Tag Archives: for-profit schools

August Survey Halfway Report

Halfway through our August survey on the Obama administration’s education leadership, we bring you a report of the results so far. If you haven’t yet participated in our August survey, you can vote here.

The survey question this month is:

Do you think the Obama administration and Secretary of Education Arne Duncan are doing a good job of leading the country in the right direction with education?

The answer choices are:

• Yes: they really “get it.”

• Yes, national standards and the reform funded by Race to the Top are really needed, but we still need an overhaul of No Child Left Behind.

• Yes, the oversight of the for-profit schools is critical, and the other things I can live with.

• No, they’re off-track in just about every possible way.

• No, some things are okay, but Race to the Top and the national standards are a major step in the wrong direction in terms of educational quality and giving up local control.

• No, the federal government should be moving towards less involvement in education, rather than more.

Other (please specify)

So far, 81 votes have been cast, with 19 people (23.4%) voting for one of the three answers beginning ‘Yes,’ 55 (67.9%) voting for one of the three answers beginning ‘No,’ and 7 (8.6%) choosing ‘Other’ and leaving a comment.

The leading answer is: “No, the federal government should be moving towards less involvement in education, rather than more,” which has 33.3% of the vote.

Second place goes to: “No, they’re off-track in just about every possible way,” with 24.7% of the vote.

The least chosen answer is: “Yes, the oversight of the for-profit schools is critical, and the other things I can live with,” with 2.5% of the vote.

The responses to ‘Other’ include the following (lightly edited for typos, etc.):

• “After 10 years in education I have left the classroom and taken my 3 children with me, we will be homeshooling from now on. Until NCLB is recognized as the “Every Child Held Back” program that it is and we stop punishing teachers for going into the most illiterate schools in the country by touting Pay for Performance as a means of rewarding teachers that take the easy way out, it really isn’t that hard to teach children who can read and write BEFORE coming to school and who have parental support; well until that time my children and I will not set foot in a public school again.”

• “not so rigid on certification for international teachers who are already certified and brilliant on their country. And no discrimination on application. They are employing a lot of international teachers not knowing they are victimized by private agencies hiring them back home, charging them their whole salary upon employed and leaving them destitute and not to be renewed for the next school year because of the probationary certificate for the expensive visa they have paid from hard work. May the government have pity on the poor but bright international teachers that they are hiring for lack of teachers in science, math and special ed in the USA.”

• “Education is one of the small things in these bad economic times. Obama needs to get the economy better before he tries anything big like education.”

• “NCLB needs a major over-haul, less emphasis on AYP [Annual Yearly Progress] and less testing requirements. Students should not be tested every year, every other is plenty. National standards are already in place and working well. Merit pay could work if done right: it should be based on teacher performance and training, not student performance. Race to the Top as it stands will harm students. The biggest change that needs to happen is FUNDING REFORM. School funding should not be linked to property tax. At least half of school funding should come from the federal government. Our schools are not equitable and no amount of reform will help our students until school funding is equitable.”


• “Get rid of the Unions and schools might have a chance!”

• “more vouchers and school choice—they are good on charter schools

If you haven’t yet voted, we’d like to include your opinion for our final report, so please take the survey here.

For-Profit Schools: New Proposal

On May 19, we discussed the new rule proposals for “For-Profit Schools” arising from concerns that the vocational or technical training they offer does not, in many cases, equip students to earn enough to pay off their school debt.

In our June 21 blog “Federal Student Aid Rules Rollout,” we explained that on June 16, the US Department of Education had issued a proposed rule on the first 13 of 14 issues concerning federal student aid, and that the 14th was being held for reconsideration.

Today, the results of that consideration have been announced.

The U.S. Department of Education today released a proposal that ties the eligibility for federal aid for students at for-profit schools such as University of Phoenix, ITT, and Corinthian Colleges, Inc., for example, to the rates of former students’ salaries and debt repayment.

In an article titled “Obama Cracks Down on For-Profit Colleges, Links Loans to Income,” Bloomberg reports that US Secretary of Education Arne Duncan stated in an interview yesterday that the new ruling would mean that 5 percent of all for-profit education programs would not qualify for any federal student aid whatsoever.

The proposed criteria are two-pronged. Either a for-profit has to demonstrate that a minimum of 45 percent of its former students are successfully paying off their student loans or it must show that graduates are paying less that 20% of their discretionary income or 8% of their total income on repayment of student loans.

A Signal Hill Capital Group analyst, Trace Urdan, suggested that high-priced programs that are intrinsically linked to low-paying jobs—such as criminal justice degrees—may be terminated to new students and eventually phased out, if the proposed rules go through.

Reaction from one of the for-profits cautioned about cutting off education access, while the associate executive direction of the American Association of Collegiate Registrars & Admissions Officers, Barmak Nassiarian, cautioned that standard that allows federal student aid may prove to be too low.

The Wall Street Journal in “U.S. to Scrutinize For-Profit Career Colleges” reports that for “many” for-profits 90 percent of their revenue is through federal aid. There is a 45-day period for comments on the proposal, which would not go into effect until the school year 2012–2013.

Community College Developments

Community colleges made the news several times this week for reasons associated with budget, but with two very different outcomes. In Arizona, USA Today reports the approach of a mainly online community college that has revamped its course texts in “Arizona college cuts textbook costs the old-fashioned way.” Rather than shifting to ebooks to save students from expensive textbooks, Rio Salado College allowed its 26 full-time, on-campus faculty to designate one text for all sections of a course, even those sections taught by the over 1000 off-campus faculty, who have no voice in the matter.

Because of the large numbers of identical books ordered, the college is able to cut a deal with a publisher—in this case Pearson—that saves students a lot of money.

Off campus instructors, all adjuncts, are able to personalize their sections of courses to a certain degree using the course learning management system, but there are serious limitations to this. However, with the change, students still have a physical book and it is estimated that they have saved $6 million in textbook expenses in the 2 1/2 years since the approach began.

It is worth noting that other colleges are moving entirely to ebooks (full disclosure: I’m trained as a reading clinician, and I find that approach problematic), and that the other colleges taking this approach are largely for-profits.

Community colleges are also the subject of a New York Times article “Community Colleges Cutting Back on Open Access.” This article reports on the over-enrollment and underfunding of community colleges that is leaving students who have begun a program—whether to achieve vocational goals or to complete enough courses to transfer into a 4-year program—stopped in their tracks. Course cuts have eliminated some courses that students need, and sometimes there isn’t room in the classes that are offered.

In short, the reality of the community college as an open access institution is failing.

But there are those ready to fill the gap, if they can. The New York Times also reported in “For-Profit Colleges Find New Market Niche” that Kaplan University, a for-profit, is offering those students who want to go to a California community college but have been wait-listed for admission or a class, a chance to take Kaplan online courses with a tuition discount…. a discount that means that the course only costs nearly 10 times as much as it would cost at a California community college. Princeton Review has a similar relationship with a Massachusetts community college, but charges only double the community college rate.

The faculty of the California college voted in the spring to urge that the understanding with Kaplan be withdrawn.

For background on community colleges, we invite you to check out our article “University vs. Community College.”

Federal Student Aid Rules Rollout

On June 16, the US Department of Education issues a Notice of Proposed Rule Making (NPRM) dealing with higher education. Thirteen of fourteen issues under consideration were announced, with the fourteenth being taken under advisement. These proposals are shaped by testimony and subject to public comment. Here’s a round-up of the proposed reforms:

Student Eligibility for Federal Funding

• In the face of an increasing number of high school “diploma mills” (organizations that grant diplomas that do not represent the legitimate of a legitimate secondary school course of study) Institutions of Higher Education (IHEs) and postsecondary vocational schools must find a way to validate diplomas that are in doubt.

• Students without a (valid) high school diploma would become eligible for federal student aid if and when they complete 6 credits of college credit.

• IHEs and postsecondary vocational schools must implement “satisfactory academic progress policies” (the policies that determine if—by the institution’s standards, students are eligible for financial aid; moreover, they must abide by them.

• The process for verification of information reported by students (and parents) on the Free Application for Federal Student Aid (FAFSA) will be streamlined, reducing—for some students—the amount of additional information they will have to supply.

Consumer Protection

• The USDOE’s authority to act against IHE’s and postsecondary vocational schools that deceive students in advertising, sales, and/or marketing is strengthened.

• Changes to the rules about admissions recruiters compensations intended to help discourage recruiting practices in which students were pushed towards programs were a bad fit for them, either because the financing was beyond their likely means to repay, they were not qualified for the program, or they were unlikely to succeed in it.

• States—some of which have not satisfactorily establish an approval and monitoring process for IHE’s and postsecondary vocational schools—must now do so.

Course Eligibility for Federal Funding

• A new definition of a credit hour, which has here-to-fore not been standardized, and new procedures for accrediting agencies to determine if IHEs and postsecondary vocational schools are using the assignment of credit hours appropriately.

• New regulations on the amount of a program in one IHE or postsecondary vocational schools that can be delivered by another institution, and eligibility requirements for all bodies involved.

• New rules for counting repeated coursework towards eligibility for full-time standing.

• Closing loopholes in the student withdrawal from studies process so that unused funds are properly returned to the USDOE.

• Changes in disbursement to rectify the situation in which students who need their federal funding before the start of school (e.g., to purchase books) will receive it earlier.

For Profits

• In the proposal that is being held, the USDOE is considering requiring for-profit IHEs and postsecondary vocational schools

a) to disclose the program’s graduation rate and job placement rate to prospective students;

b) to disclose information so that the USDOE can calculate student debt and income after completing programs.

The Wall Street Journal reports that the for-profit schools were very pleased that the final NPRM was held for reconsideration because according to industry lobbyists, it could have a profoundly negative effect on the for-profit schools

More Information

You can find more information about the process here.

You can find a Microsoft Word version of the complete NPRM in the small “Related Resources” section to the right of the first paragraph of the press release here.



For-Profit Schools

For-profit Schools have made the news the last few days as rumors that U.S. Education Deputy Undersecretary Robert Shireman is planning to resign have surfaced. Shireman has been considered a leader among those seeking tougher regulations of for-profit schools—regulations that could potentially reduce their Federal financial aid, which had increased six-fold from 2000 to 2009.

What are the for-profit companies for which Shireman has wanted to see increased regulation? They include Corinthian Colleges, Apollo Group Inc. (which owns University of Phoenix), Career Education Corp., DeVry Inc., and ITT Educational Series Inc. Upon news of his leaving, stocks rose significantly Monday for all of these companies. On Tuesday, with breaking news that Shireman would continue his relationship with the US DOE in an advisory capacity, the stocks all slid down, some more than others.

One of the main criticisms of for-profit schools is that they serve a predominantly low-income population of students who can end up with large, and sometimes unpayable, debt. Shireman had proposed that for-profit schools be required to demonstrate that graduates of the for-profit programs would have incomes commensurate with paying back their student loans.

Many of the schools that offer online technical or vocational training are for-profit schools. Certain of them have been known to have issues with proper accreditation as well as the funding issues, but careful vetting can help you sort these out. You can find useful information for making an assessment in our articles: “Distance Learning” and “Online Technical Schools.”

Technical and vocational education is also offered through schools that are not-for-profit, like high schools with technical centers, community colleges, and state-run colleges, universities, and technical colleges.