The for-profits hit a nasty speed bump

     As a rule, Americans don’t like to think and they’re not particularly interested in conserving anything. They daily lend their tacit consent and even enthusiastic embrace to anything commerce spits out, no matter how thoroughly it reshuffles the social deck or how irreversibly it sends us into a brave new world of unknown nature.
     In this regard, arguably, so-called “conservatives” are scarier than liberals and progressives, for they happily embrace that loose cannon known as commerce, and they trust the alleged infallible benevolence of the “invisible hand” as though to do so were piety.
     In case you haven’t been paying attention, American education—and especially American higher education—is undergoing a transformation. This is occurring, not because some radical has persuaded us to adopt a new “paradigm,” but because of a confluence of mindless causes, including the failure of the academic world to keep its eye on the point and possibilities of being “educated.” By now, most citizens are academic barbarians. They watch "Three's Company" reruns. They'll tell you where they were educated, but somehow it just didn't take.
     FOR-PROFITS. There’s more to the transformation story, but a big part is the rise of the “for-profits”—the University of Phoenix, Kaplan College, Argosy, etc.—which are quietly taking over college instruction. Meanwhile, by degrees, old academic institutions—the idea of the university and even the idea of the “professor” with academic freedom—are dying, replaced with notions and practices that seem more at home in the world of business. Students are increasingly referred to as "customers." Education is "delivered."
     Clearly, this country—excluding immigrants—is experiencing a kind of decline, a Fall. College students no longer study much. The idea that one must get a good college education to succeed is losing its grip on the population, or at least on the youth. People increasingly occupy their minds with trivia and irrational nonsense and vote as though ignorance and stupidity were a virtue. About half the country has doubts about the President's citizenship and birth. The dullard Sarah Palin is very popular among Republicans. Everybody wants to borrow my Ouija board.
     Because we really are quite stupid and unconservative, there’s no stopping this transformation in education. Our only hope is in all those people from somewhere else—immigrants and their families—who don’t drag decadence over here with ‘em. I see this all the time at the colleges. Increasingly, immigrants are the big achievers among students. They're the student leaders. Meanwhile, Sean and Buffy are at the beach with dad's new Beemer.
     Those immigrant kids are a ray of hope. They really are.
     The for-profits are a cancer and, naturally, because our educational institutions are democratic—America is unusual in its approach to education, leaving big decisions, not with highfalutin distant experts, but with local elected officials—morons and barbarians often oversee our colleges, and they promote their own kind, including for-profits boosters and ardent believers in the latest untested whiz-bangery.
     Hence it was that, overnight, the conniving and ruthless (but distinctly undereducated) Raghu P. Mathur went from being a chemistry teacher to the President of Irvine Valley College. He was picked by a crew of "fiscal conservatives" that had just been elected to the board, owing to a nasty backroom deal with the faculty union. And then, after Mathur experienced two massive votes of “no confidence” among faculty, the board fixed the hiring process to make the creep our Chancellor. He has endlessly promoted “distance ed,” something he can barely pronounce, and he has long been affiliated with the execrable Argosy University, where he still pontificates in evening classes about good management, “new paradigms,” and “team building.” He received his doctorate from Crack Jack Prize University, a.k.a. Nova Southeastern, which is really good at making money selling degrees to morons like Mathur who know that there’s money in higher degrees, no matter how phony or worthless. (Mathur was only recently ousted.)
     This is America, where the business of Americans is business, and nobody knows the name of their Congressperson, and so there’s no stopping the for-profits. They are the future. You should invest in 'em.

* * *

     But, for the time being, they’ve hit a nasty speed bump, ‘cause Democratic legislators have been all over ‘em lately. You see, it turns out that the for-profits rely on turning the heads of the most clueless among us, helping them to get big loans that they can’t pay back. They default on these loans bigtime. And so, what happens? That’s right: the taxpayer pays the bill. People are already calling this a “bubble.” It’s worse than that. It’s a tar bubble. When it pops, everybody will get gooed. We’ll stink. We'll sue BP. BP will prevail. No one will care.
     Yesterday, the New York Times described a small part of the aforementioned “speed bump”:

Kaplan Suspends Enrollment at 2 Campuses

     The Washington Post Company’s Kaplan Inc. unit suspended enrollment on Friday at its campuses in Pembroke Pines, Fla., and Riverside, Calif., where undercover investigators for the Government Accountability Office found deceptive practices by admissions officials.
     At a Senate hearing on Wednesday on recruitment at for-profit colleges, a G.A.O. report, accompanied by videos, described deceptive or fraudulent practices at each of 15 campuses visited, two of which were Kaplan campuses. At Kaplan College in Pembroke Pines, for example, an admissions officer told investigators posing as applicants that the college had the same accreditation as Harvard.
     Washington Post stock fell $31.05, or 7.6 percent, to close at $377.56 on Friday, its largest drop in more than a year, after the company said in its quarterly report that proposed United States Department of Education rules could have a “material adverse effect” on Kaplan’s higher-education operations. The higher-education unit’s $212 million operating income for the first half of the year made up almost 80 percent of the company’s overall operating income for the period.
     The Education Department’s proposed rules would tighten regulation of for-profit colleges’ recruiters and rein in programs whose graduates end up with more debt than they can repay.
     Melissa Mack, a Kaplan spokeswoman, said the company suspended enrollment at the two campuses pending an investigation of the G.A.O. findings, and meanwhile was working “to ensure that such incidents are not repeated anywhere at our 75 campuses or among our 16,000 higher-education employees.”
     Kaplan’s higher-education programs enrolled more than 112,000 students as of June 30. 

     Don’t worry. Kaplan will be fine. Washington Post will make lots of money.
     The following article appeared two days ago in the always-excellent Inside Higher Ed. It gives you a pretty good idea what’s going on:

Shellacking the For-Profits

     Senate Democrats made it clear Wednesday that their examination of for-profit higher education has only just begun, and that they plan to pursue legislation aimed at reining what they see as the sector’s dishonest – if not fraudulent – practices.
     At a hearing on the “student recruitment experience” at for-profit colleges that began Wednesday morning and carried on through the mid-afternoon, Sen. Tom Harkin (D-Iowa), chairman of the Health, Education, Labor and Pensions Committee, outlined plans to hold more hearings on the sector, to collect broad sets of information from for-profit colleges, and to begin drafting legislation aimed at cleaning up the sector.
     “Education is too important for the future of this country,” he said. “Facing the budget problems we have in the next 10 years, we just can't permit more and more of the taxpayers' dollars that are supposed to go for education and quality education … to be going to pay shareholders or private investors.”
     Much of Harkin’s motivation came from the findings of a Government Accountability Office “secret shopper” investigation of recruiting practices at 15 for-profit campuses, the results of which – including a powerful videotape visible below – were officially released at the start of the hearing. The probe identified “fraudulent, deceptive or otherwise questionable marketing practices” at all 15 institutions, and inducements to commit fraud on the Free Application for Federal Student Aid at four institutions. Coupled with a former recruiter’s account of his experience on the job, the evidence presented at the hearing depicted an industry aggressively and universally going after “leads” and “starts” with the institutional objective of securing federal financial aid dollars.
     "GAO's findings make it disturbingly clear that abuses in for-profit recruiting are not limited to a few rogue recruiters or even a few schools with lax oversight,” Harkin said. The evidence was collected from some of the nation's largest for-profit colleges, including the University of Phoenix and Kaplan College.
     Though the U.S. Department of Education is expected to publish regulations intended to guard against abuse of the Title IV financial aid program by Nov. 1, Harkin said he was “not certain regulations will suffice.” Rather, he said, “I believe and I think where we’re headed is very clear cut legislation that can’t be overturned by another administration, that can’t put in ‘safe harbors’ and say it complies, but really tightly designed legislation to correct these practices.”
     Harkin promised more hearings on for-profit colleges in September, November and possibly December – including one on accreditors’ oversight of for-profits – and also announced plans to collect data on sector outcomes and practices. His office will today send requests to 30 for-profit colleges – all of the publicly traded companies, plus a mix of privately held institutions – asking them to provide information about their graduation and loan default rates, plus internal recruiting documents and details about their use of third-party companies, like lead generators that help with recruiting. “We’ve got to get to the bottom of this,” he said.
     Sen. Mike Enzi, of Wyoming, the senior Republican on the panel, acknowledged “aggressive and inappropriate recruiting practices” at the colleges visited by GAO investigators, but said he wanted to see the Senate’s scrutiny of higher education reach to nonprofit institutions as well. “In focusing only on for-profits, we are not being objective and we are ignoring the bigger picture of what is happening across all of higher education.” (That approach seems unlikely so long as Democrats have the majority and nonprofit colleges wield the clout they enjoy among many lawmakers on both sides of the aisle.)
     Also on Wednesday, Sens. Jim Webb (D-Va.) and Richard Durbin (D-Ill.) sent letters to Defense Secretary Robert Gates and Veterans Affairs Secretary Eric Shinseki asking for detailed data on how tuition assistance money for members of the military and for veterans is being spent.
     “[W]e have heard reports that some for-profit institutions may be aggressively targeting service members and veterans, signing them up for educational programs that may bring little benefit to future employment opportunities, low graduation rates and high default rates,” they said. With the passage of the Post-9/11 GI Bill, they added, “we have heard concerns about excessive tuition being charged at some of these institutions.”
     Democrats Tom Carper (Del.), Kay Hagan (N.C.), Claire McCaskill (Mo.), Russ Feingold (Wisc.) and Harkin also signed on to the letter.

'Deceptive or Completely Questionable' Practices

     Presenting the findings of the GAO investigation was Gregory D. Kutz, the office’s managing director of forensic audits and special investigations at the Government Accountability Office. In testimony made more powerful by the brief undercover video clips that punctuated it, Kutz detailed “deceptive or completely questionable” practices at all 15 institutions.
     The colleges the GAO visited were not a totally random sample, Kutz said, but they were not institutions where his office or the Education Department were already aware of fraud. “It gives you an indication that this is much more widespread than a few bad actors.”
     Though Kutz’s written testimony didn’t identify the campuses the GAO examined, he did, at Harkin’s request, release a list of the institutions. They included campuses of the University of Phoenix in Arizona and Pennsylvania, Kaplan College in California and Florida, Everest College in Arizona and Texas, as well as privately held institutions including ATI Career Training and Medvance Institute.
     Manny Rivera, a spokesman for Apollo Group, which owns the University of Phoenix, said the company has “strict policies in place to protect students during the enrollment process and throughout their tenure with the university, and when we discover any violation of this policy, we take immediate and decisive disciplinary action up to, and including, termination of the employees involved.”
     Jacquelyn P. Muller, vice president of public relations at Education Management Corporation, which owns Argosy University in Chicago – one of the institutions visited – said that “every employee within our organization is held accountable for upholding the highest moral, ethical, and legal standards at all times.”
     Kutz said that though corporate leaders may try to dismiss his investigation’s findings as problems with individual employees, “I expect anybody who would have walked in... and that was trained a certain way in marketing was going to the same script.” Institutions may say “‘that was a rogue employee,’ but I suspect in some of these cases that is absolutely not true.”
     Sen. Johnny Isakson (R-Ga.), reinforcing what has become Republicans’ standard way of addressing problems uncovered at for-profit colleges, said: “I know we’ve got people doing bad things, but I know we’ve got a lot of people doing it right and they’re going to be under a cloud unless we begin to separate the wheat from the chaff.”
     Joshua Pruyn, a former recruiter for a Westwood College, who testified at the hearing, said he didn’t think the kind of dishonest behavior that he saw and was encouraged to emulate while working at a Colorado campus resulted from a few “rogue” employees violating his institution’s code of ethics, but rather a pattern of behavior encouraged by corporate leaders.
     Harkin, too, said he believed the encouragement to aggressively and dishonestly pursue students came from higher up. Showing a recruitment training PowerPoint slide from the University of Phoenix with the header “Creating Urgency: Getting Them to Apply NOW."
     Harkin said he thought inducements to recruit aggressively were coming from company executives. “That doesn’t come from some employee,” he said. “That comes from the top.”
     During the HELP committee's June hearing on for-profits, Harkin voiced concern that formerly good actors in the sector had been “lured into the vortex of bad practices” that might, only a few years ago, have been the domain of only some. The findings of the GAO investigation, he said, were “evidence [that] points to a problem that is systemic … to the for-profit industry,” with a “recruitment process specifically designed to do whatever it takes to drive up enrollment numbers, more often than not to the disadvantage of students.”
     The fallout from the hearing isn’t likely to be positive for the for-profits.
     Jerry W. Hartle, senior vice president of government and public affairs at the American Council on Education, said he couldn’t “say for sure that it’s the most devastating Congressional hearing I’ve ever seen, but it’s in that league.” Harkin’s statements at the hearing, Hartle said, indicated that he “is fully engaged and is emotionally committed to this issue.” The findings of the GAO investigation, in particular, “seemed to really get Sen. Harkin’s attention.”
     The stocks of most publicly traded for-profits, including those visited by GAO investigators, closed down for the day on Wednesday afternoon.

     You’ve got to hand it to the current crop of GOP leaders. They’re amazing. They represent everything that’s wrong with this country.
     Democratically speaking, that’s good representation.