Category Archives: Education / Youth

For-Profit Education Is About Profit, Not Education

It will come as a surprise to exactly no one that Betsy DeVos is a fan of for-profit colleges. After all, she has championed voucher programs that take funding from public schools and send it to private ones, many of which are run or managed as for-profit enterprises. Unfortunately, her support is not shaken either by the data rebutting the belief that such schools actually provide an education (let alone a superior education), or by the documented fraudulent behavior of for-profit “colleges.”

The New York Times editorial board recently weighed in on DeVos’ roll-back of efforts to protect college students against that fraud.

Say this for Betsy DeVos: The secretary of education has shown an impressive commitment to rescuing her friends in the for-profit college business from pesky measures to rein in their predatory behavior. As pet projects go, it lacks the sulfurous originality of her emerging idea to let states use federal dollars to put guns in schools. But it is a scandal nonetheless. Given the choice between protecting low-income students — and, by extension, American taxpayers — and facilitating the buck-raking of a scandal-ridden industry, Ms. DeVos aggressively pursues Option B.

The Obama-era regulations basically required “truth in advertising.” If too many students at the for-profit school racked up massive student debt–financed, after-all, by We the Taxpayers– and then were unable to qualify for decent jobs, and if the ratio of such failures exceeded a certain level for two out of three years, those schools became ineligible to receive taxpayer-backed loans and grants. The regulation also required for-profit programs to include whether or not they meet federal job-placement standards in their promotional materials.

DeVos said the regulation unfairly targeted for-profit schools, even though–as the Times reported-

A recent review of “borrower defense claims” — requests for loan relief filed with the Education Department by students asserting they were defrauded or misled by their schools — found that almost 99 percent involved for-profit institutions.

There is, in fact, plenty of evidence that for-profit educational institutions are much more interested in profit than in education. DeVos herself doesn’t seem very educated about data, education or the department she presumably runs. Nor is she winning many converts.

A federal court has ruled against her effort to delay implementation of the Obama rules, calling it “arbitrary and capricious.” And California just became the first state in the nation to ban for-profit charter schools. The law was inspired by a newspaper investigation confirming allegations of profiteering at the expense of children’s educations. For-profit charter schools currently operating in California “must convert to non-profit management prior to each school’s renewal deadline.”

Although I absolutely support both the regulations DeVos is attacking and California’s  requirement that for-profit institutions become nonprofit,  the problem isn’t limited to institutions that are organized as private, for-profit enterprises. Any business lawyer can explain the ways in which the line between for-profit and non-profit can be blurred. Create a corporation to provide an arguably publicly- beneficial purpose, and distribute what would otherwise be “profits” as salaries, and voila! (Take a look at some of your local “nonprofit” hospitals…)

And that brings me to Purdue University’s recent acquisition of Kaplan University, a for-profit enterprise now re-branded as public.  I think the Century Foundation got it right, when it charged that Purdue University Global Is a For-Profit College Masquerading as a Public University.

In April, the for-profit Kaplan University officially became an arm of Indiana’s public university system. With its new home and new name, Purdue University Global is the first public university to share control with a for-profit company answerable to investors. When the deal was announced last year, Purdue’s president said that critics of for-profit colleges “should be happy” that Purdue was turning Kaplan into a public rather than for-profit institution. Critics, however, wondered whether the for-profit company’s large ongoing role meant, instead, that Kaplan’s history of predatory practices would simply re-emerge under a “public” moniker.

One answer to that question arrived last week, when Purdue faculty members revealed that the online school is requiring instructors to sign a four-page nondisclosure agreement. The pledge, required for Purdue Global employees, prohibits professors and staff from discussing anything they know about the university’s operations with anyone else, including their colleagues (unless those people already have access to the information). Officials at the American Association of University Professors (AAUP) describe the pledge as “unprecedented for a public, non-profit university” and “breathtakingly inappropriate in higher education.”

Now, The Century Foundation has new documents showing that predatory practices at Purdue Global were baked into the plan from the very beginning.

Those documents–described in detail at the linked article–reveal a number of ways in which Purdue Global was designed to be much more of a for-profit college obligated to its investors than a public institution serving students.

I am a big believer in markets, profits, and capitalism…in the economic sectors where markets and profits are appropriate. Education is not one of those sectors.

Rather than strengthening performance of education’s public function, rather than recognizing the critically important role of education in producing a literate and informed polity, the Republicans running our government–and the Republican running Purdue University–are elevating profit over purpose, and moving us in precisely the wrong direction.

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“I Quit”

Principled people who can do so are fleeing the Trump Administration. Those who cannot afford to take the moral high ground–the government workers with mortgages to pay and children to educate–are valiantly trying to hold their agencies accountable to the rule of law.

Talking Points Memo, among others, has reported on the departure of one who just left: the top watchdog overseeing student loans.

The Consumer Financial Protection Bureau’s “Student Loan Ombudsman,” responsible for guarding student borrowers against predatory lenders and scammers, has resigned in a scathing letter aimed at acting CFPB director Mick Mulvaney.

“Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting,” Seth Frotman’s resignation letter, obtained by NPR, read. “Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America.”

Not exactly surprising, in an administration where up is down, failure is success, accurate reporting is “fake news,” and corrupt practices are touted as “good business.”

Frotman’s job was to monitor and review of thousands of complaints from student borrowers. The Obama administration had introduced a number of regulations intended to protect those student borrowers against fraudulent practices; according to Frotman, Mulvaney and Betsy DeVos have worked “diligently” to eliminate those protections.

Frotman’s letter pointed to specific wrongdoing by Mulvaney, NPR reported, including the alleged suppression of a report from his office revealing that big banks were “saddling [students] with legally dubious account fees.”

In May, NPR noted, Mulvaney called for Frotman’s office to be incorporated into the Office of Financial Education, effectively proposing to remove Frotman’s office from direct enforcement actions and shifting it to an educational role.

Regarding another change — the Department of Education’s announcement last year that it would no longer share federal student loan oversight data with the CFPB — Frotman wrote: “The Bureau’s current leadership folded to political pressure… and failed borrowers who depend on independent oversight to halt bad practices.”

NPR has posted a copy of Frotman’s letter here.

My husband often reminds me that–while Americans are distracted by our demented President’s tweets, rages and sundry other embarrassing and destructive behaviors–his administration is busily dismantling the structures of accountable and legitimate governance–stacking the federal courts with right-wing ideologues, eliminating regulations protecting air and water quality, bleeding public schools of the resources needed to educate the country’s children, empowering theocrats, and weakening the rules that restrain the rich and powerful.

Even if November brings the hoped-for “blue wave,” and installs a Congress that takes its oversight responsibilities seriously, it will take years to restore both the rule of law and the American people’s ability to trust that their government is operating on their behalf.

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If Evidence Mattered….

It’s a depressing time to be teaching public policy.

As I tell my students, there is an analytical process that should be followed by lawmakers who are considering legislation to address a problem, questions that need to be answered before a bill is introduced, let alone voted on.

To wit:

Is this a problem that government can or should address, or is it more properly left to the private and/or nonprofit sector? If it is appropriate for government action, is it the sort of issue that should be handled by government’s own employees, or is it appropriate for contracting out? (There are a number of additional questions we ask to determine that–and judging from the problems that have arisen with “privatization,” it would appear that those questions are seldom asked). Are there potential negative outcomes of the proposed solution(s), and if so, what are they? Do the anticipated benefits of the proposal outweigh the likely costs?

And finally, what do we know about this issue? What does the evidence say?

It may seem obvious that this sort of analysis should always precede policymaking, but too often, laws are based upon ideology rather than a consideration of the available evidence. The recent tax bill is an example. Those who voted for it evidently never heard of Kansas.

School voucher programs are another example.

At the beginning of the voucher experiments, it may have been reasonable to hope that taking poor children out of poorly performing public schools and giving them vouchers to attend private ones would somehow overcome the barriers that make it difficult for poor children in public school classrooms. But as evidence to the contrary has accumulated, policymakers with ideological fixations have ignored or discounted it.

Scholars at the University of Virginia conducted one of the more recent investigations.

For this new study, researchers analyzed data collected from a group of 1,097 kids in nine states who were followed from birth through age 15. The scholars looked at how many had attended private school between kindergarten and their freshman year of high school. They also looked at how the kids performed as ninth graders on a range of benchmarks, including test scores.

When the scholars did a simple comparison, they learned that students who had attended private school at any time in their academic career performed better on most benchmarks than students who only attended public school. But when the scholars controlled for factors related to family resources — the household income-to-needs ratio, for example — they got a very different picture.

They discovered that kids who went to private school and those who only attended public school performed equally as well in the ninth grade in terms of math achievement, literacy, grade-point averages and working memory. They were just as likely to take more rigorous math and science courses, expect to go to college, have behavioral problems and engage in risky behavior such as fighting and smoking.

In other words, the apparent ‘advantages’ of private school education–the academic results that led early voucher proponents to theorize that the private schools were somehow doing something different, something that produced better results –were really due to the socioeconomic advantages of the children whose parents placed them in these schools, not to what went on in the classroom.

In states with voucher programs, desperately-needed resources are being siphoned from the public schools and sent to private, mostly religious schools. This is problematic both fiscally and constitutionally. These programs have been justified by claims that they will improve the academic achievement of children who would otherwise be “trapped” in “failing” public schools. The evidence simply does not support those claims.

it would be comforting to think that the growing body of research–virtually all of which has reached the same conclusion as the Virginia study–would result in policy change.

It would be comforting, but inaccurate. As a friend of mine used to say, you can’t reason people out of positions they didn’t reason themselves into.

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DeVos Strikes Again

Despite the recovery, student loan debt continues to be a “drag” on the economy. As numerous economists have explained, Millennials have not been buying homes (and the furniture and appliances to fill them)at the same rates as preceding generations due to the significant student debt so many of them carry.

Repayment is burdensome enough when the student assuming the debt used it at a reputable institution of higher education, and graduated with a credential that led to employment. But that hasn’t always been the case. For-profit “colleges” making extravagant claims on which they are (knowingly) unable to deliver have ripped off thousands of low-income students–and ultimately, all of us, since those students subsequently default on their government loans.

And then there are the “private” loan servicers, who have gouged other students, and who are protected against loss by government guarantees.

The Obama administration had taken several steps to punish institutions and lenders who  engaged in these practices, and to relieve the students who had been defrauded of all or part of their repayment obligations. But of course, the sympathies of the Trump administration and Betsy DeVos lie entirely with the perpetrators, not the victims.

As the IBJ recently reported,

The nation’s consumer watchdog agency is accusing the Education Department of impeding a lawsuit that could potentially bring financial relief to millions of student loan borrowers.

The Consumer Financial Protection Bureau is suing Navient Solutions, alleging one of the nation’s largest student loan servicers violated consumer protection laws and in some cases caused students to pay back too much on their student loans. But in court filings, the CFPB says the Education Department is refusing to authorize Navient to turn over documents. Without that authorization the federal government, as well as several state attorneys general suing Navient, could find it difficult to show what type of damage the company’s alleged misbehavior caused to borrowers….

Under the Obama Administration, the Education Department and the CFPB agreed to share records and resources in cases of potential violations of student borrowing or consumer protection laws. But after Trump-appointee Betsy DeVos took over, the Education Department rescinded that agreement, calling the CFPB “overreaching and unaccountable” and saying the bureau had no authority to oversee federal student loan servicers.

DeVos has previously acted to protect non-performing for-profit colleges, as Time Magazine reported in May.

Career Education Corporation is one of the companies no longer being investigated by the U.S. Education Department after members of an enforcement office tasked with investigating abuses by for-profit colleges were instructed to focus on other issues, the New York Times reported this week, citing current and former employees. Meanwhile, former executives and consultants from those for-profit institutions have been hired as top advisers to the Education Department under DeVos.

This isn’t a matter of being legitimately “pro-business.” A pro-business administration would help the entire business community by taking steps to reduce the excessive levels of student debt that are burdening economic activity generally, including weeding out the bad actors.

This is a “pro-crony” administration. And if the students suffer, well–they aren’t the political donors whose interests this administration serves.

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A Step Too Far

The modern-day version of the Golden Rule is apparently: “He who has the gold, rules.”

Today, I’d like to consider the application of that axiom to institutions of higher education, and the donors they solicit.

People give money to colleges and universities for a number of reasons, and many of those reasons are laudable. University research is responsible for curing diseases, explicating history and developing philosophies, among many other things. University classrooms introduce students to great literature and art, help them develop critical skills, and deepen their understanding of the world. Making a gift to support those activities is a welcome expression of philanthropic generosity.

Then, of course, there are people like the Koch brothers, whose “gifts” generally come with rather disquieting strings. 

FAIRFAX, Va. — Virginia’s largest public university granted the conservative Charles Koch Foundation a say in the hiring and firing of professors in exchange for millions of dollars in donations, according to newly released documents.

The release of donor agreements between George Mason University and the foundation follows years of denials by university administrators that Koch foundation donations inhibit academic freedom.

University President Angel Cabrera wrote a note to faculty Friday night saying the agreements “fall short of the standards of academic independence I expect any gift to meet.” The admission came three days after a judge scrutinized the university’s earlier refusal to release any documents.

The report from the New York Times, from which the above paragraphs were taken, confirms a  widespread suspicion among academics. There have been rumors about George Mason University for years; those rumors have cast a shadow over the school’s reputation and that of its scholars. When people believe a donor’s “generosity” has purchased a desired research result, the research results will–properly– get discounted.

When it appears that a faculty member has been added not because a search committee, operating under standard academic procedures, determined that the person hired was the most accomplished applicant, but because s/he was the preferred choice of a donor–especially a donor like Koch– looking askance at that new hire shouldn’t be surprising.

The newly released agreements spell out million-dollar deals in which the Koch Foundation endows a fund to pay the salary of one or more professors at the university’s Mercatus Center, a free-market think tank. The agreements require creation of five-member selection committees to choose the professors and grant the donors the right to name two of the committee members.

The Koch Foundation enjoyed similar appointment rights to advisory boards that had the right under the agreements to recommend firing a professor who failed to live up to standards.

To label this state of affairs “unacceptable” is to state the obvious. It’s hard enough, in today’s toxic and polarized environment, to find sources of unbiased information. The reputation of a university is inextricably tied to its demonstrated  intellectual honesty. That doesn’t mean that all of its research results are sound, or all of its teaching Socratic, but it does mean that the inevitable flaws and missteps are honest errors, not purchased propaganda.

The activist group UnKoch My Campus noted that the George Mason documents evidencing the arrangement are strikingly similar to agreements the Koch Foundation made with Florida State University–agreements that recently caused an uproar at that institution. (There’s a lesson here for Ball State University, here in Indiana,  which has  accepted Koch dollars to establish an economic Institute.)

Cabrera’s admission that the agreements fall short of standards for academic independence is a stark departure from his earlier statements on the issue. In a 2014 blog post on the issue, he wrote that donors don’t get to decide who is hired and that “these rules are an essential part of our academic integrity. If these rules are not acceptable, we simply don’t accept the gift. Academic freedom is never for sale. Period.”

In 2016, in an interview with The Associated Press, he denied that the Koch donations restricted academic independence and said Koch’s status as a lightning rod for his support of Republican candidates is the only reason people question the donations.

Right. And if you believe that, I have some underwater land in Florida to sell you. It’s going to take some time and effort to restore the reputation of George Mason University–assuming it can wean itself away from the “gold” that has ruled it.

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