A New Leaf?

The first institution I worked for in the field of higher ed was the University of Phoenix and I admit that, at the time, I never really paid much attention to the debate between for-profit / non-profit (and / or not-for-profit). I was in my mid-20’s, was happy to have a job and loved helping students. After working there just a few months and receiving a promotion from Student Services Support to Academic Advisor though, I started to learn more about the campus operations and the organization as a whole, and that’s when my education about higher education really started.

Part of my training as an Advisor, was to spend time sitting in on some of the recruiting appointments so I could gain an understanding of how the entire enrollment process worked. While there were a couple of recruiters who were very upfront and clear about exactly what prospective students could expect, the vast majority of the recruiters that I watched were really just there to tell the student what they wanted to hear, and whatever it took to get them to sign the application and sit down to complete the FAFSA:
- Sure, you can always take your classes on Tuesday nights only
- Of course you can complete your degree in just two years
- No, there isn’t any math required for your degree
- I’m sure all of your transfer credits will apply to your program

As an Advisor, I spent a great deal of time doing damage control by trying to get students to be realistic about what it would actually take to complete their degree (basically correcting all of the inaccurate information the Recruiter had told them). One a particularly challenging day, I remember speaking to one of the Recruiters about how it would be so much better for everyone if the Recruiters would just be honest with prospective students up-front, and his response was, “well, we really want you guys to get your bonus each quarter though”. After hearing him say that, I remember the feeling in my gut that told me, this was not the place for me.

While UoP had eliminated paying the Recruiters bonuses for the number of students they enrolled, they still had incentives in place to keep the recruiting department performing at their peak…a large part of the employee’s evaluation was based on how many students they enrolled (and evaluation performance was tied to raises) and if the Recruiters for a particular campus met a particular enrollment target, all of the full-time staff at that campus (except the recruiters) received a bonus. It was a tactic to keep all of us tolerating the inaccurate information the Recruiters gave out.

Fast-forward almost 15 years (and a transition from for-profit, to private not-for-profit, to public), and I have learned a great deal, but so many of the lessons I learned while at UoP stick with me; the biggest one is…just be honest with students about what their situation is, and what they are facing. As I read the article A New Leaf at Phoenix? in Inside Higher Education about some proposed changes that the University of Phoenix announced it was going to make starting last year, I had a flashback and was somewhat surprised that many of the practices I experienced at UoP were still going on.

The article discussed changing the title from Recruiter to Counselor (really though…what’s in a name??), removing the recruiting productivity piece from the performance evaluation of the Recruiter (oh, I mean Counselor), focusing on maintaining a longer-term relationship with the student instead of primarily being focused on just getting them in the door (and not really caring if they stuck around after that), and being less aggressive in their follow-up with prospective students.

While the overall tone of the article seemed to be that UoP was embarking on these changes because it was the right thing to do, my cynical-former-employee self simply said, “yeah, right”. They’re doing these things because they saw tighter regulation and scrutiny on the horizon and did what any smart business (that wants to stay in business) would do…turn pending legislative mandates into a public relations opportunity. It may be a new leaf, but it’s the same old tree.

KY AG Fights for Consumer Protection

Kentucky Attorney General Jack Conway is on a mission. His goal is to advocate for consumers in lawsuits against for-profitschools that misrepresent themselves in some way. 


Two of the institutions he has already taken on are the National College of Kentucky,Inc., for allegedly falsifying job placement numbers and Educational Management Corporation (EDMC), which owns Argosy University and Brown Mackie Colleges. EDMC is charged with violating federal law by paying admissions officers a commission based salaried for the number of students recruited.

Conway’s investigations into the for-profit sector started when his office began receiving complaints of students being exploited financially by seven of the more than 100 for-profit institutions in Kentucky.

Conway is not the only attorney general seeking action against these institutions. He is joined by 22 other states investigating these institutions. And Conway has gained significant support from the media and other political figures, such as the director of the C.I.A. and his wife, Hollister K. Petraeus.

Actually, Petraeus had an interesting letter to the editor on the topic in the New York Times back in September. In this letter, Petraeus condemns for-profit colleges for maliciously misleading veteran students by enrolling them and then offering no academic, financial or counseling support. She states for-profit schools use military students for their G.I. Bill monies, which in turn maintain the institution’s ability to receive other federal student aid.

Another editorial in the New York Times in Octoberexpands on this issue. For-profit schools have collected 37 percent of dispersed G.I. monies but enrollment numbers show only 25% of veterans have been trained. The first-year attrition rate is astounding, noted at 409,437 students. This group is lead by the Apollo Group, the umbrella corporation for the University of Phoenix. This was also noted in a Chronicle of Higher Ed article in September.

 

Not all for-profit schools are using immoral practices and it is important to acknowledge the work being done by The Foundation for Educational Success, an independent organization focused on enforcing standards for the for-profit colleges. Unfortunately, only approximately 17% of the nation’s for-profit schools have endorsed these standards.

The work of Conway and others in making these institutions more accountable is impressive and imperative. I am pleasantly surprised to see the standards and ethically driven improvements of those institutions involved with the Foundation for Educational Success. When I review the advertisements and job descriptions of for-profit schools, I am now inclined to check the Foundation’s website and see if the institutions has accepted and is working towards the standards. 

We expect public higher education institutions to be accredited or to maintain self-assessments using the Council for Educational Standards measurements, I’m just glad to see those expectations being applied to other educational outlets as well.

Profits off For-Profits

While browsing through the Association of Private Sector Colleges and University’s fall magazine, The Link, I was struck by the advertisements. To be clear, a “Private Sector College” is a euphemism for a proprietary institution, and the bulk of their quarterly magazine’s content, at least for the last year or two, is devoted to criticism of gainful employment legislation, and to an extent, whining about public and not-for-profit privates. As you can imagine, their magazine is chocked full of marketing for various companies which offer services that the for-profit sector can use to maximize their profits—things like lead generation companies, website analytic tools that promise to give you more insight about the prospective students checking out your website, and online career tools that allude to higher placement rates. None of this was surprising to me—after all, it is only natural that for-profit educational institutions are going to be viable marketing targets for companies looking to make money in a new area.

What struck me most however, were the ads that were offering service in the area of compliance. For example, Compliance Point is a company that is offering their ACE program, an ‘online compliance portal’, to colleges and universities. Their services include everything from ‘secret shoppers’ to snoop on Admissions Representatives to job placement verification/compliance, and even general “gainful employment compliance”. In this one magazine, I counted no fewer than 5 ads which offered compliance-related services—offering to be “your source for default prevention services” and using terminology such as “compliance driven”, “default preventative”, and event the classic fear-tactic: “are you protected?” to lure the institutions to their compliance-management product.

In my naiveté, I was imagining gainful compliance being handled by the institutions directly, perhaps with the assistance of outsourced services for certain components. I was picturing concerned professionals thinking strategically about how practices might need to change in order to comply with regulations, and discussing strategies with faculty and administrators at various levels of the institution. In the early stages of the development of gainful employment legislation, when I was working at a for-profit, I was not imagining gainful employment compliance as the type of thing that we could simply hand off to an outsourced company to manage. Although I was concerned about the work-load and transitional pains that we might experience, completely outsourcing this responsibility seemed… well, irresponsible. It appears that since that time (I left the for-profit sector just over a year ago), compliance management for gainful employment regulations has blossomed into a full industry itself… and, I imagine, a potentially quite profitable industry too.

Although the various compliance management products are offering to take the burden of compliance management off the shoulders of the institution, I have to wonder about where the buck will stop when inevitably a client of one of these companies is found to be non-compliant. Since the Dept. of Ed. will come after the institution, will the institution attempt to turn around and go after the compliance management company? The compliance management companies are surely aware of this possibility, and they are likely writing their contracts with the institutions to protect themselves (note: I tried to find more information on the websites that I visited, but they were all mysteriously vague…). In short, it is unlikely that they are actually taking on the full responsibility, as their websites and marketing would have you believe.

In any case, here we have profits to be made off the for-profits. This is just one example of further commercialization of higher education—perhaps amplified because it is (mostly) focused on the already for-profit sector. What’s next?

Student loans, for profit

As student financial aid is increasingly used at for profit institutions, people are taking notice. For profit institutions offer degrees focus on specific careers, often geared towards non-traditional students. Enrollment at for profit institutions has increased 225% since 1998. As the government offers fewer scholarship and grants, they encourage and support students taking loans to invest in their education. However – as more and more students are going into debt, are they being taken advantage of by for profit colleges?

About 10% of college students go to for profit colleges, but over half of loan defaults come from for profit institutions. Colorado is one of 5 states with a default rate over 11% (the others are Iowa, Arizona, Arkansas, and Indiana) . For profit colleges attract students who may already be less likely to be able to pay back their loans, but are they also responsible for making sure half of their students don’t default on their loans? Is college more a benefit to the student or to the community (going back to the discussion of a welfare vs neo-liberal state)? If it’s a commodity for a student to pursue, why should the college be responsible or accountable for their debt? Should Best Buy be held responsible for their customers’ credit card debt?

This article has an interesting perspective, that sheds light on how an education is being viewed. In it, they quote the Minnesota Attorney General who says – do your homework. Make an informed decision about where you go to college. What a remarkable idea! This article also shed light on some of the limitations of for profit colleges including their higher cost and lower graduation rates.

You may have also heard that the government is looking into the admissions practices of for profit institutions. This report shows how last fall, the US Government Accountability Office posed as students interested in attending for profit institutions and learned about suspicious admissions practices. Several schools encouraged students to falsify information to better qualify for student loans.

Increased regulations on admissions procedures have, understandably, hurt for profits. Devry’s stock fell 22%. As the government looks to student loans as the solution to increased cost of higher education, they are now faced with the question of how students get to use that loan money. Should we restrict how students spend their money? I know of students who use the money to buy cars and computers, clearly there are many more who choose to spend it on a poor degree or a less-than-reputable institution. What is the government’s role in regulating this?