Higher Ed Watch: Steve Burd - "Why the Harkin Report on For-Profit Colleges Really Matters"

Higher Education Policy Analyst Steve Burd, at the New America Foundation, published a piece on July 31st about Senator Harkin's report on for-profit colleges. The findings offer damning evidence of how these schools mislead students and defraud them. It is clear, based upon Burd's analysis, why Harkin's findings matter. The report, as Burd notes, is "voluminous" and accurately documents systemic abuse among for-profit schools. This abuse turns students into indebted, and oftentimes unemployable citizens. AEM has also documented these sorts of abuses in the past (here's a sampling - here, here, and here, and it doesn't stop there).

Sentoar Harkin is a rarity on the Hill, especially when it comes to critiquing the predatory nature of higher education, and the way in which these higher education institutions - for-profits in particular - make money by turning students into permanent debtors. He is one of the few who truly cares about prospective students, their families, and those who have graduated and struggling with large amounts of student loan debt. Harkin has received a lot of heat for these investigations. That's unfortunate, because he should be praised by groups who supposedly advocate for students. Sadly, so many of these "pro-student" groups have been co-opted by the lenders and the higher education industry that they fail to properly offer support to leaders like Harkin.

The report has come after a 2-year investigation, and Burd calls it a "major development," because "[the report] will make it extremely difficult for the industry and its Congressional champions to continue to deny that abuses have occurred at their schools that have caused – as Senator Harkin said at a press conference yesterday -- 'lasting harm to the students they enroll.'"

Burd admits that lawmakers can ignore the report and its pages and pages of documentation that prove the truly deceptive and fraudulent practices of these institutions. However, they can no longer assert, as Burd notes, "with a straight face," that these operations are run in a transparent, ethical, and fair manner.

As so many of us have known all along, and I would include Burd in this camp, these schools do not have the interests of the students at heart. On the contrary, they are driven by maximizing profits. In so doing, students pay a terrible price and are turned into permanent indentured educated citizens. The borrowers aren't the only ones paying the price: taxpayers who fund these schools are also being hurt. Unfortunately, the lending system is so complex and bureaucratically layered to confuse the public - especially when it comes to the way these schools allocate funds - that few taxpayers truly understand how they are also being defrauded. 

As for the findings in the report, it of course remains to be seen if it will lead to any actual change, such as enforcing strict regulations and penalties for their predatory nature.

Photo Credit: Johnathan Ernst/Reuters

Did you graduate from a prestigious law school, unemployed, and deeply in debt?

Help A Reporter: Are you a law grad from an Ivy League or prestigious school (Georgetown, Stanford, U. of Chicago, etc), can't find a job, and have a lot of student loan debt? A major broadcasting company is doing a show and asked for assistance on finding people who are willing to be interviewed.

Email me - info@alleducationmatters.org

"Woman's on the Hook for a $25,000 Student Loan She Never Knew Existed"

Mandi Woodruff put out a recent article about a woman, Alice Cortes, who somehow owes $25,000 to Sallie Mae. What's the main problem? She co-signed for a person who seems to not exist.

I have heard from a number of people who paid off their loans, only to later learn that the loan was somehow turned over to collections and still existed. Several of them learned about these loans after they tried to buy homes, and they discovered that their credit was ruined.

In this case, Cortes never took out the loan for this individual, so she is at a loss to determine how to solve the problem.

Have you ever discovered a loan in default when you pulled your credit score, even though you paid it off years earlier? Has a lender ever pursued you for a loan that you never co-signed on?

In my view, this is another example of how out of control the lending industry is - there is essentially no oversight, so lenders have full power over people. In this case, they are apparently tracking down a woman who never even signed for a loan.

the on line education revolution: its all about the design

Because on line education is booming there is a sense that something new and interesting is happening in education. In fact, what is new is the venue for education not the education itself. The courses that universities have always offered were meant to put people in seats efficiently so that less faculty could teach more students. On line education is simply an extension of that model. Arguments can be made for how this on line lecture-based model is better than the old classroom model, and arguments can be made for how it is worse than the old one. But, the new on line models really are not attempts to solve the real problems in education.

What are the real problems?

1.   What is being taught in universities is academic material derived from research intended to create students who can do research and become scholars.

2.   The idea that a university education is meant to produce students who can immediately go to work because they have been taught employable skills is argued against at research universities and typically is seen as a second rate educational model.

3.   The methodology of lecturing,  reading, essay writing and test taking, is in direct opposition to a learn by doing, experiential model of education where students go out and do things and learn from their mistakes.

4.   On line education allows, in principal, the creation of simulated experiences so that you don’t have to actually crash an airplane in order to learn how to fly nor do you have to bankrupt an actual business in order to learn how to run one.

5.    New models of education are explicitly rejected by university faculty, who, in general, do not spend much time on teaching and would rather do research. They don’t want new on line models that might force them to re-order their priorities. University faculty have a pretty nice life and will reject changes to their research-focused existence.

The real opportunity in on line education is to change what is taught and how it is taught, in order to create graduates who can be immediately be employed by a workplace that needs skilled workers rather than theoreticians and scholars.

We have been building on line learn by doing models for over 15 years. Universities are afraid of these  models because they are afraid of the faculty revolt that would ensue if these models became the standard. They are also expensive to build. Students love them however because they can get jobs immediately after graduation and because it is really a very enjoyable way to learn.

The mentored, teamwork, based model that XTOL (http://xtolmasters.com/) uses depends upon building a detailed story and simulation of actual work experiences. This is not as easy to as it sounds.

To start, there needs to be one or more subject matter experts who guide the development. But, such experts are typically professors and professors want to teach theories. So, finding the right subject matter experts can be difficult.

Even more difficult is the design process itself. We use a team of people who have been doing this kind of work, in some cases, for twenty years or more. All of our senior designers have been doing this for at least five years and as far as we can tell it takes three or four years of apprenticeship to actually be any good at it.

The reason is easy to understand, Building an all day, full year, learning experience is somewhere between making a motion picture and writing a textbook. You don’t usually get it right the first time, in either case. Learning by doing is really how we learn and our people have been learning design by doing for a very long time.

Teaching others to do this is the next step in the education revolution.

Higher Ed Watch: "New Financial Aid Shopping Sheet Standardizes Award Letters—But Will Anyone Use It?"

Rachel Fishman recently wrote an article at Higher Ed Watch about the new financial aid shopping sheet that the Department of Education and the Consumer Financial Protection Bureau (CFPB) are now offering to prospective students. The resource will enable students to decipher financial aid letters sent to them once they have been admitted into college(s). The CFPB provided a prototype - or "draft" - of this tool last October. But there's a catch to this new sheet: institutions don't have to offer it to incoming students. Since schools are not required to adopt the tool, Fishman raises valid concerns about its potential efficacy.

Indeed, it is not only unfortunate but somewhat troubling that schools are not required to offer the sheet. Instead, as already mentioned, it's voluntary. In addition, a recent piece published by The Huffington Post - and referenced by Fishman - includes an interview with U.S. Secretary of Education Arne Duncan. He made it clear that if schools do not opt to use the sheet, there will not be any "sanctions" against them. Duncan is, however, confident that most schools will "do the right thing," and provide it to students. But on what grounds does Duncan believe schools will actually use the sheet? Is that some gut feeling he has? In a word, what evidence does he offer to make that assertion?

Fishman is also right in saying that the voluntary option to use or not use the sheet is "one glaring, fatal problem." Even if the sheet will provide more transparency to borrowers, what will actually motivate schools to implement the measure? Again, there is no a shred of evidence that suggests schools across the U.S. will use this new resource to help incoming students understand their financial aid packages. Furthermore, schools control all funds disbursed to borrowers, and this is precisely why transparency is, overall, sorely lacking. The lack of full disclosure should disturb the public. When pundits and politicians, lenders and school authorities continually rant against the millions of borrowers who have defaulted on their loans or fallen behind on their payments, and pull the "personal responsibility" argument, it is important to remember that these institutions of higher learning are not regulated in any way when it comes to the way in which they allocate funds.

As for the interest in and commitment to using the financial aid sheet, a few institutions have already pledged to offer it. But with over 6,600 institutions in the U.S., the likelihood is that the tool will not be offered to the millions and millions of incoming college students. If that is the case, then why was it designed in the first place? Obviously, money and labor were put into its design and creation. So, does this mean that it will be another case in which invested time and labor will be wasted?

In some ways, it is reminiscent of IBR (Income Based Repayment program). While I do not have numbers on how many borrowers are now enrolled in IBR, last Fall - when I was on a press call with the White House - Melody Barnes, Director of Domestic Policy, admitted that only 450,000 people were part of the program. There are over 36 million Americans who have federal student loans and are no longer in school, which suggests IBR has not been properly implemented and promoted. That is one of the reasons the President spent time promoting the program when he visited college campuses at that time. The Department of Education did a poor job of advertising IBR. Even worse, lenders are not required to even disclose the program to struggling borrowers.

Will this also be the case for the financial aid shopping sheet? Will only a few borrowers have access to it, because schools will not offer it? 

The optional factor has gotten the attention of some politicians who are concerned about students and the skyrocketing cost of college. Senator Al Franken (D-MI), for instance, has realized the inadequacy of the sheet being optional. Fishman notes, "Franken understands the importance of a model financial aid letter for students, which is why he has introduced bipartisan legislation that would mandate its use. He wants to ensure that all students, not just those lucky enough to apply to schools that voluntarily adopt this letter or those using military benefits, understand the true cost of college. A scattershot approach will not help a student and her family line up and compare four different award letters on the dining room table."

The big picture, that is, the depth of the crisis, cannot be overlooked when discussing these sorts of plans and programs. Indeed, we need to be remember that outstanding student loan debt has now surpassed $1 trillion. Despite this troubling figure, the dramatic increase in default rates, and the lack of jobs for graduates (especially recent grads), there are currently no short-term or long-term solutions to solve the crisis. The severe hemorrhaging continues, and more borrowers are slipping off the grid and being sucked down a financial tube towards total and permanent ruin. The emotional cost is tremendous and is mercilessly hitting countless grads with debt - these painful truths should not be forgotten. Some, as I noted in a recent article and in an interview on NPR, are suicidal. When will there be viable solutions implemented? That remains to be answered.

NPR Interview - The Story: "Suicide and Student Debt"

 

Guest Host Sean Cole spoke to John Koch and me, as the founder & executive director of All Education Matters, about suicide, student loan debt, and the student lending crisis.

Listen to the podcast here.

Guest Host Sean Cole

Innovation is now impossible in high school curriculum. Thank you Bill Gates.

It is has always been frustrating to work on trying to improve education. No one really likes to see changes in anything they are used to. I have written about this over the years but now I am really angry. Who am I angry at? Bill Gates.

I have finally been able to come close to producing a very novel solution to some of what ails education. I am a year away form launching an on line mentored learn by doing computer science high school. What this means is that that after four years in this high school students will be immediately employable in the software industry. (They could still got to college or do something else, but they would be at a professional level in programming.)

Can I launch this school? No.

At least not in the United States. Why not? Because of Bill Gates (ironically).

Bill Gates has championed the Common Core standards movement in the U.S. And now, one by one, each state is moving towards adopting it, which means there will be no innovation in the high school curriculum in any way. A school like the one I am building cannot exist in the U.S. because it wouldn’t meet the Common Core standards, which are all about the facts everyone should know which were decided upon by the Committee of Ten in 1892.

A new, modern, learning by doing high school that doesn’t teach algebra or literature? Not possible. Teach students to build mobile applications rather than memorize facts about history? Not possible. Teach students to how to launch a business on the internet rather than to memorize physics formulas? Not possible.

Fortunately there are other countries in the world.

Are you proud of what you have created Mr. Gates? No innovation is possible now in high school in the U.S. and you did it.

Congratulations.

(If anyone who knows a state where what I am saying  is not true, please let me know.)

Joe Paterno, rich alumni, and imminent demise of college campuses

When I arrived at Northwestern in 1989 the President was a man named Arnie Weber.  He told me that his mother once asked him what he did as President. After he described his daily life to her she replied “ I didn’t raise my son to be a schnorrer.” (That word is Yiddish for “begger.”)

At a different moment he told me that the only real job of the President of a university was to provide ample parking for the faculty, nice dormitories for the students, and football for the alumni.

I am mentioning these things because I feel that a university-insider needs to put the Joe Paterno story in perspective. 

(For my non-US readers the short story on Joe Paterno is that he was a football coach at Penn State, regarded as a saint by nearly everyone, who turns out to have been protecting a pedophile on his staff from prosecution for years.)

We now are hearing about whether Penn State’s football program should be punished and we are hearing mea culpas from the Penn State Board of Trustees.

This is all nonsense of course. As usual the real problem is not being discussed.

Joe Paterno owned Penn State. The President of Penn State could not fire a man who was obviously too old to be a coach anymore and he could not fire him for protecting a pedophile. In fact he could not fire him for anything.

Now it may seem that this was an unusual situation. Not that many schools have football coaches who did as much to make an obscure university well known and whose influence and general goodness was agreed upon by all.

But in fact universities the size of Penn State always have a Joe Paterno. The man who runs the show may not be the football coach, but he is almost certainly not the President either.

The man or men who run big universities are the very wealthy alumni. Universities the size of Penn State need tremendous amounts of operating capital to support the sheer number of buildings and acreage not to mention sports arenas. As I mentioned in my most recent column, universities are money hungry and will overcharge students if they can get away with it because they need a lot of money in order to operate. Who supplies this money? 

Alumni donations are the number one issue on a college president’s mind. At Penn State it was Joe Paterno who supplied the money by winning football games and by getting massive numbers of people into State College, PA, six times a year to bolster the local economy.

Northwestern had a Joe Paterno when I was there. He wasn’t the football coach. He was just a local billionaire who got to decide whatever he wanted to decide at Northwestern. The basketball arena is named after him, the football field is named after him, and his not too bright relatives are on the board with him.

He decides what goes on at Northwestern because he can give large amounts of money to the university and he can push his friends to do so as well.

What I am describing is especially true at any private university which has no public money but it is true at state owned universities as well.

The President of the University of Michigan once mentioned to me that he was being forced to admit a student who couldn’t read because powerful alumni wanted him on the football team.

There are some obvious conclusions here. One is that college football is a bad thing. Now I say this as someone who happens to love college football. I even played college football. But really,if football issues drive out reason and fairness at a university (the players live like royalty in comparison to other students for example) perhaps it should be abolished.

People think that football produces revenue in terms of TV contracts and gate receipts and that is why it is there. The real revenue football produces is in the form of alumni donations which do indeed go up when the team wins.

It is alumni donations and the university's dependence upon them that is the real problem. Alumni at Penn State don’t know or care how good the Physics department is. Donations don’t go up when faculty win international recognition in research.

Universities are run by those who bring in money. At Northwestern, I brought in a lot of money for research. I got what I wanted when I wanted it. I understood how the system worked.

It is time to end this system. It is time to end the idea of the big college campus which is like a hungry animal that needs to be fed. 

Local colleges are about as important as local bookstores or local movie theaters these days. Their time is over.

Education, like anything else these days, can be done without physical locations.

Unfortunately, on line education is awful. The reason for that is simple. The physical model of education (large lectures halls and long lectures -- a money saving idea if ever there were one) still serves as the model for on line education. But it won’t for long.

Penn State is doomed, not because of Joe Paterno but because the physical campus and alumni network that controls Penn State cannot last in the world of the Internet.

Campuses will go away. Get used to it. 

It is our job to build on line education that is better than anything provided on campuses now. This can and should be done.

   

Interview with Host Michael Castner, Wall Street Journal's Dail Wrap

 

The Economic Hardship and Reporting Project provided me with a grant to write an in-depth article about suicide and its relationship to student loan debt. The piece was  published by the Huffington Post early last week. Thanks again to authors Barbara Ehrenreich and Gary Rivlin for being editors on this important project.

Also, listen to AEM's interview with Michael Caster, host of the Wall Street Journal's Daily Wrap.

Here's the link to the podcast - http://www.dailywrapwsj.com/Podcasts/11533904 - the interview took place on July 5th (jump to the seventeen minute mark to listen).

Why are students willing to go into debt in order to pay large amounts of tuition in order to attend college?

Why are students willing to go into debt in order to pay large amounts of tuition in order to attend college? 

There are two questions here really.

Why does college cost so much?

Why do students want to attend college?

Let’s start with the first. Here are some important facts to get an idea about the costs:

Stanford University, as an example owns 8000 acres of very highly valued real estate. They didn’t purchase it and they don’t pay taxes on it but there are hundreds of buildings and playing fields and parking lots and laboratories and streets all or which require massive expenses to maintain. Full professors make an average of $188,000 per year at Stanford.

I am not picking on Stanford here. Its neighbor UC Berkeley has a slightly smaller campus and pays its faculty slightly less, but really they are pretty similar, except that UC is a state owned institution.

To run an operation of this size requires money, lots of it. Tuition does not actually even cover the cost. Universities must constantly ask for donations from alumni and rich people. In addition both of these universities are heavily subsidized by the Federal government in the form of research grants which pay astoundingly large amounts of overhead.

Even so, if they can get it they charge it, so like any business as long as there are customers who are willing to pay, tuition can keeping going up.  

The real question is why are students willing to pay? Couldn’t someone offer a cheaper alternative? Does college really have to be this expensive?

The first thing to understand about all this is that Stanford (I was a faculty member there once upon a time, but they are all the same really) is not about students. A student may think that these campuses were built for them and maybe they were originally but Stanford faculty are not thinking about undergraduate education. Faculty at places like that are in the research business and faculty members have no choice but to look for research money and then do the research that will satisfy the funder and then get more money.  This process does entail paying attention to one’s graduate students who are supported by that money, but undergraduate teaching is seen by nearly all Stanford faculty as an annoyance that one has to put up with and that it is best to buy one’s way out of if possible.

Faculty are happiest in the summer when the students have gone home and they are left with a beautiful peaceful campus in which to think great thoughts, work in their labs, and talk with colleagues.

So why do students go into debt in order to attend these institutions? A more interesting question is why undergraduate education is offered at all at places like Stanford and UC Berkeley (or Yale or Harvard.)

Stanford likes the income of course, but could survive without it. (There are respected universities that do not take undergraduates. Usually the general public hasn’t heard of them because they don’t have football teams or elaborate campuses. One is Rockefeller University in New York.) What Rockefeller doesn’t have, that Harvard has, are alumni who would scream bloody murder (and stop giving money) if Harvard shut down its undergraduate program.

If what I am saying is right, and believe me no faculty member would agree with me openly but most would privately, then why do undergraduates willingly go into debt in order to attend these schools?

In the case of Harvard, Yale, or Stanford, the answer is obvious. Saying you graduated from one of those schools, rightly or wrongly, will get you instant respect for the rest of your life.

But what about Florida Atlantic University, Elon College, Southern Connecticut State, Beloit College, De Paul University, or Texas A&M to name any of 3000 I could name?

Same big fees, and curiously, same curriculum more or less.

Now I haven’t mentioned curriculum to this point but students go to college to take courses right? At least that is the common agreed upon reason.

Now any professor knows that students are really there to get away from home, drink a lot, play sports and party on. But there are courses and students must come away with an education so it is all worth it right?

Now here is a radical thought: Sitting in a classroom, or doing required reading, and parroting it all back on a multiple choice test or in some research essay is not actually education. It is school, but it is not real learning. Real learning would involve learning to do things one will do later on in life. Rarely does one write a research paper, or run an experiment, or take a multiple choice test, much less do we listen to lectures. College prepares you for nothing in actuality. (Yale’s graduates may become investment bankers but they didn’t learn that at all, they studied Classics.) Colleges say they do prepare their students and pay some homage to teaching them to think, and there actually are some specialized programs that actually do teach students to do things. But for the most part, your average English major or physics major has learned nothing that he will use in his later life except at cocktail parties.

The faculty don’t care. They care about their research. If you want to learn to be a researcher, Stanford is the place for you. The curriculum Stanford teaches is meant to get you ready to take advanced courses which are the ones that faculty actually like to teach. They are preparing students to do research because they like research and that is all they know how to do.

Now this is less true of the smaller colleges and big state universities where there is less research going on, but even at those schools, the faculty desire to be researchers and they studied with researchers and they really want to try and get research grants and behave like their colleagues at fancier institutions.

So, in essence, they teach the same courses at Stanford as they do at BYU, or Northern Illinois.

What do the students get out of this? A big debt. A four year vacation (assuming they didn’t have to work while going to school) and not much else. Well, there is always graduate school.

Why do they put up with it? Because they feel they have no choice. Being a college gradate is seen as a big deal. It wouldn’t be seen that way if being a high school graduate meant anything at all, but it doesn’t. (And the peer pressure and parental pressure to go to college is enormous.)

The solution to all this: build a high school system that teaches what college should be teaching: practical experiences that will prepare you to make a living or know how to live. (I am quoting John Adams and Ben Franklin here by the way.)

This is why we need good on line universities (and good on line high schools.) When Stanford pretends to offer on line courses in order to get people off their backs they are simply doing what they have always done, ignoring the needs of the undergraduates.

It is time for on line universities that create real (or simulated) experiences through which students can learn to do things in the real world.

We will be teaching people to work in the software industry through some on line programs we are developing (see XTOLmasters.com) in the coming months. Stanford could do that if it wanted to but it won’t. The faculty at Stanford are willing to teach students to do research or to be intellectuals.  Teaching someone to be a programmer or how to open a business is beneath them. (I am not picking on Stanford here. This is true of any research university. It is also true of the other 3000 colleges in the US since their faculty typically haven’t had much real world experience to teach about.)

Now, of course there are exceptions to all of this, but as I said the real villain is high school. We can fix that by building an on line high school outside of the control of government (and book publishers and test makers.) 

In the mean time, my advice to students: think twice before taking on an enormous debt to attend an institution that really just wants your money.

Economic Hardship and Reporting Project - The Ones We've Lost: The Student Loan Debt Suicides

The Economic Hardship and Reporting Project provided me with a grant several months ago to write an in-depth article about the student lending crisis. My editors were Barbara Ehrenreich and Gary Rivlin. Here's the piece. I hope you'll share with your networks, because this is the dark side of the student lending crisis and the public needs to be aware of how bad things have gotten for student loan debtors. This is a national emergency and it needs to be solved now.


Here's a snippet:

This story was produced by the independent Economic Hardship Reporting Project, co-edited by Barbara Ehrenreich and Gary Rivlin.

One evening in 2007, Jan Yoder of Normal, Illinois noticed that her son Jason seemed more despondent than usual. Yoder had been a graduate student in organic chemistry at Illinois State University but after incurring $100,000 in student loan debt, he struggled to find a job in his field. Later that night, Jason, 35, left the family's mobile home. Concerned about her son's mood, Jan Yoder decided in the early morning hours to go look for him on campus, where a professor she ran into joined her in the search. The two of them discovered his body in one of the labs on campus and called campus police at 8:30AM. 32 minutes later, Jason was declared dead due to nitrogen asphyxiation.

 Read the rest of the story here.