Letter to Hannah Fearn of the Times Higher Education

The following is a letter sent to Hannah Fearn, regarding her story in the Times Higher Education titled American administrator sounds for-profit warning.

Ms. Fearn: Your report on private sector colleges and universities based on one organization’s incredibly biased and self-serving view is extremely disappointing. As one who lived in the UK for two years while working as a Research Assistant to a Member of Parliament (John Roper, now in the Lords), I have the highest respect for your publication. So I was incredibly surprised to find you took the views of one person as an accurate reflection of private sector colleges and universities in the US, schools that now educate 12% of students in higher education, and, just as one example, have graduation rates almost three times higher than students at our heavily state and local government subsidized community colleges. And while we are 12% of higher education nationally, 17% of degrees and certificates earned in the US last year were from our schools, demonstrating once again that we have better outcomes than traditional schools overall. We do not claim to be competing with Harvard or Cambridge, any more than a US community college or state college does, but for the population we serve—non-traditional students—we do extremely well, which is good for the students and for the US economy, which badly needs these skilled workers.

If you really want to educate your readers about PSCUs, and why I and others think they will be a growing part of the UK educational system, just as they have become in the US, we would be pleased to talk to you, and provide you the research to back up our claims and to counter the biased opinion of one organization’s representative.

Harris Miller
CEO and President
Association of Private Sector Colleges and Universities

Response to a Huffington Post Article "Education Comes With a Price Tag"

In response to a HuffPost College article: Education Comes With a Price Tag by Beth Kobliner; Posted: April 26, 2011.

Beth Kobliner's column on higher education (Education Comes with a Price Tag) combines practical, real-world advice on selecting a college with assumptions and statements that are ridiculous. A few examples of the latter:

• Student loan defaults are similar to the housing mortgage market collapse is false. Speculation and appreciating housing values, along with securitized and under-analyzed mortgage investments, and the absence of regulatory oversight fueled the overheated housing market; there is simply no analogue to higher education, in which speculators are not driving the train, the return on investment to students and taxpayers has been repeatedly documented, and each institution is regulated by three separate bodies;
• Private sector colleges and universities (PSCUs) have "scandalously low" graduation rates is false. Every college or university can do better, but graduation rates at two-year PSCUs are three times higher than at community colleges. PSCUs generally serve at-risk, non-traditional students. These students are older, poorer, more likely to have family obligations and job commitments that interfere with education. PSCUs do a better job of graduating these "at-risk" students than do traditional colleges and universities. Most have to achieve pre-established job placement rates for their graduates in order to continue to accept students with federal aid, while traditional schools do not even monitor their placements. In terms of debt management, PSCU graduate default rates are similar to rates among at-risk students in other postsecondary settings. Research has demonstrated that student demographics, not tax status of institutions, explains higher default rates;
• Students are being misled is false. All postsecondary schools have enormous disclosure requirements. PSCU students are often the first in their families to attend college. While Kobliner assumes that "ambitious parents" share a "dream" about college education, the truth is that for many non-traditional students, parents and high school guidance counselors are simply not a factor at all. These individuals are financially independent adults, making the decision to pursue higher education having misplaced, misapplied or missed out on earlier opportunities altogether. These students have not been groomed since birth for academic laurels;
• Students should avoid debt by going to community college is a nice wish, but not valuable for many. By and large, high school guidance counselors already do steer less competitive students to community colleges. Whether or not such an institution has strong academics, a record of placements, or successful transfer rates is problematic. What too many students find at community college is an extension of high school, with little personal attention and long wait lines to be accepted into the most popular, career-focused programs. In California, where community college enrollments represent about one in four of all community college enrollments nationally, 70 percent of degree-seeking students had not received an award and had not transferred to another institution within six years. Rather, most have dropped out. The problem is even worse for minority students. On top of that, the head of the California community college system was recently quoted as saying the system would turn away 400,000 students this fall because of budget cuts;
• High school guidance counselors should "warn their students" about the "dangers" of private sector colleges and universities is nonsense. What the counselors should do is visit their local private sector colleges and universities, meet with faculty and staff, talk to current students and speak with graduates and employers who hire the graduates. Doing so would be illuminating to them, who often should recommend students to consider PSCUs, but do not, because of bias or ignorance. It will also reveal the silliness of Kobliner's assertion. Graduates of nationally accredited PSCUs gain jobs in field at a rate of 70 percent. Can most traditional colleges and universities make the same claim? Or are many of these students home, on the couch, pondering the value of their postsecondary education and driving their frustrated parents crazy?

No one wants to see college turned into an expensive nightmare. Let’s reach the President's 2020 goal by building on facts, not fantasy. And let’s not assume our way to spurious conclusions.

Harris Miller
CEO and President
Association of Private Sector Colleges and Universities

Harris Miller Says Student Loan Changes Build Barriers

For most Americans the message is simple: Go to college. Get a good job. Build a solid career. But the U.S. Department of Education, through its controversial “gainful employment” proposal, could make it much more difficult for those attempting to do so.

At a time of high unemployment, Washington is building barriers instead of bridges to better jobs and lives.

The gainful employment proposal, the government’s answer to excessive student debt, singles out career-oriented private sector colleges and universities (PCSUs) — in the department’s vernacular, “for-profit” schools. More than 100,000 New York students are currently enrolled in these institutions.

Excessive student debt is a problem in all of higher education, in part because borrowers can use federal student aid programs to borrow far more than they need to pay for education. Rather than tie lending amounts to tuition and reasonable fees, the gainful employment rule would create a debt-to-income ratio for determining program eligibility in student aid programs. The government would bar students using federal aid from entering programs that fail the pre-set ratio. The department is expected to issue its final rule on this matter shortly.

Here’s the problem. The payback of attending college takes place over a lifetime. The federal formula covers the first three years following graduation. If the gainful employment proposal is a good idea, it should apply to all college students, not just those in career-oriented programs.

Instead, the proposed regulation targets the nation’s non-traditional students. These are individuals who entered the work force after high school, enlisted in the military, started families or pursued other life interests. Most are returning to an academic setting, not entering directly from high school.

By closing this door, the proposed rule limits student choice and diminishes the value of private-sector education. The move also has the potential to push up to 2.3 million students out of higher education in the next decade. That will mean workers with fewer skills, fewer opportunities to deploy those skills, a less capable local work force to attract employers and investment, and a less vibrant economy overall.

Washington claims its gainful employment proposal is about reining in excessive student loan debt. Among baccalaureate degree programs, students at public and private nonprofit colleges and universities account for 90 percent of excessive debt ($45,000 or more) and, at the associate’s degree level, these students account for 62 percent ($25,000 or more). These disparities exist despite the large taxpayer subsidies supporting both public and private nonprofit postsecondary institutions.

So what’s the real issue here? Private sector colleges and universities account for 12 percent of higher education enrollments, growing from 1.7 million to 3.2 million in the last six academic years. That kind of growth attracts plenty of attention. Making the issue about private sector colleges and universities takes focus away from far more intractable problems, like spurring job growth, spreading equality of opportunity and shoring up the shrinking American middle class.

No sector of higher education is perfect. Private-sector colleges and universities make their share of mistakes — as do all types of postsecondary institutions. If the question is about education quality, frame the debate in that light and include all players, not just some players. If the question is about debt, look at ways of limiting borrowing so that student loans do not become personal loans.

The public understands the relationship between choice, education and jobs. Time for Washington to understand it, too, and to stop experimenting, especially when the livelihoods of hardworking New Yorkers hang in the balance.

Harris N. Miller
President and CEO
Association of Private Sector Colleges and Universities

This Op-ed appeared on syracuse.com as a Monday commentary: http://blog.syracuse.com/opinion/2011/04/mondays_commentary_harris_mill.html

Response to an Opinion Piece in The Sacramento Bee regarding Cal Grants

Pamela Eibeck doesn’t want to throw the baby out with the bathwater, but her opinion piece (In Cutting Cal Grants, Choose Students Over Shareholders, April 14) makes it perfectly clear she is willing to throw more than 20,000 California college students under the bus. That’s the number of men and women enrolled in private sector colleges and universities in California who are 2009-2010 recipients of Cal Grants. Ms. Eibeck, president of the University of the Pacific, suggests eliminating Cal Grants for PSCU students as a means of protecting students at her own school and other liberal arts colleges in the state. Her outrageous recommendation, built on the twin faults of entitlement and presumption, argues that private nonprofit colleges should retain Cal Grant funding because “they were here first.” Her logic suggests restricting postsecondary grants to those who can trace their roots back to the Mayflower.

While tradition is important in higher education, so is innovation and change. PSCUs are changing the higher education landscape by bringing entirely new cohorts of students into the postsecondary mix: older working adults, minorities, service members and veterans, single mothers and other non traditional students. A comparison of new Cal grant recipients at PSCUs and at private non-profits such as the University of the Pacific shows that PSCU students are older and poorer than the state while their private non-profit counterparts are on average younger and more well-off. PSCU Cal grant recipients are on average 26 years old compared to the state average of 22 and 20 for private non-profit institutions. PSCU Cal grant recipients have an average annual income of $19,337, compared to the state average of $24,687and $34,790 for private non-profit. Moreover, 39 percent of students enrolled at PSCUs in California are Hispanic/Latino and 14 percent are African American. At the University of the Pacific, 12 percent are Hispanic/Latino and four percent of students are African American. A majority of students enrolled at PSCUs are Pell Grant recipients, compared to 29 percent of students enrolled at the University of the Pacific. In arguing for her exclusionary approach to Cal Grants, Eibeck charges PSCUs with low graduation rates and high default rates. In fact, PSCUs in California compare favorably on both counts with all California postsecondary institutions. And in their performance with respect to low-income students, PSCUs do a better job of graduating non-traditional students than do other types of colleges and universities. And PSCU students, like other low income students enrolled at all types of schools, have higher default rates than those coming from more affluent families. Few non-traditional students could afford the $34,000 a year tuition at the University of the Pacific. Average PSCU tuitions, according to the College Board, are less than half that total.

Eibeck charges that private sector colleges and universities make profits and line shareholder pockets. True, some PSCUs are owned by publicly traded companies and sell stock. Many non-profit schools sell tax free bonds. Many enjoy substantial endowments and, to advance those funds, make prudent investments in for profit companies. Non-profit institutions pay no taxes. Instead, they participate in federal loan and grant programs while removing high value real estate, facilities, equipment and other assets from the tax rolls and making tight state and local budgets tighter. Publicly traded PSCUs pay dividends to shareholders, but they also invest their gains in the expansion of schools and programs, not in exclusivity of privileged access and the maintenance of prestige. Needless to say, PSCUs pay taxes.

Sadly, Eibeck attempts to erect barriers in higher education when we should be building bridges to wider access and better accountability, in California and across the country. All postsecondary institutions should share a common goal of putting students first and advancing their interests. Playing favorites with Cal Grants is a big step in the wrong direction.

Harris N. Miller
President, Association of Private Sector Colleges and Universities

Response to Sen. Harkin’s guest column in the Iowa State Daily

In response to Sen. Harkin’s guest column, “Public loses with for-profit colleges,” a few points of fundamental clarification, context and balance:

• Private sector colleges and universities (PSCUs) account for 25 percent of federal student aid for the simple reason that we educate 25 percent of needs-based students. What’s wrong with this picture? Nothing. Perhaps Congress wants to mandate that traditional schools accept higher percentages of lower income students so they account for a higher percentage of federal aid? No? I didn't think so.
• The Senate Health, Education, Labor and Pensions Committee (HELP) hearings have focused on a small number of anecdotes in which students have not been in an ideal situation. We feel for dissatisfied students whatever type of school they attended. But this small sample, which has not even attempted to include unhappy students from traditional schools, is hardly representative of the 3.2 million students attending private sector colleges and universities or indicative of widespread problems. The Government Accountability Office (GAO) report so critical of our sector has been widely discredited for containing misstatements and exaggerations, and lead to the "transfer" of the head of the project.
• Private sector colleges and universities educate primarily non-traditional students, most at-risk for graduation because the likelihood of completing studies is impeded by situations such as job obligations, military service, child bearing and rearing, elderly parent care and other developments. These "life gets in the way" students are much rarer at traditional schools. Yet even with these challenges, the dedicated students who attend PSCUs have completion rates much higher than students at traditional schools with similar student demographics.
• Critics have lost the enormous advantage to taxpayers of PSCUs by overly focusing on risks. For instance, our higher education system has not done well educating minorities. Yet PSCUs educate 12 percent of postsecondary students overall but award 25 percent of the postsecondary degrees and awards earned by minority students. These are individuals unlikely to attend more selective colleges and universities or to gain entry to popular, over-crowded and resource constrained programs at state institutions. Individuals with a college credential are more likely to be fully employed, to avoid layoffs, and to rise in their careers. The social costs avoided in areas such as welfare payments, tuition subsidies, government paid health care benefits and unemployment benefits are substantial.
• While reference is made to manipulative and misleading PSCU marketing campaigns, Title IV eligible institutions must be accredited and meet accrediting agency standards for school operations, including marketing. Accreditation is rigorous and backed by on-going external audits. PSCU tuition is more expensive for students, though not taxpayers, because the cost is not heavily subsidized by the government as it is at state colleges and universities and community colleges, many of which have graduation rates in single digits. College Board studies show that PSCU tuition, averaging $14,000, is much less expensive than private, not-for-profit tuition.
• HELP Committee Chairman Tom Harkin states that he will introduce legislation to reform federal oversight of PSCUs and says this effort deserves bipartisan support. There has been, of course, nothing bipartisan about the hearings his committee has conducted to date. In fact, yesterday ten U.S. senators, including HELP Committee Ranking Member Michael Enzi sent Chairman Harkin a letter, labeling his hearings “disorganized and prejudicial.” Hardly the stuff that builds confidence, much less an approach that unifies higher education in the effort of putting students and a more globally competitive U.S. economy first. We are ready to work with Senator Harkin and all other stakeholders to find ways to improve the return on investment for students and taxpayers that is based on unbiased research and is applicable to all of higher education. An institution's outcomes for its students and taxpayers, not its tax status, should be all that matters.

Harris N. Miller
President, Association of Private Sector Colleges and Universities

Responding to Articles on the LA Times and Shanker Blog

A couple of points Liz fails to cover in her post on the LA Times titled Cost of borrowing to send child to a for-profit college may be too high. The graduation rate of community colleges is one-third that of private sector colleges and universities. So while living at home and going to community college is a cost saving strategy but may not be a successful strategy ultimately. Also, the College Board pegs the average charge for PSCU tuition and fees at about $14,000. How borrowing amounts would reach $92,000 over four years suggests that numerous living costs not directly related to education would be included. Whether a college student lives at home or away can be a difficult choice for some families. Most who attend PSCUs are non-traditional students, older working adults, who live independently and do not have the option. Finally, the student involved may well do better in the PSCU learning environment, which eliminates irrelevant electives and focuses programs in a concentrated, hands-on manner, providing a much greater emphasis on learning by doing. PSCU programs, being concentrated, can help the student reach the job market faster than traditional programs, meaning more paychecks and a jump at gaining career building experience. The student may also do better by shouldering some of the responsibility for the additional cost, particularly if that means attaching greater significance to the outcome.

Regarding the LA Times: Cost of borrowing to send child to a for-profit college may be too high By Liz Weston; Posted: March 27, 2011.

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The following is our comment regarding a blog post on the Shanker Blog titled College For All, Profit For Some.

Secretary of Education Arne Duncan testifies before Congress, warning the nation that over 80 percent of schools will fail the No Child Left Behind law. Yet the American Federation of Teachers is worried about postsecondary access, the promise of a four-year degree, and the gap between what private sector colleges and universities say and do? Perhaps if Esther Quintero would do a little homework herself she’d find that over 50 percent of PSCU awards are certificates, not four year degrees. PSCUs provide a valuable entry point to a vast array of jobs and careers. Our programs are also the first academic success that many students have ever enjoyed. Too often, PSCU education must fill in the blanks rather than building on the foundations students have attained in high school. Is it an epiphany that not everyone needs or wants a four-year college degree? Hardly. But before casting the next stone, visit one of our schools and talk to our students. About high school, college, and the value of gaining a postsecondary credential. It might be a learning experience.

Regarding the Shanker Blog: College For All, Profit For Some By Esther Quintero; Posted: March 30, 2011.

APSCU Responds to an Editorial in the Rome Sentinel of New York

Taxpayers deserve a full explanation on the education provided by private sector colleges and universities (PSCUs). Unfortunately, the picture painted by higher education groups like Education Trust and repeated in editorials such as yours today (Questions about For-Profit Universities, March 31, 2011) is extremely distorted. You note, for instance, that the graduation rate of our schools is 22 percent. But you fail to mention that the Department of Education uses an outdated metric, “first time, full time” students. Students at our schools are often not either and, therefore, are not included in this count. For instance, over one-quarter of PSCU students already have a college degree. Many of these individuals enroll at a PSCU because they need more specialized education to gain the right employment opportunity.

Another important point on graduation rates: most of our schools are nationally accredited, and unless they can maintain prescribed student retention/graduation rates and job placement rates, they lose their accreditation. Traditional schools have no such requirement, and thus one finds that while 60% of our students in two-year institutions complete their programs within three years, the comparable percentage at community colleges is only 22%. And an “apples to apples” comparison of postsecondary students at risk for program completion shows these individuals achieve better outcomes at PSCUs than they do at any other type of institution.

You note that PSCUs educate 25 percent of students receiving needs-based aid. You fail to associate this with the fact that PSCU students receive about 25 percent of federal student loans. If we are educating 25 percent of the eligible students, should our students not be receiving 25 percent of the aid?

Finally, you say that our students end up carrying “huge” debt loans. Again, this is misleading. You rightly include the College Board’s tuition summary, showing that our sector’s institutions are much less expensive than private non-profit schools (Public colleges and universities enjoy public subsidies, making student—if not taxpayer--tuition costs less expensive). Our sector’s growth suggests that students find a well balanced ratio of debt to future income by gaining new employment prospects—the sine qua non of PSCU institutions. To the extent that excessive debt exists, it is an issue for all sectors of higher education. The problem would be reduced if federal student lending policies allowed schools to limit borrowing to the cost of tuition, fees, books and other direct educational expenses.

Harris Miller
President
Association of Private Sector Colleges and Universities

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Regarding The Rome Sentinel Questions about for-profit universities editorial; Posted: March 31, 2011.