Submitted by Paul Fain on October 19, 2015 - 3:00am
ITT Educational Services will suspend new student enrollment at several of its 135 campus locations, including campuses in Wichita, Kans., and South Bend, Ind. The embattled for-profit chain, which is facing financial and legal challenges, has closed eight of its ITT Technical Institute locations during the last two years, according to ITT's national accreditor.
The company made the decision to temporarily supend a handful of locations based on its research about local market demands, said Nicole Elam, an ITT spokeswoman. The campus locations "undergoing market assessments" represent 3 percent of ITT's new student enrollment, she said. ITT enrolls roughly 50,000 students.
"There will not be any disruption to ongoing course work for continuously enrolled students as we will continue to teach classes for those students," Elam said via email. "Our primary focus is on our currently enrolled students at those campuses and providing them with the same level of service and education as they pursue their degrees."
The U.S. Securities and Exchange Commission this year charged ITT and its top two executives with fraud for allegedly concealing massive losses in two student loan programs the company backed. The Consumer Financial Protection Bureau has also sued ITT, and the U.S. Department of Education has begun more tightly monitoring the company and its finances.
Submitted by Ryan Craig on October 15, 2015 - 3:00am
Can you name 50 U.S. colleges or universities that (i) don’t carry the name of a state and (ii) don’t have a Division I football or basketball team? If you can, you’re an elite reader of Inside Higher Ed.If not, you’re probably suffering from myopia like the rest of us.
Myopia in higher education is the tendency to mistake elite institutions -- the Harvard of Love Story (or really the Harvard of any of Kevin Carey’s favorite films) -- for the whole of our wonderful, diverse system. But this is not the only form of myopia afflicting our sector.
Conventional wisdom on postsecondary education says that the entire enterprise is indistinguishable from the work of colleges and universities. However, a recent report by Tony Carnevale and the Georgetown Center on Education and the Workforce serves as a corrective lens: colleges and universities represent $407 billion of the $1.1 trillion spent on postsecondary education and training, or only 37 percent of the total.
On the other hand, spending on training provided by employers is nearly 50 percent greater than all college and university spending. And broken down by age group, while colleges and universities dominate total postsecondary spending for young adults, they account for less than a quarter of total spending on adult education and training.
College and University Share of Total Spending on Postsecondary Education
It appears as if higher education is suffering from double myopia: the first misconception of the system is mistaking elite universities for all colleges and universities. The second is mistaking colleges and universities for all postsecondary education.
As we refocus our vision, the next big opportunity for growth in education may not be in attempting to “do college better,” but rather found in the yawning gap between what we typically conceive as postsecondary education and the world of work.
U.S. employers are developing a global reputation for wanting the perfectly qualified candidate delivered on a silver spoon -- or they won’t hire. As Peter Capelli of Penn’s Wharton School astutely notes, “Employers are demanding more of job candidates than ever before. They want prospective workers to be able to fill a role right away, without any training or ramp-up time. To get a job, you have to have that job already.”
He calls it the “Home Depot view of the hiring process,” where filling a job vacancy is “akin to replacing a part in a washing machine.” The store either has the part, or it doesn’t. And if it doesn’t, the employer waits. The result is that while there are over eight million unemployed workers, we have over five million unfilled jobs, and perhaps as many articles featuring employers whining about unprepared workers.
In his wonderful monograph “Why Good People Can’t Get Jobs,” Capelli says we have a “skills standoff,” with employers dissatisfied with the level of new hire preparation but unwilling to provide training or otherwise engage in skill-building activities with candidates. One major reason? Employers don’t want to risk investing in employees who may leave the company soon after.
And so the supposed skills gap is a byproduct of a trust gap. How can we get employers to trust new hires and engage in training and skill building? Likewise, how can we get candidates to invest in their own skill building -- perhaps even skill building specific to an employer -- so that employers find the “right part in a washing machine”?
Bridging the skills gap is not work that employers are prepared to do. In response, over the past several years we have seen a variety of intermediaries emerging at the intersection of higher education and the labor market in an area we call pre-hire training.
Some focus solely on training. Some focus on training and placement or matching services. Others focus solely on matching candidates with employers. In terms of revenue, some seek revenue from job seekers. Others generate revenue from employers. Still others attempt to charge education providers. The result is a matrix that looks something like this:
While these pre-hire training companies are diverse and include boot camps, online training providers, employment brokers, staffing companies, e-portfolio providers, and competency and credentials marketplaces, what they have in common is the following:
Pre-hire training is skill specific and often employer specific.
Employers are not asked or expected to bear the cost of pre-hire training, or engage in any way until candidates are trained. Rather, the cost of pre-hire training is borne by the candidate or the intermediary. (Even when the intermediary bears the cost of the training, the candidate hasn’t been hired yet, so the employee has skin in the game.)
Once intermediaries are successful in aggregating a pipeline of qualified candidates for employers, employers jump in with both feet and are willing to compensate intermediaries for producing employees who will be productive from day one as well as engage in developing and improving training curricula.
Fast-growing pre-hire training intermediaries like Galvanize, eIntern, Credly, ProSky and Portfolium are establishing structures and programs that encourage employers and candidates to trust one another. For example, pre-hire training companies that are confident in their ability to train and place candidates, and thereby attract employers, can guarantee some outcome to candidates to bring them in the door in the first instance. This could be a guaranteed interview, or even a job guarantee if they successfully complete the pre-hire training.
While some of this should be the province of colleges and universities, much of it won’t be. Higher education institutions should be in the business of equipping students with general skills like coding or reading a balance sheet -- tangible skills that are directly relevant to thousands of workplaces across the country.
However, I don’t see colleges and universities involved in matching students with employers at the level of the competency -- a proposition that requires institutions to assess students’ competencies and then match, rather than simply arranging job fairs and interviews. Nor do I see institutions engaging in employer-specific training on products, systems and process, so new hires can hit the ground running like an experienced employee. When we get beyond skills-based training to matching students with employers, intermediaries aggregating candidates from multiple institutions and providing matching and training services for multiple employers will be much more productive for students and employers than a single institution: scale matters.
Many institutions (and their students) will benefit from partnerships with these intermediaries. By connecting students with employers, students will have a better sense of the placement and salary outcomes from their program of study. But colleges and universities need to be prepared for the consequences: higher ROI programs will benefit at the expense of low ROI programs; shorter, less expensive programs with credentials that clearly convey competencies are likely to flourish.
The impact of this new generation of pre-hire training companies on students and employers is likely to be more profound. They will provide employers with visibility into a deep pool of future talent, along with the means to engage and attract this talent. And they will provide students with a much clearer road map of the education and training required in order to be considered by employers of choice. While our vision now is still quite cloudy, pre-hire training companies have the potential to restore it to 20/20, and dramatically improve the efficiency of our labor and postsecondary education markets.
Ryan Craig is managing director of University Ventures, a fund focused on innovation from within higher education.
Submitted by Paul Fain on October 9, 2015 - 3:00am
The U.S. Department of Defense has suspended the University of Phoenix's participation in the federal tuition-assistance program for members of the U.S. military, the for-profit chain's holding company disclosed in a corporate filing. A Defense Department website said the University of Phoenix is on probation.
The sanction appears to be related to allegations about the for-profit chain paying for preferential recruiting access to veterans and service members. The nonprofit Center for Investigative Reporting published an article in July asserting that Phoenix has paid the U.S. military $250,000 over the last three years to sponsor 89 recruiting events, including concerts, a chocolate festival and a fashion show. The center also reported that Phoenix produced a commemorative coin, which it distributed on military bases, that included the Defense Department's seal.
The Defense Department's inquiry also cited investigations of Phoenix by the U.S. Federal Trade Commission and California's attorney general. Those investigations, both of which revolve around student recruiting and marketing, are still ongoing.
Apollo Education Group, which owns Phoenix, said it had fixed its military student-recruiting compliance issues and that the Defense Department had acknowledged that corrective action.
“The university intends to continue its cooperation with federal and state agencies to respond to their requests. We will continue to hold ourselves to the highest standards of accountability, transparency, ethics and compliance," Timothy Slottow, Phoenix's president, said in a written statement. "The Department of Defense in its letter acknowledged the corrective actions taken by the university to date. University representatives had been working closely with DoD leaders and we all expected a different response from DoD.
"It is troubling that the DoD has used requests for information from other governmental agencies as grounds for placing the university’s DoD MOU in a probationary status. At this time, the university will not accept new students who wish to use Tuition Assistance Program funds.”
Roughly 4,000 Phoenix students receive military tuition assistance, Apollo said, accounting for about 1 percent of the university's revenue.
Senator Dick Durbin, the Illinois Democrat, praised the Defense Department's decision to put Phoenix on probation, which he said would prevent the university from enrolling new service members under the tuition-assistance program. Durbin called for an investigation of the university based on the center's reporting. “This is a decisive action by the Department of Defense to protect service members and taxpayers from a company that offers degrees of questionable value,” he said in a written statement.
Submitted by Paul Fain on October 6, 2015 - 3:00am
A new report from the Century Foundation questions the legitimacy of four former for-profit colleges' recent transformations to nonprofit status. Those institutions are "covert for-profits," according to the report, "where owners have managed to affix a nonprofit label to their colleges while engineering substantial ongoing personal financial benefits for themselves."
The report's author is Robert Shireman, a former U.S. Department of Education official who recently joined the foundation as a senior fellow. The report said several for-profits have sought to become nonprofits to avoid federal regulations, some of which Shireman worked to create. By using public information requests, Shireman wrote case studies about the conversions of Herzing University, Remington Colleges Inc., Everglades College and the Center for Excellence in Higher Education (CEHE).
All four of the institutions signed contracts committing them to pay their former owners hundreds of millions of dollars, the report found, while those former owners remain involved in the governance of the nonprofits. For example, Keiser University told the IRS that neither its founder, Arthur Keiser, nor his family members would receive any "nonincidental private benefit attributable" to the newly nonprofit Everglades College. Yet in 2011 Everglades paid more than $34 million to entities owned by Keiser's family members.
Despite what Shireman called the "egregious" examples of covert for-profits, the IRS and the Education Department have failed to crack down. The reason, he said, is a regulatory blind spot where each agency assumes the other is doing the monitoring.
The company also announced Friday that it has become a public benefit corporation. That switch means the company remains for-profit but legally is allowed to focus more on activities that aren’t related to boosting its profit margin. The process requires companies to alter their governance structures. Another for-profit chain, Rasmussen College, made the same change last year.
Becker explained the decision in a written statement:
“Most of our operations are outside of the United States, where there are many barriers that inhibit participation in higher education. We committed ourselves to overcoming these barriers in order to expand access. For a long time, we didn't have an easy way to explain the idea of a for-profit company with such a deep commitment to benefiting society. In 2010, we took notice when the first state in the U.S. passed legislation creating the concept of a public benefit corporation, a new type of for-profit corporation with an expressed commitment to creating a material, positive impact on society. Our public benefit is firmly rooted in our belief that when our students succeed, countries prosper and societies benefit.”
Oscar Braynon II, a Florida state senator who is expected to become leader of the Senate Democrats next year, recently urged Florida’s Board of Physical Therapy to continue to allow colleges to operate unaccredited physical therapy programs, The Miami Herald reported. While some believe such programs lack appropriate oversight and may be of poor quality, Braynon spoke of the importance of preserving them.
While addressing the board, Braynon didn't reveal that he is senior vice president of government and senior relations at a for-profit college, the University of Southernmost Florida. And that college announced, shortly after Braynon's appearance before the physical therapy board, that it is launching a physical therapy assistant program that is just the kind of program Braynon was lobbying to preserve. Braynon told the newspaper that he was unaware of the college's plans to start the program.
The U.S. Department of Justice is investigating whether ITT Educational Services defrauded the federal government, the company disclosed Monday.
ITT told investors that it had received a formal demand for information from the Justice Department, which is looking into whether the for-profit education giant violated the False Claims Act.
The inquiry is focused, the company said, on whether ITT “knowingly submitted false statements in violation of the Department of Education’s Program Participation Agreement regulations.” ITT said it believes the investigation centers around its compliance with Education Department rules on compensation.
The company added that it “believes that its practices with respect to compensation matters are in compliance with applicable laws and regulations, and is cooperating with the DOJ in responding to the [civil investigative demand].”
The Justice Department joins a growing list of federal and state authorities that are scrutinizing ITT. The company is fighting lawsuits from both the Consumer Financial Protection Bureau and the Securities and Exchange Commission, as well as facing heightened oversight from the Department of Education. More than a dozen state attorneys general are also investigating the company.
Submitted by Tim Slottow on September 15, 2015 - 3:00am
As president of University of Phoenix, I am instinctively guided to support the principles of greater access to, and better analysis of, data and information. That holds particularly true in the case of data that can help prospective students make informed choices about higher education.
So the White House’s newly released College Scorecard -- and its attendant torrent of new data on colleges -- should be a welcome move. It purports to contain a variety of information that assesses institutions on important metrics, including graduation rates and the income of graduates.
It is no secret, however, that the Scorecard has attracted widespread criticism, not least from my colleagues at large public universities, whose concerns I share regarding broader methodological flaws in it -- particularly the failure to include data on students who did not receive Title IV funds (data currently unavailable to the department under federal law). And even the data about Title IV recipients presents major challenges. They paint a skewed view of graduation rates that I believe does a particular disservice to students and prospective working adult learners -- the very people this tool should help.
Just taking University of Phoenix as an example, there is much for which my university can be proud. The data released includes findings ranking it sixth in the nation amongst large, private institutions (more than 15,000 students) in terms of the income of its graduates (and 24th among all large institutions, public and private). This adds to our institution’s latest draft three-year cohort default rate of 13.6, which is comparable to the national average.
But consider the methodology behind the graduation rates that the Scorecard cites -- arguably the most problematic flaw underlying it. For years now the U.S. Department of Education has relied on Integrated Postsecondary Education Data System (IPEDS) graduation rates, which reflect only first-time, full-time undergraduate students. By any measure, the student population of America is more diverse than those who attend college full-time and complete it in a single shot. At the University of Phoenix, 60 percent of students in 2014 were first generation, and 76 percent were working -- 67 percent with dependents. These are the type of students labeled “nontraditional” by a Department of Education that has often talked of empowering them.
Yet for the purposes of the department’s graduation rates, these nontraditional students are effectively invisible, uncounted. In 2014, University of Phoenix’s institutional graduation rate for students with bachelor’s degrees was 42 percent. The department’s new Scorecard puts that figure at 20 percent. Our institutional rates demonstrate a higher rate of student success while IPEDS provides an incomplete picture of the university’s performance. In 2014, only 9.3 percent of my university’s students were first-time, full-time students as defined by IPEDS.
These graduation data would be troubling enough were it not for the fact that they are misinforming the same students that the Department of Education claims to be helping. For our graduates, the refusal to accurately calculate these data cheapens their legitimate and hard-earned academic achievements.
Reporting on the Scorecard, National Public Radio suggested that “what the government released … isn’t a scorecard at all -- it’s a data dump of epic proportions.” That is a correct assessment that speaks to the crux of the problem. More data, in this case, is not better. In open phone calls with reporters, department officials have acknowledged the limitations of their data, seemingly citing that very acknowledgment as license to publish them anyway. Yet no such acknowledgment is made clearly on the new Scorecard’s website, where students will access the information to make their decisions.
Now that the floodgate of institutional data has been opened, however, it is incumbent on all of us to improve it, contextualize it and help interpret it so prospective students can be appropriately informed by it. Responding to the Scorecard, the Association of Public and Land-grant Universities called for “Congress through the reauthorization of the Higher Education Act to support a student-level data system for persistence, transfer, graduation and employment/income information to provide more complete data for all institutions.”
The University of Phoenix has long supported these principles and objectives -- not just in pushing for more complete data but also in making clear that the standards must be applied to all institutions of higher learning. We agree with both Republicans and Democrats who want to see more audit-ready data for every college and university so as to validate and verify the foundational basis upon which the department creates and enforces regulations that should be applied to all higher education institutions (last year’s gainful employment rules among them). More can be done to guard against potential political motivations in the presentation of public data.
For our part, University of Phoenix is also clear that we must improve student outcomes, as we generally have year over year. From significant investment in our core campuses to ensuring that first-time undergraduates complete a pathway diagnostic before enrolling in their first credit-bearing course, we are engaged in the work that will help us to continue improving those outcomes and, more generally, to transform into a better, more trusted institution.
In the year I have been president, I have met with thousands of our students and graduates -- the men and women who are the face of that nontraditional category. These are people who are achieving great academic success despite the other demands that contemporary life imposes. They are driven, ambitious, determined and hardworking. And they leave me in no doubt of two things: their success deserves to be appropriately recognized, and their successors deserve better information in picking a college. We can all play a role in securing these basic goals.
Timothy P. Slottow is president of University of Phoenix.
Daymar College has agreed to pay a $1.2 million settlement to former students who sued the Kentucky, for-profit company for false job placement claims and fraud, according to The Louisville Courier-Journal.
The settlement requires Daymar to pay $1.4 million to Kentucky Attorney General Jack Conway's office. Students who attended the college in the five years ending July 27, 2011, would split the rest, while Conway's office will keep $200,000 to cover attorney's fees and to pay a claims administrator. The lawsuit had 413 private plaintiffs.
In 2011, Conway charged the college with overcharging students for textbooks, misleading them about financial aid and failing to provide accurate information about the ability to transfer credit.