Gainful Employment, For-Profit College Talk on The Kojo Nnamdi Show on NPR

Today at 1pm EST CCA President and CEO Harris Miller will be on The Kojo Nnamdi Show NPR (locally WAMU 88.5 FM). To wit:

Enrollment is booming at for-profit trade colleges, thanks in part to taxpayer-funded grants. But regulators say students are graduating with high debt and poor prospects for getting a job. Kojo explores concerns about recruiting, financial aid and employment prospects in the for-profit sector.

Guests

Harris Miller  

President, Career College Association

Goldie Blumenstyk

Senior Writer and "Financial Affairs" Columnist, Chronicle of Higher Education

You can listen to the show by clicking here and then clicking on the "Listen to WAMU" button in the upper right hand corner of the webpage. CCA will also be live Twittering Miller's appearance.

Benefits of For-Profit Colleges Acknowledged by The Economist

The reality is access to higher education should remain open, not closed, and more education choices are the essential key to meeting President Obama's 2020 goal. To wit:

I think these places get a bad rap. Profit and education are not anathema. It is true that for-profits have poor graduation rates for four-year degrees, but rates are abysmal across the board and for-profits lead the industry in graduation rates for two-year degrees (60%). Yes, a lot of revenue does not go into teaching students, but the same is true in the eye-wateringly expensive non-profit institutions.

The reality is that for-profits are the best chance for the disadvantaged to get an advanced degree—a key qualification in the economic recovery—and they offer flexible schedules and training courses in growing sectors. The Obama administration’s penchant for community colleges is insufficient: a Pew report shows that state funding for in-state and community colleges is plummeting, classes are being cut, and tuitions are going up. Meanwhile, Congress seems torn: since 2008 they increased loan ceilings and the stimulus added billions in Pell Grants, but they are sceptical of the for-profits that are using these resources most. They are planning to set a cap on debt depending on post-graduation income.

I think this is imprecise and a tall order during such high employment. A far better move would be to extend loan repayment periods and waivers, not make education more difficult to obtain in the first place. If America is going to meet its advanced degree ambitions, the government might have to work with for-profits, not against them.

For-Profit Colleges Defended in Wall Street Journal

Henry Bienen, vice chairman of the board of Rasmussen Inc., ably makes the case these schools offer value to their students and graduates as well as the American taxpayer that funds Pell grants:

What are the facts?

As of 2008, the for-profit sector, which has grown rapidly over the last decade, included 9% of students enrolled in American colleges and universities. For-profit colleges run the gamut from vocational schools that give certificates for culinary or beautician training to schools that grant bachelor's, nursing, medical and master of business degrees. Some of these schools have regional accreditation (the highest type) from the same organizations that accredit elite public and private universities.

The graduation rates of some for-profit institutions are well above 50%—as high or higher than those of many four-year public colleges, let alone community colleges and nonselective public and private colleges (which often have rates below 50%).

All schools' graduation rates are driven by selectivity and demographics (including the income, age, race and prior education of students and the education level of their parents). Students who attend for-profits typically work during the day and go to school at night. Often they matriculate online. They may be single mothers. They borrow not just for tuition but for general expenses. And they do have relatively high default rates. Their average two-year default rate is 11%. For public nonprofits the rate is 5.7% and for private nonprofits it is 3.7%.

Like graduation rates, default rates are driven by demographics. At for-profit colleges, 39% of degrees are conferred to minorities who tend to be, on average, in tougher financial shape and more likely to be the first in their families to attend college. At public nonprofits, 20% of graduates are minorities. In addition, 76% of students at for-profit colleges are financially independent, meaning their parents do not support them. But colleges don't control student borrowing, so they don't control how much debt students accrue.

As for career placement, more than 90% of graduates of Rasmussen College, with which I am associated, are currently employed, despite the recession. Across for-profits, placement rates for students who get degrees in medical technology, business administration, information technology and design are all high.

Gainful Employment Rule: Rep. John Kline Voices Opposition to Proposed Law, Supports For-Profit Colleges

From CCA's YouTube channel. Video page here.

Speaking Out on Gainful Employment Rule Affecting For-Profit Colleges

Cross-posted on Career.org:

The Program Integrity notice of proposed rulemaking was officially published in the Federal Register on June 18. This important NPRM would change the regulations governing gainful employment; incentive compensation; state authorization of a postsecondary institution; misrepresentation; and more.

NPRMs are issued to solicit public comment on the proposed regulatory changes. The public comment period ends Aug. 2. The more comments the Department of Education receives suggesting changes to a proposed regulation, the more likely they are to make changes to that proposed regulation (although it is not guaranteed). In that same vein, the more comments they receive supporting a change, the more likely they are to keep that proposed regulation. There has never been a more important time to speak up on behalf of the students and schools in our sector of postsecondary education. We need every CCA member to submit comments to the department of education.

CCA hosted three webinars for the membership outlining the impact the various issues may have on students and schools, and suggesting areas for comment; additionally, we covered how to submit comments. Those webinars are available on the CCA website at http://www.career.org. CCA staff are here to assist you in every step of this process, but we need you to take action now and submit your comments!

Contact Tammy Halligan at TammyH@career.org or 202-336-6839 if you have any questions or need assistance.

Students Increasingly Attracted to Online Colleges, Courses

The Fox 34 affiliate in Lubbock, Texas keys in on a growing and fundamental trend in higher education. One that is not exclusive to any sector of higher education, but most certainly pioneered and popularized by career colleges. Here's their report, which underscores just how fundamental this model of education is for non-traditional students:

Source: Fox 34 in Lubbock, Texas

ABC 6 in Philadelphia Spotlights For-Profit College Preparing Students for Workforce

Source: ABC 6

Career College Association Offers Response to Gainful Employment Notice of Proposed Rulemaking (NPRM)

In an issued press release, CCA yesterday said the Department of Education’s metrics-based gainful employment proposal, establishing a ratio between student debt and anticipated graduate earnings, is unwise, unnecessary, unproven and is likely to harm students, employers, institutions and taxpayers. CCA said the move is also unlawful since the Department of Education lacks the statutory authority to impose such a new measure.

The government’s approach would impose sanctions on programs wherein student debt to earnings ratios exceed certain percentages. CCA President Harris N. Miller said additional analysis would be required to understand the full ramifications of the ED gainful employment proposal, but he went on to express CCA’s disagreement with a metrics-based approach:

“Adjusting the numbers in the original gainful employment formulation is not the issue. Amounts borrowed today do not indicate what you will be able to repay in five years, ten years or over a working lifetime. Our analysis, based on the real experience of over 600,000 borrowers, indicates that students in more expensive programs are actually more likely to repay their student loans. An approach based on a debt to earnings ratio is, therefore, by definition counterproductive.”

An earlier CCA commissioned study found the gainful employment ratio could eliminate programs serving 300,000 students, disproportionately harming female and minority students.

With community college budgets shrinking, eliminating career college programs could mean eliminating postsecondary access for these non-traditional students. “The President’s 2020 goal for educating Americans means keeping all avenues to education open,” Miller said. “Students need more information, not fewer choices.”

Rather than use an imprecise and ineffective debt to earnings ratio, CCA earlier put forward a proposal that would add to the disclosures already required in the Higher Education Opportunity Act. The approach also included independent employer affirmation and licensure/certification criteria. The Department of Education included increased disclosures in its proposed rule concerning gainful employment, released on June 18.

Education Report: U.S. Lagging in Production of College Graduates

Daniel de Vise reports:

The United States has fallen from first to 12th in the share of adults ages 25 to 34 with postsecondary degrees, according to a new report from the College Board.

Canada is now the global leader in higher education among young adults, with 55.8 percent of that population holding an associate degree or better as of 2007, the year of the latest international ranking. The United States sits 11 places back, with 40.4 percent of young adults holding postsecondary credentials.

The report, to be presented Thursday to Capitol Hill policymakers, is backed by a commission of highly placed educators who have set a goal for the United States to reclaim world leadership in college completion -- and attain a 55 percent completion rate -- by 2025.

The campaign mirrors President Obama's quest to reclaim world leadership in college graduates by 2020, although it gives the country five more years to get there. The Commission on Access, Admissions and Success in Higher Education set its goal in December 2008, seven months before Obama's American Graduation Initiative.

"I don't think what we're saying and what the president's saying are that different," said Gaston Caperton, president of the College Board, the New York nonprofit agency responsible for the SAT and AP tests.

Further evidence that shutting down for-profit colleges that are equipping students with the skills necessary to compete in a 21st century workforce is foolhardy and counterproductive to President Obama's and the country's education interests.

Mary Beth Marklein of USA Today spoke with College Board president Gaston Caperton and commission chair William "Brit" Kirwan, the chancellor of the University System of Maryland, about their efforts:

Q. The report says an effective strategy would be to eliminate disparities between underrepresented minorities and white Americans. Many middle-class white families feel they're struggling, too. How do you persuade them that everyone benefits by focusing on those most in need?

Caperton: There are two positions you can take. One is to blame the group that is pulling the averages down. The the other is to give them the right kind of education, so they can succeed. Let's look at it as if it was a family. There's three brothers and sisters, and one of them has the capacity to learn but doesn't go to school and doesn't get a job. Do the other two siblings want to have to supplement the third? It's best for them to say, "We don't want to carry you. You've got to pay attention to your education." That's a win for everyone.

Kirwan: We can't be competitive in the global economy if we don't have a highly skilled or highly educated workfoce. We can't be the leader in things that matter if we aren't the leader in educating our citizens. Everybody benefits when our education levels are high. In addition to the economic well-being of our nation, crime goes down as education levels go up. Health care costs go down. That's the message we have to do a good job of articulating.

Emphasis added.

Tom Vander Ark: For-Profit Colleges Doing Better Job of Graduating At-Risk Students

It may not conveniently fit the narrative of career higher education critics, but this report is putting out compelling arguments:

Only the private sector has the capacity to expand higher education and serve at-risk students, writes Tom Vander Ark on EdReformers. In his Gates Foundation days, he worked on doubling the number of low-income students who complete a college degree. He commissioned a Parthenon report, which found that most private-sector providers “do a better job graduating students, deliver superior income gains, and do so at a societal cost comparable to public institutions.”

Private operators invest nearly $1 billion annually in growth, the report found. The for-profit sector enrolls a higher percentage of at-risk students, yet has a higher graduation rate and transfer rate than public two-year colleges.

Private two-year colleges cost about the same as community colleges, when government funding is included, and “produce comparable income gains of $7,500,” even though the for-profits serve more high-risk students.

Student Debt: Higher Education Problem, Not For-Profit College Problem

Ben Strubel over at Seeking Alpha makes the case:

While the range of programs at nonprofit schools affected would be wide, let’s use law schools as an example. According to the ABA for the 2007-2008 academic year, the average public school law graduate carried $59,324 in debt while the average private school law graduate carried $91,506 in debt.

According to the Bureau of Labor Statistics, the median salary for a lawyer nine months after graduation in 2007 was $68,500. Applying the 8% in 10 years rule means that a graduate can expect to pay back only a maximum of $54,800. This figure does not take into account the interest paid. This figure is below the average amount borrowed for law graduates of public schools and well below private schools.

While there has been much debate in legal circles regarding the appropriateness of current student debt levels, some of the best and brightest individuals in U.S. society still choose to attend law school and incur high debt. The media tend to portray for-profit students who take on high debt as stumbling know nothings who are unwittingly lured in by unscrupulous recruiters. Yet, law students, who represent the cream of the intellectual crop, have been making the same choices regarding debt levels in relation to salary.

Clearly one of two things is at play: (1) society has decided that furthering one’s education is a laudable goal and that incurring debt, even amounts greater than the government proposes to allow, is beneficial in the long run; or (2) the debt problem is endemic to higher education.

Indeed, student debt levels at all types of institutions have been rising. Across the entire demographic spectrum of the country, students are continuing to fund education via debt. Therefore, it is shortsighted to single out for-profits for censure while ignoring the same trends at nonprofit institutions.

Linda Chavez Asks: Is There Bias Against For-Profit Colleges?

We think so, but here's Chavez's take:

It seems like the folks in charge of writing the regulations are prejudiced toward for-profit schools. These institutions already meet accreditation rules and must disclose graduation rates and other information to ensure that they are legitimate educational institutions, not mere moneymaking scams.

Schools that advertise on TV and radio and provide education to working-class adults are anathema to the education community elite — who not only didn't attend such schools but don't know anyone who did. But I've seen firsthand the important role for-profit schools play in providing opportunity. One of my sons earned his Microsoft certifications in a for-profit school and has gone on to a very successful, steadily advancing career in IT in the 10 years since.

The idea that everyone must attend a four-year college in order to succeed is nonsense. Education is important — and improving skills to compete in a more demanding work environment often makes the difference between those who keep their jobs in a recession and those who don't. But it shouldn't be the federal government's job to decide which school a student chooses. The for-profit market is growing because there is an increased demand for the kind of education it provides. Shouldn't the Education Department devote its resources to expanding opportunities for Americans to receive schooling, not restricting them?

Former Congressman Bob Barr Criticizes Steve Eisman Appearance at Harkin Hearings on For-Profit Colleges

Barr asks some important questions that are deserving of an answer:

Some suspect that, in bad-mouthing the proprietary school industry, as he did on May 26 and again in the most public of ways on June 24, Eisman is hoping that the price of shares of companies that own for-profit schools will drop. While the witness denied — without perceptible blushing — any such intent, the question Harkin felt himself forced to ask, remains hanging like a flashing neon sign at an all-night diner. Why would a hedge fund manager with no obvious connection to the substantive topic of for-profit schools, be invited to testify at a major committee of the United States Senate chaired by one of the most senior members of that body?

While Eisman’s attempt at magnanimity — declaring he was appearing because there was still “hope” to salvage the proprietary school industry — was delivered with a straight (and again, unblushing) face, it rang hollow. Perhaps more revealing was another remark by Eisman, in which he noted in passing that he serves as a “money manager” to make money for clients that include “universities.” Guess who would benefit from the demise of proprietary colleges? Is the picture starting to come into focus?

CCA's Harris Miller Responds to L.A. Times Sen. Harkin Op-Ed on For-Profit Colleges

The full published text:

Harkin has every right to ask whether federal student aid dollars are well spent. His article, however, relies on distortions presented by a self-interested Wall Street short-seller, Steven Eisman.

The Eisman thesis is upside down. There is no higher education bubble. President Obama has made clear this country's imperative to broaden access to higher education, which traditional higher education is struggling to do in these tough economic times.

For-profit colleges are creating opportunities for non-traditional students — working adults and those from lower incomes — who go to college to enter into new careers or advance their current ones. The federal government, through grants and loans, helps economically disadvantaged students gain an education and a path to greater prosperity.

That the private sector plays a role in helping these students should be praised, not pilloried based on the views of short-sellers.

Harris N. Miller 
Washington
The writer is president and CEO of the Career College Assn.

CCA's Harris Miller Continues Criticism of Roles Short-Sellers Play in Attacks on For-Profit Colleges

From today's Inside Higher Ed:

Harris Miller, president of the Career College Association, has attacked Eisman and other short sellers early and often. Eisman, he said in a statement just after Harkin’s office released the list of panelists for the hearing, was “a Wall Street short seller born with a silver spoon in his mouth, who got his first big paycheck the old-fashioned way, through his parents.”

The day before the hearing, Miller held an hour-long press conference at the National Press Club. “When among the stakeholders are a population of working adults and lower-income students, many pursuing higher education for the first time in order to achieve better lives for themselves and their families and benefiting our country’s economy, particular care should be given to the line between vigilance and vitriol,” he said. “For whatever reason, Mr. Eisman not only crossed it, he ignored it altogether.”

In a conversation with Inside Higher Ed just after the hearing and again in a conference call for reporters that afternoon, Miller continued to focus the lion's share of his response to the hearing on short sellers and their assault on institutions that largely serve low-income adult students.

Since then, Miller has continued to rail against short sellers. “They have a strange role in that there’s no downside to them just making stuff up,” he said this week. “They have no concern about whether they have credibility in Washington. I have a reputation to defend, someone from the Department of Education, they have a reputation to defend. But someone who’s a short seller is only thinking about the profit from what Washington does and is intentionally misleading.”

LeBron James Accepts University of Phoenix Scholarships for His Foundation

Why Loan Default Rates Don't Represent Institutional Quality

Liz O'Neill takes a stab at unpacking the issue. The short answer? Reading between the lines on the data reveals a much different, more complete picture:

Both default rates are higher than they should be, and overall city stats can’t substitute for actual student stats, but this offers a rough illustration of the differences we should be talking about. Cohort default rates don’t serve as a measure of a school’s quality or financial aid worthiness. Students’ repayment habits are subject to countless factors, at least a half dozen of which precede the quality of the education they received.

In fact, many studies have already isolated some of the determinants of student loan default risk. Collectively, these determinants paint a picture of the average community college or for-profit student. In other words, they exist regardless of which school a student opts to attend. By pretending that default rates reflect institutional merit, cohort default watchdogs ignore the real barriers between the American workforce we have and the American workforce we need.

If a school is providing a sound, relevant curriculum and/or training experience (as is currently determined by accreditors), its capacity to enroll future students should not be compromised by the shifting variables of the local economy or the preexisting circumstance of its disadvantaged demographics.

How Short Sellers Corrupt Media Coverage of For-Profit Colleges for Financial Gain

ProPublica takes a look and notices the circumstances behind this story are not altruistic consumer reporting initiatives. It's also about the personal financial interest of short sellers and it's corrupting how the media reports on career colleges. To wit:

But some short sellers appear to be moving beyond assessing particular companies and taking a financial position accordingly. Now, says the Career College Association, some are trying to stage-manage the reporting of negative stories to fuel the impression of a groundswell of anger against the schools.

"Certainly there are legitimate critics. I may not agree with them, but they're not in it to fatten their wallets," said Harris Miller, president of the CCA, which represents for-profit schools. "But I think that a lot of the activity going on, and with other media reports, is being driven by the short sellers, who are hiring people who are semi-disguising who they are and not being candid with people about their role in trying to drive down the stock price of certain companies."

Early terminated the interview with ProPublica when asked whether the hedge fund knew she had drafted the letter and coordinated the effort to have it cosigned by representatives for homeless shelters.

But when informed of Early's connection to an investment firm, several people who signed the letter said they found the episode disquieting.

Two who signed told ProPublica they were under the impression that Early was conducting research for a Bloomberg Businessweek reporter working on a story about for-profit schools enrolling homeless people. Early confirmed in the interview that she "connected" the reporter with several people at homeless shelters.

For-Profit Colleges Educate Workforce, Place Graduates in Jobs

Despite claims to the contrary, here is unequivocal evidence that career colleges follow through on what they purport to do -  educate students, turn lives around and equip graduates with jobs in the career of their choosing:

Career colleges such as Everest are helping career switchers find truly rewarding professions. Now Davidson works in the billing office of a supplier of durable medical products. "I feel like I now have the job security I lacked," she says.

Other career switchers decide that going back to school is the only way for them to land the career they truly desire. David Leopold served in the Army for 10 years, before driving a diesel truck for more than a decade. One terrifying day, Leopold's trailer went off a 20-foot embankment and caused major damage to his vehicle. Although Leopold was not seriously injured, it was a wake-up call for him.

"When you live through such a serious accident, you realize that you have to take control of your life," he says. "For me, I realized I wanted to know the mechanics behind the truck that could have taken my life, so I decided to go back to school to study diesel engine mechanics."

Leopold explains that he had tried an auto technician school previously, but dropped out. "The second time around, I knew I needed to find a program that offered excellent instructors, hands-on training and a supportive environment," he says. "I chose WyoTech in Laramie, Wyo., and I've been very happy with my choice."

When he graduated, Leopold easily found employment at Petro Stopping Stations as a diesel technician. He says that he has finally found a career he is passionate about. "It's a hard decision to leave your old career behind, but I knew I had to take the risk. WyoTech helped me find the career I wanted, and I know I made the right decision," says Leopold.