For-Profit Colleges: Educators or Predators?

Time Magazine's Elizabeth Dias reports:

When Yasmine Issa found herself, at 24, unemployed and a recently divorced mother of twins, she turned to the Sanford-Brown Institute, a for-profit, or proprietary, college in White Plains, N.Y., that offered an ultrasound sonography program and promised her job-placement opportunities. But a completed program and $15,000 in federal loans later, Issa missed the catch: the program was not accredited. "I was somebody no one wanted to hire," she says.

Issa testified on Thursday before the Senate Health, Education, Labor and Pensions Committee as part of a new investigation into federal investment in higher education. Congress last instituted reforms in the for-profit education sector two decades ago, but federal aid to students at for-profit schools has rapidly increased, approaching $24 billion last year, with an additional $36 billion Pell Grant boost approved in March. A report released late last week by chairman Senator Tom Harkin found that up to 90% of for-profit schools' revenue comes from Washington and that for-profit students are graduating with more debt than students at public or private nonprofit universities. With 96% of proprietary students taking out loans, and nearly half of them defaulting, taxpayers foot the bill. (See pictures of the college dorm's evolution.)

At current increasing enrollment and loan rates, testified Steve Eisman (famous for waging war against the subprime-mortgage market in 2008), there could be $330 billion in defaults in the coming decade. "The taxpayers are being taken for a ride on this," Senator Harkin told TIME.
"Taxpayers, I think rightfully, are saying, 'Yes, you can take my tax dollars to help educate kids; that's good for us and our country.' But I don't know that the taxpayers want their money to go to institutions to pay the shareholders huge profits."

Government money, lightly supervised institutions, unchecked supervising bodies and debt-trapped students — it all sounds similar to the subprime-mortgage collapse that is still fresh in America's mind. "The analogies are unbelievable," said Barmak Nassirian of the American Association of Collegiate Registrars and Admissions Officers, linking the for-profit education boom to the savings-and-loan crisis of the 1980s, the dotcom boom of the '90s and the recent mortgage bubble, which was helped along by lax credit-rating agencies and loose regulation. (Comment on this story.)

For-profit school leaders deny the parallel. "It's silly and simplistic," responds Harris Miller, CEO and president of the Career College Association. "The analogy between the [for-profit college] accrediting bodies and the [credit] rating service is absolute nonsense." Corinthian Colleges Inc. downplays default numbers and cites an Office of Management and Budget figure showing that loan-repayment rates have actually risen in the past decade.

Apollo Group, the University of Phoenix umbrella, cautions that federal student and default data itself is unreliable and can't be used in its current state to guide regulation. "The federal government's Integrated Postsecondary Education Data System does a poor job of capturing the nation's next-generation learners, who comprise the majority of the university's student body," Apollo Group spokesman Manny Rivera said. (See TIME's special report on paying for college.)

The House's proposed accountability rules only start to address limited Department of Education graduation data and unreliable self-reported school figures. Moreover, Harkin's findings indicate that there is no information available on how private schools spend Higher Education Act student-assistance dollars. While Congress is seeking to create a Consumer Financial Protection Bureau (CFPB) to oversee private student loans, the CFPB would not have jurisdiction over the loans that for-profit colleges make or over Sallie Mae, the largest private student lender.

Other for-profit industry ties to Washington remain murky. Last month, House Republicans nominated the only for-profit members — Keiser University chancellor Arthur Keiser and University of Phoenix president William Pepicello — to the Secretary of Education's accreditation advisory committee, the National Advisory Committee on Institutional Quality and Integrity. While direct political contributions from the Career College Association, Apollo Group and Corinthian Colleges Inc. have totaled only $923,000 since 2006, their lobby maintains a strong presence.

Issa's story parallels hundreds of others that Senator Harkin's office received recently. The refrain is usually the same: after being lured by aggressive recruitment and advertising strategies, low-income students leave proprietary schools unemployed and trapped in debt.

Deanne Loonin, director of the National Consumer Law Center's Student Loan Borrower Assistance Project, has seen for-profit student clients seeking help with loan defaults for nearly 20 years. Not one client, she claims, got a job in his or her anticipated field. "The schools are playing the role of the brokers who are pushing the products on the vulnerable population," Loonin remarked.

The Health, Education, Labor and Pensions Committee appears divided on the next steps as it awaits July's for-profit-education hearing. Ranking member Senator Michael Enzi disavowed the partisan nature of Harkin's report. But for Senator Al Franken the solution is simple: "Well, we have a job here," he said at the committee hearings, "and part of it is to look out for Ms. Issa, look out for the taxpayer, and I'll be damned if I'm going to be a Senator and not do that job." For-profit education may again face tougher regulations and oversight from Washington.

— With reporting by Katy Steinmetz

Scapegoating immigrants won't help American workers

I met AFL-CIO President Richard Trumka at the national march against SB 1070, Arizona's xenophobic law that institutionalizes racial profiling and scapegoats immigrants for America's economic problems.

Trumka ,whose parents migrated from Italy, was a keynote speaker at the march and rally in Phoenix of more than 50,000.

President Trumka condemned SB 1070 as a cynical attempt to divide the working class by criminalizing some of its hardest working and most exploited members.

In a recent speech Trumka explained:

Blaming immigrant workers for our economic catastrophe is like blaming shrimpers for the BP oil spill in the Gulf of Mexico.

An immigrant worker did not move your plant overseas. An immigrant did not take away your pension. A Mexican or Salvadoran or Guatemalan worker did not cut off your health care. His wife didn't foreclose your home. Her children did not crash our financial system.

BP was too greedy to drill that well safely. And many U.S. employers are too greedy to pay workers a living wage, or comply with health, safety and labor laws. They've got exactly the immigration system they want -- plenty of workers living and toiling in the shadows, borders that are closed enough to turn immigrants into second-class citizens and criminals but open enough to ensure an endless supply of socially and legally powerless cheap labor.

Gripped by our own economic insecurity, it's often hard to see immigrants as mothers and fathers who are just trying to make a living and take care of their families -- people pursuing the same goals and dreams the rest of us have. Maybe it's easier to identify with or side with the rich and powerful.

The entire speech is linked here. It is worth reading.

Senate Grilling of For-Profits; Listen on Line

June 23, 2010, 03:35 PM ET
Senate Grilling of For-Profits: Join the Conversation Online
By Marc Parry Chronicle of Higher Education

All eyes will be on the for-profit-education industry Thursday as the U.S. Senate convenes the first in a series of hearings examining federal spending on proprietary colleges. If you care about online education, it's worth paying attention because for-profits are gobbling up a growing share of the e-learning market.

Here's how you can follow along and join in the conversation online:

The hearing kicks off at 10 a.m., Eastern Daylight Time, and will be Webcast here. I'll be reporting live from the event on Twitter (@marcparry). If you're on Twitter, you can contribute to our coverage by using the hashtag "#4profit." All tweets with that tag will be published in a box on The Chronicle's home page.

A key witness testifying will be Steven Eisman, a hedge-fund manager who predicted the housing bubble and is now issuing similar warnings about for-profit higher education. He played a part in Michael Lewis’s best-selling book, “The Big Short: Inside the Doomsday Machine.”

For more on the issues at play Thursday, check out this morning's story by Chronicle reporter Paul Basken: "New Grilling of For-Profits Could Turn Up the Heat for All of Higher Education." hearing.

Inquiry Is Sought Into Practices of For-Profit Colleges

The New York Times Tamar Lewin reports:

Concerned about the disproportionate share of federal student aid flowing to for-profit colleges, several Democratic lawmakers on Monday asked the federal Government Accountability Office to investigate the for-profit institutions, in terms of both quality and finance.

“Recent press reports have raised questions about the quality of proprietary institutions,” said the letter signed by the chairmen of the Senate and House education committees and others.

“These questions stem from the rapid growth of this industry over the last few years, reported aggressive recruitment of students by such institutions, increased variety in the delivery methods used to provide education to students, and the value of the education provided by such institutions.”

Republicans had mixed responses to the request.

“There may be bad players in this industry, but for-profits also provide very necessary services for rural people, and for people learning certain trades,” said Steve Wymer, a spokesman for Republicans on the Senate Committee on Health, Education, Labor and Pensions. “We need to look for ways to improve the bad players, but not cast a wide net over the industry.”

For-profit colleges have less than 10 percent of the nation’s college students, but get about 25 percent of all federal student-aid disbursements.

With for-profit colleges taking in $26.5 billion in federal money last year, up from $4.6 billion in 2000, government scrutiny is becoming intense.

Last week, at a hearing of the House Education and Labor Committee, the Department of Education inspector general raised concerns about how accrediting agencies oversaw college credit hours, which determine how much federal aid students can get.

On Thursday, the Senate committee will hold the first in a series of hearings on for-profit colleges.

Meanwhile, the Department of Education last week proposed a regulatory package requiring greater disclosure by for-profit colleges, and tightening the rules against paying recruiters by the number of students they sign up.

The department is still working on a controversial proposal to cut off federal aid to for-profit programs whose graduates do not earn enough to pay off their loans.

Monday’s letter asked the accountability office to gather information on the growth of the institutions, their governance, and the kind, and quality, of programs they provide — along with students’ outcomes, completion rates, professional licensure rates, job placement rates and indebtedness.

In the letter, the lawmakers asked the accountability office to explore whether existing safeguards adequately protect against waste and fraud, and to make recommendations based on its findings.

The letter was signed by five Democrats: Representative George Miller of California, chairman of the House education committee; Senator Tom Harkin of Iowa, chairman of the Senate education committee; Senator Richard J. Durbin of Illinois; and Representatives Timothy H. Bishop of New York and Rubén Hinojosa of Texas.

The full text of the letter is below.

Gene L. Dodaro
Acting Comptroller General
U.S. Government Accountability Office

Dear Mr. Dodaro:

We write to request that the Government Accountability Office (GAO) conduct a review of the for-profit or “proprietary” postsecondary education sector and the sector’s share of revenue derived from Federal student aid funding. The federal investment in the proprietary sector is significant. While this sector accounts for less than 10 percent of total enrollments, it accounts for roughly 25 percent of all Federal student aid disbursed.

Recent press reports have raised questions about the quality of proprietary institutions. These questions stem from the rapid growth of this industry over the last few years, reported aggressive recruitment of students by such institutions, increased variety in the delivery methods used to provide education to students, and the value of the education provided by such institutions.

On March 30, 2010, President Obama signed the Health Care and Education Reconciliation Act into law. That legislation expanded student aid opportunities for students, including an historic $36 billion investment in the Pell Grant program. The increased availability of Federal student aid, coupled with the significant growth of the proprietary sector, raises the issue of whether current safeguards are sufficient to protect the best interests of students and ensure that the nation’s taxpayers are achieving the best possible return on their investment.

In conducting its review, we are particularly interested in GAO examining:

· The growth and change in the postsecondary education sector over the last several years, including changes in the structure and governance of institutions, recruitment practices, and the type and delivery of educational programs provided;
· What is known about the quality of educational programs offered by proprietary institutions and the outcomes for students attending such institutions, such as program completion rates, professional licensure rates, job placement rates, and student loan indebtedness;
· Whether existing program integrity safeguards are sufficient to protect against waste, fraud and abuse in the Federal student aid programs; and
· The extent to which proprietary institutions’ revenue is comprised of Federal student aid offered under Title IV of the Higher Education Act as well as other Federal funding sources.

Finally, based on your review, we request that you provide any recommendations you believe may be warranted.

Mark Beiling: standing up for corporate malfeasance and greed

The first (and probably the biggest) jaw-dropping moment of the congressional hearing with British Petroleum (BP) CEO Tony Hayward occurred when GOP Rep. Joe Barton, the top Republican on the House Energy Committee’s subcommittee for investigations, opened the hearing by apologizing to BP CEO Tony Hayward, saying he’s "ashamed" of the American response to BP’s oil spill.

Not to be outdone, WISN's Mark Beiling spent Thursday afternoon ranting about the MMSD in a transparent attempt to divert attention from BP's deadly negligence.



According to Barton, asking BP to set up an escrow account to compensate victims of BP's disaster, the largest oil spill in U.S. history, was a criminal action -- a "shakedown" as he put it. Barton's not alone: his comments echo those made by other Republicans in recent days, including Michele Bachmann, Haley Barbour, and Tom Price and were taken directly from a Republican Study Committee statement that characterized the $20 billion dollar escrow account negotiated by BP and the Obama administration for victims of the oil catastrophe in the gulf is a "Chicago-Style Political Shakedown."

Beiling joined the chorus reading from the Republican Party's talking points. He minimized the serious of BP's oil spill and the resultant contamination of the Gulf of Mexico by comparing it to the MMSD's release of 23.6 million gallons of a sewage and storm water mix into local lakes and Lake Michigan.

His obvious intent was to divert public attention from BP to Beiling's favorite bogey man, the public sector.

The BP oil spill, the result of BP's cutting corners to minimize costs and maximize profits and weakened federal regulation, is dumping between 25,000 to 30,000 barrels a day into the Guld of Mexico. That conservative estimate (it may be much higher) is equivalent to the Exxon Valdez disaster every 8 to 10 days.

A barrel is 42 gallons. So 30,000 barrels equates to nearly 1.3 million gallons a day.

Since the oil rig exploded on April 10th, more than 80 million gallons of oil, almost three times the quantity of sewage Beiling is bemoaning, have been released. And that number is growing daily.

The BP oil spill is a human, economic and environmental disaster.

Eleven oil rig workers were killed. None were killed by the MMSD.

The economic devastation to Louisiana was immediate. The spill has contaminated 100 miles of coastline, polluted coastal wetlands, and threatens national wildlife refuges, the home for many endangered species. The state of Louisiana was also forced to shut down fishing in the area. Commercial fisherman that harvest nearly one billion pounds of fish and 3.2 million recreational fishermen were shut down in the process.

The economic carnage does not stop there. The Gulf States, from Mississippi through Florida, have suffered from both curtailed fishing operations to severely reduced tourism. Occupancy rates are down 90% in some regions along the Florida panhandle. The Gulf's beaches are empty. Oil spills tend to do that to tourism.

No Lake Michigan businesses were forced to close because of the MMSD's action, no species were endangered and no one lost their jobs. Over the weekend, Bradford Beach was packed with sun-loving Milwaukeans, despite Beiling's blustering.

Beiling's tagline should be changed from "Standing up for Milwaukee" to "Standing up for British Petroleum and corporate malfeasance!"

Deficit hawks threaten recovery!

Nobel Prize winning economist Paul Krugman writes:

...we have a severely depressed economy — and that depressed economy is inflicting long-run damage. Every year that goes by with extremely high unemployment increases the chance that many of the long-term unemployed will never come back to the work force, and become a permanent underclass. Every year that there are five times as many people seeking work as there are job openings means that hundreds of thousands of Americans graduating from school are denied the chance to get started on their working lives. And with each passing month we drift closer to a Japanese-style deflationary trap.

Penny-pinching at a time like this isn’t just cruel; it endangers the nation’s future. And it doesn’t even do much to reduce our future debt burden, because stinting on spending now threatens the economic recovery, and with it the hope for rising revenues.

So now is not the time for fiscal austerity.

The rest of the article is linked.

Another bad idea from Arizona

New York Times editorial
June 18, 2010

Not satisfied with a shameful new law that invites, indeed demands, racial profiling, some Arizona politicians are now pushing for a law that would deny citizenship to babies born in Arizona whose parents cannot prove they are legal immigrants.

The 14th Amendment, adopted after the Civil War, states: “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside.” It could not be clearer.

The Constitution apparently does not matter to these politicians. They also do not seem to care that Arizona is earning a national reputation for intolerance and racism — and if it continues this way will pay an economic price in boycotts of its lucrative tourism industry.

When State Senator Russell Pearce first started pushing for a law that requires police forces to stop and check anyone who appears to be an illegal immigrant, he was dismissed as a crackpot. The legislation passed both houses of the Republican-controlled Legislature with distressingly large majorities. Gov. Jan Brewer then proudly signed it into law.

Now Mr. Pearce is at it again with this new proposal, meant to end what he calls the “inadvertent and unforeseen” consequences of the 14th Amendment’s citizenship clause. He pins it all on the phrase “subject to the jurisdiction thereof,” arguing that the babies of illegal immigrants — like the children of foreign diplomats — do not have full allegiance to this country, and thus do not deserve automatic citizenship. It is a spurious argument.

Mr. Pearce’s bill, we fear, is likely to get a sympathetic hearing in Arizona’s Legislature. Governor Brewer told interviewers this month that illegal immigrants should leave and take their citizen children with them.

President Obama, who has criticized the first Arizona law, has so far failed to use his power to block it, though his administration is preparing a lawsuit to do so. He needs to reassert sole federal authority over a rational and humane immigration system, and stop Arizona and other states from creating a crazy quilt of harsh statutes, some crazier than others.

Until the president and all people of conscience stand up to these bullies, they will keep pushing. The Constitution and the civil rights of thousands of people must not be violated this way.