For-Profits Starting to Consider Student Outcomes and Providing a Niche for Military Education

Although I've never personally considered enrolling and trying to complete a degree online, I've always had a negative (maybe stereotypical) opinion of online education. I know people who are studying in these for-profit programs, and despite a seemingly non-existent application process, they appear to be earning a high quality, challenging, and applicable education. However, I still seem to cringe when I think of "faceless" students across the globe who earn not only undergraduate degrees, but graduate degrees, in fields such as counseling, education, and other helping professions. In my limited viewpoint, I assumed these universities flew under the "We'll take anyone who can pay us," mentality to enrollment, despite any indepth personal contact with potential students to assess capabilities, appropriateness, or career goals.

While much, little, or somewhat of my assumption may have been true, it may be time to reconsider this opinion. In a recent article in InsideHigherEd.com, we see many for-profit institutions such as Kaplan and University of Phoenix reconsidering their enrollment strategies to become more selective and accountable to student outcomes. For-profits globally have taken a considerable hit in recent years with enrollment--Kaplan alone experienced a 42% decline in applicants this past year. However, authors of the article/blog claim that Kaplan and U of P may be doing this "voluntarily." These institutions are beginning to become more selective in their admissions, and releasing "unprepared" students without stapling debt to their efforts. The article discusses an attempt to lessen the emphasis on the original "business model" to education, and to start better serving student consumers, despite the net monetary profit this will risk. Reading these words on paper (or on screen) was one of those "maybe there is still some good in this world" moments for me for sure!


Pairing my previously narrow opinion of these for-profits, and the little I know about the daily tasks of our U.S. military overseas, I came across yet another humbling article in the Chronicle recently. The piece titled, "For U.S. Soldiers in Afghanistan, Online Courses Fill a Valued Niche," authors explain how the U.S. military is meeting the increased need for personnel overseas with an offer to pay for online education. Within ten years of this ongoing ten-year war, military members in Iraq and Afghanistan taking online courses rose from 15% to over 60%. As a result, our military members are now beginning to surpass non-service citizens in educational success. Fewer high school dropouts and more college graduates are within our military than ever before, and approximately 92.5% have high school diplomas compared to 82.8% back in the states.

Reviewing both of these articles has given me a broader and less "simple" perspective on online education and for-profit institutions. Increased accountability on behalf of enrollment hungry universities will undoubtedly lead to more student success, higher graduation rates, and fewer gate-keeping ethical issues. As a country, I am overjoyed that our government has offered to provide a full-expense paid education via distance learning for those who are serving our country for months and years at a time.

Kylie

Donor Dance

In the efforts of institutions to raise money I came across this article in the chronicle referencing donors. This is an area of higher education that I honestly spend little time thinking about. However, this article gave rise to the idea that I should be. I often do not wonder what it takes to get donations and naively think donors are folks that are alumni and we just spend money wining and dining them for dollars or real estate or whatever it may be. To some extent I risk looking uninformed here but I will own that.

The article discusses how a wealthy alumna contacted an institution wanting to endow a faculty position. Which turns out it meant a gift of about $2million dollars but only if the faculty member hired was devoted to teaching and doing research on psychoanalysis. The university ultimately turned it down stating it felt it was to specialized of an offer. I applaud the ability of the institution to turn down such an offer. Then I thought, how many of these offers are made to institutions and how often are they turned down? If they are not turned down, how are they affecting our institutions as a whole? The article goes on to state that not all colleges would reject such a gift for a variety of reasons. Which leads me to a research topic - what are the underlying effects on education due to donors and the way they wish their money to be used?

The fund raising article goes on to explain the two camps...first, the fundraisers who want engagement. They want engagement for their donors and feel donations follow a circle model of "engagement, communication, and gifting." On the other hand many provosts and professors, according to the article, see donations as a one way road. The donor, donates and moves on. Edward J. Kvet, Provost of Loyola University in New Orleans states in the article, "on the academic side, we just want them to be there in name only."  The fundraiser or in the case of this article, Thomas W. Young, Vice President for Institutional Advancement at Gustavus Adolphus College, recognizes that sometimes donors can cross the line from engagement to interference. This is the difficult dance - how to engage donors to feel involved in how their donation is being used yet limit their involvement since the money is donated and to some extent under institutional control.

This article brought back a rather interesting and funny re-run episode called the benefactor factor episode from The Big Bang Theory show. Basically, this episode covers a similar idea of the chronicle article. A character in the episode is unsure if he should sleep with a prospective donor of the institution to ensure his department gets the money. As I type this it does not seem that it would give you a laugh or get you thinking but if you have the time I recommend watching it and see what your reaction is.

I think this article and episode really show how the dance with donors to donate cane be quite challenging. In addition the article shows how difficult it can be to turn down donations and to balance the two camps each who feel they have leadership over the donation.

An additional point of interest is one of the donors from this article is now a board member for the institution - engagement or interference?

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?