Wednesday, December 28, 2011

Cal and Texas Not the Only Schools in 2011 Holiday Bowl

As the football teams from Texas and Cal(both non-profit schools) square off on the field tonight they are part of perhaps the most visible contradiction within public education in this country, college athletics.   There is a lot of money made.  That much is clear.  But the title sponsor of the Holiday Bowl, Bridgepoint Education(BPI) is part of a much less clear segment of education, much farther from the public awareness. BPI has proven to be one of the most successful for-profit higher education companies and as a result has become the focus of greater government scrutiny.  Unlike schools involved in NCAA athletics, some of this attention is unwelcome.

Tom Harkin
Andrew Clark
In March of 2011 the United States Senate held a series of hearings on for for-profit higher education.  Senator Tom Harkin(D-Iowa) took the gloves off a bit and used Bridgepoint Education as the poster child for all that is wrong with the industry.  His lengthy opening statement in the Senate Health, Education, Labor and Pensions(HELP) Committee pretty much said it all and called into the question the ability of these institutions to balance profit with the purpose of education.   Many claim that for-profit colleges abuse the system at the expense of the student and public taxpayer.

The CEO of Bridgepoint, Andrew Clark, chose not appear at the hearings as did all other company officials who declined the commission's requests to appear, citing an ongoing audit by the Office of Federal Student Aid.  Clark, who earned $20.5 million(salary + stock options) has remade what was a small school in Iowa into a major player in the industry, one that has maximized its return.  Much of that success has come with efforts in recruitment and marketing.  As a business, BPI's Ashford University is an unquestionable success story.  As a school, the outcomes are less apparent.  So all this profit, where has it come from and at what cost?  Furthermore, who pays it?  Not everyone on the committee shares Harkin's views. 

Link to Senate Charts
Senator Michael Enzi(R-Wyoming) spoke out against the hearings indicating that they singled out career colleges despite similar issues existing elsewhere in education.  He commented “Unfortunately, by only focusing these hearings on individual examples of a problem in one sector of higher education, we have no understanding of the true extent of the problem, nor have we heard any constructive solutions for solving that problem.”  he then walked out of the hearings. 

On the full Senate floor Harkin said the following in advance of the hearings:   “In the first year, 84.4% of students from Bridgepoint who signed up dropped out, what do you think happened to their [federal] loans? What do you think happened to their Pell grants? Students get those back? Not on your life. Bridgepoint kept them, the money went to their shareholders.”

Link to Senate Charts
Harkin added that 63% of those seeking a bachelor’s degree at Ashford drop out within a year.  The basic criticism is that such schools work hard to bring in students and help them secure funding and loans knowing full well that they will not remain enrolled.  Then once the funding is secured they have shown little concern if the student is successful or if they are saddled with enormous amounts of debt after enrolling since they have made their profit.  True margin lies with enrolling more new students. 

About a year ago on a whim I filled out an online questionnaire for information about an online degree program at such a university.  By the time I got home I had sixteen messages, that's right sixteen, on my cell phone.   They continue to arrive on occasion to this day more than a year later.  The recruiters are persistent to say the least.  The good news is I do not actually use my cell phone much and to date haven't spoken to any real people on the matter.  If you ever want to get back at someone...fill out one of these forms with their info...on second thought, don't.

Harkin summed the business model up as follows: “While Bridgepoint employs 1,703 recruiters, they employ just one person to handle career planning…for the entire student body of 67,000 students.
He wants to reform how these institutions are monitored.  For certain, the Department of Education is having a hard time keeping up.  But many Republican Senators(Enzi, McCain, Burr) have spoken out claiming the hearings were politically motivated and singled out for profit colleges unfairly. 

Whatever the case, the money trail is big and lengthy.  To date no one really seems to have a handle on who these students are, how they are affected and what all this is really costing.  With higher education costs skyrocketing and the demand for a better educated workforce this issue has a greater significance than even a few years ago.  The TU doesn't usually delve into higher education as it is beyond our normal daily experience in public schools, but the parallels present surrounding the for-profit education industry at both levels is clear. 

As to what all this means in the world of education, I think the TU has been pretty consistent expressing concern about what motivates these for-profit companies involved in education.  As they continue to play an increasing role in our public schools we might look to this debate about for-profit colleges as a cautionary tale.  Just something to think about as we move into the new year.  As we do we hope you enjoy the college football bowl season.  Usually these broadcasts are full of graphics.  So I'll throw a few in from the Senate Hearings to wrap things up.

Link to Senate Charts

Link to Senate Charts

Link to Senate Charts

Link to Senate Charts

Not from Senate Hearing

I just figured if you read this far you should be rewarded with a smile.

No comments:

Post a Comment