower unemployment (5.2 percent, nearly one-quarter lower than Wisconsin’s 6.8 percent.), Politifact rates the statement half true because Wisconsin scores better on some business climate and competitiveness indices.

 Since Minnesota leads Wisconsin in all the economic measures that matter. what this really tells us is that business climate and competitive measures which are subjective and heavily weighted toward states with low tax rates and minimal regulations are of virtually no value.

Monday, September 9, 2013

Assembly's leadership threatens shared governance

A meeting between the University of Wisconsin Board of Regents and state legislators last week was designed mainly to find common ground in the wake of recent disputes over cash reserves. But discussions during the meeting about rethinking shared governance had some faculty feeling like they were left holding the bag for administrators' actions – and that their decision-making authority within the system was under threat.

The conference, “Finding Common Ground: Regent Governance, Funding, and Partnerships for Wisconsin’s Public University System,” was initiated by the board, following a state audit this spring that showed the university system had cash reserves of $648 million, about a quarter of its annual appropriation. The funds were distributed among many accounts across the system and the funds had gone virtually unmentioned to state officials. While many state higher education systems use reserves, the issue highlighted legislative-board relations. System President Kevin Reilly, who has been in office since 2008, recently announced that he will be stepping down in January.

Mchael Falbo, the board's president, told legislators they needed to “reboot” the longstanding partnership between Wisconsin and its public universities.“We need to remember that we are all in this together, and we need to look at ways to strengthen that partnership.”

During a panel discussion on board governance, however, legislators took the opportunity to start a discussion about the role of the faculty in decision making.

General Assembly Speaker Robin Vos, a Republican, said governance changes within the system were a matter of “when, not if,” and that university chancellors should be empowered to “truly be the chief executive officers.”

Vos added: "Does the role of allowing faculty to make a huge number of decisions help the system or hurt the system?"

Some faculty advocates present, including Sara Goldrick-Rab, associate professor of educational policy studies and sociology at the Madison campus, where the meeting took place, called those statements troubling.

“Vos, in his remarks, very explicitly stated that we need to look into this issue of perceived inefficiency,” stemming from faculty involvement in decision making, she said. “I attended this meeting very interested to hear the conversation, but I did not expect to hear any of that.”

Taking faculty out of the decision-making process to save time and money is misguided, she said, citing a 2012 American Enterprise Institute study that will be included in a forthcoming volume from Harvard Education Press on stretching the higher education dollar. The study, by Robert E. Martin, Centre College emeritus professor of economics, shows that college costs continued to grow even as faculty say in institutional priorities declined, nationwide, from 1987 to 2008.

It’s also against tradition, said Goldrick-Rab, noting that Wisconsin professors have long enjoyed a strong governance "partnership" with administrators and students, thanks to state statute, under which faculty are guaranteed active participation in shaping institutional policy and responsibility for academic and personnel matters.

"The reason I've stayed at Wisconsin is shared governance," Goldrick-Rab said. "It's really important to faculty worklife and quality of education."

But the principle has eroded over time, Goldrick-Rab said. And the current political environment in Wisconsin, in which Governor Scott Walker, a Republican, has proposed linking funding for higher education to "performance," doesn't bode well for its future.

In public remarks last year, Walker said: "In higher education, that means not only degrees, but are young people getting degrees in jobs that are open and needed today, not just the jobs that the universities want to give us, or degrees that people want to give us?"

William Tracy, professor of agronomy at Madison and president of Madison's Public Representation Organization of the Faculty Senate, said he was concerned about Vos's comments, and blamed them in part on what he called a "misunderstanding" of the faculty role in governance.

"We've been effective in many, many ways," he said, including increasing graduation rates and decreased time-to-degree for graduate students in recent years. "It's hard to see that we're being inefficient or inflexible or not 'nimble,' or stodgy, if you will."

Like Goldrick-Rab, Tracy said that while including faculty in governance can slow down the decision-making process, it often leads to better decisions.

Randy Olson, professor of astronomy and chair of the Stevens Point campus Faculty Senate, said in an e-mail that Madison faculty members "are not the only ones that are upset."

"Most of my colleagues believe that one of the real strengths of the University of Wisconsin System is its shared governance where we have a collaborative approach with faculty and administrators in providing our students the best education possible," he said, adding that the legislature -- "in its earlier days" -- agreed.

He compared Vos's wish to make chancellors more like CEOs to making governors more like CEOs, diminishing the role of the legislature in governance.

Julie Schmid, chief of the staff for the American Federation of Teachers in Wisconsin, including its higher education component, said in an e-mail that the state law enshrining faculty governance in the university system has "been in both University of Wisconsin System administration's and the Republican lawmakers' sights for a while now."

Proposed changes need to be seen as "part and parcel" of Walker's 2011 overturning of collective bargaining for public employees, including faculty and staff, said Schmid, who will soon be the head administrator of the American Association of University Professors. "This is all about the further corporatization of public higher ed in this state and the further privatization of a common good [...] and it puts the [university] outside of the norm for U.S. higher ed."

Tracy said he believed that Wisconsin's system of shared governance wouldn't let faculty down, and that he was looking forward to a dialogue with legislators and administrators going forward.

Following Thursday's meeting, Falbo said: “We will organize our administration in a way that strengthens the institutions, and enhances their service to students, families, businesses, and communities." In doing so, he added, "we will focus on effective resource management, high-quality education, and competitive compensation for the faculty and staff who deliver the goods.”

Vos did not immediately respond to requests for comment. Reilly could not immediately be reached for comment.

State Senator Sheila Harsdorf, chair of the body's Committee on Universities and Technical Colleges, last week agreed with Vos that governance practices needed to be reexamined and that "the system needs to be driven by the campuses with the campuses driving what services the system provides." In an interview, she said that she was more interested in rethinking the higher education funding model than the role of the faculty in governance, but that better systems of "accountability and measurement" are needed.

Lots of communication between on and off-campus constituencies, including "those who are creating the jobs and providing job opportunities for graduates," is needed to develop those systems, Harsdorf said.

Some of the board's meeting pertained to links between universities and businesses. Keynote speaker Charles Reed, chancellor emeritus of the California State University System, said, "[We] want to understand what employers need from our graduates and what legislators expect from our institutions so we can prepare our students to be successful in their workplace." Goldrick-Rab and others said they believed it was an unofficial endorsement of a more outcomes-based curriculum that focuses on job preparation at the expense of the liberal arts.

State Rep. Janet Bewley, a Democratic member of the Assembly’s Education Committee, challenged some of her fellow legislators' opinions last week, saying to those gathered: "What I want to prevent is a whole new set of cooks going into your kitchen, people who are not academics trying to run your campuses."

In an interview, Bewley said Walker's vision for higher education enjoys more than marginal support in the legislature, and that shared governance -- along with support for the liberal arts -- is potentially vulnerable. She didn't know of any specific threats, she said, but "I think right now all of us are going to be wise enough to carefully watch what happens in the months to come."

Some faculty advocates praised Richard Wells, chancellor of the Oshkosh campus, for telling those gathered last week that campuses are communities, not corporations. In an e-mail, Wells said shared governance "is and will be increasingly under threat in Wisconsin and throughout the nation in large part because the higher education financial model is broken resulting in, among other things, the affordability and student debt crises. "
Faculty, staff, students and administrators must defend the principle through efficient and effective service of the system's mission and values, he said. "I am confident we will be successful together in the long run because we have a long Wisconsin legacy of addressing very difficult challenges," Wells said. "However, the short run ride is going to be tough. Stay tuned."

Read more:
Inside Higher Ed

Friday, September 6, 2013

U.S economic policy: a horrifying failure

Five years after Lehman Brothers collapsed, Nobel Prize winning economist, Paul Krugman concludes that: ".. by any objective standard, U.S. economic policy since Lehman has been an astonishing, horrifying failure."

Read his column here.