Welcome to National Distance Learning Week. In education, distance learning is becoming an increasingly important tool for the effective teaching of students of all backgrounds and levels. Without technology, many students and teachers would be unable to adequately communicate due to barriers in both schedule and geographic location.
In fact, distance learning has become so important that the U.S. Distance Learning Association released a white paper today to recognize how broadband Internet access has enabled education to enter a new stage. The white paper argues that without broadband Internet access, many students would be less engaged or unable to reach their goals in school. See below for a quote from USDLA’s press release:
“In order for 21st century distance learning opportunities to continue to flourish and allow more consumers immediate availability to convenient and affordable education, immediate access to affordable broadband must continue to grow,” said Dr. John G. Flores, Executive Director of the USDLA. “This paper highlights the measures we believe need to be taken in order to advance online learning and opportunity; and broadband access is a huge component of that need.”
Distance learning and higher education are inextricably linked. Without the Internet, many for-profit and not-for-profit programs would not exist. Therefore, we should recognize the impact that distance learning has on the higher education students in our country and work to make these programs even better in the future.
The recently released data from the Department of Education demonstrate what many people have repeatedly said; for-profit schools are disproportionately educating Americans from the working class with lower incomes, and lower income students have higher default rates on their loans than students from higher income families. The data include loan repayment rates and loan default rates. Repayment rate is calculated as the 2009 institutional repayment rate of students from the prior 3.5 fiscal years. Yesterday’s New York Times education supplement summarized the Department’s data for the 2007-2008 loan repayment rates for large colleges and universities. The focus was on large schools from three sectors: (a) for-profit, publicly traded; (b) private, nonprofit; and (c) public.
What the data appear to disclose is a relatively lower institutional repayment rate by students from for-profit schools that are publicly traded. Upon closer analysis, however, the data really disclose what many have said; the for-profit schools are disproportionately educating Americans from the working classes who qualify for Pell grants at much higher rates. The average percentage of students from large public schools who qualify for Pell grants is 21%. By contrast, the percentage is double for large for-profit schools; 42% of their students qualify for Pell grants. The for-profit sector is serving substantially higher proportions of students from lower income families.
The data do demonstrate higher default rates and lower loan repayment rates from the for-profit sector. But what lies beneath this superficial observation is instructive as policy decisions are made by the Department of Education. In order to understand the data better, a more narrow comparison of more similar large institutions across the three sectors was used. This comparison looked only at institutions with somewhat comparable Pell grant qualification rates between 20% and 39%. The analysis does not include for-profit schools with much higher Pell eligibility and apparently concomitant poorer loan repayment behavior nor does it include private and public schools with much lower Pell eligibility. That approach does show a higher loan default rate and a lower loan repayment rate in the for-profit sector. The default rate was 7% for students from for-profit schools; whereas it was 4% for students from the other two sectors. The loan repayment rate of 41% for this slice of for-profit schools was lower than the 56% and 57% rates respectively for private, nonprofit and public schools. Of course, even in this slice of large schools, we do not have comparable institutions in terms of student income; the for-profit sector had a much higher Pell-eligibility average of 37% compared to an average of 28% among private, nonprofit schools and 25% among public schools. .
While the analysis of this narrower slice of schools still shows more problematic repayment behavior among students in for-profit schools, it also suggests that students may be behaving in ways that are driven more by their income than by the type of school they attend. In order to pursue the question of why loan repayment rates differ using the same public data, another analysis was completed. The private, non-profit schools and the public schools were split into two groups – those schools within the same 20-39% slice of Pell-eligibility and those schools with Pell-eligibility rates below 20%. For the large public schools, the loan repayment rate was substantially higher (68% versus 57%) for those schools with lower percentages of Pell-eligible students, and the loan default rate of 2% was half of the 4% rate for those public schools with higher Pell-eligible rates. The same relative comparisons were evident for the private, non-profit sector.
For at least this group of large schools, the New York Times data demonstrate what we would expect; students from lower incomes – whether in for-profit schools or more traditional schools – have a harder time repaying their student loans, and disproportionately, for-profit schools are educating a higher percentage of students with lower incomes.
On October 25, Lanny Davis penned an interesting piece on Huffington Post. See below for the comment I posted in response:
Mr. Davis addresses the issues with facts, and he makes a great point. The Department of Education’s approach seems to picture for-profit institutions as somehow unworthy of public support, perhaps because they are for-profit entities. In the process of doing so, the Department has failed to propose a rule that will effectively lower student debt rates while assuring access to higher education for working class students.
The facts, as Mr. Davis makes clear, picture for-profit institutions rather differently than recent media attention. As schools of choice for minority and working class students, for-profit colleges and universities have loan repayment rates that are expected for students from these backgrounds. For-profit institutions are less demanding on our tax dollars than traditional four-year schools when all sources of public funding, including loans, are taken into account, and their graduation rates are better than traditional community colleges’ rates.
For-profit schools are very market focused. They understand that they have to be innovative, offer convenient class locations and provide schedules that correspond to working adults’ needs. And their market orientation has led them to provide educational opportunity for students who otherwise would not attend traditional colleges and universities.
Like Mr. Davis, I encourage the Department to work toward lowering student loan rates, but at the same time, let us acknowledge that for-profit scshools are playing a critical role for students in the higher education industry.
Yesterday, the Department of Education announced in the Federal Register that it would hold meetings with individuals who filed comments on the gainful employment rule. Presentations will allow stakeholders to express their views but offer no new comments. With so many negative comments having been filed against this rule, it is encouraging that the Department of Education is taking the time to listen to those who dissented to the rule. The Federal Register states:
On July 26, 2010, the Department published a notice of proposed rulemaking (NPRM) in the Federal Register proposing regulations for determining whether a postsecondary educational program provides training that leads to gainful employment in a recognized occupation and the conditions under which such a program would remain eligible for the student financial assistance programs authorized under title IV of the Higher Education Act of 1965, as amended (HEA). Comments on the Department’s proposed regulations were due on September 9, 2010. The Department received over 90,000 comments from a wide range of stakeholders, including for-profit universities and colleges, community colleges, students, higher education associations, members of Congress, financial analysts, economists, and college and university faculty.
The Department appreciates the tremendous feedback, both positive and negative, that it received on the proposed regulations. The response from so many individuals and entities demonstrates how important the issues relating to gainful employment and this rulemaking are. To better understand parties’ comments and have an opportunity to interact with commenters, the Department will hold four public meeting sessions over the course of two days. During this time, commenters who have timely submitted comments on the NPRM may orally present their comments to a panel of Department representatives. Commenters also may have an opportunity to respond to questions from the Department about their comments.
On October 16, Fortune published an article about short-sellers in the for-profit education debate. The article discusses the roles that all parties – short-sellers, community college officials and third parties – have played in the lawsuit between Keiser University and Florida State College. With access to private emails, Fortune summarized the issues:
In the litigation, filed earlier this month, a privately held for-profit school called Keiser University sued a competing nonprofit public institution, Florida State College, for spreading “injurious falsehoods” about Keiser. In its formal complaint, Keiser — which is based in Fort Lauderdale and has 21,000 students seeking degrees ranging up to doctorates — claims FSC and two of its administrators aimed to “derail” the for-profit education sector through a “false and misleading campaign.” That campaign, according to the complaint, was executed in part through a “conspiracy” with both advocacy groups and short-sellers like Eisman, who famously made a hedge-fund fortune by anticipating the housing-market crash in 2008 and betting against subprime mortgages. Along with FSC, the two administrators — CEO Steven Wallace and vice president Susan Lehr — are named as defendants in the suit. Eisman and two other institutional investors, Gilchrist Berg and Antal Desai, are cited only as “co-conspirators.”
One of the more interesting aspects of this case – and the Fortune article – is this – Why are short-sellers and representatives of the Department of Education talking with one another?
The Department of Education wrote the Gainful Employment rule as an attempt to decrease student debt. Since its was released, there has been significant debate over whether the Gainful Employment rule is in fact a path to addressing the issue of student debt. But whatever the rule’s merits, discussions between short-sellers and representatives of the Department of Education give an appearance of impropriety. There is the appearance that information is being preemptively shared with short-sellers and some others who have vested interests in opposition to for-profit schools. Addressing student debt constructively while assuring access to higher education are laudable goals; the appearance of impropriety tarnishes those efforts. We should really be focusing on the future of our students – and their access to higher education along with their successful graduation.
With so much negative coverage of private sector colleges and universities in the news, this blog has focused on a balanced view of access and success in higher education. Some would say that the media’s reporting could hardly be called “fair.” However, two media opinion pieces this week bring some balance to the issues. Of particular note is the recognition of several themes of this blog: (a) the need for more “seats” and the capacity of the private sector to provide increased access and (b) the biased focus of the Department of Education on only one sector of higher education while ignoring the need to improve public higher education. See below for excerpts from these articles:
The Florida Times-Union: “For-profit, ‘career’ colleges play vital role in education”
In a society where the haves and have-nots are on increasingly divergent trajectories, education remains a critical path to equal opportunity.
The traditional model of higher education – nonprofit public and private universities and community colleges – is limited in its ability to support this pathway.
In fact, the overcrowding problem is so acute at some community colleges that many students have stopped making progress toward a degree simply because they cannot get access to necessary courses.
Milwaukee Journal-Sentinel: “A well-laid plan to cripple needed for-profit colleges”
Let’s be clear. We agree with the concern the department is trying to address. The idea is that students should graduate with jobs that pay enough to enable them to repay their loans. We’re committed to students’ successes, so we would like to be part of any solution that helps further their success.
So what has gone awry?
The Department of Education proposed a rule based on anecdotal information from 16 unnamed for-profit colleges that no one is allowed to examine for accuracy. Worse, the “study” does nothing to compare graduation outcomes or debt levels of our students with public or non-profit institutions serving similar student populations.
A Wall Street Journal article yesterday filled in some of the blanks left by the Department of Education’s postponement of the gainful employment rule. The article notes that the Department will hold meetings with stakeholders and interested parties to further discuss the rule. See below for an excerpt from the article:
The Education Department will use the extra time to conduct a series of public hearings and meetings, which it said “will allow interested parties to clarify the comments they’ve submitted and respond to questions from Department officials.” The department will not open up a second official comment period.
I’m encouraged by the Department of Education’s initiative to understand the rationale behind the 90,000 comments it received regarding the gainful employment rule. However, I urge the Department to use these meetings as exploratory opportunities to understand why so many individuals dissented to the rule as written, rather than as attempts to convince opposing voices to change their points of view.
Yesterday, Norton Norris, Inc. released a survey of 332 career college students who have attended community colleges in the past. The study was of particular interest to me because of my family’s long-time involvement with and support of community colleges; my wife spent 35 years as faculty member and administrator, and both she and my son have Associate’s degrees. The Norton Norris survey found that career colleges ranked higher on 13 out of 14 aspects of its study, including job placement services and flexibility of class schedules.
What I found most interesting was the study’s break-down of the costs of education between the for-profit sector and the publicly funded community college. There was a significant difference between career and community colleges with career colleges’ costing about $25,000 more per student graduate. The study makes the following observations. Community colleges only graduate 20.3% of their enrolled students, compared to 58.2% at private sector schools. Community colleges do not assist most students with job placement and community colleges are not more accessible to students; overcrowding and scheduling continue to be major concerns.
Traditional community colleges do provide a low price option for someone to take a single course or a few courses, and this is part of their mission and a source of the higher cost per graduating student. But the outcomes of the study are noteworthy, especially in light of the very high cost-per-graduate difference. It is also worth noting, in light of the recent GAO report on for-profit colleges and universities, that the Norton Norris study found some less-than admirable practices from traditional community colleges. Community colleges are also guilty of withholding important information from prospective students, such as graduation rates. Moreover, like their career college counterpart, community colleges also advertise relatively widely today, and they use the public’s tax dollars to do so. While no misleading practice by career colleges or community colleges is acceptable, the study paints a much more positive picture of the for-profit career college than information the public has recently received from many media.
Click here to view one video that was produced as a result of the study.
The World University Rankings were published today in London with new methodology and some changes from last year. One very significant aspect of the rankings is the uneven distribution of quality universities on the list of 200.
No Latin American university was on the list, and only two African universities – the University of Cape Town and Alexandria University in Egypt – were on the list. No Middle Eastern university was included on the list except for Middle East Technical University in Turkey which straddles Asia and Europe. In Southeast Asia, only two universities made the list – both from Singapore – and there was no Indian university on the list.
Even in areas of the world like Europe and North America, the distribution of universities was uneven. It was no surprise to find that the ranked U. S. universities are concentrated in California, the Northeast and the Atlantic states with only two universities – Georgia Tech and Emory in the Deep South. The usual California schools were on the list, but there was only one university – U. of Washington – on the list from the northwest. And in Europe, much of the southern and eastern sectors of Europe were not represented but for the presence of two in Spain’s Catalan region – the University of Barcelona and Pompeu Fabra University.
Providing widespread access to excellent university education is still a challenge in much of the world. We increasingly understand the implications of higher education for regional and national competitiveness – both in terms of the quality of the labor supply and in the impact of technological creativity in the marketplace. Yet, assuring that there is increased potential opportunity for citizens in many regions is a challenge. We still need a much greater focus on assuring that there is quality higher education in all parts of the U. S. and the world if we are to raise the standard of living with available jobs, better paying jobs, and increased citizens’ participation in society.
In his recent opinion piece in the Chronicle of Higher Education, “Is Obama at War With the For-Profit Universities?” Richard Vedder makes an interesting point. By attacking private sector institutions, President Obama and his administration are jeopardizing their self-proclaimed goal of increasing the number of college graduates. And in this economy, when a college education is necessary to get and keep a job, we should not be discouraging any student from pursuing higher education.
Private sector colleges and universities increasingly are the innovators among higher education institutions. Many increasingly fuse innovative teaching practices with the latest in technology; they have a record of “customer focus” that has resulted in their offering convenient class times at nearby locations with career-related degrees. The private sector of the higher education industry has thrived, in part because of its innovation and accessibility.
We should neither be employing legislative nor executive remedies to rising student debt that jeopardize access to higher education for only some students in only some programs at only some schools. Our focus should be Instead on raising the quality of all of the higher education players, making the experience of higher education a transformative one that educates and raises the quality of our labor supply. And that focus should be on traditional, public and private colleges and universities as well as private sector colleges and universities. We should work to improve the state of higher education as a whole, without depriving students of access to federal financial aid.