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Tuesday, October 3, 2017

Proprietary School Education

Originally Published November 06, 2009; Last Updated October 03, 2017; Last Republished October 03, 2017:

It's probably too early to tell if the proprietary school does anything more than saddle our youngsters with a mountain of debt to enrich a few investors—but an initial look is not encouraging.

It's not too early to require transparent disclosures4, oversight, and reporting from our proprietary schools.

These data can be used to determine whether these schools, as a whole or individually are responding to market demand or creating market distortions5?

It's difficult to imagine what proprietary schools provide, beyond a mountain of student debt and a near useless education1 that our community colleges cannot better provide. Our community college system, properly configured to respond to the needs of our population2 and nation is a superior substitute for proprietary schools3.

Res: 

UPDATED 07/30/2012 Senate Report, For Profit Higher Education: The Failure to Safeguard 
the Federal Investment and Ensure Student Success (pdf) and For Proļ¬ t Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success dated July 30, 2012 (pdf-alt-prefer-format).

The data contained in this detailed report and appendixes make it clear that it is no longer "too early to tell" if our proprietary schools do anything but saddle our youngsters with a mountain of debt to enrich a few investors at our nation's expense.

More than half of the students enrolled in proprietary schools between 2008-09 left without a certificate, associate degree or bachelor degree, which on average cost $15.5K, $26.6K and $10.1K (respectively) more than a nonproprietary equivalent.
"...As a result of high tuition, students must take on significant student loan debt to attend school. When students withdraw, as hundreds of thousands do each year, they are left with high monthly payments but without a commensurate increase in earning power from new training and skills.

...The vast majority of the students left with student loan debt that may follow them throughout their lives, and can create a financial burden that is extremely difficult, and sometimes impossible, to escape.

...During the same period, the companies examined spent $4.2 billion on marketing and recruiting, or 22.7 percent of all revenue. Publicly traded companies operating for-profit colleges had an average profit margin of 19.7 percent, generated a total of $3.2 billion in pre-tax profit and paid an average of $7.3 million to their chief executive officers in 2009."--Senate Report, For Profit Higher Education--
The report's recommendation that private student debt be dischargable in bankruptcy must extend to public student debt, too.

GAO Report, Improved Department of Education Oversight Needed to Help Ensure Only Eligible Students Receive Federal Student Aid

GAO Report, Stronger Department of Education Oversight Needed to Help Ensure Only Eligible Students Receive Federal Student Aid

 Blog: 

UPDATED 10/11/2012 RadioWorks, The Rise of Phoenix: For-Profit Universities Shake Up the Academy (transcript of podcast)

UPDATED 10/05/2012 ProPublica, No Income? No Problem! How the Gov’t Is Saddling Parents with College Loans They Can’t Afford6

It's unclear why our Congress has yet to enact legislation ensuring all student loan debt is entirely dischargable within a nominal bankruptcy proceeding. Perhaps they'e been overwhelmed unwinding the first and second wave of debt from bank recapitalization and restructure?

UPDATED 08/10/2012 ProPublica, The For-Profit Higher Education Industry, By the Numbers
UPDATED 12/11/2010 ProPublica, For-Profit Colleges Rake in Millions From Post-9/11 G.I. Bill.
UPDATED 12/02/2010 ProPublica, Ex-Admissions Officer at For-Profit College Testifies About School's Tactics. More evidence that our proprietary schools are exploiting instead of educating.

UPDATED 07/09/2010 ProPublica, Investment Funds Stir Controversy Over Recruiting by For-Profit Colleges. Perhaps government guarantees and payments to proprietary schools can be directly and continually tied to graduates' actual earnings. Preventing the serial subscribers from proliferating proprietary schools (new name, same subscribers, operators, and investors) whose graduates' actual earnings are insufficient to sustain current operations.

Web:

UPDATED 10/03/2017 InsideHiEd, Federal Audit Challenges Faculty Role at WGU and IG, Western Governors University Was Not Eligible to Participate in the Title IV Programs
UPDATED 07/26/2017 AP, Records: Student-loan Forgiveness Has Halted Under Trump
UPDATED 07/06/2017 NYT, 18 States Sue Betsy DeVos Over Student Loan Protections

Our "new" alt-white-house seeks to reshift the risk of valueless and non-performing proprietary schools to our students who are already overload with unserviceable student loan debt.

UPDATED 01/11/2017 Brookings, How much do for-profit colleges rely on federal funds?

UPDATED 01/09/2017 Vox, The battle over for-profit colleges, explained


UPDATED 10/27/2016 WH, The White House Community College Convening


A conference to strengthen the use of evidence based strategies for effectively advancing higher education stakeholders' interests—no mean feat!

UPDATED 08/29/2016 NYT, Crackdown on For-Profit Colleges May Free Students and Trap Taxpayers
UPDATED 06/28/2016 Reveal, Who Got Rich Off The Student Debt Crisis
UPDATED 06/09/2016 Youtube TedxPSU, A solution to student debts in America


The sooner our nation completely unwinds all toxic student loan debt in bankruptcy or equivalent process the better.

UPDATED 11/16/2015 AP, US reaches $95.5M settlement in for-profit education case
UPDATED 11/12/2015 Reuters, Students across U.S. to march over debt, free public college
UPDATED 11/11/2015 UCTV, Student Loans and the Rising Cost of Higher Education -- UC Public Policy Channel

ROI on citizenry education is a circular debate that need not precede a society's decision to continuously optimize access to current conceptual acquisition by all its citizenry.

UPDATED 11/03/2015 Atlantic, How For-Profit Colleges Hang on to Federal Funding

UPDATED 10/20/2015 UPI, Obama administration urges no bankruptcy relief for student debt

Stabilization of the student loan program does not require that we flog our insolvent retirees through bankruptcy proceedings. Nor does or should the present draconian bankruptcy provision require a petitioner to prove a "certainty of hopelessness" or "total incapacity" to change (i.e. death) before discharging their student loan debt.

Shame on the Obama administration for arguing such bizarre nonsense in a bankruptcy proceeding!
 
UPDATED 10/12/2015 NYT, For-Profit Colleges Accused of Fraud Still Receive U.S. Funds

UPDATED 06/24/2015 MW, Obama administration scores big win in crackdown on for-profit colleges

Our Congress should adopt "gainful employment rules" and amend our bankruptcy code and related laws to ensure student loans are routinely dischargeable in bankruptcy proceedings.

Creating "debtor prisons" for our college students is not in the best interest of our students or nation. 

UPDATED 01/20/2015 WH, The President Proposes to Make Community College Free for Responsible Students for 2 Years

Excellent idea, even if we must listen to our confused-cowboy-cannibal-carney-capitalists squeal about a seven or eight cent per dollar excessive-debt-margin-discouragement-fee.

UPDATED 08/05/2014 CIR, University of Phoenix barred from enrolling veterans in 7 programs and CIR, GI Bill loophole keeps 4 major for-profit educators from violating law


UPDATED 07/05/2014 UPI, For-profit Corinthian Colleges Inc. submits plan to shut down its operations

How about the Apollo Group, Education Management Corporation, Kaplan, DeVry, Career Education Corporation, ITT, Bridgepoint, Strayer Incorporated, Lincoln Educational Services, Capella Education Company, American Public Education Incorporated, Grand Canyon Incorporated, Universal Technical Institute and National American University and others?

It's a rare or extinct proprietary school that is not receiving at least 75% of their revenue from federal sources—many receive more than 80% and some exceed 90%.

Wonder if their lobbyists are schlepping the halls of Congress on their behalf? (Hint: begin with the "As")7.

UPDATED 06/09/2014 WH, President Obama Speaks on Student Loan Debt



Kudos to the President for using his bully pulpit and limited authority to highlight the need for affordable access to education and encourage an intransigent Congress to act.



Access to very low or no cost education is not an elite privilege, but a fundamental cost of continual development and maintenance of our modern civil society structures (i.e promoting the welfare of our nation).

Unfortunately, some of our current congressional representatives seem to believe that the constitutional phrase "promote the general welfare [of our nation]" means perpetually promoting war and prison in perpetuity.

UPDATED 06/08/2014 NYT BookRev, B.A.s and I.O.U.s ‘Degrees of Inequality,’ by Suzanne Mettler

We need not await definitive data delineating proprietary school student loan fraud to initiate prophylactic measures.

Pending legislative action reinstating the prior treatment of student loan debt as routinely dischargeable unsecured debt our bankruptcy courts can take notice that student loan debt is a hardship.

Loading our students up with massive debt differs little from private capital (new definition for old leverage buy-out; LBO) structuring a deal that sends a target into bankruptcy with crushing unserviceable debt, except unlike our students the target can routinely discharge its crushing debt and sometime recover its losses from those that structured the LBO.

Our college students should not be required to make the Hobson's choice between a lifetime of debt and a lifetime of disadvantaging ignorance!

UPDATED 01/15/2014 MJ, How College Pricing Is Like Holiday Retail Sales
UPDATED 08/12/2012 CFR, Guest Post: Community Colleges and America’s Skills Gap

It's unclear why our community colleges are not seamlessly integrated into the life-long educational needs of our citizenry—offering no cost classes responsive to local, regional and national vocational, professional and two-year degree requirements (scalable to some four-year degrees) on a 24/7/365 schedule8.

UPDATED 07/30/2012 Reuters, Senate report calls for congressional action on for-profit colleges

The excellent Senate report (ExecSum) contains much informative data, including profiles from a sample population of proprietary schools. The senate report (FullReport)  can be accessed via a link under "Res:" section above.

UPDATED 02/20/2012 WT, Obama takes tougher stance on higher education

UPDATED 11/21/2010 NYT, Scrutiny Takes Toll on For-Profit College Company and NYT, For-Profit College and WP, Is The Post falling short on Kaplan coverage.

UPDATED 10/02/2010 Reuters, Opposition to education rules gathers steam.

UPDATED 09/17/2010 ProPublica, For-Profit Schools Donate to Lawmakers Opposing New Financial Aid Rules. Fortunately many are no longer accepting the myth that our representatives are not voting consistent with their dominate campaign contributors'' monies. The impacts of such voting is still a hotly debated topic requiring further research and analysis.

UPDATED 08/15/2010 Reuters, For-profit schools get report on loan repayments.

UPDATED 08/04/2010 NYT, For-Profit Colleges Mislead Students, Report Finds.

UPDATED 05/05/2010 PBS Frontline, College Inc.

 Investigating how Wall Street and a new breed of for-profit universities are transforming the way we think about college in America...



Why do any for profit markets exist for educating human beings? Are for profit markets for education a solution or deficiency? What are the costs to a society of operating private markets for human being education? Is producing a product or service for a market the same as educating a human being? What, if any human activity is not amenable to a market solution? Is education or learning an "efficient" activity? Are there ways to improve public not for profit education that will eliminate for profit education markets? Can private for profit and public not for profit education markets coexist? Should education ever be responsive to any markets (see is education efficient above)? Is private for profit education a substitute or complement to public not for profit education? Do universal national standards for measuring educational outcomes inform the private for profit and public not for profit education debate?

 Most significantly, what are the costs to our historically beneficial capitalist system from misapplication or distortion of markets and market principles or solutions to great harm? Once, twice, three times, or more... 

UPDATED 12/21/2009 ContraCostaTimes, A four-year degree from a two-year school? It could happen. Many California community colleges could make this transition quickly given the additional resources—others would require more time, notwithstanding sufficient resources. Nevertheless, all our community colleges should begin the transition.

UPDATED 12/16/2009 ProPublica, Real Student Default Rates Much Higher Than Previously Known ProPublica, At University of Phoenix, Allegations of Enrollment Abuses Persist

-----notes-----

1. An early flashing warning light is that other colleges, schools and universities are not transferring units from many proprietary schools. A second flashing warning light is that economic analysis indicates many graduating student's earning capacity, as a direct result of the education provided, will be inadequate to retire the incurred debt.

2. Some policymakers and educators still incorrectly think they must conform a population to their demands to disastrous results for our students, schools, and nation. Meeting our population cum students "where they are" while ensuring a meaningful education has always been a challenge for both students and educators—just more acute today.

3. Proprietary school enrollment figures indicate that our community colleges may be deficient in responding to our students' needs. On the other hand many of our community colleges are pursuing very diverse and innovative approaches to meet fast changing demands—near round-the-clock class schedules; adapting to the more mature students; remedial classes; accommodating mental, learning, and physical disabilities; aligning course curricula and degree requirements to meet our changing national objectives, rigorous university academics, and local labor markets (present and future).

4. All disclosures of graduation rates, dropout rates, placement rates, instructor qualifications, course curriculum, teaching and training facilities, overall and individual grade point averages, complaints, lawsuits, underwriters, investors etc. must be certified current, complete, and accurate.

5. The "subprime" mess reminds us of the trillions of dollar difference between creating market distortions and supplying market demand. Some of our "capitalists" have difficulty distinguishing one from the other.

6. College students with insufficient educational attainment, enthusiasm or direction after high school (see ProPublica, The Opportunity Gap Is Your State Providing Equal Access to Education?) may find it useful, efficient and more effective to attend a less costly community college—transferring to the university after a couple of years (remember educational attainment is a nonlinear lifetime process).

 7. Those wanting additional details on the politics of perpetuating these proprietary schools will appreciate Suzanne Mettler's new book Degrees of Inequality.Telling a story of:

"... how the US political system today has become a polarized plutocracy, with a government that is fiercely divided and ineffective, with rare exceptions--aside from those instances in which powerful, wealthy industries manage tho unite lawmakers across the aisle in bipartisan support of government largesse directed toward them. In an age of rising economic inequality, American government has grown so polarized that most efforts to respond to public needs end in stalemate. Yet big money interests with political savvy yield the power to generate bipartisan support for political elites. In the case of the for-profits, such success has enabled them to divert funds intended for educational opportunity, using them instead to improve their bottom lines." @ pg 167

8. UPDATED 10/21/2016 Solutions to the challenges, which will propel our nation during the next century will need cross-discipline, cross-culture, and cross-clock teams. (e.g. National Science Foundation, Community College Innovation Challenge 2016-2017) .

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