Transcript Slide 1

It’s War!
Survival of Private Sector Colleges and Universities at Stake
Michael J. Cooney
[email protected]
Battles:
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Congressional Hearings
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GAO Reports and Investigations
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NPRM – Gainful Employment
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Negative Press
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State Investigations
Plus:
• All Higher Education Outcomes in Question
• Validity of the Accreditation Process
Finally!
The value assessment, structure, methods and delivery of
higher education is undergoing dramatic change.
What is college? And why should I go?
The traditional model is changing.
Students’ convenience is the future.
“The students of 2020 will demand an education on
Their terms and will be seeking a technology-based
customized approach.”
The College of 2020, Chronicle Research Services
Why?
$
Why?
Outsized rate of growth in the for-profit sector.
1990 – 2010 from less than 1% market share to
almost 12%.
Why?
Students enrolled at for-profit colleges jumped from 1
million to 1.8 million between 2003-2008.
Federal aid to these schools TRIPLED
from $8 billion to $24 billion.
Federal aid to not-for-profit and public schools increased 69% during the same time period
For-profits schools represent 8%
of total student enrollment and
23% of federal student aid in 2008
$129,775,998,123
Title IV Funds Total 2009/10
18.54% increase from previous year
------Publically Traded For-Profit Education Companies
15% of all Title IV Funding
64% of the for-profit sectors Title IV funds
$5,380,680,600 (2009/10) Estimated
University of Phoenix /14% increase
“The vast majority of the growth among Pell
recipients attending for-profit colleges in the last 15
years has been among students that many traditional
colleges and universities have shunned: working
adults, especially from the lower socioeconomic
strata.”
Thomas G. Mortensen,
Why?
To BIG to regulate!
The power and validity of the “Triad” is in question.
HELP COMMITTEE
HEALTH, EDUCATION, LABOR & PENSIONS
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Emerging Risk? An Overview of the Federal Investment in For-Profit
Education
For-Profit Schools: The Student Recruitment Experience
The Federal Investment in For-Profit Education: Are Students Succeeding?
HELP COMMITTEE
HEALTH, EDUCATION, LABOR & PENSIONS
Emerging Risk? An Overview of the Federal Investment in For-Profit Education
For-Profit Schools: The Student Recruitment Experience
The Federal Investment in For-Profit Education: Are Students Succeeding?
The Battle
The Role of Accreditation
Quality Assurance – Gate Keeper - Quality Improvement
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Focus on Inputs and process
Promotes status quo
Establishes barriers to entry
“Accreditation today is the biggest barrier to innovation
and change in higher education” Charles Miller
“The secrecy of peer review has actually become counterproductive
in terms of credibility with the public” Steven Crow
The Battle
Yasmine Issa ,
former Sanford Brown Institute student,
Yonkers, NY
The Battle
Gregory Kutz , Managing Director,
Office of Forensic Audits and Special Investigations,
U.S. Government Accountability Office, Arlington, VA
CLAIMS:
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Cost the taxpayer too much
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Charge too much for tuition
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Have excessively high default rates
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Have excessively low graduation rates
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Fail to prepare students for Gainful Employment
“Debt without a Diploma”
No Comparable Data!
Post-Secondary Education Market Share
70% Public
18% Private non-profit
12% For-profit
Student success story vs. Student failure story
For-profits Cost Taxpayers More
Taxpayer Cost per student per year
$12,000 Public Universities
No taxes on endowment income, property or use taxes etc.
$5,300 Private Non-profit Colleges & Universities
No taxes on endowment income, property or use taxes etc.
$4,800 For-profit Colleges
Pay federal, state and local taxes
The Apollo Group (University of Phoenix) paid an estimated
$500,000,000 in taxes in 2009.
For-profits Cost Taxpayers More
Annual Taxpayer Cost Per Completion
$50,000 Public Universities
No taxes on endowment income, property or use taxes etc.
$18,000 Private non-profit colleges & universities
No taxes on endowment income, property or use taxes etc.
$17,000 For-profit Colleges
Pay federal, state and local taxes
Stifel Nicolaus 10/27/10
For-profits Cost Taxpayers More with
Loan Defaults Factored In
Student loan default rates track very closely with the socio-economic
status and family money management practices of the borrower.
Inputs vs. Process
For-profits Charge Too Much for Tuition
Cost per student, per year 2009-10
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$14,174 For-profit colleges
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$7,020 Public colleges – in state
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$18,548 Public colleges – out of state
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$26,273 Private non-profit colleges
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$50,000 Plus Elite private non-profit colleges
Public colleges increased their tuition as much as 17% across the board
and many hidden fees are up more than 50% in 2010
For-profits Have the Highest Loan Defaults
Defaults are high and on the rise for all institutional types
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The current economy and unemployment rate
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The Fed encouragement of irresponsible borrowing
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A change in borrowing habits and rationale: Student who used to borrow
only for tuition are now borrowing to support a lifestyle.
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The feds will not permit the schools to limit loan values based on realistic
payback
85% of college graduates must move back home
For-profits Have Low Graduation Rates
Institutional types of all types have low and declining graduation rates
and the public colleges and universities are among the worst.
Robert Tucker
Only 25% of community college students earn degrees within six years
Remedial courses do not carry credit-weight, which is the main cause
of discouragement for students who are placed in them. Students feel
as though they’re working for nothing and 30 percent drop out before
even beginning their college career.
For-profits Fail to Prepare Students for
Gainful Employment
A potentially good idea even though
the current metrics are badly flawed.
In some form this is the new reality!
Gainful Employment for All?
Finally:
“Despite dismal student outcomes,
for-profit institutions are raking in record profits.”
Senator Harkin
For-profit educations makes way to much money!
OPPORTUNITY?
You have to
BELIEVE!
And don’t employ anyone who doesn’t
COLLECT DATA
Measure learning in quantitative terms.
NEW RULES:
• On-time graduation rates for students entering the program
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Placement-rate information for students who completed the program
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Median debt incurred by students who completed the program during the
Preceding three years.
Change Their
Frame of Reference
They can’t understand you, until they experience you.
Revise your marketing
Take control of your advertising and message
and move beyond “compliance.”
Integrity
in all aspects of your lead generation
Recover from the
Good times
The recession student market maybe the new normal
but the realities could be fatal.
Better not Bigger!
Enroll only those who you can graduate!
End of the open access model?
Weaker consumer demand as potential students are more wary of taking
on debt relative to job prospects in the current economy”
Be Exceptional
Build your institutional capital and instructional quality with
Service Leaning.
Learning by doing through the act of giving
Globe University
Be Exceptional
Help fulfill your students dreams and
take advantage of the recessional economy with
Entrepreneurial Development Programs
Abolish the
Job Placement Office
Make your graduates responsible for their own success
Wage Negotiations & Job Search Skills
Introduce:
Career Progression Planning
Where you are – Where you want to be.
Career, academic, & financial assessment at enrollment
Then create a individual success plan
There is power in
community
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Accept each other credits
Make referrals
Promote higher education of all kinds
Michael J. Cooney
[email protected]