AFT organizes Art Institute of Seattle

Inside Higher Ed reports:

Instructors at the Art Institute of Seattle on Friday filed signatures with the National Labor Relations Board seeking a union election with the goal of affiliating with the American Federation of Teachers.(The Art Institute of Seattle and other art institute campuses including one planned for Milwaukee's Third Ward are owned by the Education Management Corporation, a major player in for-profit higher ed, which also operates Argosy University, Brown Mackie College, and South University.)

The move could be significant for several reasons. The major unions that organize faculty members in the United States (the AFT, the American Association of University Professors and the National Education Association) have largely stayed away from the growing for-profit sector. Officials of both the AAUP and NEA said that they have no organizing drives going on in for-profit higher ed. If the AFT is successful, some labor experts believe that academic unions could find fertile ground in for-profit higher education (and plenty of academics in nonprofit higher education would like to see that happen).

Also of note are the issues that union organizers are stressing. There is little talk of wages and benefits. Rather, the campaign is being built around allegations that faculty members are not being permitted to uphold academic quality. Faculty members say that they are pressured to give (undeserved) high grades and to pass some students who should fail. These charges come at a time of increasing scrutiny of for-profit higher education and mirror themes from a much-discussed "Frontline" documentary and from advocates for tougher federal regulation of the for-profit sector, suggesting that some for-profit colleges encourage students to enroll not because they are qualified or will benefit, but for their student aid dollars...

The "universal concerns" of faculty members...are "student-related issues." ... "the students are being treated like cattle," and that the institute's "focus is to get the numbers in, get them on financial aid, and to get the money back to shareholders ... and to do this, they want to make sure that regardless of what happens in the classroom, the student passes."

Faculty members have been going to open houses that the art institute holds to listen to what recruiters say, and ...students are being promised that the courses will be easy and will lead to good jobs. As a result, students have "weird expectations" and faculty members are caught in the middle when they try to enforce academic standards that the students aren't prepared for. "What the faculty have said that they hate so much is that they feel that the school is stealing from the students and we are in the middle of that..."

"I think this could be a test case for a whole class of institutions," said Richard Boris, director of the National Center for the Study of Collective Bargaining in Higher Education and the Professions, at the City University of New York’s Hunter College. For-profit higher education is booming, Boris noted, but faculties are heavily part time, without protections of tenure or unions. "You have this cohort of the academic dispossessed," he said.

The entire Higher Ed article is linked here.

Suit filed against diploma mill that MEDC is planning to finance

By Brian BowlingPITTSBURGH TRIBUNE-REVIEWFriday, May 7, 2010
A former employee of South University Online claims in a federal lawsuit unsealed Thursday that the subsidiary of Downtown-based Education Management Corp. fraudulently obtained student loans.

Brian T. Buchanan of Squirrel Hill filed the lawsuit in 2007 seeking return of the student loan money under a federal law that allows private citizens to file such actions on behalf of the government.

He claims that while working for the school from December 2005 until May 2007, he observed the company paying salaries to admissions representatives based on the number of students they signed up for courses. That violates the federal law that made South University Online eligible to accept federal student aid, he says in the lawsuit.

Jacquelyn Muller, spokeswoman for Education Management Corp., said the publicly held company doesn't comment on pending litigation, but it plans to file a shareholder notice about the lawsuit today with the Securities and Exchange Commission. Such notices typically advise shareholders about the potential impact a damage award could have on the company's finances.

The law under which Buchanan sued requires the case to be sealed for at least 60 days until the government decides whether it wants to take over the case. The government repeatedly asked for extensions of the deadline. U.S. District Judge Arthur Schwab told the government on March 4 that it had to make a decision by April 15. The government decided to let Buchanan continue with the case but may still intervene, according to court documents.

"We're still investigating the case," said acting U.S. Attorney Bob Cessar. He declined further comment.

The lawsuit accuses the company of submitting fake proctor forms that are supposed to ensure students who took admissions tests online were observed by a nonfamily member who verified they didn't look up the answers. Prospective students are not allowed to take the admissions test more than three times in a year, but South University Online allowed students to repeatedly take the tests until they passed it, the lawsuit says.

The company provided free trips, iPods and gift cards to admissions representatives who signed up the highest numbers of students, the lawsuit says.

If Buchanan proves his claims, South University Online would be liable for three times the amount it defrauded from the government plus a fine of $5,000 to $10,000 for each false claim it submitted.

If the government doesn't intervene in the case, Buchanan would receive about 25 to 30 percent of the damages, according to a 2009 report on citizen lawsuits by the Congressional Research Service. If the government intervenes, his share would be at least 10 percent and as high as 25 percent, depending on how crucial his information was in winning the lawsuit.

For profit colleges criticized by Education Department leader

The U.S. Department of Education's Robert Shireman compared the growth of for-profit colleges like Corinthian, the Art Institute and Strayer, all of whom have announced that they will establish campuses in Milwaukee, to the Wall Street firms that caused the nation's financial collapse.

Shireman called the colleges out by name for the vast and quickly increasing sums of federal student aid money they are drawing down and noted that most of them are accredited by agencies composed of their peers, creating a conflict of interest reminiscent of that between Wall Street and the accrediting agencies that turned a blind eye to the reckless trading that created the worst financial panic since the Great Depression.

The full story from Inside Higher Ed is linked.