Career Ed Quote: Liberal PAC Backs For-Profit Colleges

As the Obama administration works to boost college graduation rates during an economic downturn, a liberal political action committee is recommending that sometimes controversial for-profit colleges like the University of Phoenix and DeVry Universities be recognized as viable alternatives to traditional institutions like state and community colleges.

Michael J. Wilson, the director of the organization Americans for Democratic Action, said today that for-profit colleges are a good fit for both first-time and returning college students, especially those in underserved communities, and should not be overlooked in the hierarchy of higher education institutions.

"We don't believe we can use the same narrow bands of universities that we traditionally use, and we believe we need to use every arrow in our quiver," Wilson told reporters in a conference call today. Citing the rising, often prohibitive costs of traditional colleges Wilson said "education is unequal depending on where you are from, and we need to give more opportunites" to low-income people seeking further education and training.

-- Ali Weinberg, MSNBC.

Read more about the ADA's study here.

Harris Miller of CCA Responds to Stephen Burd on For-Profit Accreditation Issues

The following is a response from CCA President and CEO Harris N. Miller to Stephen Burd's "Ed Dept's IG Sends a Shot Across the Bow of Accreditors":

Yesterday I was contemplating our remarkable country...Enabling an individual from a straitened background, “Barry” Obama, as he is now known to local DC radio listeners, to graduate from Harvard Law School and then be elected our nation’s first African American President…President Obama then appointing my friend Howard Schmidt, veteran, former local law enforcement official, and graduate of a groundbreaking institution, the University of Phoenix, to be our nation’s top cybersecurity cop.   My reverie was thrown slightly off kilter, however, when I read another diatribe against private sector higher education from Stephen Burd.   If a doubt existed about Burd’s ability to cover higher education with equal treatment and fairness, let it finally be laid to rest. In his latest screed, Mr. Burd lathers himself in phony outrage by trying – and abjectly failing again – to string together a narrative about poor accreditation oversight of the for-profit higher education sector. Perhaps Mr. Burd’s arguments would be more compelling were his evidentiary support more than the less-than-meaningful combination of: 1) a report about dubious for-profit accreditation from more than a decade ago and 2) a single accreditation issue affecting one college at one time that is based on a debate, as important as it is, between bean counters and academics.

If Mr. Burd deems policing the higher education ranks his personal mission, then one wonders when he will get around to underscoring the shortcomings in other sectors. Notably, Mr. Burd has continued to give short shrift, for instance, to more than 100 not-for-profit schools on the Department of Education’s financial risk list that still hold their accreditation from various regional accreditors despite hanging on the precipice. Mr. Burd also fails to acknowledge the numerous four year programs and community colleges across the country with graduation rates in the thirties, twenties or even teens. If Mr. Burd requires robust facts and hard analysis for his public advocacy, he need not twist what little evidence exists for problems within for-profit higher education. There is plenty of material to chew on beyond the purview of our sector.

What’s most notable is that the Inspector General’s (IG) report that so alarms Mr. Burd added little to substantive problem solving but simply gave vent to hysterics. And for Mr. Burd himself, one can almost see his spittle flying off the screen.  And, of course, he is attacking a body, the Higher Learning Commission (HLC), which clearly is “in the bag” to for profit higher education, which is the premise of his attack.  In case no one has looked at the HLC Board of Trustees recently, the members are listed below.  But exactly who among this group is turning a blind eye to alleged shortcomings?  Is it the Ohio Supreme Court Judge?  The leaders of the various community colleges?  The elected officials?  Maybe it is the leader of the for profit sector who serve?  Cannot be them, however, because there are none.  Even without the IG’s “alert memorandum”, the parties in charge were acknowledging changes were in order and action was required. The Higher Learning Commission (HLC) had notified the school involved of concerns about how credit hours in online courses are evaluated long before the IG’s memorandum was ever circulated. The HLC ultimately concluded that while this was an issue that required further examination and action, it did not justify precluding the institution in general from accreditation.

What’s important here is to understand the nature of the dispute. This is a disagreement among academic specialists on how to define and qualify online coursework under the “class time” rubric. While there are differences of opinion—and while the Office of Inspector General has long questioned any form of distance education, so this is nothing new—see, e.g., recent reports on Middle States and SACS and the Acting IG’s testimony before Congress in October--reasonable people should be allowed to disagree without government investigators jumping into the mix.

The uproar over awarding credit hours for online classes springs from the evolution of higher education and the need to embrace innovation in the higher education process. Classroom attendance is not the sole province of academic worthiness. Basing academic credits in such a single-minded and rudimentary way is out of step with the needs of students generally and non-traditional students specifically. The Department of Education has recognized the need to further explore the issue of what constitutes a credit hour in new form of higher education learning, making that a topic of discussion for the current negotiated rulemaking. The Office of Postsecondary Education also released a paper recognizing that learning options have expanded in type and access, and that using the traditional model of “seat time” as a basis for evaluating online education is not acceptable.  And, of course, the recent meta-analysis commissioned by the Department and trumpeted by Secretary Duncan shows distance education can often produce better academic outcomes than “butts in seats” approaches.

Perhaps what is most appalling about Mr. Burd’s post is the reference to “unscrupulous” schools.  Mr. Burd has no qualms about needlessly and unfairly undermining confidence in the Department of Education, the accreditation process, or anyone else who simply does not understand what he learned as “truth” in his college courses—“for profit” and “higher education” never belong in the same sentence.  Not to say his continued willingness to attack the education choice of approximately 2.5 million students being educated at for profit schools, including perhaps the next Howard Schmidt.   Mr. Burd’s has a clear vendetta against for-profit education. Even when the evidence against proprietary schools is outdated, circumstantial or just plain missing, Mr. Burd always sees an attack opportunity. He ignores endorsements by independent third parties, such as recent reports by the National Governors’ Association and Americans for Democratic Action. Perhaps he should be examining his own motives in regards to for profit institutions.

Mr. Robert R. Cupp - Justice, Supreme Court of Ohio  -
Mr. Joseph A. Garcia - President - Colorado State University-Pueblo
Dr. Leslie H. Garner, Jr. - President - Cornell College
Dr. Carmen  L. Gonzales - Vice President for Student Success/Dean of the College of Extended Learning - New Mexico State University
Dr. Lorraine M. Hale - President - Presentation College
Dr. Timothy Hartshorne - Professor of Psychology - Central Michigan University
Mr. David Ho - Vice President of Academic Affairs - Metropolitan Community College
Dr. Cynthia Lindquist Mala - President - Cankdeska Cikana Community College
Dr. Nancy A. McDowell - Professor of Anthropology - Beloit College
Dr. Margaret M. Murdock - Associate Provost for Academic Affairs and Dean of Outreach - University of Wyoming
Dr. Kathleen L. Nelson - President - Lake Superior College
Mr. David  Nething - State Senator - State of North Dakota
Ms. Janis Purdy - President - Services to Nonprofit Organizations
Dr. Marlene I. Strathe - Provost & Sr Vice President - Oklahoma State University
Mr. Michael Strong - Executive Director - Oklahoma Quality Award Foundation, Inc.
Mr. J. Guadalupe Valtierra - Branch Chancellor - Ivy Tech Community College of Indiana
Dr. Jacqueline A. Vietti - President - Butler County Community College
Dr. Albert L. Walker - President - Bluefield State College
Mr. James F. Williams - Dean of Library  Administration - University of Colorado at Boulder

For-Profit Education Thriving in Mississippi

So says the Clarion Ledger:

A new crop of for-profit colleges is looking to tap into Mississippi's growing higher education market as more people head to college to weather the economic downturn.

The University of Phoenix - the nation's largest for-profit college - will open a Mississippi campus next month in Flowood. Virginia-based for-profit Strayer University also plans to open a metro-area location early next year.

"There's more than enough need," said Brent Lyons, state vice president for the University of Phoenix's Louisiana and Mississippi campuses.

...

Mississippians have shown interest in having more for-profit institutions.

Strayer officials said they received more than 1,000 inquiries from potential students in Mississippi before pursuing a campus here. The school costs about $1,500 a quarter each class.

More than 4,800 Mississippians already are taking programs through Phoenix online.

As for why proprietary schools are an enticing option in Mississippi, the facts speak for themselves:

A recent study released by the Americans for Democratic Action found widespread public approval of for-profit colleges, particularly among groups like Latinos, blacks and lower-income whites. ADA is a political lobbying organization that focuses on social and economic issues.

"The public does not buy arguments that for-profit colleges and universities exploit their students," the ADA report states. "Nor do Americans buy the attacks that for-profit schools provide a lower-quality education, though standards are important."

Phoenix leaders say their programs will help meet the state's work-force needs.
"There's a growing contingent of talented, hard-working people who have real life responsibilities but want to further their education," Lyons said.

MSNBC's Christina Brown Is a Career College Graduate

Hear her tell her story:

For-Profit College Grad Takes on BusinessWeek's Dan Golden

In response to Golden's recent piece on the relationship between for-profit schools and the military, a graduate of Ashford University's MBA program responds to Golden point by point. On the issue of grads of for-profits colleges being unable to find jobs and sometimes filing lawsuits, the author writes:

As for disappointed grads, for-profit schools aren’t the only ones who have alma mater looking for employment in these hard times. “Trina Thompson, 27, of the Bronx, graduated from New York's Monroe College in April with a bachelor of business administration degree in information technology…she filed suit against the college in Bronx Supreme Court, alleging that Monroe's "Office of Career Advancement did not help me with a full-time job…” (Kessler, 2009). Let’s face it; it’s a tough economy for everyone these days especially for newly minted college grads with no experience. I have a friend at work for example with a BS degree in Computer Science from the University of Oklahoma, his son had to move 3 hours away just to take the only job he could get as a tech support specialist for a software company working for $12 an hour. Not exactly a princely wage for an OU grad.

Read the whole thing here.

Career College Association Responds to ProPublica's Student Default Rate Report

Lies, damn lies and statistics. At best, ProPublica has its statistics scrambled.  Career college students have higher default rates than students attending Harvard or Yale.  Big surprise.  They are poorer.  And they have similar default rates to students at institutions who also accept lower income students in large percentages (which, again, no surprise, does not include Harvard or Yale). In fact, 50 percent of career college students come from the lowest economic quintile. A terrible economy makes the default rates that much worse.  The ProPublica story suggests that 40 percent of all federal money lent to career college students will never be repaid.  This is, of course, nonsense.

No one knows what percentage of students will go into technical default, because the numbers are illustrative of what might occur, as the Department of Education has explained, if nothing is done to reverse some trends. And even students who default ultimately repay the Federal government because the obligation remains in force and the federal government is excellent at debt collection.

It’s true default rates for proprietary schools have risen both since 2003 and with the new three-year calculation change, but so have rates for all sectors of higher education during the same time period. The overall Budget Lifetime Default Rate actually shows a rise in CDRs in all sectors from 11.5 percent in 2003 to 15.3 percent in 2007. In fact, graduate students, the group ostensibly most likely to repay their loans, have seen their ranks of defaulters among borrowers double since 2003.  Why?  It’s the economy.   The economy does not discriminate among types of schools.  If the reported rates took into account the profile of borrowers and defaulters, the cohort default rates for for-profit students would be substantially similar to community college students and those attending Historically Black Colleges and Universities.   In addition, many community colleges refuse to participate in the Federal student lending program out of concern that high defaults will reflect badly on them or lead to loss of Title IV eligibility. Such a move helps mask some of the costs that come with admitting low-income students who otherwise have no higher education opportunities. As the Government Accountability Office, Congress’ watchdog,  testified at a recent Congressional hearing, it is student demographics, not the type of ownership of an institution, that explains variation in default rates.

Another factor is that the elevated cohort default rate is a matter of basic mathematics.  CDRs are calculated by dividing the number of borrowers into the number of defaulters. Given that the number of borrowers in any cohort remains fixed and that the number of defaulters in the cohort naturally increases over time, the default rate has nowhere to go but up.  The adjustment in moving from two years to three years necessarily increases the number of defaulters as a percentage of borrowers.

In assessing the Cumulative Lifetime Default Rate from 2003 to 2007, proprietary schools are actually experiencing a decline. Whereas the estimated lifetime rate was 26 percent for proprietary schools in 2003, that rate now stands at 15.7 percent. Current two-year public and private institutions’ rates stand at 14.1 and 14.3 percent, respectively.  Those numbers hardly stand in strong contrast to one another.  That trend may reverse as the recession roils the waters for working Americans, but such a shift will be caused by the economy and the type of student demographics, not the quality or tax status of the schools.

The Career College Association is not satisfied with cohort default rates as they exist today, nor should anyone involved.  Default rates reflect a challenge in a system of opportunity and upward mobility that serves students, institutions, employers, and taxpayers.  Graduates generally enter a career of choice at the lowest rung of the compensation ladder.  This will change as individuals advance, but until recently loan forbearance was the only tool available to help borrowers cope with student loan debt.  The Income Based Repayment plan, that took effect July 1 of this year, presents a far more practical approach to loan repayment and, we believe will help reduce cohort default rates.  The Income Based Repayment plan  allows students to pay lower amounts when they first graduate and have a lower earning capacity, with payments increasing as earnings increase.  New provisions of the law also permit students who enter public service to have their loans reduced or even eliminated.  CCA is also taking several steps to work with its members to lower rates.  For several years, CCA has had an active Default Prevention Initiative, in conjunction with the Department.  We work aggressively as an Association and as a sector to minimize student defaults.  Allowing lower tuition schools to limit federal student borrowing, not permitted under current regulations, would also help alleviate the cohort default rate situation.  Unfortunately, students use student aid to cover other expenses not related to tuition and fees.  Student aid programs are not consumer lending programs and the proceeds of the former should remain concentrated on true postsecondary expenses.

Harris Miller of CCA Talks Student Loan Default Rates on CBS News

Career College Association President Harris N. Miller Pens Healthcare I.T. Op-Ed

The following is authored by CCA President and CEO Harris N. Miller:

Solutions for Building the Health IT Workforce

The topic of healthcare reform has saturated the news for much of 2009 as President Obama and the Congress grapple with changing the current system. Solutions for lowering costs and improving efficiency are hotly debated. Yet one solution that has received bipartisan support and is gaining traction is adopting health information technology (HIT).

America’s population is aging and as it does so, it will require more medical attention. Medical care is becoming more sophisticated each day and health information technology is a part of the solution for ensuring safe, effective, efficient and timely healthcare as prescribed by the Institute of Medicine.

President Obama has set aside nearly $19 billion for HIT in government spending plans, with $17 billion through Medicare and Medicaid and $2 billion in direct funding. With this action, combined with the passage earlier this year of the Health Information Technology for Economic and Clinical Health (HITECH) Act, America has the tools to begin a major transformation in high quality, affordable American health care, and it needs the workforce to make the plans a reality.

A 2008 study based on the Health Information Management and Systems Society analytic database of more that 5,000 hospitals found hospitals currently employ 108,000 health IT professionals. However, if the U.S.’s HIT agenda is to be fulfilled, an additional 40,000 Health IT professionals will be needed in hospitals alone. Additional skilled workers will be needed to satisfy the HIT needs of physician offices, nursing homes and home health providers.

HIT will improve our healthcare delivery systems on many fronts. As Dr. David Blumenthal, the National Coordinator for Health Information Technology, said in a recent letter to healthcare providers and stakeholders, “By using current technologies in a meaningful way, as well as technology to be developed in the future, we will take great strides toward solving some of the most vexing problems facing our health care system and creating a new platform for innovative solutions to health care.”

Career College Association Responds to Bloomberg's Dan Golden

In response to Daniel Golden’s article, “Marine Can’t Recall His Course Lessons at For-Profit College,” military service personnel are shifting from traditional to private sector colleges and universities not for free laptops and other perks, but for a far more fundamental reason:  we offer education to a purpose.  Like other non-traditional students, those in the military have little time for frills and football games.  They are generally older adult students, no longer comfortable with the values and distractions of their younger peers.  For many, online education provides the degree of flexibility necessary to pursue studies while remaining on active duty—even from a war zone.  We honor the service of men and women in uniform and provide education geared to their special needs and interests.  Some call it “military friendly,” we call it common sense.

In terms of our degrees being less helpful in seeking employment?  Please.  Notwithstanding Mr. Golden’s reporting the views of two headhunters, the statistics show that our in career placement rates are 60 percent or higher, depending on type of degree earned.   And what exactly does the online nature of course delivery have to do with anything?  Any college or university worth its salt is embracing this technology, and online was recently endorsed by the Secretary of Education.  The University of Maryland University Campus has almost 200,000 online students alone.  As far as who pays the bill, think about this:  taxpayers subsidize the community college student with $7 for every $1 dollar supporting a student at a private sector college or university.  Plus the chance of a student graduating from one of our schools is twice as good, not because the education is lower caliber but because the approach to higher education puts the student first.

On transfer of credit, the last bastion of traditional education, the Department of Education and the Council for Higher Education Accreditation agree:  Transfer of credit decisions cannot be based on the accreditation of the sending institution, so long as that school’s accrediting agency is recognized by the Department of Education.  Registrars ignore the rule, to the detriment of students, employers and the economy overall.

And on the admittedly arcane 90/10 rules, your report is somewhat misleading.  Under current rules, if a student receives 90% or more of his/her financial aid through Federal student aid, then even if he/she receives aid from other sources, such as the GI bill, that student is still over the 90% threshold.

National Governors Association: Community Colleges "Have a Lot to Learn From Private Two-Year Colleges"

A new report makes the case:

The National Governors Association (NGA) is praising the success of America's private career colleges and urges state-run community colleges to follow their lead in several specific areas, including graduation rates and support programs.

In a new report issued December 9, 2009, the NGA recommends that state-run community colleges use private career colleges as a model for how to successfully engage low-income students, keep students on a path towards their educational goals, and maintain high graduation rates. The report is titled "Increasing College Success: A Road Map for Governors."
...
The NGA believes that community colleges "have a lot to learn from private two-year colleges." According to the report (page 1):
Private two-year colleges have much higher graduation rates than public two-year colleges, even though they enroll similar students. The private colleges recognize they have nontraditional students who need different types of support.

Also according to the report (page 9):

What do these colleges, which tend to have an occupational focus, do differently? The private two-year colleges recognize they have nontraditional students who may not always have well-developed plans and who may lack the motivation and organizational skills to earn a degree. As a result, these institutions structure their support for students differently than public two-year colleges by providing:

• A clear pathway to each program's goal and a clear timeframe;

• Information systems to track progress closely, which then is used to guide students' choices;

• Mandatory advising and peer cohorts that meet regularly;

• And active job placement assistance.

Read the full report here.

CareerBuilder CEO Says Professional Services Sector Shows Jobs Growth

HT: Professional Services Blog

Apollo Group Issues Response to Resolution of False Claims Act Case

From the official press release:

PHOENIX--(BUSINESS WIRE)--Dec. 14, 2009-- Apollo Group, Inc. (NASDAQ: APOL) (the “Company”) today announced that it has entered into an agreement with the United States of America, acting through the U.S. Attorney’s Office for the Eastern District of California and the U.S. 

Department of Justice on behalf of the U.S. Department of Education, and with two private plaintiffs to resolve the False Claims Act lawsuit filed in 2003 against subsidiary University of Phoenix, United States of America ex rel. Mary Hendow and Julie Albertson v. University of Phoenix. Although a party to the agreement, the U.S. Department of Justice at no time intervened in the lawsuit, which was pursued by the two private plaintiffs as a qui tam action on behalf of the government. Under the terms of the agreement, the Company will pay $67.5 million to the United States. A separate agreement provides for the payment by the Company of $11 million in attorneys fees to the plaintiffs, as required by the False Claims Act.

“This agreement not only brings closure to a long-running dispute and enables the Company to avoid the uncertainty and further expense associated with protracted litigation, it opens the door for a more constructive partnership with our lead regulator, the U.S. Department of Education,” said Charles B. Edelstein, co-chief executive officer of Apollo Group.

“Apollo Group is committed to rigorous regulatory and compliance systems to serve and protect the academic innovations for which we are known,” added Gregory Cappelli, co-chief executive officer of Apollo Group and chairman of Apollo Global, Inc. “Resolution enables us to focus on our core mission of providing access to quality higher education opportunities for students who have been historically underserved by the conventional system of higher education – and at a time when such access is more critical than ever.”

The agreement makes clear that the Company does not acknowledge, admit or concede any liability, wrongdoing, noncompliance or violation as a result of the settlement. Moreover, the Company is confident it will not face any further civil or administrative exposure relating to its compliance with the Higher Education Act provision relating to incentive compensation for the period of March 1997 through the present as a result of the various releases and related agreements it has obtained from the U.S. Department of Education, U.S. Department of Justice and the plaintiffs.

“While we believe that the compensation practices and programs of University of Phoenix have always complied fully with applicable federal laws and regulations, the regulations at issue in this case were unclear and inconsistent and, even after they were clarified by Safe Harbor provisions, involved complex judgments and interpretations,” said P. Robert Moya, executive vice president, general counsel and secretary of Apollo Group. “Settlement on these terms eliminates the risks inherent in taking any case to trial and, ultimately, is in the best interests of our students, employees and shareholders.”

“On behalf of the plaintiffs, we are pleased that the parties have been able to reach an agreement on terms that protect the interests of the government and the taxpayers,” said Robert J. Nelson, Lieff, Cabraser, Heimann & Bernstein, LLP, lead counsel for the plaintiffs. “The case raised several challenging issues, many of them novel, which made settlement of the case appropriate.”

 HT: Inside Higher Ed

More Career Higher Education Support for Wounded Warrior Project

Yesterday I highlighted the efforts of CCA member school CTU for their participation in the scholarship side of the Wounded Warrior Project. It turns out there's a little more context to the story that merits attention.

There's this video from KOAA-TV CH 5 (NBC) Colorado Springs, which I encourage everyone to watch. There's also this piece about the same efforts in Colorado from media in North Carolina. More local coverage in North Carolina here.

Kudos again to CTU for their exemplary efforts in assisting America's veterans looking to further their post-secondary education.

Colorado Technical University Continues Wounded Warrior Project

Five soldiers will receive a full ride to obtain a two-year degree from Colorado Technical University courtesy the Wounded Warrior Scholarship. From The Colorado Gazette:

The Wounded Warrior Scholarship program was developed two years ago after a university official volunteered at Walter Reed Army Hospital in Washington D.C. and saw that wounded soldiers were growing bored of the videogames and television they used to occupy themselves, said Jim Hendrickson, the scholarship program director.

Since then, 100 soldiers from across the country have received scholarships, he said. The awards include a laptop computer and cover the full cost of their tuition, program fees and books.

“This is something that I think a lot more institutions should consider,” said Eric Mitchell, an advocate in the U.S. Army Wounded Warrior Program, which works with each of the soldiers who received scholarships. Unlike the Army’s tuition assistance, soldiers will keep the scholarships even if they are released from duty. The help from CTU means they will be able to save money from their G.I. Bill for further education, should they choose to pursue it.

Spouses also were eligible to receive scholarships for the first time this year, in recognition that they are just as involved in a family’s fight to regain normalcy after a life-changing deployment, the university said.

And who are these soldiers receiving these scholarships? Here's one award winner :

Scholarship winner Spc. Eric Sassenfeld, 27, suffered a traumatic brain injury from repeated explosions in Iraq in as part of the 764th Explosive Ordnance Disposal Company, which deployed in 2006. With few career opportunities for bomb technicians, he plans to study computer forensics with the goal of joining a law enforcement unit devoted to fighting internet crimes against children, fraud and other burgeoning computer-related crime.

A generous and heartfelt thank you to the soldiers who deserve these scholarships and the colleges who provide them the opportunity.

Career College Association Comments on Cohort Default Rate Calculation Change

The following is CCA's official press release/statement on changes to the calculation of the cohort default rate (CDR). Email here with any questions. Relevant quote:

Cohort Default Rate Reflects Economy, Economic Disadvantage of Students

Washington, DC – The Career College Association today released the following statement from its President, Harris N. Miller, in response to the illustrative, 3-year CDR data released today:

“The substantial increase in the cohort default rate reflects the economic condition of the economy and the fact that over 50 percent of our students come from the lowest economic quintile.  If the reported rates take into account the profile of borrowers and defaulters, the cohort default rates for for-profit students are closest to community college students and those attending Historically Black Colleges and Universities.   And the community college rate would undoubtedly be higher if it were not for the fact that many community colleges refuse to participate in the Federal student lending program because of concern that high defaults will reflect badly on them or lead to loss of Title IV eligibility.   The Income Based Repayment plan, that took effect July 1 of this year, is a far more practical approach to loan repayment than past practice and, we believe, will help reduce cohort default rates.   CCA will continue to work with the Department of Education on other steps, including the Default Prevention Initiative, which involves institutions, ED officials and CCA staff working to gather data on the characteristics of defaulters at various stages (early missed payments, late stage delinquency and defaulters) and developed strategies for identifying potential defaulters before the first late payment.  Finally, we should note that these are nominal rates—rates that are intended to help all involved improve their future CDR standing but have no legal effect currently.“

The Department of Education data shows that cohort default rates, the rate at which borrowers fail to repay their student loans, jumped from 11 percent to 21 percent in the career education sector.  A change in the law increased the period over which CDRs are calculated from two years to three years.

Career College Association Newsletter for December 11, 2009

Stories of note:

1. Second Round of Program Integrity Negotiated Rulemaking Wraps Up

The second round of negotiated rulemaking for the team focused on program integrity issues wrapped up yesterday. The team spent the week discussing draft proposed regulatory language on issues including incentive compensation, the definition of gainful employment, agreements between institutions, and state authorization as a component of institutional eligibility for participation in the title IV programs. The complete list of topics and the draft regulatory language are available on the Department's negotiated rulemaking website.

The third and final round, at which consensus will attempt to be reached on all the issues, will take place January of 2010.

2. CCA Hosts Investment2009

From December 9^th to the 11^th, CCA held Investment2009, its third annual Investment Conference at The Fairmont Hotel in Washington, DC.

The event kicked off on the 9^th with a pre-conference “boot camp.”  That evening a reception was hosted by DowLohnes and Stifel Nicolaus.

On Thursday, December 10^th, CCA Chairman of the Board Rene Champagne opened the conference with remarks about the health of the sector, it’s role in President Obama’s 2020 vision and a reminder that this private sector of the economy has persevered even in challenging economic times. Remarks from Michael B. Goldstein of Dow Lohnes PLLC and James A. Rowan of Stifel Nicolaus were also offered.

Due to conflicts in Congress, keynote speaker Congressman John Kline (R-MN) was unable to deliver the keynote address. However, several informative sessions were offered including a financial overview of the public markets, a roundtable on the challenges education companies face when going and a look into the “Accreditation and Scrutiny of Online Learning.” The afternoon sessions were also informative. These included a look into mergers and acquisitions, employment forecasting, global higher education investment opportunities and more. A reception was provided that evening by Drinker Biddle and Reath LLP.

 Whole newsletter here.

For-Profit University Establishes Collegiate Football Program

David Moltz of Inside Higher Ed has explains why Post University, a for-profit college in Connecticut, would elect to join a football association that forbids scholarship or off-campus recruiting. The answer is that officials are trying to unite the campus while impacting the larger community:

To hear Ken Zirkle, Post’s president, tell it, starting a sprint football team and affiliating it with those from a handful of highly selective institutions will help the university in ways more valuable than the initial start-up investment of around $400,000 and the eventual annual cost of around $150,000 to maintain the team. Like a number of presidents who consider adding a traditional football team to their institution, Zirkle hopes Post’s sprint football team will help bolster the enrollment of male students, which he believes is lacking. More than that, he hopes the addition of the team will foster a greater sense of community at a university that educates more than four times as many students from around the country online as it does local residents at its main campus in Westbury, Conn.

“A lot of online colleges don’t have a campus to call home,” said Zirkle, who presided over the addition of a traditional football team at Becker College, in Massachusetts, when he was president there in 2005.

“We have about 3,000 online students, and we even offer them a stipend if they want to come join us on campus here for graduation. A lot of them take us up on that offer. Online students want to take pride in their university. I expect that adding [a sprint football team] will do nothing but enhance that. We already have alumni clamoring for a homecoming event, and a football game is a natural venue for that. Football has a certain mystique, and I know the benefits of it, having experienced them firsthand at other institutions.”

Anthony Fallacaro, Post’s athletics director, said he believes the sprint football team will complement the existing sports offered, further contributing to a sense of community on campus. Those students who take classes at the main campus, both athletes and non-athletes alike, have expressed interest in the sport, he added.

“The excitement on campus is there,” Fallacaro said. “I’ve already talked to students who are checking their weight to see if they’ll be able to play. The existing teams and coaches of them are being supportive of it all. Also, I’ve had inquiries about tickets and home games, not just from students but from people in the Westbury community.”

 Some would argue such a move by Post officials would be a superficial improvement, but they'd be missing critical aspects of the decicion. It not only tightens the community of students attending the school, but gives them common cause and mutual identity. It reduces the transient nature of non-traditional schools and most importantly, gives a for-profit institution some depth beyond their financial category. Good luck to Post University.

ChinaCast Leading China's For-Profit Higher Education Sector

Their value from their size and trailblazing efforts is indisputable:

ChinaCast Education Corporation (CAST) may not be as large as Apollo Group, Inc. (APOL) or Career Education Corp. (CECO), but it is the first and only publicly listed for-profit, post-secondary education services company with fully-accredited universities in China. Since 1999, the company has provided degree programs to over 21,000 on-campus students and e-learning services to over 141,000 students through 15 university partners in its learning network.
...
The Takeaway…

ChinaCast is the first and only publicly traded for-profit, post-secondary education service company with fully-accredited universities in China.

China’s education market is the world’s largest and offers favorable supply/demand characteristics with a high barrier to entry.

ChinaCast’s business model has high revenue visibility, strong free cash flows, and appreciating assets, with a proven track record of organic growth and acquisitions.

The primary reason for the recent downside has been the decision by the company to utilize equity instead of debt financing.

What's notable is not just ChinaCast's strengths, but the willingness of the government to take steps towards improving higher education and access to it:

Last year, the Ministry of Education announced a higher education reform and development plan to transform China into a learning society and to increase the skill of its labor force. By 2020, the government has targeted 40 million higher education students, compared to just 22 million students in 2008. Meanwhile, a valuable governmental license provides a key barrier to entry.

The barriers to entry aren't too steep, but the competition from China in the 21st most certainly will be.

Study: Americans Widely Support For-Profit Colleges

In the news and opinion aggregator The Huffington Post, Michael J. Wilson of the Americans for a Democractic Action said the following about for-profit colleges based on findings from a study his organization recently commissioned:

“In fact, the real strength of America's higher education system is the diversity of options. Everyone doesn't graduate from high school, go to their state school and graduate in four years. The U.S. system of community colleges, public and private colleges, and for-profit colleges provides a wealth of higher education opportunities for potential students.”

...

“And the American public supports [Obama]. In a recent poll done for Americans for Democratic Actions Education Fund, we measured the views of the American public regarding higher education and the various kinds of schools. It won't surprise anyone who lives in the real world, but most folks think getting higher education - of any kind - is good, and that whether you attend Harvard, the local community college, take classes online, or attend the big state university, you can improve your skills, develop your mind, and further your education. The President's challenge makes college graduation not only smart, but patriotic; not for just a few of you, but for all of us.”

When reading what the survey itself says, the message becomes even brighter for the career higher education sector:

“The public has a positive view of traditional as well as for-profit colleges  and universities.  They have a better sense of the work of traditional schools, but they think for-profit schools are doing an excellent or good job educating their students.  They want a variety of institutions out there including community colleges and for-profits to offer the most opportunity to students and workers.  People believe for-profits offer critical flexibility.”

The data from this survey suggests 58% of Americans support the efforts and mission of for-profit colleges. In other words, this sector of higher education has broad grassroots support among Americans. They know flexibility and more opportunity are what higher education needs and that for-profit schools deliver those necessary education components in spades. They also know this sector of higher education is critical to ensuring all Americans get the opportunity to enhance their skills training and education to prepare themselves for a 21st century competitive workforce.

In short: as confirmed by this study and others, Americans are in favor of for-profit colleges. The data and message are clear.

Shorter Completion Time for Undergraduate Degree Growing in Appeal

MassLive.com makes the case:

Considering that most students no longer work in the fields tending crops, they are available to take classes during the summer. While most colleges offer summer classes, few, if any, students take a full load of courses to help speed up their expected date of graduation. The majority of students take a class or two to catch up, or repeat a course to get a higher grade.

There are a handful of colleges that have capitalized on the fact that students can save on an extra year of costs by offering a bachelor's degree in three years. It's not entirely a novel idea.

...

Who says college has to be a four (or more) year experience? The drive for more colleges to offer the three-year degree is rather timely as the increased cost of college, combined with the downturn in the economy, has many prospective students looking at any way to save. This is especially a concern when the average undergraduate student today takes six years seven months to complete his degree.

Before students start flocking to the likes of Bates and Hartwick, there are a few cautions. Taking extra credits - either during the semester or during the summer term - still costs money. Most colleges tack on a surcharge if one exceeds the credit maximum allowed as part of the standard charge. Summer classes are also not free and, depending on where the classes are taken, can mean extra housing costs.

Most of the savings from avoiding a fourth year of college will likely come in room and board costs. Additionally, to be done with school one full calendar year sooner, would be mean that graduates can start earning a regular paycheck sooner.

The iPhone and Higher Education

Wired details the intersection:

That’s the idea Abilene Christian University has to refresh classroom learning. Located in Texas, the private university just finished its first year of a pilot program, in which 1,000 freshman students had the choice between a free iPhone or an iPod Touch.
 
The initiative’s goal was to explore how the always-connected iPhone might revolutionize the classroom experience with a dash of digital interactivity. Think web apps to turn in homework, look up campus maps, watch lecture podcasts and check class schedules and grades. For classroom participation, there’s even polling software for Abilene students to digitally raise their hand.

The verdict? It’s working quite well. 2,100 Abilene students, or 48 percent of the population, are now equipped with a free iPhone. Fully 97 percent of the faculty population has iPhones, too. The iPhone is aiding Abilene in giving students the information they need — when they want it, wherever they want it, said Bill Rankin, a professor of medieval studies who helped plan the initiative.
....

The traditional classroom, where an instructor assigns a textbook, is heading toward obsolescence. Why listen to a single source talk about a printed textbook that will imminently be outdated in a few years? That setting seems stale and hopelessly limited when pitted against the internet, which opens a portal to a live stream of information provided by billions of minds.

Green Jobs in Asia and More: The Competitive Workforce Report for Week of December 3rd

In this issue:

Green Jobs: Help Wanted…in Asia:

China, Japan and South Korea are deemed the clean energy “Rising Tigers” in the report, “Rising Tigers, Sleeping Giant: Asian Nations Set to Dominate the Clean Energy Race by Out-Investing the United States.”  What makes these countries the global clean energy leaders?  First, these countries have already passed the U.S. in terms of production of clean energy technologies which include solar, wind and nuclear power, carbon capture and storage, next generation vehicles and batteries, and high speed rail.  Second, in the next five years, their governments will out-spend the U.S. three-to-one in clean technology investment.  This public spending will also help to encourage private investment and research and development, the report states.

A College Education in “High-Return Fields” is the Tide that Lifts all Boats to Higher Earnings:

The findings show that community colleges can boost earnings, particularly of students who pursue certain fields of study.   Specifically, the average earnings seven years after leaving college of community college students who pursued “high-return” or “very-high return” fields earned an average of $12,000 and $18,000, respectively, more annually than those in low-return fields.  Fields of study were classified into four groups:  very high, high, medium and low return.  Health care was singled out as the only “very high” field of study preparing for nursing and medical technician professions. In the high return category are fields such as business, computer science, education, engineering, marketing and environmental science for professions such as computer programmers and engineers.  Low return fields of study include fine arts, humanities, human and consumer services, performing arts, public services and social studies, exemplified in such professions as artists and consumer service representatives.  In the medium return category fall machinery repair, legal and protective services, and building trades.

 And the stat of the week:

2,892,351 public school students received a high school diploma in 2006-07, resulting in an Annual Freshman Graduation Rate of 73.9%; 16 states had an AFGR above 80%, while 12 states had an AFGR below 70%.

CBS 11 in Dallas, Texas Reports on Workforce Development at PCI Health Training Center

Full video here. Notable quote:

Friday was student Cynthia King's first day. She is following a path of investing months of training in hopes of obtaining a medical assistant's job in one of the fastest growing industries.

"[I'm here] because I was laid off, with the recession and all," she explained. "And I had to pick myself up and come back to school."

King, a mother in her 30's, is like so many North Texans trying to fast-track the transition to a new career.

Martha Pasillas spent years in the finance world. Now, with a room filled with mostly women learning the techniques of medical care, she is on a new path. "It seems like if you're in the medical field, you'll never be laid off. So, it's the future," Pasillas said of her career options.

Amy Edwards is the certified lab instructor at PCI. "The industry is changing and medical is where the jobs are. So, there are more people gravitating to the medical field, due to the economy as well," she explained.

Baltimore Sun Incorrectly States College Enrollment Numbers

From Joyce Lain Kennedy:

Debt loads for graduating college students are at a record high. The average recent college graduate with debt owes a total of $21,000 -- and the payback figure can be as steep as the high fives. (Debt totals for graduate and professional studies are another jaw-dropping story; research student debt and you'll see what I mean.)

Some observers worry that we've hit the college-price ceiling, as costs appear to be trumping prestige at a time when jobs are scarce. Families look at the price tag of name-brand schools and, in a growing number of cases, decide they can't handle the freight.

Result: Many students are turning to four-year state schools. But the biggest jump in enrollment today is at two-year public community colleges.

Emphasis mine. The general phenomenon she's describing is true, but the numbers above are not accurate even a little. 

The reality is just the opposite. Namely, as the graph above indicates (and all of the data is available from the Department of Education), the fastest growing sector of higher education in terms of enrollment is career higher education by a factor of ten.

While community colleges as well as traditional universities play pivotal roles in the education of Americans, so too, do career colleges. It is important that the exceptional growth of the sector - in all of its forms - be faithfully articulated and represented by the media.

President Obama Says Colleges Should Do More to Prepare Students for Jobs

While career colleges are not directly included in the messaging (for now), the message is still clear: higher education must make job skills training a higher priority. From the Chronicle of Higher Education (subscription required):

Higher education, and particularly community colleges, can play a key role in creating jobs and reversing the economic slump, several speakers said Thursday at a White House forum on jobs and the economy.

President Obama specifically called on educators to take a lead in his opening remarks at the jobs summit, saying he wanted to hear what "universities can do to better support and prepare our workers—not just for the jobs of today, but for the jobs five years from now and 10 years from now and 50 years from now."

...

Jamie P. Merisotis, president of the Lumina Foundation for Education, which has called for significantly increasing the proportion of Americans with a college degree or credential, urged the federal government to finance accelerated degree programs that "treat education like a 9-to-5 job."

Career College Association Newsletter for December 4, 2009

This week's CCA newsletter is out. The newsletter is an excellent tool for the membership or other stakeholders to keep up with CCA and the career higher education sector. In this week's letter, there is talk of the second round neg reg, Investment 2009 registration deadlines, news on a dinner held for CCA President and CEO Harris Miller and more.

As for a sample, from the "Policy Perspectives" section in an entry titled "Second Round of Program Integrity Neg Reg Begins Next Week":

The second round of negotiated rulemaking dealing with program integrity issues will take place next week, December 7 - 11, 2009. This team will be discussing incentive compensation, gainful employment, the definition of a credit hour, the timing of aid disbursement, and other issues. During the second round, negotiators begin the process of fine-tuning the draft regulations and offering suggested changes or complete counter-proposals to the Department's proposed language.

The Department's draft regulations that will be under discussion are available here. We strongly encourage you to take the time to read these draft proposed regulations (realizing they can drastically change during the course of negotiated rulemaking).

Consumer Financial Protection Agency Oversight of Career Colleges Not Needed

A massive financial services bill, containing a provision to create the Consumer Financial Protection Agency, goes to the floor next week in the House. When in the Financial Services Committee, Rep. Maxine Waters introduced an amendment that would apply CFPA oversight to career colleges making institutional loans to students (defeated 33-35). As of this writing, it is unclear whether she will re-introduce the same provision for a vote on the full House floor next week. House Education and Committee Chairman George Miller is said also to be considering his own amendment that would have all higher educational institutional loans, regardless of sector, covered by the CFPA. We opposed in Committee and continue to oppose the Waters amendment because our sector, like all of higher education, already has most of its institutional loans (effective February 2010, as required under HEOA) covered by the Truth In Lending Act (Regulation Z) with oversight by the Federal Trade Commission, plus various state consumer laws, and have seen no evidence presented that the Federal and state consumer protection/oversight system has failed in any way requiring special coverage by CFPA. We also object to the fact that our sector is singled out by the Congresswoman’s amendment.

Other groups are joining the fray, including U.S. Public Interest Research Group (PIRG). U.S. PIRG just issued a report that is factually inaccurate in several important ways, including their fundamental mistake claiming that our sector’s institutional loans are somehow subject to less oversight than loans issued by other sectors of higher education, which is simply untrue. They also fail to mention that most institutional loans are covered by TILA and state consumer laws. Either they are terribly misinformed, or are intentionally trying to mislead people. Someone needs to call them on that.

ACICS Connects Workforce Investment to Economic Recovery

Albert C. Gray, Ph.D., Executive Director and Chief Executive Officer, Accrediting Council for Independent Colleges and Schools, makes the case in today's Congress Blog for The Hill. To wit:

Enrollment for colleges and schools providing workforce education has surged as unemployed professionals look to refocus their career training or seek secondary training for future employment opportunities. These trends are reflected in new data gathered by the Accrediting Council for Independent Colleges and Schools (ACICS), the largest accreditor of degree-granting career colleges in the country. The unemployment rate has reached its highest point since the Great Depression and will be the subject of much discussion this week during a White House jobs summit. Now more then ever is the time for enhanced collaboration between policymakers, employers and the education sector.

...

Accredited career education is growing organically as unemployed Americans get ready to go back to work when the economy recovers. National accreditors like ACICS play an important role in ensuring the quality of that education, workforce training and skill acquisition. Policymakers at state and federal levels are encouraged to harness that resource and apply it to their economic recovery strategies within their local communities.

Career College Association Responds to AP Story: "For-Profit Colleges Haul in Government Aid"

The following is the Career College Association's response to an Associated Press article by Justin Pope.

"December 1, 2009

A few points of correction, clarification or context on the November 29 Justin Pope article (For-profit colleges haul in government aid):

One fundamental correction to the article’s title. Career colleges get no Federal aid. The students obtain the aid based on their financial situation and then make a choice.

More economically disadvantaged students are using Pell Grants to pay for higher education because more of these students realize the need for skills and education in a difficult economy. Increased federal support is good for students and for the country to keep us from slipping continuously behind our global competitors.

For-profit institutions help students tap into their full federal benefits, while, according to Mark Kantrowitz of finaid.org, over 40 percent of students at two-year public institutions leave Pell grants to which they are legally entitled on the table, presumably because of a lack of information and financial counseling.

It is incorrect as the article states that the taxpayer suffers when students default on government backed loans because the government ultimately collects all that is owed. However, student loan default prevention efforts should be pursued at every step.

Taxpayers spend $7 for every student attending a public institution and just $1 for every student attending a for-profit institution. Not receiving this generous public subsidy and being poorer, it’s not surprising that students at for-profit institutions leave college with more debt. These individuals have exercised free choice to make an investment in themselves, acquiring an education that the facts indicate is not available elsewhere.