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    "Companies seek rollback of tough Obama-era regulations that threaten to lead to school closures" "Investors, in turn, have poured hundreds of millions of dollars into education stocks since the election, hopeful that a change of regime would spur a resurgence in the for-profit college sector"
    6 years ago by @prophe
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    "In early 2015, 15 students at Corinthian Colleges, then one of the largest for-profit college chains, formed a group called the Corinthian 15 and pledged to strike until their student loans were discharged. Corinthian Colleges shuttered its doors just months later, displacing roughly 16,000 students."
    6 years ago by @prophe
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    "The Department of Education (ED) on Tuesday dropped Globe University and Minnesota School of Business (MSB) – two for-profit colleges under the same ownership – from participating in federal student aid programs"
    6 years ago by @prophe
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    Despite higher fee, these schools are a necessity till we develop alternatives Last week, we delved into whether the furore over school fee is justified. Taking it forward, in this second part, we look into whether private ‘for-profit’ schools are flourishing despite government and government-aided schools being affordable. How big is the private school sector? According to a report by Ernst & Young — ‘Private Sector’s Contribution to K-12 Education in India’, 25 per cent of all schools (Kindergarten to Class 12) in India are under private management. Their enrolment has crossed 40 per cent (urban and rural together) of the total enrolment. This number increases to 55 per cent when you look at only the secondary and higher secondary enrolment. The Annual Status of Education Report 2016 points out that this is not just an urban phenomenon. Enrolment in private schools (age 6 to 14) even in rural India is increasing — from 18.7 per cent in 2006 to 30.8 per cent in 2014. Every poor family spends a disproportionate amount of its earnings to send her child to a private school. Clearly, private schooling is big and is growing in both urban and rural India. Government Spend A study by Ambrish Dongre and Avani Kapur titled ‘India’s Spend on Elementary Education’ states that the government (Central and across 16 States) median spend on elementary education (Class 1 – 8) works out to Rs 11,225 per student enrolled in 2011-12. This looks quite low because it is the average across India and across all types of schools in rural and urban areas. A better benchmark is ‘government-spend’ in Kendriya Vidyalayas that provide the best quality among government schools. Elementary school education (Class 1 to 8) is free in KVs and is subsidised thereafter. The fee notified by the KV Sangathan is nil for these classes. From Class 9 to 12, a tuition fee of Rs 200-400 per month is claimed from boys. In addition, Rs 650 per month is taken for computers and Vidyalaya Vikas Nidhi, with exemptions for certain categories of students.
    6 years ago by @prophe
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    Educational companies have seen their stock surge since the election. While the market as a whole has done well since Nov. 8, major companies including K12 Inc., Career Education Corp., DeVry Education Group Inc. and Capella Education Co. have grown faster than indexes. Laureate Education, Inc., which educates over one million post-secondary students in dozens of countries internationally, also concluded its (second) IPO in recent days. The company was publicly traded until 2007 when a group of investors took it private. Optimism and growth in the for-profit education market could mean changes to how the public thinks about higher education and career readiness. Many of the bigger higher education corporations tend to be more nimble in where they set up shop and more likely to build partnerships with business, said Guilbert Hentschke, a dean and professor emeritus at the USC Rossier School of Education. Many of the firms are focused on ensuring a local labor market is stocked with a stream of specifically accredited workers, compared to traditional non-profit four-year degree programs focused on the liberal arts. There are also signs of increasing collaboration between for-profit education companies and private non-profit institutions. Yesterday, Vanderbilt University joined with dozens of other schools in partnering with 2U Inc. to launch online degree offerings through its graduate school of education program. A big reason the for-profit education sector has seen renewed buoyancy in recent weeks is tied to the end of the Obama era. Hentschke, who is also affiliated with the Ernst & Young consultancy Parthenon-EY, said in an interview that the new administration and the new education secretary, Betsy DeVos, have not given a specific indication of their attitude toward for-profit education. Nevertheless, Trump’s business-oriented disposition and DeVos’s preference for free market fixes to the education system have not been lost on investors. The mere “absence of negative signals” represents a major shif
    6 years ago by @prophe
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    Laureate Education just became the first IPO of a company that's legally allowed to sacrifice profit in exchange for purpose, though the for-profit education industry has had a hard time finding any purpose at all. On February 1, Douglas Becker made history when he rang the opening bell of the Nasdaq. His company, Laureate Education, Inc.—the world’s largest for-profit college network, with more than 1 million students enrolled at over 200 campuses in 28 countries—had just launched an initial public offering. IPO filings happen every day, but this is the first public benefit corporation to ever be publicly traded. Laureate is listed on the exchange as LAUR and raised $490 million by offering 35 million shares at a price of $14, slightly lower than expectations. Benefit corporations are distinct from a traditional corporation. Rather than a singular focus on creating financial value, a benefit corporation is explicitly mandated to pursue positive social and environmental impact along
    6 years ago by @prophe
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    MADISON, Wis. — Gov. Scott Walker is renewing his push to eliminate the state board that regulates for-profit colleges. The executive budget Walker unveiled Wednesday calls for eliminating the Educational Approval Board by January 2018 and transferring its duties to the Department of Safety and Professional Services. The governor proposed getting rid of the board in his 2013-15 executive budget as well, arguing then that doing away with it would lift unnecessary financial and regulatory burdens on for-profit schools. Opponents countered that the board plays a key role in overseeing the schools and the Legislature's finance committee ultimately nixed the idea as it revised Walker's budget. The board's executive secretary, David Dies, didn't immediately respond to messages seeking comment on the new proposal.
    6 years ago by @prophe
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    For those that draw the line in the sand at $5.00 for a “penny stock,” Aspen Group, Inc. (OTCQB:ASPU) may be able to graduate out of penny-stock-land soon. Trading as low as $1.52 last July (and $1.21 in January 2016), the company has found a solid uptrend to tip the scales at $4.44 in December for its current 52-week high. After a pullback from that high, shares are moving up again, including a 7.7% climb in morning trading to $4.04 on Friday. Shares are being driven by the New York City-based post-secondary education company issuing two substantial pieces of news after Thursday’s closing bell. First, in the third quarter of fiscal 2017 (ended January 31, 2017), Aspen reported revenue of $3.74 million, up 73% from the year prior quarter. The company swung to a profit, with net earnings of $7,377 versus a net loss of $689,718 a year earlier. Aspen also had a record number 825 new student enrollments during the latest quarter, a 50% year-over-year increase. Separately, the company said it signed a letter of intent to acquire an unnamed regionally accredited for-profit university based in California for $9.0 million. Payment will come in the form of $2.5 million in cash, $2.0 million in convertible debt and $4.5 million in ASPU common stock. $900,000 of the $2.5 million cash component will be lent to a newly-formed entity controlled by the loan’s guarantor who owns 100% of the voting power of the university.
    6 years ago by @prophe
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    Dive Brief: Career training programs will have until July 1 to appeal the U.S. Department of Education for reconsideration of compliance under current gainful employment and revenue reporting guidance enacted by the Obama administration, a signal that the Trump administration is holding to promises of massive deregulation in the federal education agency. The extended review period will allow schools the chance to prove they were unfairly assessed in previous years, under rules requiring that graduates' loan payments do not exceed 20% of their discretionary income or 8% of total earnings, metrics that many for-profit college advocates say was an unfair rule designed to disrupt for-profit impact in higher education. For-profit leaders applauded the extension, but opponents say the delays will allow more students to potentially be defrauded by predatory recruitment schemes and false information about postgraduate outcomes. Dive Insight: The extended review of the gainful employment policies will have impact throughout the higher education sector, as community colleges and schools which disproportionately serve poorer students will now have time to provide more context about graduation rates and employment outcomes which previously may not have been possible due to time constraints. Additionally, the extension signals the first sign of regulatory repeals for higher education, one of the only signature details of President Trump's higher education platform during the campaign season, and a recurring theme shared by Congressional higher education leaders. For most institutions, this is a positive sign towards reducing costs and manpower committed to compliance efforts, but for smaller institutions with missions to serve underrepresented populations, it may be a lifeline.
    6 years ago by @prophe
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    Many for-profit colleges are accused of broken promises, high prices and not preparing students for the workforce. The federal government has increased its regulation of them. It's sparking a big debate in Washington, and two of the main players are North Carolina politicians. The new chair of the U.S. House Committee on Education and the Workforce, U.S. Rep. Virginia Foxx (R-- N.C., District 5) already said the rules need to go. The way she sees it, the Obama administration "intentionally targeted and sought to dismantle career colleges and universities with unnecessary regulations." She praised for-profit schools, calling them "responsive higher learning institutions." Action 9 investigator Jason Stoogenke found her biggest donor is a for-profit college, Full Sail. Full Sail is based in Florida and focuses on entertainment and media, offering degrees up to master's. When Stoogenke asked Foxx whether that's a conflict of interest, she emailed, "When an individual or industry offers me their support, they're endorsing my views, not the other way around." On the other side, 18 attorneys general, including North Carolina's Josh Stein, are urging the federal government not to go easy on for-profit schools. They sent the federal government a letter, saying undoing the regulations would mean "open season" on students. "We're very concerned," he said. "They're preying on people's dreams." LETTER When students can't pay back debt, taxpayers get stuck with the bill. Some wonder how much debt students rack up at for-profit colleges. The Brookings Institution created a list of 25 colleges where students are the most in debt. More than half are for-profit schools. Charlotte School of Law, DeVry, ITT Tech, Brookstone and Kaplan have all had problems in recent years, either financial, legal, or both. "It's been really hard," Charlotte Law student Stefanie Quinde said. "I understand it's a business. But at end of day, the interest of the students, it's, it's a big priority." "I think the regulat
    6 years ago by @prophe
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    The Trump administration is delaying implementation of one of the signature policies of the Obama-era crackdown on for-profit colleges. The Department of Education announced Monday night it was targeting the Obama administration rule aimed at holding career-training programs accountable for getting students decent jobs and earnings. To be in compliance with the regulations, career-training programs, which are largely at for-profit colleges, need to graduate students whose loan payments don’t exceed 20% of their discretionary income or 8% of their total earnings. Programs that don’t fit this criteria for multiple years could lose access to federal financial aid. Career-training schools will now have until July 1 to file appeals to the program debt-to-earnings ratios published by the Department earlier this year, as part of the enforcement of the gainful employment (GE) rule. Originally, their appeals were due Friday, March 10. The schools will also now have until July 1 to publish disclosures about their debt-to-earnings ratio that are required by the new law. Before this decision, the programs had until April 3 to post those disclosures. The gainful employment rules were a long fought victory for the Obama administration in its quest to crack down on for-profit colleges, which officials and advocates have accused of loading students up with high debt loads for questionable outcomes. The for-profit college industry fought the regulations in court and the Obama administration ultimately prevailed. But the Trump administration’s embrace of an increased role for the private sector in education has had supporters of efforts to crack down on for-profit colleges worried that the new rules could be in jeopardy — and investors betting on for-profit schools. The delay is the first signal that that speculation may be correct. “This is a sign that does nothing to dispel concerns that this administration will be sufficiently aggressive in protecting students,” said Ben Miller, the senior director of postsecondary educati
    6 years ago by @prophe
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    The UK government will decide whether BPP University should continue to be eligible for university title and degree-awarding powers, after its US owner was sold to a private equity consortium for $1.1 billion (£899 million). BPP, one of only three for-profit universities in the UK, saw the sale of its owner, Apollo Education Group, completed last month. The deal, which takes the company private, also includes its big US for-profit institutions, such as the University of Phoenix and Western International University. The new owners are a consortium including Vistria Group, a private equity firm run by Marty Nesbitt – a Chicago businessman sometimes described as Barack Obama’s best friend – and former US deputy education secretary Tony Miller. The consortium also includes “funds affiliated” with private equity firm Apollo Global Management, according to the Washington Post. The change of ownership for BPP comes as the UK government nears the final stages of steering through Parliament the Higher Education and Research Bill, which aims to further open England’s sector to new private and for-profit providers. While ministers believe that new providers are needed to introduce greater competition for established universities, critics believe creating more for-profit universities that can go through repeated changes in ownership may have an impact on quality for students. An independent review of BPP will now be submitted to the Higher Education Funding Council for England, including checks on whether the institution continues to meet student number and governance requirements. Hefce will, in turn, advise the Department for Education on the institution's future status. Carl Lygo, BPP's vice-chancellor, said that "nothing has changed" at the university since the sale was announced. "Neither of the new owners has any record in delivering higher education in the UK and so their plans will be carefully scrutinised by the Department for Education," Professor Lygo said. "This is not a rubber stamp process." A DfE spok
    6 years ago by @prophe
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    According to a Chronicle analysis of data released on Tuesday, 177 private colleges that grant degrees failed a U.S. Education Department test for financial responsibility in the 2014-15 academic year. That’s 18 more than the previous year. Of the institutions that failed, 112 are nonprofit, and the remaining 65 are for-profit. In the previous year, 93 of the 159 failing institutions were nonprofit. The department considers an institution’s debt and assets, among other factors, in giving it a score ranging from -1 to 3. Scores lower than 1.5 are considered failing. The department’s methodology in devising the scores has drawn sharp criticism in the past from some higher-education groups. The latest scores cover the institutions for fiscal years ending between July 1, 2014, and June 30, 2015. Several of the colleges have closed since the 2014-15 academic year. Some, like Dowling College, in Oakdale, N.Y., previously failed the financial-responsibility test, while others, like Saint Joseph’s College, in Rensselaer, Ind., passed it.
    6 years ago by @prophe
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    The secretary of Wisconsin’s Department of Safety and Professional Services sought to reassure the state’s for-profit college oversight board Tuesday that a proposal to shift responsibility for regulating those schools to her agency would not weaken supervision of the industry. But members of the Educational Approval Board were skeptical of whether the state department would have the expertise to scrutinize for-profit schools and protect their students, and voted to oppose the plan in Gov. Scott Walker’s budget. “If it’s not broken, don’t fix it,” board chairman Don Madelung said. “We’re not broken.” Walker’s proposal would eliminate the agency’s board and shift its staffers’ jobs to DSPS. Speaking to EAB members, DSPS officials pitched the move as a way to complement the agency’s efforts by maintaining its 6½ full-time staff positions and pairing them with the larger department’s legal counsel, investigators, consumer complaint division and other resources. “If the EAB does go away, nothing else would,” Secretary Laura Gutierrez said. “I don’t think the regulations, I don’t think your best practices (or) the way you do business would go away. “We would be protecting the students, and that would be our focus.” Consumer advocates and government regulators have been critical of the for-profit college industry, saying some of its schools use misleading marketing and offer expensive programs that are of questionable value to graduates on the job market. After facing increased scrutiny during the Obama administration, experts anticipate for-profit schools will experience less federal oversight under President Donald Trump, which could make the role of state regulators more significant. Walker advanced a similar plan two years ago to shutter the EAB, which legislators later removed from the budget — something Madelung praised Tuesday as “common sense.” Unlike the proposal Walker announced this year, that plan would have consolidated the work of the EAB’s staff and board into a single part-time employee. Sti
    6 years ago by @prophe
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    The Trump administration has taken its first shot at rules designed to protect students from expensive, low-quality colleges and career training programs. Less than a month after Betsy DeVos was sworn in as its top official, the U.S. Department of Education announced Monday evening that it would delay until July 1 an effort to crack down on career training programs that load students up with unpayable debt. The biggest winners: the more than 800 higher educational programs that claim to lead to “gainful employment” but flunked the department’s January excessive debt test—mostly for-profit art and cosmetology schools. These programs can now continue to recruit applicants (at least until July 1) without having to warn them about alumni’s oppressively high debt loads. The schools can also take this extra time to seek data showing that their graduates’ student loan bills are actually below the official “excessive debt” cutoff. That means bills must be no more than 12% of the average student’s gross earnings, as reported to the Social Security Administration, and no more than 30% of their discretionary income. That means, for example, that students considering entering, say, the Art Institute of Pittsburgh’s two-year Associate’s program in graphic design won’t necessarily be warned that the typical graduate of the program has taken on about $40,000 in debt, but finds a job paying only about $22,000 a year. The monthly financial reality for such graduates is grim. Their before-tax monthly salary works out to about $1,900. The monthly payments on a standard 10-year student loan repayment plan top $400 – or more than 20% of their gross earnings. The department said it would use the extra time to “further review the [Gainful Employment] regulations and their implementation.” The action puts the brakes on one of many last-minute moves by the Obama administration. In January, the Department of Education issued an analysis of the earnings and student debt levels of more than 8,600 higher education programs that offer pr
    6 years ago by @prophe
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    Current higher education policy in England is based on “bad pub economics” and ministers have failed to learn the lessons from international developments, according to a leading academic. Lorraine Dearden, professor of economics at the UCL Institute of Education and research fellow in education at the Institute for Fiscal Studies, lamented England’s 2012 trebling of fees to £9,000 and current plans in the Higher Education and Research Bill to ease the entry of new private providers as being driven by a desire to create competition. "There are very, very good economic reasons why the market alone cannot be allowed to operate in higher education,” said Professor Dearden in a keynote speech at the Central for Global Higher Education’s annual conference in London on 1 March. She cited “credit market failures” for student lending that means government has to provide loans, the fact that higher education brings “social returns” as well as private returns, “risk and uncertainty” caused by student reluctance to borrow, and “information problems” that mean prospective students cannot know the costs and benefits of their higher education until much later in life. The government’s misguided notion that price competition between universities would occur under the £9,000 cap – when in reality all have ended up charging the maximum – was “bad pub economics”, Professor Dearden said. The £9,000 fees policy failed to take into account the fact that income-contingent loans meant the repayment risk from higher fees was borne by government rather than universities or students, she added. “If you want to allow a range of fees, what is important is that the higher education institutions need to share some of the risk of non-repayment,” she continued. That would mean a system that better reflects the “true costs and benefits” of courses, Professor Dearden said. She added that there were currently “lots of economists trying to work out” how to ensure that universities “have skin in the game”. Professor Dearden also accused Jo Jo
    6 years ago by @prophe
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    The Trump administration just handed an olive branch to the battered industry. he Trump administration appears poised to undo one of its predecessor’s most ambitious attempts to rein in for-profit college rapacity. The Department of Education is delaying the so-called “gainful employment” rule, in place since 2015, the Wall Street Journal’s Josh Mitchell reports. Under the Obama-era rule, the Department of Education would shut off the financial-aid spigot for higher education institutions if their typical graduate reported spending more than 30 percent of after-tax cash or 12 percent of total income on student loan payments. In other words, if a college saddles too many of its students with debt and shabby job prospects — if graduating classes debt-to-income ratios don’t look good for a few consecutive years — it will be barred from receiving Stafford loans, Pell grants, and other forms of taxpayer funding for higher education. The more than 800 schools that the Department of Education threatened in January with sanctions under the rule—98 percent of which are for-profit institutions like Full Sail University and University of Phoenix — will now have until July 1st to hire independent auditors to investigate whether the government’s damning data on their students career outcomes is wrong or flawed. Since most for-profit colleges derive most of their revenue from students’ federal financial aid packages, thousands of the schools may have eventually had to close their doors without reconsideration by the Department. The extended timeline to appeal, and the department’s promise to review the rule, could be a lifeline for an industry that was facing an unprecedented crackdown via states attorneys general lawsuits and federal enforcement actions. But, as Pacific Standard reported in 2015, this wouldn’t be the first time the industry has bounced back from a regulatory beating. For-profit college parent companies stocks have surged since Donald Trump’s election in November. Now, shareholder faith looks like it could g
    6 years ago by @prophe
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    President Trump’s postelection agreement to pay $25 million appeared to settle the fraud claims arising from his defunct for-profit education venture, Trump University. But a former student is now asking to opt out of the settlement, a move that, if permitted, could put the deal in jeopardy. Lawyers for the student, Sherri Simpson of Fort Lauderdale, Fla., on Monday asked a federal judge in San Diego to reject the settlement unless former students are given an opportunity to be excluded from the deal so they can sue Mr. Trump individually. If the judge, Gonzalo Curiel, decides that Ms. Simpson and potentially others should have that chance, legal experts say it could disrupt the settlement because Mr. Trump and his lawyers saw the deal as a way to resolve all of the claims, once and for all, to avoid a trial and distractions to his presidency. “If even one person could opt out of the settlement and force a trial, that might, in fact, crater the deal,” said Shaun Martin, a professor at the University of San Diego School of Law. “I’m sure Judge Curiel will be aware of that.” The agreement, announced in November, appeared to resolve years of hotly contested litigation, including two federal class-action cases in San Diego and a separate suit by Eric T. Schneiderman, the New York attorney general. Students maintained that they were cheated out of tuition through high-pressure sales tactics and misleading claims about what they would learn. At one point during the contentious case, Mr. Trump questioned Judge Curiel’s impartiality based on his Mexican heritage. Mr. Trump, who has rejected the claims and did not acknowledge fault in the settlement, posted on Twitter after the settlement announcement that he “did not have the time to go through a long but winning trial on Trump U.” Patrick Coughlin, a lawyer representing the class-action plaintiffs, said that it was a “terrific settlement” and that the objection seemed “politically motivated.” He said he feared that the objection could result in delays for students
    6 years ago by @prophe
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    Buoyed by the ascendancy of Donald Trump, America’s predatory for-profit colleges are renewing their multi-front fight to destroy a key measure to hold them accountable: the gainful employment rule. The new battle plan includes pushes in Congress and before the Betsy DeVos Department of Education, plus two new lawsuits aimed at the regulation, including one, in Arizona, that has not been previously reported. It looks like this harmful effort is rapidly gaining traction. It took the Obama administration nearly eight years of battling well-paid for-profit college lobbyists and lawyers to finally enact and implement this regulation, which has a simple, common sense premise: Career training programs that, year-after-year, leave graduates mired in overwhelming debt should lose eligibility for taxpayer-funded student grants and loans. Career education should make people financially better off, not worse off, and the rule aims to channel money away from programs that do harm — and channel it toward those honest, effective colleges that are genuinely helping students build careers. For decades, many for-profit colleges, through a toxic mix of high prices, low quality, and weak job placement, have promised more than they could deliver, and yet have been getting billions annually in federal aid, much of it spent on advertising and profits, rather than education. Many veterans, single moms, displaced factory workers and miners, and others struggling to build a better future have been deceived and abused by unscrupulous college owners, whose offices are in Wall Street suites as well as strip malls. The final gainful employment rule does not demand much; only the worst programs flunk its test comparing graduate earnings with debt levels. The first round of results, reported in January, showed that 98 percent of the flunking programs were at for-profit colleges. The for-profit colleges have never stopped trying to overturn the rule, even after federal courts decisively rejected two separate industry lawsuits. Now, however,
    6 years ago by @prophe
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    I’m working with a client to help fill a management level position, and last week we interviewed an applicant with three degrees from a for-profit university. As college degrees become more important for both hiring and advancement, these for-profit educational institutions are growing in number and presence. For-profit schools are just that — businesses. They are corporations, often with shareholders, that have the objective of making a profit. Education is their product. If you’re thinking about going back to school, here are some things to consider before you commit your time or your money to these businesses. Consider your objective. If you want a technical skill, the for-profit route may be for you. Most of these schools do not have entrance requirements. Money and a high school diploma or its equivalent will get you a seat in the program. If you want a college education, consider that the for-profit degrees come with limits. Credits for your work may not transfer to other programs. A bachelor of science degree may not qualify you to move into a graduate program with another school. Most employers will give preference to a candidate with a degree from a traditional university. And if you’re thinking about an advanced degree that will allow you to teach at the university level, don’t even consider the for-profit route. If your objective is flexibility, remember that many traditional universities are now offering online classes and flexible scheduling. Pay attention to accreditation. Accreditation for the university AND for specific programs is a big deal. Learn what accreditation means. Know what the standard of excellence is. Lack of appropriate accreditation may mean your degree is worth very little. Pay attention to cost. Congress is now involved in investigating the costs of for-profit schools. Many state schools are now offering online, evening and weekend programs for much less money. For example, the Georgia WebMBA program is a fully online 18-month master’s program offered through a consortium of
    6 years ago by @prophe
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    President Donald Trump’s administration has begun relaxing restrictions on for-profit colleges, and traders in shares of companies like Strayer Education Inc. (STRA) and Capella Education Co. (CPLA) have taken note. For-profit college stocks soared in the week after the Department of Education announced a delay in the implementation of a regulation finalized in October 2014 by former President Barack Obama. Shares of Strayer Education, a holding company for Strayer University, climbed 2.5 percent in the week following the March 6 announcement, hitting a high of $81.40 shortly after Monday market open, while Capella Education, the parent of Capella University, grew 1.8 percent over the same period, surpassing $78 Monday morning. Grand Canyon Education Inc. (LOPE), the parent of Grand Canyon University, rose 3.5 percent over the past week to an all-time high of $67.49, and Laureate Education Inc. (LAUR), which counts Walden University as one of its for-profit institutions and was formerly known as Sylvan Learning Systems, saw its shares rise 0.6 percent to nearly $13 Monday. DeVry Education Group Inc. (DV), known for its DeVry University, saw a more modest 0.4 percent rise over the past week. The Department of Education initially required for-profit colleges, along with some nonprofit and public schools, to report data on the success of their job training programs by April 3, but under new Education Secretary Betsy DeVos, the date was pushed to July 1. The rule, which was originally slated for implementation on July 1, 2015, would cut back on federal funding for institutions whose programs did not lead to "gainful employment"— meaning graduates’ annual loan payments exceeded 20 percent of their income. For-profit colleges, whose attendees tend to be disproportionately female, minority and low-income, have long faced criticism for their role in the student debt crisis. Data released from the Department of Education in September linked more than 35 percent of student debt defaults in 2013 to the institutions, des
    6 years ago by @prophe
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    Comeback of for-profit medical schools brings questions of reputation, quality of education After nearly a century of dormancy, for-profit medical schools are making a return in the United States. A recent paper by University researchers analyzed the history, reappearance and possible effects that these schools could have on medical education. Though at one time for-profit medical schools existed in the United States, this changed with the publishing of Abraham Flexner’s 1910 report on the state of these schools, according to the paper. There were numerous critiques of these schools in Flexner’s report, particularly of the standards, requirements, teaching and students’ clinical and research exposure. The report led to a renovation of medical teaching and the subsequent disappearance of for-profit institutions. The medical education system accepted nearly all students who could afford to pay tuition prior to 1910, Gruppuso said. “There was no standardized set of requirements for medical schools, and it was creating a real crisis in terms of quality for medical care.” In 1996, the court case United States v. American Bar Association made it possible for for-profit law schools to be established, according to the paper. Though the Liaison Committee on Medical Education had previously been opposed to for-profit medical schools, they slowly began to change their opinions after the court case and eventually allowed for for-profit medical schools to be established in 2013. According to the paper, a number of investor-owned schools, such as the Rocky Vista University College of Osteopathic Medicine, have been accredited, and more have received preliminary and provisional accreditation. Philip Gruppuso, professor of pediatrics and an author of the paper, said the main point of the article was to bring both the existence and establishment of these for-profit schools to public attention. “(This article) sheds light on the fact that not all medical schools in the United States are nonprofit institutions, so I’m not
    6 years ago by @prophe
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    Senate Democrats want Education Secretary Betsy DeVos to explain why she’s delaying the implementation of an Obama-era rule aimed at ensuring career-training programs, specifically those at for-profit colleges, actually prepare students for good-paying jobs. In a letter to DeVos this week, Sens. Dick Durbin (Ill.), Patty Murray (Wash.) and Elizabeth Warren (Mass.) called the department’s gainful employment rule a critical protection for both students and taxpayers. On Jan. 9, the department released final debt-to-earning rates for career training programs required by the rule finalized under Obama in October 2014. Under the rule, the estimated annual loan payment of a typical graduate would have to be at or below 20 percent of his or her discretionary income or 8 percent of his or her total earnings to be considered a program that leads to gainful employment. Programs that exceed these levels would be at risk of losing their ability to participate in taxpayer-funded federal student aid programs. Late last week the department gave schools more time to appeal their ratings, which are generated using earnings data from the Social Security Administration and debt information from the department’s records and the school. Final appeals, originally due March 10, are now due July 1. But Democrats argue the rule was generous to begin with, giving schools three opportunities to appeal their rates. “According to a Department spokesperson, the delay was also due to ‘a question about whether schools can provide data to a third party,’” the senators wrote. “It is unclear how this question could not have been solved through follow-up guidance rather than a delay.” DeVos is also giving Gainful Employment Programs until July 1 to switch to a new format in meeting the requirement to disclose information about their programs, including graduation rates, tuition and fee amounts, typical student debt upon graduation and what a graduate is likely to earn. The senators asked DeVos how long
    6 years ago by @prophe
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    Students who were scammed by a for-profit college back in the '80s could get their money back under the Trump administration. The Wilfred American Education Corp. used to run beauty and secretarial schools that primarily attracted low-income students, usually women. In 1988, Wilfred had 58 schools and more than 11,000 students, making it one of the largest for-profit college chains in the country. Many of those students used federal loans to pay for their education. But in 1991, Wilfred was found guilty of fraud in two different federal court cases. By law, the Department of Education should have canceled the student loans after the school was shut down. That didn't happen. Seven former Wilfred students sued President Obama's Education Department, demanding their student debt be canceled and the loan payments they made over the years be reimbursed. They were among 60,000 people who took out government-backed loans to go to Wilfred. That lawsuit was originally dismissed on a technicality. The decision was overturned when a judge said the Education Department was required to tell students if they're eligible to cancel a loan. Now, four people familiar with the case told Bloomberg the federal government is considering a deal. It would allow students to petition to cancel their debt and get refunds on past payments. The outlet notes a lawyer for the students said in a March 9 filing that they "have made substantial progress toward a final settlement," but no official agreement has been submitted to the court yet.
    6 years ago by @prophe
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    Arizona Summit Law school, a troubled for-profit institution owned by the InfiLaw System, has been placed on probation by its accrediting body, the American Bar Association. The association’s move was announced on Monday and followed Arizona Summit’s affiliation with Bethune-Cookman University, a nonprofit historically black college in Daytona Beach, Fla. Arizona Summit Law in Phoenix is the second school owned by InfiLaw to be placed on probation for failing to meet A.B.A. accreditation standards. Sterling Partners, a private equity firm in Chicago and Baltimore, is an investor. The first, Charlotte School of Law in Charlotte, N.C., lost its eligibility for federal student aid in January as a result of the probation. Its enrollment has declined sharply, and the school has said it is trying to restart federal aid and is exploring affiliation with a nonprofit college in a Northeastern state. At Arizona Summit, the bar association found that admissions practices, academic programs, and graduation and bar exam passage rates were below par. These deficiencies, according to a statement by the A.B.A. Section of Legal Education and Admissions to the Bar, “have resulted in the law school now being in a position where only immediate and substantial action can bring about a sufficient change to put the law school on a realistic path to being in compliance within the time allowed” by the bar association’s rules. Only 24.6 percent of Arizona Summit graduates who took the Arizona state bar exam for the first time in July 2016 passed, an exceptionally low rate. Charlotte School of Law reported nearly the same passage rate for its graduates who took the North Carolina bar exam last month. The bar association said that because the situation at Arizona Summit was critical and urgent, it could have hearings this year to consider any additional remedial action or sanctions “up to and including withdrawal of the law school’s approval.” The probation decision was made by the bar association’s Council of the Section of Legal E
    6 years ago by @prophe
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    Remember when candidate Trump promised to make college affordable for everyone? Yeah, that’s not happening.  Instead, Trump is turning to the notorious corporateers who have been pouring McDiplomas on the nation’s steaming trillion-dollar student debt pyre to shake up higher education. Education Secretary Betsy DeVos’s controversial pick for a special assistant—for-profit college corporate lawyer Robert Eitel, may be a portent. As counsel for Bridgepoint, the parent company of the now-tainted brands of Ashford University and University of the Rockies, was forced by the Obama administration last year to refund $24 million in tuition and debt costs to students, plus civil damages, after the Consumer Financial Protection Bureau found that its heavy marketing scheme for its online programs, and “deceived its students into taking out loans that cost more than advertised.” Bridgepoint is just one player in a sector of for-profit institutions that are known for exploiting millions in federal loans and grants, providing substandard academics and granting worthless diplomas. While many companies were reined in by regulators under Obama, the industry as a whole has survived, and is now poised for revival under Trump. In fact, even those companies penalized for defrauding students have not been held fully accountable over federal student debts; Bridgepoint’s sanction, for example, did not encompass federal loans, even though graduates are typically chained to about $33,000 in taxpayer-subsidized debt. But the for-profit college companies hobbled by financial crisis under Obama might see a major resurrection under Trump’s and DeVos’s deregulatory agenda. One tactic may be for belly-up for-profits to reinvent themselves as nonprofits, in order to skirt future regulations and wriggle out of liability for financial abuses. The Corinthian college chain, for example, following bankruptcy, was placed under the control of a nominal “nonprofit” called Zenith (which was later exposed for having compromising financial entangle
    6 years ago by @prophe
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    It might just be career government lawyers doing their jobs, and doing them well, until the Trump Administration can catch up and work its malevolence, but in court papers filed today, the Trump Justice Department defended the Obama Administration’s gainful employment rule, a measure aimed at curbing predatory abuses by for-profit colleges. The rule penalizes expensive career college programs that, year after year, leave graduates with debts that, based on their earnings, they cannot afford to repay. “The public interest is served by allowing the Department to go forward with implementing the GE regulations,” Justice Department lawyers wrote on behalf of their client, Secretary of Education Betsy DeVos, who is being sued by an association of cosmetology schools. The association’s somewhat risque argument is that many hairdressers and other beauty professionals do not report all their tip income to the IRS, and thus their graduates actually are doing better than the gainful employment calculations give them credit for. Revised under pressure from industry lobbyists, the Obama Administration’s rule is not very strong, but it does endanger some of the worst-of-the-worst college programs. The operators of those programs, who have been raking in billions in taxpayer money, want to make sure they can still act with impunity, even though their abuses have ruined the lives of countless veterans, single moms, and other students. There are good cosmetology schools, as well as other types of career schools. The gainful employment rule aims to channel resources and students to those quality, affordable schools, and away from the kind of for-profit colleges that law enforcement agencies are investigating or prosecuting for fraud. But given: that Donald Trump was previously the proprietor of his own predatory for-profit real estate “university”; that Trump crony Newt Gingrich and congressional Republicans have aggressively advocated for the for-profit college industry; that DeVos has been invested in for-profit education
    6 years ago by @prophe
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    All three of England’s for-profit universities owned in Netherlands Calls have been made for greater scrutiny of the ownership of for-profit higher education providers after it emerged that BPP University is owned in the Netherlands by its US parent. The disclosure means that all three of England’s for-profit universities are owned in the Netherlands, which is known for its attractive corporate tax regime. However, Apollo Education Group, which has owned BPP since 2010 and was recently bought by two US private equity firms, said it did not gain any tax advantage from Dutch ownership of the institution. BPP has benefited from £26.6 million in tuition fee payments via the public Student Loans Company over five years since 2011, according to SLC figures. Companies House documents show that BPP University is owned by BPP Holdings, which is in turn owned by Apollo UK Acquisition Company Limited, which is itself owned by Coöperatieve Apollo Global Netherlands UA (UA is the abbreviation for the Dutch-language term for “excluded liability”). England’s two other for-profit universities, the University of Law and Arden University, are both owned by Global University Systems, a company whose leadership is Russian and which is registered in the Netherlands as a “BV”, the Dutch equivalent of a private limited liability company. The government’s Higher Education and Research Bill, currently making its way through Parliament, aims to bring in more private and for-profit providers to compete with universities. Times Higher Education asked Apollo why BPP is ultimately owned in the Netherlands, whether or not Netherlands ownership conferred any tax advantages for Apollo, and whether the location of ownership is likely to change under the new owners of Apollo. A spokesman for Apollo Global, the group’s subsidiary for its non-US operations, said: “Apollo Global’s Dutch structure was put into place in 2011 in conjunction with the development of a new global learning platform. We do not gain any tax advantages related to the s
    6 years ago by @prophe
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    A new report from the American Enterprise Institute argues that state and local funding of public colleges stacks the deck against for-profit institutions under the gainful-employment rule, an Obama administration regulation that measures the ability of graduates of vocational programs to repay their student loans. The rule covers nondegree programs at nonprofit colleges -- mostly community colleges -- and all for-profit programs. Roughly three-quarters of for-profit programs pass the rule, the report said, compared to a relatively small number of nonprofits that are covered under gainful employment. Direct public funding drives much of that disparity, according to the report's authors. "Higher tuition at for-profits means students take on more debt, while public institutions have the luxury of charging lower tuition due to their direct appropriations," the report said. "Therefore, even if a for-profit institution and a public institution have similar overall expenditures (costs) and graduate earnings (returns on investment), the for-profit institution will be more likely to fail the gainful-employment rule, since more of its costs are reflected in student debt." Congressional Republicans and the Trump administration have said they will seek to roll back gainful employment and other Obama-era regulations aimed at for-profits. But such nixing of the rules likely will take time. And this week the U.S. Education Department defended gainful employment in federal court.
    6 years ago by @prophe
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    "For-profit colleges have faced federal and state investigations in recent years for their aggressive recruiting tactics –– accusations that come as no surprise to author Tressie McMillan Cottom," NPR reports. "Cottom worked as an enrollment officer at two different for-profit colleges, but quit because she felt uncomfortable selling students an education they couldn't afford. Her new book, Lower Ed, argues that for-profit colleges exploit racial, gender and economic inequality. Cottom tells Fresh Air's Terry Gross that for-profit institutions tend to focus their recruiting on students who qualify for the maximum amount of student aid. 'That happens to be the poorest among us,' she says. 'And because of how our society is set up, the poorest among us tend to be women and people of color.' Though for-profit colleges hold out the promise of a better future, Cottom notes that the credentials they offer tend to be 30 to 40 percent more expensive than the same credentials from a nonprofit public institution. What's more, she says, students at for-profit institutions often drop out before completing their degree, which means many students are left mired in debt and with credits that are not easily transferable. 'The system that we've come to rely on to increase access to higher education to the most vulnerable among us really only compounds their poverty and their risk factors,' Cottom says. 'That's the exact opposite of what higher education is supposed to do.'" NASFAA's "Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.
    6 years ago by @prophe
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    The NCAA is an organization full of hypocrisies. It rakes in billions of dollars, but says there’s no money to pay the student-athletes. It works overtime to appease high-dollar corporate sponsors, but won’t let a star basketball player accept any perks. It routinely looks the other way when it comes to abuse scandals, and marginalizes its female athletes, all while running commercials focused on safety and equality.
    6 years ago by @prophe
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    As the Trump administration tries to roll back education regulations, one city is attempting to stay a move ahead by fortifying its own protections for some college students. The Milwaukee Common Council unanimously passed legislation last week to prohibit financial assistance to for-profit institutions unless they meet federal financial aid regulations. The legislation, which updates a previous rule, means the city won’t provide monetary aid to for-profits or to related development projects if the involved colleges fail to meet federal financial aid regulations that were in force on Jan. 1, 2017, before Trump's inauguration. “Considering the leadership change at the federal level and who is now over the Education Department and her relationship with private for-profit colleges, it was thought that the federal guidelines could change, and our ordinance was predicated on what the federal guidelines were at that time,” said Alderwoman Milele Coggs, who sponsored the legislation. “So if those guidelines change, it doesn’t affect the standard we set as a city for education.” Coggs said Milwaukee has a right to be concerned about the types of education institutions that want to do business there. The original ordinance was put into effect following the 2009 arrival of Everest College, which received development money from the city. “We had major reservations about them coming in here, and we put them through the paces and [made them] jump through a series of hoops to demonstrate they could be successful in serving students,” said David Dies, executive secretary of the Wisconsin Educational Approval Board, the state’s for-profit oversight agency. Coggs said she and other residents in the city also had reservations about Everest. But the institution eventually opened its doors with the help of $11 million in bonds from the city’s redevelopment authority, she said. It wasn’t too long after Everest opened that the EAB noticed problems. “They only operated here about 18 months, and early on we started sensing issues based
    6 years ago by @prophe
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    For-profit college investors bid up stock prices in anticipation of a lenient Trump administration. Were they wrong? For-profit colleges were supposed to thrive under a Trump administration staffed by officials known to be friendly to the industry. President Donald Trump and Republican allies in Congress had made broad promises either to revisit or to repeal federal rules governing the schools. That gave hope to for-profit colleges and their investors, driving up their stock prices. Meanwhile, consumer protection advocates worried about a resurgent for-profit college sector unburdened by Obama-era rules. A legal filing from last week suggests perhaps those assumptions were premature. In late March, the Trump administration offered a forceful defense of the so-called gainful employment rule, the 2015 regulation that threatens to shut off the spigot of normally free-flowing federal funds that sustain career programs if the typical graduate's annual loan payments exceed 20 percent of her discretionary income or 8 percent of total earnings. It also called on suspect career programs to warn prospective students if they risked running afoul of the guidelines. Colleges mostly opposed the rule. “The regulations are intended to protect students and taxpayers by providing warnings about programs with relatively high loan debt compared to the earnings their students could hope to achieve after graduating from those programs,” Justice Department attorneys wrote in their brief on behalf of Education Secretary Betsy DeVos. Students benefit from the warnings, Trump administration lawyers wrote, “because it could prevent them from taking on debt that they will not be able to repay, and they could more reasonably evaluate whether they would prefer to enroll in programs that have been more successful in enabling their students to find employment that would allow them to repay their loans.” Taxpayers would benefit, too, they wrote, because of the likely corresponding fall in defaults on federal student loans. “The public intere
    6 years ago by @prophe
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    A federal appeals court rejected the Consumer Financial Protection Bureau’s investigative fishing trip into the records of a leading accrediting agency for for-profit colleges, saying the bureau failed to explain what sort of illegal conduct it was looking into. The decision by the D.C. Circuit Court of Appeals in Washington is a rebuke to the CFPB and its director Richard Cordray, who demanded the Accrediting Council for Independent Colleges and Schools turn over documents and make an executive available to testify about the group’s possible involvement in “unlawful acts and practices in connection with accrediting for-profit colleges.” The Obama administration mounted fierce legal attacks on for-profit colleges, accusing them of peddling shoddy degrees financed by federal student loans and forcing Corinthian Colleges and ITT Technical Institute to close their doors. This appears to be the first time in decades that a federal appeals court rejected an agency's civil investigative demand or administrative subpoena, said Allyson Baker, a partner in Venable's Washington office who represented ACICS. “They didn’t think the CFPB met the requirements of the statute, which requires notice,” said Baker, herself a former CFPB enforcement attorney. ACICS refused to comply with the civil investigative demand in 2015, sending the question to a federal district court. That court last year said the CFPB, which is charged with enforcing consumer financial laws, didn’t have authority to question a school accrediting agency. The CFPB “plowed head long into fields not clearly ceded to it by Congress,” the district court said. The D.C. Circuit affirmed today, in an opinion by Judge David Sentelle, on narrower grounds. The agency “wholly fails” to state what sort of unlawful conduct it is investigating, the appeals court said. The CFPB never explained what “unlawful acts and practices” it suspected and merely repeated the same language in court filings. Without specifics, the court said it can’t determine whether the demand
    6 years ago by @prophe
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    The state has 11 of the schools, and a hearing is scheduled for Monday on a bill requiring annual reviews of them by the State Board of Education. AUGUSTA — A new report finds students at for-profit colleges in Maine carry much heavier debt loads than those at public and private nonprofit colleges in the state. The non-partisan Center for Responsible Lending says the debt burden falls on low-income, female and minority students who disproportionately enroll at Maine for-profit schools. About 75 percent of students at such institutions take on student loans, compared with 66 percent and 41 percent, respectively, at private and public institutions. Meanwhile, 76 percent of students are women and 8 percent are African-American. The report found 60 percent of students received federal Pell Grants, which are awarded to those with low incomes. “One of the things we see consistently across the board: Students who attend for-profit colleges are burdened more by debt,” said Whitney Barkley-Denney, legislative policy counsel for the nonprofit organization. Maine’s student borrowing figures closely track national data. In the 2011-2012 school year, 73 percent of students at for-profit colleges took out loans, according to the Brookings Institution. Career Education Colleges and Universities, the for-profit higher education sector’s primary trade association, didn’t respond to requests for comment. Several for-profit schools have been the subject of state and federal investigations in recent years and faced lawsuits alleging deception in advertising and recruiting tactics. The industry has declined since rising from 650,000 students in 2000 to 2.5 million students in 2010, and several have closed down, leaving students with debt. In January, federal officials said hundreds of programs at for-profit colleges are at risk of losing federal funding unless their graduates start earning better wages. However, Education Secretary Betsy DeVos has said she would take another look at the so-called “gainful employment” federal r
    6 years ago by @prophe
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    It may be too late for shuttered Corinthian Colleges, ITT Technical Institute or even Trump University, but Wall Street is betting the potential rollback of Obama-era initiatives to hold for-profit colleges accountable may lead to a resurgence of the beleaguered industry. Rebounding from what some analysts saw as an existential threat during the Obama administration, for-profit college stocks are up sharply since Donald Trump's November election amid renewed investor optimism — and growing concern from education watchdogs. "The perception of investors has been that the prior administration was really out to get the sector," said Trace Urdan, a research analyst at Credit Suisse. "Trump helps make these companies more investable because there is less concern that the government is trying to drive them out of business." Less than 100 days into Trump's presidency, the Department of Education under Secretary Betsy DeVos has delayed implementation of gainful employment rules, withdrawn key federal student loan servicing reforms, and signaled a less onerous regulatory environment for the essentially taxpayer-financed career education sector. While good news for investors, the policy shift may mean "buyer beware" for students such as Gilbert Caro, of Chicago, who amassed nearly $100,000 in debt while working toward a master's in business administration at DeVry University, only to end up working as a prison guard near Joliet. Caro is among the tens of thousands of for-profit college graduates alleging they were misled and seeking relief from their federal student loans. "The initial signs are troubling," said Pauline Abernathy, executive vice president of the Institute for College Access and Success, a nonprofit research and advocacy organization focused on alleviating student debt. The for-profit college industry, which saw enrollment peak during the depths of the Great Recession, became the focus of an Obama administration crackdown in 2011, taking on everything from inflated job placement claims to predatory fin
    6 years ago by @prophe
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    Purdue University’s plan to buy for-profit Kaplan University to expand its reach is the latest twist on an old idea: boost enrollment by attracting students online.
    6 years ago by @prophe
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    Purdue University held its first classes on its Indiana campus in 1874 and was ranked as the sixtieth best undergraduate university and twentieth best public university in US News and World Report’s most recent list. The University particularly excels in science and engineering, supplying a substantial number of NASA’s past astronauts, including Neil Armstrong. Kaplan University began offering online courses in 2003 as part of The Washington Post Company’s growing education division. Kaplan was started as a test prep company in 1938 by Stanley Kaplan. When The Washington Post was making more money than it knew what to do with, it purchased Kaplan in 1984 and grew it to an education empire that included brick and mortar campuses, an online university, international schools, and test preparation materials. By 2010, Kaplan was doing $2.9 billion in revenue, but then the landscape dramatically changed for for-profit education companies as they became accused of aggressive sales techniques and poor educational quality. Donald Graham, the Post Company’s CEO, defended for-profit institutions in his 2010 letter to shareholders, by arguing that its student population was more likely to face challenges because Kaplan was providing access to at-risk student populations, but that adjusting for these risk factors, for-profit schools were often better than their non-profit counterparts. Whether or not he was right, it became clear as time passed that he had lost the war. After the Graham sold the namesake newspaper to Amazon founder Jeff Bezos, the name of the company owning Kaplan changed to The Graham Holdings Company. The deal allows Purdue to create a separate, online university with little investment in technology and infrastructure. The University will pay Graham Holdings $1 initially, but up to 12.5% of the university’s revenues. The deal also involves 32,000 students compared to the 40,000 currently enrolled at Purdue. After the deal closes, only The University of Maryland would have more online students among publi
    6 years ago by @prophe
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    How do you turn a for-profit college into a not-for-profit? Partner with a public university—and pay $50 million for the privilege. That’s basically what happened on Thursday, in a financial deal between the for-profit Kaplan higher-education chain and Purdue University, the flagship Indiana college run by Mitch Daniels, the state’s former governor. The arrangement may help Kaplan parent Graham Holdings Inc. shed the for-profit education sector’s tarnished reputation. Purdue—paying Graham only a symbolic $1—immediately enters the ranks of public universities expanding their reach with online degrees targeting older Americans—many of them minorities—who are unable to attend traditional schools. “We thought it would be a bad idea for us to build this on our own,” said Daniels, Purdue’s president. “We’ve seen a lot of schools throw a lot of money at online education without much result.” Under the contract, Graham will transfer Kaplan University’s online programs, as well as its 15 campuses and learning centers—with 32,000 students—to the Purdue-related non-for-profit. Kaplan will then operate them and guarantee that Purdue’s venture, for five years, receive at least $10 million a year from its revenues after expenses. After that payment, Kaplan is entitled to reimbursement for its own cost of providing services, plus a fee equal to 12.5 percent of the Purdue affiliate’s revenues. Kaplan Higher Education reported $617 in revenue last year and almost $67 million in operating income. Kaplan was once the crown jewel of Washington Post Co., as its fast-growing colleges helped support its financially struggling newspaper. In 2013, the company sold the Post to Amazon.com Inc. founder Jeff Bezos and then changed the name of the company to Graham Holdings, after the Washington family that had long controlled the paper. Donald Graham, then the Post Co. chief executive officer, is still the Graham Holdings chairman. For-profit colleges including Kaplan have seen their fortunes dim amid scrutiny from Congress and state
    6 years ago by @prophe
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    Indiana public higher education institution eyes for-profit online provider’s technological expertise A for-profit online university will be converted into a “non-profit, public-benefit” organisation under the terms of its acquisition by a US public university. Kaplan University – which is owned by Kaplan Inc, a subsidiary of the Graham Holdings Company – is to be purchased by Purdue University, a statement from the Indiana-based institution confirmed on 27 April. Under the sale’s conditions, Purdue University will take on Kaplan University’s 32,000 students, 3,000 staff and 15 campuses and learning centres. KU will become a new non-profit university, connected to Purdue and bearing a version of its name. A corporate filing by Graham Holdings Company stated that the transfer of assets would create a “new, non-profit, public-benefit corporation affiliated with Purdue…[which] will operate as a new Indiana public university…focused on expanding access to education for non-traditional adult learners”. Mitch Daniels, Purdue’s president, said that KU's expertise in delivering online education had been attractive. “None of us knows how fast or in what direction online higher education will evolve, but we know that its role will grow, and we intend that Purdue be positioned to be a leader as that happens,” he said. “A careful analysis made it clear that we are very ill-equipped to build the necessary capabilities ourselves, and that the smart course would be to acquire them if we could. We were able to find exactly what we were looking for.” The new institution, which will consist of the seven schools and colleges comprising KU – save for the School of Professional and Continuing Education – will have its own institutional accreditation and will be governed by its own board of trustees, which will “fully control” its functions. Purdue, which will appoint the members to the board of trustees, will provide “key non-academic operations support” to the new university for an initial 30 years, with a buyout option after
    6 years ago by @prophe
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    With a surprise deal to acquire the for-profit Kaplan University, announced on Thursday, Purdue University has leapfrogged into the thick of the competitive online-education market. Purdue plans to oversee the institution as a new piece of its public-university system — a free-standing arm that will cater to working adults and other nontraditional students. The purchase, conceived and executed in just five and a half months, puts Purdue in position to become a major force in an online landscape increasingly dominated by nonprofit institutions. Until now, said Purdue’s president, Mitch Daniels, the university "has basically been a spectator to this growth" in distance education, with just a few online graduate programs. Mr. Daniels, a former Republican governor of Indiana, described the acquisition as adding a "third dimension" to Purdue, along with its research-rich flagship in West Lafayette, Ind., and its regional campuses. For Kaplan and its parent company, Graham Holdings, the deal offers a potentially profitable exit strategy for an operation that has seen its bottom line battered for several years by falling enrollments. (Kaplan now has 32,000 students.) The contrast between the typical Purdue student and the military veterans, lower-income students, and members of minority groups who make up much of the enrollment at the open-access Kaplan is "stark," said Mr. Daniels. But he said the university has a responsibility to serve such students. Millions of Americans have some or no college credits, and Purdue can’t fulfill its land-grant mission "while ignoring a need so plainly in sight," he noted while unveiling the deal at a Board of Trustees meeting on Thursday. The potential financial upsides were also clearly a factor. In an interview with The Chronicle, Mr. Daniels said it was "too soon" to talk about revenue projections. "We have hope and reason for hope" that Purdue’s new acquisition will do well, he said, alluding to the fast pace of online growth at other nonprofit institutions, like Western Gover
    6 years ago by @prophe
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    The students framed their enrollment in a for-profit as having stemmed from a desire to gain confidence, reach their potential, take charge of their lives, and shed social labels associated with a lack of a college degree. ----- What leads more than 7 percent of the nation’s college students to enroll at for-profit institutions? Much of the discussion of higher education’ proprietary sector assumes that its member schools enroll students who are academically marginal and lack other options. That’s far too simplistic, a new study concludes. The study’s authors are two scholars from the University of Pittsburgh: Linda DeAngelo, an assistant professor of higher education, and Molly M. McClelland, a doctoral student in administrative and policy studies there. They based their analysis on extensive interviews with 19 students who had attended two-year, for-profit colleges before enrolling in a private, four-year, urban college. The students ranged in age from 20 to 60 and were diverse in terms of their race, ethnicity, gender, and major. Contrary to common stereotypes, the two researchers say, their subjects generally saw their experience with a for-profit college as positive, and said little that traced their decision to enroll in it to poor academic performance in high school. Generally, they framed their enrollment in a for-profit as having stemmed from a desire to gain confidence, reach their potential, take charge of their lives, and shed social labels associated with a lack of a college degree. In keeping with standard research protocol, the researchers name neither their subjects nor the private college where the study took place. They caution that their study’s results might have been skewed by its focus on students who were successful enough to move on to a four-year institution. The researchers also stress that their findings should not be perceived as an endorsement of the for-profit sector, which continues to have low graduation rates and includes colleges that leave students heavily indebted and faci
    6 years ago by @prophe
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    Purdue University in Indiana announced plans Thursday to start a new online school by acquiring for-profit Kaplan University, one of the top destinations for military students and veterans. The unlikely relationship between a public land-grant university and a for-profit school stems from “mutual interests and goals” and a shared desire to expand access to education, according to the terms of the agreement between Purdue and Kaplan’s parent company, Graham Holdings. “None of us knows how fast or in what direction online higher education will evolve, but we know its role will grow, and we intend that Purdue be positioned to be a leader as that happens,” Purdue President Mitch Daniels said in a statement. “A careful analysis made it clear that we are very ill-equipped to build the necessary capabilities ourselves, and that the smart course would be to acquire them if we could. We were able to find exactly what we were looking for.” According to information provided by Purdue, the university’s feasibility studies indicated it would take 36 months to create a single degree program and much longer to create an online school of the magnitude it is acquiring with Kaplan. With Kaplan comes 32,000 students, 3,000 employees and 15 campuses and learning centers throughout the Midwest and East Coast that will fall under Purdue when the acquisition becomes official. The process could take several months, according to Kaplan Inc. spokesman Mark Harrad, as the U.S. Department of Education, state agencies and the institutions’ accreditor agencies still need to sign off. A Military Times analysis of fiscal year 2015 federal data show Kaplan Higher Education Corp. was the 11th most popular destination for active-duty service members using tuition assistance benefits and the 18th most popular school for Post-9/11 GI Bill users. That corporation consisted of Kaplan University, which Purdue acquired, as well as several smaller schools that are no longer part of the company and weren't part of the deal. But Kaplan University acc
    6 years ago by @prophe
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    In a move that has raised eyebrows with higher education experts, a well-regarded public university has forged a deal with a for-profit college. Purdue University announced Thursday that it has paid $1 up front to acquire assets from Kaplan University in an attempt to expand its offerings in online education targeted toward adult learners. Purdue President Mitch Daniels said at a Board of Trustees meeting Thursday that the Indiana university wants to be a leader as online education continues to grow, but that it wasn’t capable of doing that on its own. “Today’s agreement moves us from a standing start to a leading position,” Daniels said in a statement. Purdue will turn Kaplan into a yet-to-be-named new public university that will, for the time being, continue offering the same set of academic programs. Kaplan’s 3,000 employees will be transferred, as will its 32,000 students. Purdue says it will take over the academic side of the operation, while Kaplan will continue non-academic services, including marketing and student recruitment. The new university will be self-sufficient and run off of tuition revenue and fundraising. Students will pay Kaplan's existing tuition and fees, although Purdue said Indiana students may receive an in-state discount. Trouble-Plagued Industry While Kaplan has one of the stronger names in for-profit education, the industry has faced years of declining enrollment, heightened regulations, legal battles, and broad criticism for loading students up with debt and providing meaningless degrees. At Kaplan itself, enrollment fell 22% in 2016 and its revenue is down 40% from 2014, according to an annual report from Graham Holdings, which owns Kaplan. As David Halperin, a policy analyst who writes about for-profit colleges, points out in a piece on Huffington Post, Kaplan has been investigated by or settled cases -- some for more than $1 million -- with attorneys general in Delaware, Florida, Illinois, Massachusetts, and North Carolina, as well as with the U.S. Departments of Education and Just
    6 years ago by @prophe
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    About 2,000 Kentucky students are eligible for debt relief after getting loans to take online classes through the for-profit Corinthian Colleges Inc., Attorney General Andy Beshear announced Thursday. In Kentucky, the company solicited students under the name Everest College and Everest University. Corinthian also marketed its WyoTech career training program throughout the state. Beshear’s office is notifying eligible students by letter of the cancellation of the federal student loans they used to attend Corinthian schools. Students whose federal loans are canceled will not have to make further payments on the loan and any payments made by the student will be refunded. “As attorney general, my mission is to protect Kentucky’s families from consumer fraud, especially the ongoing deception by for-profit colleges like Corinthian,” Beshear said. “We must do everything in our power to ensure eligible Kentucky students get all the debt relief from fraudulent Corinthian loans.” Federal and state investigators examined Corinthian’s job placement rates, alleging that the company falsified those rates between 2010 and 2014. Currently, Corinthian is not allowed to enroll students and is only remaining open to “teach out” current students. Beshear’s letter will go to Kentucky students who fall within the U.S. Department of Education’s findings of fraud concerning Corinthian, and who are eligible for a special “streamlined” process to discharge their federal student loans. Any student, however, who attended Corinthian Colleges or any other school and believes the school lied about job prospects, the transferability of credits or other issues may apply to have his or her federal student loans discharged using the Department of Education’s universal discharge application at https://borrowerdischarge.ed.gov. More information is available at https://studentaid.ed.gov/borrower-defense. Beshear said Kentucky and states across the country are keeping pressure on the federal government to honor their commitment to help student
    6 years ago by @prophe
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    For-profit universities in the US have a record of aggressive marketing practices, poor completion rates, and producing graduates with uncertain job prospects and high levels of debt. So why would Purdue University, a state university in Indiana founded in 1869, buy Kaplan University, a for-profit institution with a record of federal investigations and lawsuits from former students? Purdue is eager to offer online education, and acquiring Kaplan was cheaper that building a new system form scratch, Purdue president Mitch Daniels said in a statement. The school doesn’t have to pay anything upfront, and “will enter into a long-term transition and support agreement, with a buy-out option after year six,” according to a FAQ page. For-profit universities in the US have a record of aggressive marketing practices, poor completion rates, and producing graduates with uncertain job prospects and high levels of debt. So why would Purdue University, a state university in Indiana founded in 1869, buy Kaplan University, a for-profit institution with a record of federal investigations and lawsuits from former students? Purdue is eager to offer online education, and acquiring Kaplan was cheaper that building a new system form scratch, Purdue president Mitch Daniels said in a statement. The school doesn’t have to pay anything upfront, and “will enter into a long-term transition and support agreement, with a buy-out option after year six,” according to a FAQ page. Public universities have been forced to become more entrepreneurial as states have dramatically cut funding. It’s no surprise that Daniels, the former Republican governor of Indiana who slashed the state’s higher-ed budget, would be pushing Purdue to find new sources of revenue. Still, it’s an unexpected turn in American higher education, with a market-driven disruptor swallowed by the stodgy old incumbents. But it may be that the for-profit executives just misread the market signals: Students, it seems, didn’t just want convenient education; they also wanted it to be p
    6 years ago by @prophe
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