Cengage Learning, Inc., the second largest publisher of higher education course materials in America, filed for Chapter 11 bankruptcy protection Tuesday. The move had been expected by financial analysts.
The company hopes to eliminate about $4 billion of its $5.8 billion in debt, the company said in a statement. The company's chief financial officer, Dean Durbin, blamed the company's woes on the move away from traditional printed textbooks to digital offerings, cuts in government spending since the recession, and piracy of its materials.
In a court filing, he said the company is working on a new business plan and pointed in particular to MindTap, a new cloud-based platform the company has elsewhere described as "more than an e-book and different than a learning management system." The company expects to continue to make timely payments to its vendors and offer the same wages and benefits to its employees, it said in a press release.
“The decisive actions we are taking today will reduce our debt and improve our capital structure to support our long-term business strategy of transitioning from traditional print models to digital educational and research materials," CEO Michael Hansen said in a statement. "Cengage Learning began an operational transformation six months ago under the leadership of our new senior management team, which is executing bold plans to enhance our customer relationships and introduce innovative digital and print products and solutions to meet our customers’ evolving needs."
Florida Governor Rick Scott signed a bill into law last week to encourage the state's K-12 and higher education systems to use massive open online courses, or MOOCs.
The law has narrower scope than early versions of the bill but its critics remain deeply concerned. An earlier proposal could have allowed anyone to create and seek “Florida-accredited” status for courses that Florida's public colleges and universities would have to granted credit for.
The bill Scott signed allows MOOCs, under certain conditions, to be used to help teach K-12 students in four subjects and also orders Florida education officials to study and set rules that would allow students who have yet to enroll in college to earn transfer credits by taking MOOCs.
Tom Auxter, the president of the 7,000-member United Faculty of Florida, said "intense and feverish" opposition from faculty helped scale back the plan. Still, he warned of a generation of "cheap and dirty" online courses offered to students before they enroll in college. “No matter how many times they use ‘quality,’ this is a cheapening of what higher education is all about,” Auxter warned, referring to supporters of MOOCs for credit.
Republican State Senator Jeff Brandes, who sponsored early versions of the bill, did not give the unions or faculty credit for the changes.
Much remains up in the air now, though. Brandes said he expected the scope of the law to eventually be expanded. Much will also be decided in coming months as state education officials study the issue and set rules about how to use MOOCs for college credit. “We’re giving them two years to set up all the rules and procedures they need to allow us to work with Udacity, or edX or Coursera to offer their wealth of knowledge in Florida,” Brandes said, referring to three MOOC providers.
Dean Florez, a former California state senator who leads the Twenty Million Minds Foundation and generally supports efforts to expand online education, said the Florida law encourages "practices that consider the future of the classroom from the early years into college.”
“Florida has recognized the opportunities inherent in MOOCs and in admirable fashion reached consensus on a bill incorporating all public education systems, from K-12 to higher ed,” he said in a statement.
California Governor Jerry Brown vetoed his own idea on Thursday to make the University of California and California State University systems spend $10 million each on education technology.
The new money was designed to allow the two systems to increase the number of online courses available to undergraduate students. Instead, under the budget Brown made law Thursday, the two universities will get to keep the money and spend it any way they want. Brown used his line-item veto power to take the strings off the money, although both UC and Cal State say they will go ahead with plans to buy technology with the funds. "Eliminating these earmarks will give the university greater flexibility to manage its resources to meet its obligations, operate its instructional programs more effectively, and avoid tuition and fee increases," his veto message said.
Even though they don't have to, both systems said they plan to spend the money on technology. “We’ve made a commitment to provide the $10 million, so it’s not going to affect our plans,” said Steve Montiel, a spokesman for the UC president's office.
Michael Uhlenkamp, spokesman for Cal State Chancellor Timothy White, said the system thinks technology can help address a critical need and that it can use the money to alleviate bottlenecks.
"So while there is no legislative mandate in the budget to accomplish this, we’ll still continue to work along those lines," he said in an email.
An earmark that gives nearly $17 million to the California community college system and mandates the system spend the money specifically on ed tech remained in the budget Brown signed Thursday.
Dean Florez, the head of the pro-online education 20 Million Minds Foundation and former majority leader in the California Senate, said Brown's veto should make colleges think about spending more on online education rather than less.
"Governor Brown vetoing his own earmark for online education in the CSU and UC, emphasizes that funding for said programs should not be limited in any way,” he said in a statement. “The California Community Colleges, who serve 2.4 million students and already have approximately 17 percent of their courses online, will still receive $16.9 million in dedicated funds for expansion of online access. In light of the advances made in the CCC system, we hope that the other two segments will follow through with their assurances of online program advancement to alleviate system-wide bottlenecks.”
The website of Renmin University, in China, has experienced unprecedented traffic (and has crashed as a result) because of a photograph of an attractive woman who recently graduated,The South China Morning Post reported. While the photograph is not the least bit risqué by American standards, it is quite unusual for a Chinese university's website. The photograph has prompted considerable debate in China, with some praising it and others wondering if it is shifting attention away from academic issues.