Higher education, like the human species itself, is the product of evolutionary forces that produce structures -- the DNA if you will -- that enable one variant to thrive and cause another to falter.
The life form known as higher education was hatched in a monastic cocoon in the 10th century. From this beginning, higher education institutions took shape as an evolving species, changing form and mission in response to external forces. Familiar milestones on this evolutionary journey include secularization, development of academic disciplines, evolution of administrative structures, growth of the research university, and the concepts of academic freedom and tenure.
With the dawn of the Knowledge Age, the evolution of higher education has drastically accelerated so that the pace of change is now measured in years, not centuries. Higher education today is a global commodity with all the competition and product diversification that entails, including the splitting of the production from the distribution of knowledge. This is much like the movie industry, where a few companies make movies and many companies distribute them in theaters, on television, and on DVDs.
Research I universities that produce new knowledge thrive in this new environment, but they are now dependent upon strong financial links with the economic agendas of companies and countries. They are no longer the sole citadels for the production of new knowledge, but rather just one node on a global network of corporate and national R&D sites.
The transformation of Higher Education Life Forms on the distribution side of knowledge is even more dramatic, evolving a new species that concentrates simply on distribution of currently available knowledge.
This new species features a small core of knowledge engineers who wrap courses into a degree to be distributed in cookie-cutter institutions and delivered by working professionals, not academics. There is no tenured faculty, no academic processes; the sole focus is on bottom-line economic results. These 21st century institutions are not burdened with esoteric pursuits of knowledge; rather, they focus on professional degrees for adults that have a fairly clear market value for a given career path.
The exemplars of this new species are the for-profit universities, which are cutting their teeth on the weakness of the 20th century universities. Though new at the game, in a few years they will be capable of hunting with lethal success. This new species is market-driven. Its key survival mechanism is the ability to rapidly evolve to new environments and to position in the market. Since they do not carry tenured faculty, they can rapidly jettison disciplines of study that do not penetrate market. Since they do not have academic processes, they can rapidly bring to market programs that can capture market share.
Certainly, not all for-profit providers have the core capabilities to compete long term in the market. Some emerge quickly and as quickly become extinct, but others are proving quite adept at drawing strength from this globally competitive market.
As mass, longevity and a voracious need for large quantities of prey (resources) proved lethal to the dinosaurs in the stark environments created by global darkening, so the universities of the early 20th century may face serious thinning or perhaps even extinction in the new globally competitive environment of higher education. Universities rooted in the early 20th century are intrinsically inefficient in today's environment of market valuation and brand identity. Given the current internal structure of tenure and faculty governance, these universities lack the capability to respond to market forces in a timely fashion -- to close out product lines no longer playing in the market and rapidly bring new and more efficient product to market.
Still, these once elegant life forms persevere, but for reasons having nothing to do with innate capability to embrace change. Instead, at the undergraduate level it is the instinctual and perhaps irrational desire of many parents to see their children prosper in a traditional liberal arts environment, and so their willingness to spend inordinate amounts of money for education. At the graduate level, the "brand name" is the driver. The reputation of leading institutions, established in an era before global market competition, is based on a footing much different from that used today to obtain market position, but it still works to sustain the life form, at least among a few elite universities.
In addition, traditional universities have benefited from some serious slack in the evolutionary rope. The Industrial Age required a few knowledge workers and a lot of folks doing heavy lifting, whereas the Knowledge Age requires vast numbers of educated workers. Almost overnight, this has led to a massive spike in global demand for education, with motivated consumers increasing perhaps 100-fold. What was the privilege of a few has become the expectation of all.
But global supply falls far short of meeting demand. With a population of 295 million, the United States has only 15 million active seats in the higher education classroom; China, with a population of 1.2 billion, has 2 million seats available; Brazil, with a population 170 million, has 2.5 million seats available.
This imbalance between supply and demand has creating a robust market for all providers. Suppliers of higher education simply have to dip their nets in the water to catch students. There is not yet the fight-to-the death competition for market share, and inefficient institutions have received a short reprieve from their evolutionary fate. But at some point, as with all markets, a saturation point will be reached, with supply outstripping demand -- perhaps in 5, perhaps in 15 years. When this inversion occurs, those life forms with the required flexibility to quickly adapt to a fiercely competitive environment will survive and the others will fade from memory.
As there is private health care for those who can afford to pay at any price point, so there will continue some form of higher education that will meet the need and the check book of those wealthy enough to afford it. But for most now driven to higher education to meet the requirements of the Knowledge Age, it is value (the ratio of perceived quality over price) that will be the key determinate of what institution they will choose for their tuition dollar. To further stress the current market, state funding is not keeping up with inflation or enrollment growth, forcing higher education institutions to rely more on tuition and donations. Thus higher education is being pushed to stand on its own financial bottom rather than be a subsidized commodity, once again forcing the value proposition.
So what will be demanded of 20th century universities to survive when market supply reaches or exceeds demand? As in every market, those producers that have driven efficiency into their production system and responsiveness into their market positioning have at least a change at surviving. But the challenge is daunting because the 20th century university is trying to play serious catch up in new markets -- adults, women, diversities, the under privileged -- while using the same mentalities that allowed them to attract the 18 to 25 year old male.
As with IBM, which played in the personal computer market, but really lived in the mainframe business market, there is no fire in the belly of 20th century universities for these new markets. These institutions have not changed the way they go about their business to serve these new markets; and if there has been some change, it has been accompanied by the widespread grumbling of the faculty: Why do we have to teach at night? Why do we have to teach at multiple campuses? Why do we have to provide support services in the evening? Why do we have to teach students who aren't educated the way we were? Why do we have to schedule classes so students can maximize their employment opportunities?
Meanwhile, 20th century universities are running average price increases twice the inflation rate and carrying multiple overheads of unproven value to the buying market. Walk into the library of any university today that has ubiquitous connections to the Internet, and you will find the stacks empty of both faculty and students. Is the traditional library a value add or a costly overhead? As with IBM, 20th century universities believe their brand will sustain price increases. "No frill, just degree" competitors are producing product without the high cost of minimalist full-time faculty workloads, large libraries and multiple staff intensive manual processes. As with the personal computer, will the buying market ultimately see any difference between the products except the name on the plastic and the price on the sticker?
What will be the destiny of the current life form we have called the 20th century university? It consumes far too many resources for what it returns to the environment, and though there are vast resources (markets) available, its structures do not let it tap these resources effectively. Its evolutionary tardiness has provided opportunity for a new species to take hold - the profit driven university. As the evolution of the human race has picked up the pace with each passing millennium, a future life form that has little resemblance to current higher education life forms will emerge much sooner than the usual eons it takes for evolution to create the next iteration of life.
The 20th century university is indeed obsolete and faces extinction.
Rev. John P. Minogue
Rev. John P. Minogue is senior lecturer at the Center for Higher Education and Organizational Change at Benedictine University and was president of DePaul University from 1993 to 2004.
The higher education community has been engaged in a vigorous contest with policy makers (both in Congress and in the U.S. Department of Education) over whether universities should use accreditation status to determine decisions about whether to accept the academic credits of transferring students. Arrayed on the side of restrictive regulations are individuals in the U.S. Department of Education, select members of Congress, and the Career College Association, which represents proprietary schools -- all favoring new legislation and/or regulations prohibiting individual credit transfer decisions being determined “solely on the basis of accreditation.”
The institutions targeted by these proposed restrictions are those that deny credit transfer from postsecondary institutions accredited by entities other than the six recognized regional accreditors (e.g., Middle States Association of Colleges and Schools, Western Association of Schools and Colleges).
Opponents of the proposed legislation and regulations argue that the federal government should have no role in determining credit transfer decisions that historically -- and appropriately -- have been the responsibility of the faculty and, in some instances, states and their governing systems. The debate is fueled by heated monologues, anecdotal testimonials and campaign contributions.
At the core of this policy debate is the assumption that the type of accreditation held by the institution where a student was enrolled should not be the controlling influence on the decision to award credit by the receiving institution. I believe that assumption needs to be revisited.
It must be remembered that one of the reasons for the establishment of accreditation by geographical regions was precisely to provide assurance to accepting institutions that the credits earned at the “sending” institution were in fact “earned and comparable.” Within regions virtually all institutions offering academic coursework were known and a network of college officials worked together to make practical and usually fair transfer decisions.
The higher education world has changed dramatically in the past few decades. There has been a massive growth in student enrollments, with an increasing number transferring credits from several institutions. Whereas a quarter of a century ago a typical institution might have 200 credit transfer decisions in a given year, today that same institution, particularly if located where the population is growing, may have 2,000 such decisions. One Midwestern public university with over 12,000 students annually makes nearly 4,000 credit transfer decisions. The staff in admission and registrar offices have experienced only modest growth during this same period. As a result there are far fewer resources available to address credit transfer decisions.
This explosion in student numbers is but part of the problem. Equally problematic is the growth in the number of institutions offering higher education credits. The latest figures (2006) indicate there are 2,713 proprietary institutions eligible for federal Title IV Funds, most marketing themselves as “accredited” with their accrediting agency recognized by the United States Department of Education. Just over half of these are less than two-year institutions, many offering freshmen “equivalent” courses.
Federal student aid policies, particularly those grossly expanding “guaranteed student loan” programs, have significantly contributed to growth in the proprietary sector. Recent changes in educational benefit programs for active duty military personnel have likewise contributed to the creation of institutions seeking to serve military personnel. From 2000 to 2006 the number of proprietary institutions offering baccalaureate degrees increased over 50 percent, from 274 to 429. Our sympathies should flow to registrars and admission offices flooded with transfer requests and at times confronted with transcripts from distant institutions whose names are hardly recognizable.
I would argue the opposite of the position now being made by policy makers and their patrons: Accreditation status, especially that conferred by established regional accrediting groups, should be a key part of the decision-making process by which institutional officials make credit transfer decisions.
Where institutions not regionally accredited are known to registrars it makes eminently good sense that they would make credit decisions based on what they know: articulation agreements, the experience of earlier transfer students, and the Transfer Credit Practices database used by the American Association of Collegiate Registrars and Admissions Officers. But for distant, recently created and even suspect institutions not well known to registrars and admission officers, credit transfer decisions based solely on the absence of regional accreditation status are reasonable and justified. Institutional accreditation by the six regional associations remains the most thorough and reliable of all accrediting efforts. It is also a process historically resistant to political and financial influence.
Does such a position unfairly discriminate against proprietary institutions? Not necessarily. The most recent data available (2004) indicate that 165 of the then 375 four-year proprietary institutions (or 44 percent) had earned regional accreditation. In short, a large number of those proprietary institutions meet the same standards as do independent and public colleges and universities and for them credit transfer would be handled on comparable bases. The remaining proprietary institutions would better serve their students by likewise pursuing and achieving accreditation from one of the six regional accrediting entities, rather than marketing a narrow peer accrediting status (often called “national accreditation”) and seeking governmental intrusion in the accrediting process.
The public interest would be better served if policy makers, rather than berating credit transfer decisions or proposing “federalizing” transcript evaluations, would, instead, support the work of regional accrediting agencies. Moreover, policy makers should question complaining institutions about why they have not earned regional accreditation as have a significant proportion of their proprietary counterparts.
Constantine W. Curris
Constantine W. Curris is president of the American Association of State Colleges and Universities.
Constantine Curris’s Inside Higher Edessay about transfer of credit this week confirms in print what many of us in the national accreditation sector already know: that many institutions base their decisions on credit transfers arbitrarily on the accreditation status of the “sending” college, with complete disregard for the students’ capabilities or the course equivalency of the credits the student seeks to transfer.
What is particularly alarming about the article’s portrayal of the transfer of credit issue is its reliance on history, its almost exclusive emphasis on the burdens imposed on the registrars, and, most importantly, the article’s absolute disregard of the effect that current arbitrary transfer of credit decisions have on the millions of students who attempt to change institutions in order to complete or advance their educations. Should not this national debate focus first on the students and the national education policy goals of helping them complete their educations in the most timely and cost efficient manner, while also ensuring the quality of their educations? If so, then resolving the transfer crisis by prohibiting the arbitrary denial based solely on accreditation makes eminent sense.
While Curris acknowledges the increase in student mobility and in enrollments generally, he seems content to justify current transfer policies on the historical basis for such determinations and on a time in particular when accreditation by “region” served a specific purpose. However, the increasing number of “contemporary” students enrolled -- students who are older, sometimes employed, part-time, and mobile -- is undeniable, and federal education policy and institutions must adapt to and accommodate these students.
Indeed, this fact should not be viewed as a burden, but rather as a responsibility and benefit to this country’s citizens, their educational aspirations and achievements, and to the U.S. economy’s increasing need for continuous educational upgrades. Curris’s article, however, confirms the entrenched and fundamental unwillingness of many institutions to voluntarily adapt their policies and practices on transfer of credit.
Here are the facts: Denial of credits results in the denial of access, as well as in increased education costs when students are forced to pay twice for the same course. These obstacles to completing or improving academic credentials come at a cost not only to those individuals, but also to the taxpayers who often foot the bill for the repeated coursework, and to our economy in the form of the affected students’ delayed entry to our nation’s workforce.
Indeed, in a 2005 report prepared by the Government Accountability Office on the transfer of credit issue confirms the national agencies’ own experiences. The GAO found that “84 percent of postsecondary institutions had policies to consider the accreditation of the sending institution when assessing transfer credits.” An official at the Department of Education recently indicated that the single largest number of complaints the Office of Postsecondary Education receives are from students wondering why their credits were denied by receiving institutions.
Accreditation and the accrediting agencies should play an important role in facilitating, not denying, credit approvals as Curris suggests. All recognized accrediting agencies -- whether regional, national or specialized -- are subject to the same criteria and approval processes by the Department of Education. The Council on Higher Education Accreditation (CHEA) and other organizations, like the American Association of Collegiate Registrars and Admissions Officers, have jointly and formally adopted a policy confirming that institutions should evaluate credits for transfer without discriminating based on the sending institution’s accreditation.
And, yet, the credits of students who attend nationally accredited schools continue to be denied on the basis of accreditation. Curris says that this denial is not necessarily about discrimination against proprietary schools. He is right -- this debate is not about the proprietary institutions. It is about the students who choose to attend institutions that have met Title IV eligibility and are accredited by agencies that meet the same criteria for U.S. Department of Education approval as the regional accrediting agencies. Curris seems skeptical of the types of schools the national accrediting agencies accredit -- in fact, many of these schools and their students look very much like the two year programs and students found at regionally accredited community colleges.
Instead of making arbitrary transfer decisions based on accreditation, the focus by institutions in these decisions should instead be on the students and the quality of credits they received. Even if institutional resources are tight, receiving institutions should be examining the course equivalency of the sending institution and student competency; students deserve this level of basic attention to objective measures. There is no legislation or regulatory solution proposed that would deny or affect the very important autonomy of an institution to make an independent judgment on the merits of the transfer request. The legislation that had been proposed merely asked institutions to give a student’s record a fair review.
This is a national problem requiring a national solution. Articulation, policy statements and other private sector arrangements, while helpful, do little to ensure that students nationwide will be fairly and consistently treated when considering a transfer. To support legislation in this in this area would provide affirmation to students, institutions, and accreditors that Congress intends to support student achievement, mobility, and access to an affordable education, as a matter of national education policy.
That Curris, as the head of one of the country’s major associations of public colleges, would argue otherwise is dismaying.
Elise Scanlon and Roger Williams
Elise Scanlon is executive director of the Accrediting Commission of Career Schools & Colleges of Technology, and Roger Williams is executive director of the Accrediting Council for Continuing Education & Training.
Financial crises cause public colleges to do funny things. Driven by enrollment limits, Bristol Community College in Massachusetts and Penn Foster University have come to an agreement allowing community college students to pay more to take Bristol classes delivered by Penn Foster. This deal comes upon the heels of the California Community College system announcing a deal that lets its students matriculate to Kaplan University, instead of the capacity-constrained California State University System, at a tuition level significantly steeper than Cal State’s though less expensive than Kaplan’s. Also in California, the College of the Sequoias, like many other colleges, is dipping into its rainy day fund and increasing class sizes while keeping tuition the same for now and likely higher in the future. At Bristol and through Kaplan, students pay more for the same. At College of the Sequoias, they pay the same for less.
Let me state my biases up front. I love unnatural acts -- particularly in higher education. My company, StraighterLine, which offers general education courses for which colleges can award transfer credit, has also been accused of performing unnatural acts with colleges. Kudos to Bristol Community College and the California Community College System for being willing to consider innovative options for their students. That said, these deals and actions worry me. Not because they are asking students to pay more – students always have the option to pay more – but because they do not give the students options to pay less.
Pay less? In these budget times? Any student who passed Econ 101 can tell you that, in a perfect market, price restrictions cause capacity constraints. State-mandated tuition levels and political resistance to tuition increases certainly qualify as price restrictions for public colleges. Therefore, the way to increase capacity is to allow higher prices for those willing to pay for it through a provider that’s not subject to state oversight. While these deals will undoubtedly allow greater enrollments and expand access to higher education, they do nothing to address the core failures of higher education economics. Indeed, higher education, abetted by an outdated accrediting and financial aid model, dramatically overprices many courses.
As printed in these virtual pages, it costs the University of Alabama $82 per student to deliver an intermediate math class and Frostburg State University in Maryland $25 per student to deliver an Introductory Psychology class. These two schools charge $2,680 and $2,100 for an out-of-state student for a three-credit class (out-of-state tuition better measures the nonsubsidized price per course). Further, these are face-to-face classes. Online classes can cost even less to deliver. These institutions, along with dozens of others with similar cost per student numbers, submitted this information to the National Center for Academic Transformation (NCAT) as part of the application process for grants to redesign their high enrollment general education courses. The profit margins on these general education courses for these nonprofit schools exceed 2000 percent. The same Econ 101 student would rightly note that, in a perfect market, this course-level profit margin would not be sustainable for long as new entrants would quickly enter the market to reduce the profit margin.
But it has been sustained. Why aren’t these extremely low prices for commonly taught courses passed onto students? First and foremost, most students rely on tuition subsidies available from the federal government through Pell Grants and loan subsidies. These benefits can only be accessed if the student enrolls in an institution – not just a course – that is accredited. Once enrolled, this financial aid cannot be applied to lower-priced courses at other institutions. Therefore, a market for lower-priced courses can only be supported by out-of-pocket expenditures or by a student completely transferring from one college to another. Further, lurking underneath a college’s tuition schedule is a nest of cross-subsidies. The profit margins on general education courses support low-enrollment courses, low-enrollment majors, administrators, sports teams, facilities and other nonacademic elements.
Indeed, though the price of college has risen, the amount dedicated to academics has declined. While many students enjoy the benefits of these subsidies, many others – such as commuter students, extension students or distance education students – do not. Lastly, the accreditation process itself takes five or more years, can only be undertaken by an institution (rather than a provider of courses), and requires a significant amount of overhead to be incurred – all of which pushes the overall price higher.
Agreements and actions like those of Bristol and the California community colleges, the nationwide growth in public college tuition, increases in Pell Grants, and further subsidized loans funneled through an institution-focused – as opposed to course-focused -- financial aid system point to continued rampant price escalation. So, it’s not an accident that Penn Foster, which is not regionally accredited, is working with Bristol, which is. Such an agreement gives students attending Bristol-branded/Penn Foster-provided programs access to a much larger pool of grants, subsidies and loans that can be spent on tuition. This deal expands slots for students, grows revenue for Penn Foster and grows revenue for Bristol. More importantly, it creates a precedent for variable tuition for the same credential from within the same institution. If public colleges are going to allow variable tuition for comparable credentials – and I think they should – they should allow it for those willing to pay more and pay less.
StraighterLine, the company that I run, offers a handful of general education courses for a subscription of about $100 per month without any taxpayer subsidies. As a provider of courses rather than a provider of degrees, we cannot be, nor do we want to be, accredited. Instead, our students receive credit for our courses at many hundreds of colleges via the American Council on Education Credit Recommendation Service or through direct arrangements with regionally accredited partner colleges. This can save students as much as 90 percent of the cost of their freshman year. On the one hand, since we’re not accredited, our prices only reflect the cost of individual course delivery, rather than subsidizing other elements of a traditional college. On the other, only students with the resources to pay out of pocket can take advantage of these prices. Call it an Accreditation Surcharge on taxpayers and poorer students.
Though our courses have received a variety of third-party endorsements – such as approval by the American Council of Education, approval by the Distance Education and Training Council (DETC), the appointment of an august advisory board, and review by partner colleges – awarding credit for these courses at these price points makes public colleges very nervous. When pushed by financial crisis, colleges search for deals that will help the college. They are not searching for deals that will help the student or the taxpayer.
Economist Paul Romer wryly noted that “a crisis is a terrible thing to waste.” Indeed, the higher education financial crisis presents an opportunity to examine basic pricing and financing assumptions in higher education. Agreements like the ones made by Bristol and in California should be welcomed as a way to expand capacity in high-demand fields. However, such agreements can only be embraced if similar agreements are made or policies enacted that allow students to more easily receive credit for taking much more affordable courses at other institutions and in other formats. If public colleges plan to allow students to pay variable tuition for more expensive courses, they should also allow variable pricing for less expensive courses. With many education providers – for-profit, nonprofit, accredited and unaccredited – available to provide additional educational capacity, colleges and their legislative overseers need to look at partnerships that will help students reduce tuition in addition to those that increase it. Given that this is in the student’s interest, not the institution’s, this might be the most unnatural act of all.
The notion that education, particularly a college degree, is the key to career success is a particularly American idea. It is what the sociologists W. Norton Grubb and Marvin Lazerson have called "the education gospel," a national ethos of hard work in school paying off and of equal opportunity for all. Politicians of every stripe have addressed unemployment by advising the unemployed to take individual responsibility for their futures by learning new skills and by reinventing themselves for a global economy where opportunity will materialize for those with the right credentials.
And workers have responded to the call. As The New York Timesreported recently, there are now more students enrolled in U.S. institutions of higher education than ever before. Today, women attend college in record numbers, and, according to the National Center for Education Statistics, in 2003, the number of African American, Hispanic, and other minorities enrolled in college reached the highest levels in history.
This all seems like very good news. With millions more students attending college, it makes sense to ask whether their degrees will pay off.
First of all, it is debatable whether a majority of future job openings will require a college degree. While the economist Tony Carnevale argues that jobs that require some college education will help lead a slow and painful recovery from the current recession, The New York Timesreports that, according to the Bureau of Labor Statistics, most job growth in the next decade will be in labor markets where a bachelor's degree is not necessary. Furthermore, the cost of attending college has risen dramatically in recent years. Conflicting claims about the economic value of a degree along with skyrocketing tuition raise a question about whether college is a good investment for all students, especially those low-income students who can least afford to spend money and years on a higher education venture that may not produce rewards.
Secondly, the issue of college payoff becomes even more complicated when we consider that many students who begin college will not complete degrees. While the U.S. leads the world in college attendance, it is ranked near the bottom in the number of students who actually graduate. In fact, college access, which is touted as a symbol of our meritocratic ideals, leads to a degree for only about half of all students who enroll. Completion rates are even lower for first-generation collegians and people of color. According to education researcher Peter Sacks, the chance that a low-income child will earn a bachelor's degree is no higher today than it was in 1970, a grave contradiction in the meritocratic narrative of the education gospel.
In fact, as the sociologist Annette Lareau has shown in Unequal Childhoods: Class, Race, and Family Life, the qualities that lead to academic success are not linked to college access, effort, or intelligence, but to accidents of birth. For the most part, the children of affluent parents attend the best colleges and get the best jobs. Opening the doors of higher education has not altered this basic arrangement. Still, the myth persists that, to get ahead in life, the first thing you ought to do is write a tuition check.
These days it is more likely that a student's first tuition bill will be paid with money from a loan. What looks like an investment in the future, however, can often turn into an economic disaster. For example, let me tell you about Valerie, an immigrant from Haiti, who had always dreamed of becoming the first in her family to earn a college degree. After high school in Harlem, Valerie spent six years at a private, nonprofit, open-door college in New York City accumulating credits for a psychology degree that she finally completed in 2006.
One year after graduation, the only job she could find was working as a teacher's aide (a position that did not require a bachelor's) for $14,000 per year. She also had to work as a salesperson in a clothing store to make ends meet. This might not have been so bad except that, after years of student loans, Valerie owed almost $60,000, a sum she could never hope to repay. After returning to the same college to earn a M.A. degree, Valerie found a job as a social worker earning a $33,000 annual salary. While this was a big step up from her teacher's aide job, Valerie was still unable to meet her financial obligations, and she had begun to question whether her six-year investment of time and money had been worth it. "Is this my American dream? Am I living it now?" she wondered.
There are many students like Valerie who have been led to believe that higher education is the key to a better life. We can all point to success stories in which nontraditional collegians achieve a sense of purpose and satisfaction in the life of the mind, earn degrees, and find jobs worthy of their tremendous effort and intelligence. But there is a pervasive silence in academe about the tarnished hopes and debt loads of many other students who do not complete degrees. In 2009, Public Agenda reported that most students who leave college list economic concerns as the number one reason they did not graduate. Many smart, dedicated students who want to go to college simply cannot afford to do so. And, as Valerie's case makes clear, even those students who do graduate may not find great demand for their skills at the end of a college-to-work road paved with debt.
Student loans like the ones that financed Valerie's education are the most burdensome to nontraditional collegians, especially working-class students and people of color. These students are disproportionately enrolled in institutions that do not look anything like the colleges of popular imagination in which full-time students live on residential campuses, party on fraternity row, and attend football games.
The dire situation on many campuses has been painfully documented in Inside Higher Ed by Wick Sloane, who has studied the realities of academic life for students at a two-year college in Boston. These students are commuters who sleep in their cars and attend classes in the evenings after working all day in low-wage jobs. They take their fear, stress, and economic anxiety into overcrowded classes taught mostly by underpaid, part-time teachers while "federal tax policies . . . subsidize Ivy League and other wealthy-college students by at least $20,000 per student." These conditions suggest that underfunded colleges do a disservice to poor and minority students.
This is a position much at odds with the official designation of two-year colleges as democratic ports of entry to the middle class.
Don’t get me wrong. Many two-year colleges and open-door institutions have wonderful programs run by committed faculty and administrators who have the best interests of students in mind. Yet the Herculean efforts of these educators do not change the fact that many nonselective colleges serve the same function: they keep disaffected unemployed and low-income people out of the labor market by warehousing them in college classrooms where students pay handsomely for an education that may not serve their economic interests.
Making this argument is difficult because it sounds like I am discouraging low-income and minority students from going to college. This could not be further from the truth.
Rather, I am proposing that those of us working in academe begin to dismantle the myth that higher education can facilitate social mobility on a mass scale. In fact, the opposite is true. According to a study by the Brookings Institution, "the average effect of education at all levels is to reinforce rather than compensate for the differences associated with family background and the many home-based advantages and disadvantages that children and adolescents bring with them into the classroom." This is a shattering indictment of the education gospel. Dismantling this myth means being honest with ourselves and with our students about the role of higher education in reproducing class inequality across generations.
Such honesty also means acknowledging that mass access to college does not and cannot provide upward mobility to the vast majority of students who seek it. Access to higher education can only be one part of what must become a broad social movement to redress income inequality that is higher than it has been since the 1920s. College graduates, like Valerie, should be able to earn a living wage.
But we shouldn't stop there. As the Economic Policy Institute researcher Richard Rothstein writes, "It is certainly possible for retail salespersons, fast-food workers, and home health care aides to earn middle-class incomes, but this won't happen because these workers got postsecondary training." Rather, it will be because they have "much stronger minimum-wage and labor-union protections, [and] economic security with good health care."
Class is not a result of merit or effort or hard work paying off. It is largely a legacy transferred between generations. No matter how many college degrees are distributed, we still tolerate a system that doles out limited rewards to all but a privileged few. In this climate, the pursuit of elusive degrees more often functions as a distraction from what really provides security to families and children: good jobs at fair wages, robust unions, affordable access to health care and transportation, and a sound, affordable education for everyone, regardless of background.
These are all factors unacknowledged in the push to convince people that that, if they can't find a job, they should take sole responsibility for their fate, sign up for that first student loan, and get their pencils ready.
Ann Larson is recent graduate of the Ph.D. program in English (composition and rhetoric) at the City University of New York Graduate Center. She is a writing fellow at CUNY's Hunter College.
The for-profit college industry is taking fire from all directions because a substantial number of for-profit colleges offer aggressively marketed programs of little value in the job market, leaving individuals unable to repay their debts and saddling taxpayers with the default burden. Much of the bad press is deserved, but the atmosphere of scandal and abuse detracts from a larger point: We have failed to adequately connect college and careers. The current abuses are but the worst-case examples of this failure.
This failure has broader implications because a postsecondary credential has become the prerequisite for middle class earnings, but there are enormous discrepancies in earnings returns between different credentials. Sometimes, a particular certificate is worth more than a particular bachelor’s degree. For example, 27 percent of people with licenses and certificates earn more than the average bachelor’s degree recipient does. This information is not intuitive, but it is available, and prospective students should have access to it to understand what they’re getting.
Like it or not, postsecondary education is already almost entirely occupational. All certificates and occupational associate degrees are intended to have labor market value. Academic associate degrees have minimal return unless they lead to a bachelor’s. Only 3 percent of bachelor’s degrees are liberal arts, general studies, and humanities degrees -- the remaining 97 percent have an occupational focus. (Add in English, philosophy, religion, and cultural and ethnic studies and you're up to 8 percent.) Moreover, for most students, liberal arts degrees are preparation for graduate and professional degrees, virtually all of which are intended to prepare students for careers.
The current dust-up shouldn’t be about for-profit colleges being all bad, nor about public colleges being off the hook. Rather, we should attempt to use data to find out which colleges are performing for their students.
The current scandal has arisen because of bad information. Slick subway ads and glossy brochures will not suffice to provide potential students weighing their options with accurate career advice. There is a real alternative to late-night infomercials that promise undeliverable outcomes. In fact, the detailed elements of such a system already exist -- including unemployment insurance wage records, transcript and program data, job openings data, and detailed information on occupational competencies.
It’s just a matter of putting them together effectively -- some states have already built the rudiments of such systems -- and making the information publicly available and in online, user-friendly formats.
To build this data system, wage record data would have to be tied to transcript data. Wage record data, which is actual wages at the individual level as reported by an employer, has been around since the late 1930s and is used to verify eligibility for unemployment insurance. These records are held at the state level by employment services agencies, and are also given to the federal government every three months. Transcript data is not currently collected by any federal agency, but is available in varying degrees in all but five states. Eleven states have already linked their transcript and wage record data, and are able to track earnings returns to postsecondary programs. Only seven states can link transcript and wage record data for programs at proprietary schools. This system is still nascent, but has enormous potential to help students evaluate their options, as well as inform institutions in planning new programs and evaluating existing ones.
Building a user-friendly interface is the next step, if we wish for this information to be useful for consumers. Imagine being able, with a few clicks and keystrokes, to explore various careers, find out how many jobs are currently available in the field, how many there are likely to be over the next several years in your area, what education and training programs exist in your local area and online, what they cost, what financial aid is available, and what the average salaries are for graduates of each program. Such a system would empower individuals to choose careers that would truly benefit them, and encourage institutions to offer programs that would prepare them for the jobs that will actually exist.
Such an information system would not eliminate, but would reduce, the future need for intrusive federal oversight or expensive additional state-level regulation. Further, such information systems that connect postsecondary programs with labor markets represent a savings to the taxpayer, improving efficiency in matching programs to careers and curbing the enormous cost of student loan default.
Educators and others may worry that tying curriculums to careers may subjugate education to economics. We clearly need to aspire to a pragmatic balance between postsecondary education’s growing economic role and its traditional cultural and political independence from economic forces. While it is important that we not lose sight of the non-economic benefits of education, the economic role of postsecondary education -- especially in preparing American youth for work and helping adults stay abreast of economic change -- is also central to the educator’s broader mission to cultivate thoughtful individuals.
The inescapable reality is that ours is a society based on work. Those who are not equipped with the skills and credentials necessary to get, and keep, good jobs are denied full social inclusion and tend to drop out of the mainstream culture, polity, and economy. In the worst cases, they are drawn into alternative cultures, political movements, and economic activities that are a threat to mainstream American life.
The current abuses are a wake-up call -- they signal the disenfranchisement of students who are denied access to the middle class and full social inclusion because they lack information on what kind of education can get them there.
Anthony P. Carnevale and Michelle Melton
Anthony P. Carnevale is director of the Georgetown University Center on Education and the Economy, and Michelle Melton and Laura Meyer are research associates there.
The authors of the Government Accountability Office’s for-profit secret shopper investigation pulled off a statistically impressive feat in August. Let’s set aside for the moment that on Nov. 30, the government watchdog quietly revealed that its influential testimony on for-profit colleges was riddled with errors, with 16 of the 28 findings requiring revisions. More interesting is the fact that all 16 of the errors run in the same direction -- casting for-profits in the worst possible light. The odds of all 16 pointing in the same direction by chance? A cool 1 in 65,536.
Even the most fastidious make the occasional mistake. But the GAO, the $570 million-a- year organization responsible for ensuring that Congress gets clean audits, unbiased accounting, and avowedly objective policy analysis, is expected to adhere to a more scrupulous standard. This makes such a string of errors particularly disconcerting.
In fact, the GAO is constituted precisely to avoid such miscues. Its report-vetting process entails GAO employees who are not involved with the project conducting a sentence-by-sentence review of the draft report, checking the factual foundation for each claim against the appropriate primary source. While the research is compiled and proofed, legislators who requested the investigation may keep in routine contact with the GAO to stay apprised of the inquiry.
The GAO issues hundreds of reports a year, and by most accounts revisions of the kind released two weeks ago are almost unheard of. As a former GAO assistant director who worked at GAO for a decade on issues including higher education explained to us Wednesday, the organization’s rigorous review process leaves little or no room for error.
He said, “[It is] extremely rare for the GAO to issue corrected testimony or reports. In fact, in my 10 years that I was there, I never once saw that happen.” He went on to say, “It is stunning to me, given [the GAO] process, how this many errors could have happened. It raises a lot of questions as to the pressure the GAO was under. . . . They must be sweating bullets over at GAO.”
What kinds of mistakes are we talking about here? The corrections were generally changes in emphasis or wording that altered the complexion of the finding. For instance, the original report claimed that a financial aid officer purposely ignored an undercover applicant’s supposed $250,000 in savings when calculating eligibility for financial aid. What the report neglected to reveal was that the financial aid representative did so “upon request by applicant.” This does not necessarily exonerate the financial aid officer, but it does raise questions about the impetus for the inappropriate behavior.
In another instance, an applicant went from being informed that he or she “could take out the maximum in student loans” despite not actually needing that much (revised) to being told that he or she “should” (original) do so. And in a different scenario, a for-profit official supposedly told an applicant that massage therapists could earn up to $100 an hour -- when the review showed that the official actually said that the applicant could expect to earn up to $30 an hour, a figure that is below the Bureau of Labor Statistics’ estimate of $34 for therapists in California.
The list goes on and on. Each of the GAO’s 16 corrections indicates that the recorded evidence was presented in an inaccurate or incomplete fashion, in every case portraying for-profits in a negative light.
What happened? Our source speculated that the pressure of issuing the report in time for Sen. Tom Harkin’s Aug. 4 committee hearing and in time to support the issuance of the Department of Education “gainful employment” regulations led GAO investigators to be less careful than normal.
The problem is that the “we were in a hurry” defense doesn’t explain why the errors all point in the same direction — one that happens to reflect the policy preferences of the chairman of the Senate HELP committee and of administration appointees at the Department of Education. Lanny Davis, the veteran Clinton hand who has now taken to the barricades for the for-profit providers, told us Wednesday that he thinks there is an obvious distinction between “gross incompetence” and “setting out to deceive” — and that the original GAO report crosses the line. “Given that all 16 of the so-called mistakes portrayed career colleges in a negative light, I believe there is no sliver of possibility that this was not an intentional distortion of the truth by somebody with an agenda or somebody who was pushed into doing it,” Davis argued.
The issue goes beyond incompetence or politically motivated misinformation in a government report; the message of the GAO’s initial publication has been “baked in” to the Harkin hearings and the Department of Education’s rulemaking on gainful employment.
Our GAO source observed that the original report’s finding that all of the investigated providers were up to no good was “woven into the overarching narrative that there are a lot of bad actors out there that have to be dealt with.” Even though the GAO’s revisions were substantial enough to merit a public correction, the narrative has crystallized and been wielded by Harkin and Department officials to press the case for their agendas as recently as this week (see Harkin’s December 14 speech on the Senate floor). Even more troubling, despite finally acknowledging the litany of errors that permeate the report, GAO spokespeople have asserted that “nothing changed with the overall message of the report, and nothing changed with any of our findings."
The bigger question is whether we can be confident that the GAO has caught all of the errors or is being honest with the report’s critics. The former GAO official speculated that the recent corrections could be just the "tip of the iceberg in terms of the mistakes made in the report. It calls into question the entire report because it shows that there were not sufficient quality controls in place for whatever reason.” Complicating things is that the GAO is not subject to Freedom of Information Act Requests, which makes getting to the bottom of things just a bit difficult. (Of course, the Department of Education is subject to FOIA requests, and the advocates for the career college sector have filed suit to obtain the primary source materials.)
Regardless of how this gets sorted out, this affair has crippled efforts to talk honestly about problems that need to be addressed. It is hardly shocking that there are unscrupulous for-profit providers trafficking in misinformation and misusing federal student aid dollars. Every sector, public and private, faces such problems. And the practices of all providers that collect public funds deserve to be scrutinized and monitored. The government has every right to police how its student aid dollars are being spent.
But trampling public confidence in an esteemed federal watchdog helps no one — not the individual students that are being taken advantage of by fly-by-night providers, not the colleges that are acting in good faith, not the bureaucrats charged with regulating the sector, and not the taxpayers who wish to root out corruption in student lending.
Frederick M. Hess and Andrew P. Kelly
Frederick M. Hess and Andrew P. Kelly are director of education policy studies and a research fellow in education policy studies, respectively, at the American Enterprise Institute.
Friday's op-ed in these pages, “Sweating Bullets at the GAO,” by representatives of the American Enterprise Institute, offers a lopsided, inaccurate depiction of the Government Accountability Office's recent update to its Aug. 4 report on the recruiting practices at for-profit colleges.
First and foremost, the authors ignore the fact that these updates did not alter the very troubling findings or conclusion of the report. While the GAO made some revisions and clarifications of the long list of misleading practices it documented, the finding stands -- every single school its investigators visited engaged in misrepresentation, deception or outright fraud.
In an attempt to paint the GAO’s update as a dramatic development, the authors cite an anonymous source who claims that the GAO rarely issues this sort of revision.
That’s just not true. According to the GAO’s spokesman, GAO has issued 12 such revisions in the last year alone, including a similar one in September. Additionally, their assertion that all of the edits were made to correct “errors” that cast “for-profits in the worst possible light” is misinformed. Many are simple clarifications, and some bolster the GAO’s findings.
And let’s not forget -- the GAO’s discovery of fraudulent or deceptive recruiting tactics was just the tip of the iceberg. My Committee has issued three reports based on data we collected from 30 for-profit education companies that raise several more serious concerns about whether many for-profit colleges have the best interests of their students at heart.
We’ve found that 95 percent of for-profit students end up saddled with debt (as compared with 16 percent of community college students), and that 57 percent of students at 16 for-profit schools withdrew without a diploma in a single year. Most recently, we documented a startling increase in the amount of military education benefits flowing into this sector in the last year.
Given the findings of this investigation, it’s no surprise that the for-profit education industry has turned the full force of its multimillion dollar lobbying operation on the GAO in an attempt to muddy the waters and distract from the growing consensus that their industry needs greater regulatory oversight.
Far from “sweating bullets,” the GAO is helping to illuminate a growing problem.
Senator Tom Harkin, a Democrat from Iowa, is chairman of the Senate Committee on Health, Education, Labor and Pensions.
There is a fierce battle for students being waged among for-profit colleges. To experience the frenzy of for-profit recruiting firsthand is enlightening and a little horrifying. I have occasionally provided my contact information to marketing agencies online to solicit professional services, which generated a reasonable amount of follow-up calls. But I have never been inundated by calls at the pace and level of intensity that I received one recent morning from for-profit college admissions officers.
During an especially productive work session, I received a call on my work-issued cell phone at 9:12 from a young man asking to speak with Tiffany. I politely informed the caller that there was no one by that name in my office. I received another call for Tiffany at 9:14. I assumed the caller was an associate of the previous caller and chalked it up to persistence. At 9:15 when I received yet another call for Tiffany, my graduate education kicked in and I began to recognize a pattern. I politely explained that Tiffany was unavailable and asked the caller to explain the purpose of the call. The caller informed me that he was an admissions officer attempting to contact Tiffany on behalf of a well-known for-profit college; he was trying to reach her to follow up on a request for information on undergraduate degree programs, he was sorry to inconvenience me, and he would remove me from the college’s call list.
I had similar conversations with the subsequent 19 admissions officers at 9:19, 9:22, 9:33, 9:41, 9:54, 9:58 ... 12:27, at an average of seven calls per hour. I received a "courtesy call" from a notorious for-profit institution to which I replied, "Oh I know who you are, I heard about you on a documentary about for-profit colleges," to which the caller sheepishly replied "yes."
During the next call, I insisted on speaking with an admissions office supervisor (this call was from a reputable for-profit college) who was able to tell me how her institution had obtained my phone number. My number appeared in an online database that services for-profit colleges by linking prospective students seeking information about educational opportunities to admissions offices. The company that manages the database collects fees on a cost-per-lead basis. Tiffany must have mistakenly entered my phone number into this database. Between the two of us we generated 23 individual invoices in a little over three hours.
It was an interesting experience to be personally hounded by for-profit college admissions officers for the better part of a morning. I didn't ask each caller to identify his or her affiliation, but all of those whom I did query represented for-profit institutions. I received bundles of glossy advertising materials from colleges and universities as a senior in high school, but that experience never felt as aggressive, calculated, and impersonal as the phone calls I received throughout the morning.
As a student of higher education administration I was forced to reconsider my conception of the contemporary model of higher education. I have long argued that innovative business practices are essential to higher education’s survival, necessitated by increasing demand and market differentiation; however, the motives and strategies of some for-profit colleges and universities feel the same as those of our least favorite businesses ... only a lot worse.
Sorry, will you please excuse me? I have to take a call.... "Hello, this is Tiffany."
David Farris is a Ph.D. candidate in the higher education program at George Mason University.
In an interconnected world, where data collected for one purpose can be easily transferred and used for new, unforeseen purposes, we must be vigilant to protect consumers from uses of their data that do not match their expectations.
Transparency is the cornerstone of the modern privacy regime. An individual has the right to understand what data is being collected about him and to make informed choices about how that data is going to be used.
Last July, the U.S. Department of Education (ED) proposed its “Gainful Employment Rule,” which seeks to establish complex measures for determining whether education programs at proprietary postsecondary education institutions (and vocational programs at nonprofit colleges) lead to gainful employment in a recognized occupation. Under the proposed rule, a program’s eligibility for federal student financial aid under Title IV of the Higher Education Act would be based on meeting certain metrics related to student loan debt. ED recently sent a revised version of this regulation to the Office of Management and Budget, the agency in charge of reviewing regulations before they are made final. The revised rule could be out any day.
One measure that the Education Department proposes to use assesses whether a program’s annual loan payment is either 8 percent or less of the average annual earnings of program completers or 20 percent or less of discretionary income of program completers. These ratios might change in the final rule. In order to calculate average annual earnings and discretionary income, ED proposes that the Social Security Administration (SSA) would take the actual incomes of all students who completed a program and aggregate the students’ incomes into a number that ED would use to make the gainful-employment calculation.
Unfortunately, the proposed Gainful Employment Rule suffers from a fatal privacy flaw: it fails to provide transparency into how the federal government will collect and treat student data required to implement the rule. There is much to be applauded in the department’s effort to address loan debt and employment; the problem is not in these goals but in the methods the ED is planning to use to achieve them.
The first problem with the proposed regulation is that the details of how ED will receive student income data and how this data will be treated have not been resolved. Based on a preliminary agreement between ED and SSA, released by Social Security Commissioner Michael Astrue in response to an inquiry by Senator Orrin Hatch, it appears that the Education Department is planning for SSA to provide student income data to ED. However, there are no details as to exactly what additional data SSA will be collecting about students and what technical and administrative safeguards the agency will have in place to protect the increased data collection. ED and SSA must provide transparency into this process. Students and institutions need to know how SSA will handle their data.
Further, in his letter to Senator Hatch, Commissioner Astrue seeks to ease the Senator’s privacy concerns by stating that the data provided by SSA to ED will be “strictly statistical.” However, this raises additional transparency problems as both students and institutions will not have the ability to see how data about them is being used to make decisions that may be detrimental to their interests.
Without understanding what data went into the Education Department’s calculation, institutions and students will simply be informed of ED’s conclusion that they failed to meet a certain threshold and that they will no longer be eligible for federal financial aid. This black box calculation flies in the face of the uniformly accepted privacy principle of transparency.
This lack of transparency would also lead to further data collection by the institutions. As institutions would be unable to obtain the same data that the SSA used to make a calculation, in order to contest an adverse ED decision, an institution would have to provide income data that it has collected about its former students and potentially collect even more information than it had previously collected in order to perform its own income calculations.
In addition to the lack of transparency, the additional data that would be collected and maintained about students raises further privacy and security concerns. By collecting and linking more information about a student, the information the government already holds about a student will become more available should an errant government employee desire to misuse this information or should an unauthorized individual gain access to the data as a result of a data breach.
The consequences of a data breach can be profound – just ask Sony or Epsilon. And the government is not immune to these risks. In 2010, there were 104 reported government/military data breaches according to the Identity Theft Resources Center. Nineteen of these breaches were at federal agencies or military organizations, including the General Services Administration, the Department of the Interior, the Veterans Affairs Department, the State Department, and the IRS.
In short, any Education Department regulation that seeks to collect and use data about students must be fully transparent. Students and institutions must know what additional information is being collected, who is collecting this data, and exactly how the data is being used. This process cannot result in a privacy black hole. Any calculations that impact students and institutions must be done in a way that both protects student privacy while also giving the students and the institutions the ability to review and challenge unjust results.
Daniel J. Solove
Daniel J. Solove is a professor of law at the George Washington University Law School and the founder of TeachPrivacy,a company that helps schools develop a comprehensive privacy program.