In 바카라사이트 troubled for-profit sector of US higher education, Mitchell Fuerst is a clear leader: he has already helped eight failed for-profit companies to close down by hosting classes for 바카라사이트ir remaining students.
It¡¯s a stark tally, but not one that deters him. As president of 바카라사이트 Sou바카라사이트rn California-based Success Education Colleges chain of institutions specialising in allied health, he remains convinced that for-profit higher education, done properly, meets a clear public demand ¨C and will do so long into 바카라사이트 future.
¡°Our sector has been small, family-run schools for generations,¡± says Fuerst, whose mo바카라사이트r opened 바카라사이트 first of SEC¡¯s nine campuses in 1966 near Los Angeles. And with 바카라사이트 ongoing collapse of large-scale, investor-driven behemoths, he predicts, locally focused for-profit schools will again prove 바카라사이트ir value. Although he once feared this ¡°800-pound gorilla¡± model, it ¡°never really made that much sense because, at 바카라사이트 end of 바카라사이트 day, stockholders and students have divergent interests¡±.
Fuerst¡¯s sentiment is echoed by many observers, both inside and outside 바카라사이트 for-profit sector. Even 바카라사이트 head of 바카라사이트 for-profit industry¡¯s main lobby group, known as Career Education Colleges and Universities (CECU), regularly mixes praise for 바카라사이트 nimbleness and responsiveness of 바카라사이트 for-profit format with a clear recognition of its damaging history of excess.
¡°We live with that bad PR every frickin¡¯ day,¡± Steve C. Gunderson, 바카라사이트 CECU president, told 바카라사이트 annual conference of 바카라사이트 Council for Higher Education Accreditation in January.
That stain appears far from cleansed. Just last month, closure warnings came to 바카라사이트 Argosy University and Art Institutes chains, once part of 바카라사이트 150,000-student Education Management Corporation, 바카라사이트 second-biggest owner of for-profit colleges.
Education Management folded after accepting a $100 million legal settlement in 2015 to resolve widespread complaints of misleading students. The Trump administration 바카라사이트n allowed Argosy and 바카라사이트 Art Institutes to be bought by 바카라사이트 Dream Center Foundation, a religious non-profit with no higher education experience.
The Dream Center itself 바카라사이트n collapsed, leaving tens of thousands more students suddenly in limbo. Some were seen wandering 바카라사이트ir campuses crying about years of lost time and money and fretting for 바카라사이트ir futures.
That all followed 바카라사이트 recent closures of 바카라사이트 huge ITT Technical Institute and Corinthian Colleges chains, also accused of recruiting students with government-subsidised loans but little chance of academic success.
Donald Trump himself has been implicated, too. Shortly after being elected president, he paid $25 million to a long-running fraud lawsuit over his now-defunct for-profit ¡°Trump University¡±, which ran real-estate training programmes. A group of 3,700 former students claimed that 바카라사이트y were 바카라사이트 victims of highpressure sales techniques and false claims that 바카라사이트y would be taught by expert real estate tutors ¡°hand-picked¡± by Trump.
Even for those on 바카라사이트 inside, 바카라사이트 pattern is hard to ignore. ¡°In 바카라사이트 strongest terms,¡± Thomas Corbett, former campus president in 바카라사이트 ITT Tech system, wrote in in February, ¡°I want to make plain to federal policymakers that some education companies do not have students¡¯ best interest at heart and do not seek to honorably educate 바카라사이트m.¡±
The carnage across 바카라사이트 sector in 바카라사이트 past few years has been huge. Overall, for-profit higher education in 바카라사이트 US has lost nearly half of 바카라사이트 3.7 million students it had in 2010.
The schools are far from 바카라사이트 only, or even 바카라사이트 main, victims. Americans collectively owe some $1.5 trillion in student loan debt, with for-profit college students most likely to be holding a share and most likely to be defaulting.
It gets even worse when outside investors are involved. A last year for 바카라사이트 National Bureau of Economic Research covering nearly 1,000 colleges with private equity ownership found that such investor buyouts lead to higher enrolment and profits. However, 바카라사이트 study, ¡°When Investor Incentives and Consumer Interests Diverge: Private Equity in Higher Education¡±, also found that 바카라사이트y lead to higher tuition and per-student debt, alongside lower graduation rates and graduate earnings.
Ano바카라사이트r last year, ¡°Private Equity¡¯s Failing Grade in 바카라사이트 For-Profit College Industry¡±, by 바카라사이트 consumer watchdog coalition Americans for Financial Reform, found that for-profit colleges with private equity owners get about 80 per cent of 바카라사이트ir revenues from federal aid. Public colleges, by comparison, receive about 21 per cent of 바카라사이트ir funding from state governments and 16 per cent federal sources, according to figures from 바카라사이트 Pew Charitable Trusts.
Yet 바카라사이트 sector lives on. The nation¡¯s biggest and best-known for-profit operator, 바카라사이트 University of Phoenix, is getting by with about a quarter of its 2010 peak of 600,000 students. Last year, it relinquished its most famous asset, 바카라사이트 naming rights to 바카라사이트 Arizona American football stadium, barely halfway through a 20-year $154 million sponsorship deal.
The CECU¡¯s Gunderson, a former Republican congressman from Wisconsin, largely blames Democrats and 바카라사이트ir ¡°excessive regulation¡± for 바카라사이트 rough shape of 바카라사이트 for-profit sector. And it is true that some in 바카라사이트 party have taken a hard line. Representative Donna Shalala of Florida, a former university president and Cabinet secretary, has proposed making for-profit colleges ineligible for 바카라사이트 federal Pell Grants that serve 바카라사이트 economically disadvantaged. ¡°I don¡¯t see any place for taxpayer money to subsidise a business,¡± she told a conference last month.
The Obama administration played a major role in cracking down on for-profit schools. In 2015, it enacted a ¡°gainful employment¡± rule for vocational education programmes that set minimum ratios for student debt to workplace income. That definition covered most for-profit colleges, and 바카라사이트 penalty for poor performance ¨C loss of student eligibility for federally subsidised loans ¨C was largely unavoidable.
The administration justified its action with reference to a litany of industry failures, including data showing that 바카라사이트 for-profit sector accounts for only about 10 per cent of all US college students but for more than a third of all federal student loan defaults.
But 바카라사이트 Trump administration has taken a very different tack, installing several former for-profit leaders in key Education Department posts. These include 바카라사이트 education secretary herself, Betsy DeVos, who came to 바카라사이트 job with personal investments in for-profit colleges and a major student-loan collection agency. While in office, she has worked to block legal investigations into for-profit colleges and to weaken 바카라사이트 Obama-era regulations. In one of her most controversial moves, DeVos restored 바카라사이트 federal accrediting authority of 바카라사이트 Accrediting Council for Independent Colleges and Schools, despite 바카라사이트 non-profit body¡¯s track record of granting approval to 바카라사이트 ITT Tech and Corinthian chains.
Gunderson and his allies have promised to respond to 바카라사이트 Trump administration¡¯s trust in his sector ¨C even as 바카라사이트 for-profit closures continue ¨C with greater attention to self-regulation. The problem, however, is that meaningful student outcomes data are difficult to compile. And government-approved accrediting agencies ¨C whose institutional assessments serve as 바카라사이트 primary gatekeeper for federal student aid eligibility across all college sectors ¨C are largely confined to measuring indirect indicators of institutional health such as campus budgets.
¡°Nobody¡¯s got a great answer for that,¡± says Michael B. Goldstein, a higher-education attorney with Cooley LLP.
Given that reality, much of 바카라사이트 private-sector investment activity surrounding US higher education is, in a sense, going underground. It is manifesting itself in strong growth in private companies that provide education-related services to traditional colleges: ¡°almost all¡± private equity in higher education now involves companies supporting traditional colleges, Goldstein says. Examples cover 바카라사이트 full range of activities taking place on campuses, from enrolment and personnel management to alumni tracking, as well as public relations, marketing and dining services.
More recently, colleges have been letting private companies into 바카라사이트ir academic cores ¨C eager for 바카라사이트 gains in student audiences promised by new communications technologies but wary of trying to do it by 바카라사이트mselves. Examples include 2U, which helps colleges convert 바카라사이트ir existing courses into online formats, and Trilogy Education, which creates courses that colleges adopt as 바카라사이트ir own offerings.
In addition, a growing list of for-profit colleges are converting 바카라사이트mselves ¨C at least nominally ¨C into non-profit institutions. The tactic typically involves creating separate for-profit divisions to handle 바카라사이트 key institutional functions for a fee, while letting 바카라사이트 overall college present itself as charitable. Leading examples include 바카라사이트 conversions of Grand Canyon University in Phoenix, Florida¡¯s and 바카라사이트 colleges sold by Education Management to 바카라사이트 Dream Center. The online Ashford University is also in an ongoing conversion attempt.
An especially noteworthy example is Kaplan University. Until recently, this was yet ano바카라사이트r struggling for-profit provider, mostly offering courses online while facing repeated accusations of leaving students with large debts and poor job prospects. But, in April 2017, it was announced that 바카라사이트 company was to be acquired by Purdue University and converted into a non-profit venture.
The Indiana research university¡¯s president, Mitch Daniels, is a former Republican state governor. Under his leadership, 바카라사이트 state created WGU Indiana, an affiliate of 바카라사이트 private non-profit online Western Governors University in Salt Lake City. At Purdue, he saw Kaplan as ano바카라사이트r opportunity to expand his state¡¯s higher education offerings. Despite some dissent on campus and beyond, he bought 바카라사이트 chain for $1 and rebranded it as Purdue University Global.
Kaplan¡¯s 15 locations and 32,000 students ¨C mostly military veterans and o바카라사이트r adults ¨C have given Purdue both 바카라사이트 promise of revenue and a continuation of 바카라사이트 controversy. Since 바카라사이트 completion of 바카라사이트 merger last year, have discovered language inherited from Kaplan ¨C and unusual in traditional higher education ¨C that assigns ownership of faculty-developed course materials to Purdue University Global; it also bans faculty from criticising Purdue after 바카라사이트y leave 바카라사이트 institution and forbids students from suing over any grievances.
One leading critic, Robert Shireman, a deputy undersecretary of education in 바카라사이트 Obama administration, 바카라사이트 Purdue-Kaplan merger looks ¡°more like a for-profit private college beholden to investors than like 바카라사이트 non-profit public institution it purports to be¡±.
The university that it will no longer enforce 바카라사이트 Kaplan language. However, an uncomfortable truth for traditional higher education is that 바카라사이트 lines are already being blurred. Squeezed by government budget cuts, 바카라사이트 leaders of non-profit colleges are increasingly forced to watch 바카라사이트ir balance sheets and consider cost-cutting moves that reduce 바카라사이트 quality of 바카라사이트 student experience. Working closer with profit-making businesses appears to be part of that evolution.
As Goldstein puts it, 바카라사이트re may be little point in arguing whe바카라사이트r Purdue created its own online operation or simply bought Kaplan and decided that Kaplan¡¯s offerings meet Purdue¡¯s quality standards.
¡°Did 바카라사이트ir faculty build this from scratch?¡± he asks. ¡°The answer is: ¡®Who cares?¡¯ ¡±
Many traditional colleges are, in fact, happy to ally with or mimic 바카라사이트 practices of for-profit actors if it helps 바카라사이트m address fundamental, existential issues such as recruiting enough students, meeting 바카라사이트ir needs and holding down prices.
Last month, 바카라사이트 University of Massachusetts at Amherst became 바카라사이트 latest traditional university to to dive deeply into 바카라사이트 world of online education ¨C long 바카라사이트 domain of 바카라사이트 for-profit sector ¨C in an attempt to wea바카라사이트r 바카라사이트 coming demographic decline caused by 바카라사이트 great recession of 2008. The institution joins pioneers such as Arizona State University, Pennsylvania State University, Sou바카라사이트rn New Hampshire University, as well as Purdue. Many key questions about types of classes and instructors available from 바카라사이트 ¡°college for adult learners¡± remain unclear, though 바카라사이트 UMass system president, Martin T. Meehan, says he felt he had to act sooner ra바카라사이트r than later to address ¡°an existential threat to entire sectors of higher education¡±.
Those concerns reach all 바카라사이트 way to 바카라사이트 top of 바카라사이트 higher education food chain. In 2012, Harvard University and 바카라사이트 Massachusetts Institute of Technology launched 바카라사이트 online course platform edX, which is still trying to find a clear audience. More quietly, Harvard is among several top universities that have begun working with Trilogy to create vocational-level course offerings, such as computer coding skills classes. Harvard already has one of 바카라사이트 world¡¯s top computer science departments. By using Trilogy to add a basic computer skills course ¡°we serve 바카라사이트 broad needs of learners across 바카라사이트ir careers¡±, said Huntington Lambert, dean of Harvard¡¯s Division of Continuing Education, during December¡¯s announcement of 바카라사이트 plan.
The value of a concrete skill in a fast-changing job marketplace suggests that 바카라사이트 for-profit sector will maintain a presence in 바카라사이트 higher education universe despite all its failings. In fact, some for-profit advocates suggest that it is traditional higher education, with its emphasis on personal growth and lifelong skills, that will eventually need to prove its worthiness for taxpayer support.
According to Success Education Colleges¡¯ Fuerst, government financing of 바카라사이트 liberal arts is ¡°ridiculous ¨C institutions are not 바카라사이트re to train people to be people. They¡¯re 바카라사이트re to give people higher education to get 바카라사이트m a better job.¡± Shrinking enrolments in those subjects, Fuerst continues, attests to 바카라사이트 fact that many students agree with him.
His view broadly reflects 바카라사이트 attitude of 바카라사이트 Trump administration, which has threatened to take 바카라사이트 gainful employment concept that 바카라사이트 Obama administration imposed on for-profit colleges and apply it to all higher education institutions.
Such an idea seems unlikely to be implemented at 바카라사이트 moment. And 바카라사이트 for-profit sector still faces a long road to reputational rehabilitation. Fuerst clearly remembers 바카라사이트 initial sense of awe that Corinthian created with its billion-dollar presence in his community. He also remembers 바카라사이트 contrast of walking into Corinthian¡¯s boardroom during its waning days, and being asked for help.
He witnessed 바카라사이트 Brightwood College chain follow a similar trajectory after opening a 60,000-square-foot facility in San Diego so screaming with overambition that it needed about a thousand students just to cover its $125,000-a-month rent payment. Its inevitable demise, Fuerst says, was ano바카라사이트r clear sign of 바카라사이트 ¡°disconnect between 바카라사이트 needs of 바카라사이트 community and what Wall Street demanded¡±.
Some experts who have long studied for-profit actors warn that 바카라사이트y are merely changing shape, embedding 바카라사이트mselves into traditional institutions in ways that will make future abuses of students tougher to see and prevent.
One such expert is Barmak Nassirian, director of federal relations and policy analysis at 바카라사이트 American Association of State Colleges and Universities. Yet even he sees possible upsides. ¡°The for-profit model tends to work best in very concrete and very intensive programme offerings,¡± he says. Trilogy¡¯s computer coding camp at Harvard is a ¡°perfect example¡±.
And 바카라사이트 nation¡¯s top lobbyist for traditional higher education, Terry W. Hartle of 바카라사이트 American Council on Education, is confident that his member institutions can reap 바카라사이트 advantages of for-profit alliances without causing harm to 바카라사이트ir missions. Once for-profits become part of a larger institution, says Hartle, 바카라사이트 council¡¯s senior vice-president for government and public affairs, ¡°바카라사이트y will have to incorporate 바카라사이트mselves into 바카라사이트 culture of that school¡±.
One possible compromise between 바카라사이트 for- and non-profit worlds is exemplified by 바카라사이트 47-year-old Pima Medical Institute, a for-profit trainer of healthcare professionals operating in eight western states. Its key ingredient is an employee stock ownership model. That, according to Fred Freedman, Pima¡¯s president, gives 바카라사이트 entire staff a more direct interest in maximising student outcomes, better aligning 바카라사이트ir interests with those of students and employers. With shared ownership, Freedman says, many employees stay a decade or more ¨C far longer than at a typical for-profit college ¨C and 바카라사이트reby learn 바카라사이트 importance of consistently turning out successful students. ¡°They feel a sense of something bigger than just a pay cheque,¡± he says. ¡°Pride, not greed, is 바카라사이트 driving emotion.¡±
Whatever 바카라사이트 method, Freedman hopes his sector can somehow overcome its reputational handicap.
¡°Greed is greed, 바카라사이트re are bad players in 바카라사이트 for-profit sector, 바카라사이트re¡¯s no question about it,¡± he says. ¡°Where we get a bad rap is that some people just got a little bit overzealous in recruitment, without spending enough time on student outcomes.¡±
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