College Quality

Lack of Standard Definition for Job Placement Rates Fuels Abuses

October 15, 2013

Last Thursday California Attorney General Kamala D. Harris filed a lawsuit against Corinthian Colleges accusing the company of deliberately deceiving prospective students and investors about the company’s record in placing graduates into jobs. The California AG’s action comes just two months after New York Attorney General Eric T. Schneiderman reached a $10.25 million settlement with Career Education Corporation over similar charges.

The two cases together underscore the need for policymakers to develop a single, national standard that for-profit colleges would be required to use when calculating their job placement rates and to establish a strict regulatory regime to make sure that the rates are not rigged. U.S. Department of Education officials have the opportunity to establish such standards when they rewrite the Gainful Employment regulations.

Currently, the federal government leaves it up to accreditation agencies and states to set the standards that for-profit schools must use to calculate the rates and to monitor them. The only exception is for extremely short-term job training programs, which must have employment rates of at least 70 percent to remain eligible to participate in the federal student loan program.

As a result, the methodologies that for-profit colleges use to calculate these rates vary state by state and accreditor by accreditor, making them impossible to compare. And without a single standard in place, the schools can easily game the system.

Take Career Education Corporation, for example. According to the NY AG’s findings, officials at the company’s health education schools counted graduates as being employed if they worked for a single day at community health fairs. In some cases, school officials allegedly arranged for these fairs to be held so that they could pump up their institutions’ job placement rates.

These practices were not devised and carried out by “rogue” employees. The investigation found that “high-level Career Services managers” at the company’s headquarters “not only knew about the practice of counting employment at single one-day health fairs as ‘placements,’ but explicitly condoned and even encouraged the practice of recording such employment as ‘placements.’”

Meanwhile, the California AG found that in large part the placement rates that Corinthian Colleges (CCI) has disclosed cannot be substantiated. “The data in the disclosures published on or about July 1, 2012 for all campuses in California and online campuses does not match or agree with the data in CCI’s own database system and/or in student files,” the lawsuit states. “In numerous cases, the placement rate data in CCI’s files shows that the placement rate is lower than the advertised rate.”

For example, Corinthian “advertised job placement rates as high as 100% for specific programs when, in some cases, there is no evidence that a single student obtained a job during the specified time frame,” the AG’s office wrote in a press release announcing the lawsuit.

Some of Corinthian’s Everest College campuses went as far as paying temp agencies to place graduates in short-term jobs to help the schools meet the minimum job placement rates required by their accreditors, the lawsuit states. Others appear to have fabricated the data. In many cases, the documentation needed to verify placements was just plain missing.

The AG’s complaint includes excerpts from internal company e-mails showing that top Corinthian executives were fully aware of the problems with the data but did little about them. “Corinthian Colleges, Inc.’s CEO and/or senior management were, at all relevant times, aware of the falsity, inaccuracy, and unreliability of job placement data and the statements they made concerning the data yet they did not disclose that fact to consumers or investors, or take any action to make consumer disclosures and statements to investors accurate,” the lawsuit says.

These cases show that the Education Department needs to create a single national job placement rate standard that makes clear exactly what types of practices are allowed and which are not. And it needs to develop a strict regulatory regime that will hold for-profit colleges accountable for these types of abuses.

Students rely heavily on job placement rates when deciding which career college program to attend. The least we can do is make sure that schools are not cooking the books on the rates they disclose.

House Republicans Fight to Keep Loophole in For-Profit Colleges’ 90/10 Rule

October 7, 2013

Update 10/15/2013 2 PM: This post was edited to reflect that the proposed reform would include Tuition Assistance in the 90 percent calculation, not the 10 percent.

Congress failed to reach an agreement on funding the government for fiscal year 2014, which began on October 1, 2013, shutting down the federal government. That high-stakes budget battle has overshadowed a different disagreement between the House and Senate that could have a big effect on education benefits for members of the military – and for-profit colleges.  

The disagreement is on the Department of Defense Appropriations Act, one of the annual bills that funds the DOD. The House passed the bill back in July and sent it to the Senate. The Senate Appropriations Committee passed the bill on August 2 – but included a change to an existing test for colleges called the 90/10 rule.

The 90/10 rule states that private for-profit colleges must get at least 10 percent of their total revenue from non-federal sources, namely tuition collected from the student or his family. Failure to do so can result in losing access to Title IV funds. The 90 percent includes federal Title IV aid – Pell Grants, federal student loans, and more. It does not include nearly $12 billion spent annually on servicemembers’ and veterans’ education benefits through the Department of Defense or the Department of Veterans Affairs (VA), nor does it include more than $25 billion annually lost to tax expenditures.

The new proposed language in the DOD fiscal year 2014 bill would change some of those exclusions. Military education assistance for spouses of servicemembers or off-duty training and education for servicemembers themselves would be included in the 90 percent calculation. Additionally, for-profit colleges couldn’t use any of that Tuition Assistance (DOD) funding to advertise, recruit, or market to students.

All in all, the provision is pretty limited. The Department of Defense spends only about $517 million per year on these benefits, a small share of the DoD budget or even of federal higher education funding. VA benefits, the much larger pot of money that includes the Post-9/11 GI Bill, among other education provisions, would not be affected by the new NDAA provision.

And because there are no publicly available data that provide the institution-level breakdown of the dollar amount of DOD and VA benefits spent, it’s impossible to know exactly how many schools might be affected. A paper published by financial aid expert Mark Kantrowitz this summer used national averages to estimate that adding in DOD and VA benefits would add about 2 percentage points to a school’s 90/10 amount (for example, a school that received 88 percent of benefits from federal Title IV sources under the current system would receive 90 percent when military benefits were added in. Click here to search for a school and see its 90/10 percentage, alongside other data).Those effects could be more or less severe, depending on the school’s reliance on military student benefits.

Kantrowitz also suggested the effects of banning the use of federal money for marketing would be far more drastic. Since the largest for-profit schools spend about 20 percent of their total revenue on advertising and recruitment, he argues it would effectively increase the threshold for schools to 80/20. Again, though, the largest for-profit schools may not be a good sample to judge the effects on all schools subject to 90/10 – for some schools, it could be far less than 20 percent, or for some schools, even more.

Last week, four Republican members of the House – John Kline, Chair of the Education and Workforce Committee; Jeff Miller, Chair of the Veterans’ Affairs Committee; Buck McKeon, chair of the Armed Services Committee; and Bill Flores, chair of the Economic Opportunity Subcommittee on the Veterans’ Affairs Committee – sent a letter to key members of the House Appropriations Committee disparaging the Senate provisions. They asked that the new restrictions be removed before the defense appropriations bill passes the House again.

Their reasoning?

The marketing provision implies schools are “preying” on unsuspecting members of the military and their families, and the 90/10 rule is both unproductive and unable to account for the fundamental differences between Title IV and military education benefits.

They aren’t the first to suggest concerns with the 90/10 rule, writ large. The rule is intended as a kind of rough, imperfect metric of quality – schools that aren’t able to garner at least 10 percent of revenue from non-federal sources have presumably been labeled by the market as not worth paying for. But it can have other, unintended effects, mainly discouraging schools from serving low-income students or compelling them to raise tuition. Since the 90/10 rule includes no measure of outcomes or of how well the school serves those students, it may just be leading to the exclusion of students who can’t contribute the school’s 10 percent of non-federal revenue. (Incidentally, better data in the form of a student unit record data system could allow for better quality measures and make the 90/10 rule irrelevant.)

But including military benefits within the 90/10 rule is a no-brainer, whether or not the rule is revised to avoid these unintended consequences or to incorporate additional quality measures. The question at hand is whether students and families are willing to shell out for a particular school at which many students receive federal aid – at least 10 percent of the school’s total fiscal intake. DOD and VA benefits, as federal benefits for students, fall squarely on the 90 percent side of the equation. Failing to include them creates a perfect loophole for exploitation of servicemembers and veterans by schools that can’t otherwise meet a basic financial test.

The Federal Education Budget Project, Ed Money Watch’s parent initiative, maintains a comprehensive database that includes data on the 90/10 rule for all institutions of higher education subject to the rule, as well as other cost, finance, demographics, and outcomes data. Click here to search for your school or here to download the institution-level research file.

President Obama Aims to "Shake Things Up" in Higher Ed

August 23, 2013
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When President Obama said he was going to “shake things up” in higher education just under a month ago, many of us didn’t really believe it, fatigued from lofty presidential promises that failed to go anywhere due to Congressional gridlock and the effective workings of the higher education lobby. Well, we were wrong. This week he revealed his bold new vision for higher education that will focus on three key areas: paying for performance, promoting innovation and competition, and ensuring that student debt remains affordable. The first priority—paying for performance—could be the most ambitious reform to higher education funding since the creation of federal financial aid.

Speaking to a large crowd of mostly college students at SUNY Buffalo, Obama explained, “Our first priority is aimed at providing better value for students -- making sure that families and taxpayers are getting what we pay for.  Today, I’m directing Arne Duncan, our Secretary of Education, to lead an effort to develop a new ratings system for America’s colleges before the 2015 college year.”  

A ratings system based on college performance across the dimensions of access, affordability, and outcomes would be a welcome alternative to input- and prestige-focused rankings. In his speech, the president called out the much-derided (but much-used) US News and World Report rankings:  

Right now, US News and World Report puts out their rankings [each year], and it encourages a lot of colleges to focus on ways to…game the numbers, and it actually rewards them, in some cases, for raising costs.  I think we should rate colleges based on opportunity.  Are they helping students from all kinds of backgrounds succeed, ...on outcomes, on their value to students and parents? 

Even if the president had stopped with the creation of a new ratings system, this would have been big news and a huge step because it doesn’t require congressional approval, making it harder for the education lobby to thwart. But he didn’t stop there. He challenged the way that federal financial aid dollars are allocated by proposing that they be based on these outcomes-focused ratings, rather than enrollments (examples from the White House fact sheet include providing larger Pell grants or more affordable federal student loans to students at high-performing colleges).   

Last year, when the president proposed tying just a small portion of federal campus-based financial aid dollars (i.e. Perkins loans, federal work-study) to “value” in his State of the Union, the higher education lobby cried foul—stating that the proposal was both: 1) Too small to matter; and 2) Too large a federal intrusion. Given that the president just proposed tying a much larger pot of money to outcomes—Title IV aid that is the lifeblood of most institutions of higher education—perhaps he agreed that his first attempt was too modest. But he clearly disagrees that this is too large a federal intrusion, and said as much in his speech:

And I’ve got to tell you ahead of time, these reforms won’t be popular with everybody, especially those who are making out just fine under the current system.  But my main concern is not with those institutions; my main concern is the students those institutions are there to serve…It is time to stop subsidizing schools that are not producing good results, and reward schools that deliver for American students and our future.

We couldn’t agree more. And we’re glad that our (low) expectations for the speech were mistaken. A rating system is coming. One that will be created after much careful consideration and participation with stakeholders and one that we hope is based on much better data that focus on access, affordability, and outcomes. Once this happens, students, families, and taxpayers will have a better understanding of the value of specific institutions, and Congress will no longer be able to ignore the good and bad actors the ratings reveal. Instead, lawmakers will know where money should be focused to get the most bang-for-the-constituent-buck.

Stay tuned in the coming days for more analysis of the White House proposal.

CHEAT SHEET: President Obama’s Higher Ed Plan: What Requires Congressional Approval?

August 22, 2013

We’ve been getting a lot of questions about what in President Obama’s higher education proposal requires Congressional approval. We’ve made this cheat sheet to give you a quick and dirty look. This is not meant to be exhaustive. Instead, it’s a straightforward way to evaluate what the President has power to do while clarifying some important requirements.

As an added benefit, the cheat sheet follows each point in the White House fact sheet on the President’s plan to make college more affordable. It’s available as a picture, Excel spreadsheet, and PDF for your convenience.

And if it isn’t obvious, green means President Obama has the go-ahead. Red means stop for Congressional gridlock. 

Click on image to enlarge it.

Stay tuned in the coming days for more analysis of the White House proposal.

Edited 8/22/2013 to add a note to "Make all borrowers eligible for Pay-As-You-Earn (PAYE)"

Obama Education Plan and New America Research

August 22, 2013
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President Obama today announced a bold new plan for higher education that aims to make college more affordable. Many of the features of the Obama plan have been the subject of research and analysis by the New America Foundation’s Education Policy Program in the recent past. This blog post sets out how New America’s research links with, and can help to shape, the current round of higher education reform efforts. It is our hope that our readers will find it a helpful resource.

This post closely aligns with the White House’s fact sheet on the President’s plan to make college more affordable. 

Paying for Performance

Policy 1. Tie financial aid to college value

What New America has said: “Colleges have traditionally received federal financial aid with few strings attached. In order to create new accountability mechanisms for improving data collection and to require colleges to provide more information about their success in serving students, we would hold colleges accountable for quality and affordability by extending broad accountability metrics to all higher education institutions.” (January 2013 report, Rebalancing Resources and Incentives in Federal Aid)

Policy 2. Challenge states to fund public colleges based on performance

What New America has said: "With the economy stuck in neutral, tuition prices and student loan debt skyrocketing, and parents and students increasingly questioning the value of a college degree, our public institutions urgently need a different approach to the challenge of educating an increasingly diverse mix of students at a reasonable cost. For this reason at the national level, there should be a competitive grant program, like Race to the Top for Higher Education, that challenges public higher education institutions to innovate." (May 2013 report, The Next Generation University)

Policy 3. Hold students and colleges receiving student aid responsible for making progress toward a degree

What New America has said: “One area ripe for experimentation is how colleges disburse federal student aid. Financial aid is typically distributed in one or two lump sums, which may work well for students attending traditional four-year colleges that generally require large upfront payments from students and their families. But in cases where the primary costs students face are not large upfront payments, but more regular, ongoing costs of living, it may be counterproductive to distribute aid in one or two large disbursements… Changing aid delivery to smaller, more regular disbursements at low-cost institutions could provide these students with more reliable income, create greater incentives to persist, and protect students who have to withdraw during the semester from having to pay back large amounts of aid.” (January 2013 report, Rebalancing Resources and Incentives in Federal Aid)

Promoting Innovation and Competition

Policy 4. Challenge colleges to offer students a greater range of affordable, high-quality options than they do today

What New America has said: “In an era when college degrees are simultaneously becoming more important and more expensive, students and taxpayers can no longer afford to pay for time and little or no evidence of learning. Federal policy should encourage traditional institutions to think differently about how they deliver and award credit for learning and also create a space for nontraditional institutions and organizations to prove their ability to help students achieve real, objectively verified learning outcomes.” (September 2012 report, Cracking the Credit Hour)

What New America has said: “At a time when a higher education is more important to individual and collective prosperity than ever before, students need online courses and degree programs that are effective, affordable, and grounded in public values. A State U Online model is achievable, but only if states and higher education institutions work together to share their resources and reduce barriers that prevent students from moving seamlessly through the system – credits in hand.” (April 2013 report, State U Online)

Policy 5. Give consumers clear, transparent information on college performance to help them make the decisions that work best for them.

What New America has said: “One of our biggest concerns with government consumer information tools is the assumption that students and families already have enough knowledge about higher education to understand what they are seeing. Higher education involves a lot of jargon. What does default mean? What is a 10-year repayment plan? What is a federal student loan? The [existing] Scorecard misses an opportunity here to raise overall higher education “literacy” for families.” (April 2013 blog post, “New College Scorecard: Will Students Use It?”)

Policy 6. Encourage innovation by stripping away unnecessary regulations.

What New America has said: “Higher education generally suffers from a lack of rigorous experimentation, both in terms of practice and policy. Federal financial aid is no exception...Fortunately, the ability to conduct such evaluations already exists, thanks to legislation passed in 1992. The Experimental Sites Initiative (ESI) allows the Department to waive regulatory and/or statutory financial aid requirements for a small, voluntary group of institutions to reduce burden, improve delivery of aid, or “otherwise benefit” students.” (January 2013 report, Rebalancing Resources and Incentives in Federal Student Aid)

Ensuring that Student Debt Remains Affordable

Policy 7. Help ensure borrowers can afford their federal student loan debt by allowing all borrowers to cap their payments at 10 percent of their monthly income.

What New America has said: “A redesigned federal student loan program would substantially reduce the dangers of borrowing by offering a single repayment plan that is similar to both the ‘Pay-As-You-Earn’ plan that the U.S. Department of Education recently enacted (which itself is meant to mimic a plan in statute set to take effect in 2014) and the income-based repayment plan that was enacted in 2007. Under this proposal, all borrowers would repay their loans as a percentage of their income. Such a system would recognize that some people will never earn enough to fully repay their debt, no matter how earnestly they try.” (January 2013 report, Rebalancing Resources and Incentives in Federal Aid)

Policy 8. Reach out to struggling borrowers to ensure that they are aware of the flexible options available to help them to repay their debt.

What New America has said: “Figuring out how to pay for college is a seriously complex process. Students need to be aware of the terms and conditions of their loans before they sign their promissory notes. But we can’t be complacent in thinking that all students are coming from the same place and have the same general understanding of student loans. For many students and families, a student loan is their first loan, and their unfamiliarity with loan vocabulary will add further mystery to an already opaque process. More needs to be done to educate borrowers about financial aid.” (June 2012 blog post, “What Borrowers Don’t Understand About Student Loans May Hurt Them”) 

Stay tuned in the coming days for more analysis of the White House proposal.

Skills Beyond School: An International Look at American Higher Education

July 11, 2013
Within the United States and abroad, Career and Technical Education (CTE) often exist in a world completely separate from that of traditional postsecondary education. This divide is exacerbated by the sometimes baffling array of options available to students upon completion of secondary school. With such a wide variety of degrees, certifications, credentials, career training, and other learning opportunities, it can be a challenge for students to discern which options provide superior quality, accurately value the benefits of their options, and determine the clearest pathway toward the career to which they aspire.
 
Yesterday, the Education Policy Program at the New America Foundation hosted an event marking the release of a new report by the Organization for Economic Cooperation and Development (OECD) that underscores these significant challenges for students entering the United States higher education system.
 
While emphasizing the urgency of the challenges our higher education faces, the OECD report also provides recommendations and action items for addressing them. The action items put forward by the OECD report are aligned toward building quality, transparency, and continuity between and within these presently disparate pieces of the American education system. For more information about the recommendations of the report, see yesterday’s post on the report. Strengthening the integration of CTE with secondary learning and other postsecondary education options is a critical piece in addressing the needs of students, as they navigate their pathways to the workforce.
 
Throughout the event, 20 distinguished speakers and panelists shared their insights about the challenges facing students today and their wide-ranging consequences for the labor market and the economy if these inefficiencies in education and training remain. As Amy Laitinen, deputy director of higher education at the New America Foundation, pointed out, “The OECD’s report uses the word ‘risk’ 41 times, and it’s for a good reason: most prospective students don’t know the expected earnings of the credentials they’re seeking and employers don’t know what students with these credentials actually know or can do.”
 
The U.S. Department of Education representatives speaking at the event were receptive to the report’s findings, and emphasized their commitment to reform. During her remarks yesterday morning, Brenda Dann-Messier, assistant secretary for the Office of Vocational and Adult Education and acting assistant secretary for the Office of Postsecondary Education at Department, emphasized the need for greater clarity amidst the higher education landscape. “Postsecondary CTE programs cannot exist in isolation from higher education, K-12, or systems for workforce training. To achieve their maximum potential, they must be part of a broader career pathways system for all students in order to meet our education and skills challenges in the future.”
 
For who were unable to attend the event yesterday, a webcast – featuring an overview of the report findings, followed by three panel discussions on the three primary issue areas identified by the report – is available on the New America website in full. An infographic produced by the New America Foundation that depicts the report’s main components is also available here.

The Vibrant Diversity of America’s Career and Technical Education “System?”

July 10, 2013
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Today, the OECD released a comprehensive review of Vocational Education and Training (VET) in America, A Skills beyond School Review of the United States. While those immersed in the higher education landscape might find many of the recommendations familiar, echoing calls for reform advanced by a wide range of education stakeholders, the review provides a refreshing outside perspective on Career and Technical Education (CTE) and higher education more broadly.
 
The report is charitable in their praise of the ‘vibrant diversity’ brought forth by the United States’ decentralized postsecondary CTE system. The overarching recommendation put forth by the review is to balance this approach with a more strategic pursuit of quality, coherence, and transparency. In the context of what the review further refers to as ‘The US ‘system’ of CTE,” it becomes clear that the American system of postsecondary CTE is in urgent need of reform.
 
Authors Malgorzata Kuczera and Simon Field quickly address central issues facing postsecondary education in the United States, highlighting three broad recommendations – funding for quality, anchoring credentials in the needs of industry, and building transitions that work – which are bolstered by several more specific action items.
 
1.      Substantially strengthen quality assurance in postsecondary education and its links to title IV student aid.
 
The review outlines six considerations that provide urgency for the strengthening of quality assurance. Many of these recommendations, especially in regard to federal financial aid reform, coincide with the recommendations put forward by the New America Foundation in the report, “Rebalancing Resources and Incentives in Federal Student Aid.”
 
While many of the considerations put forth by the authors point toward new reforms, it is worth pointing out that the third points to current requirements of quality assurance that are not being enforced. Citing the 2010 U.S. Government Accountability Office (GAO) investigation of several (vibrant) private for-profit institutions, they point out the finding that four institutions clearly promoted fraudulent practices, and all made ‘deceptive or otherwise questionable statements’ in materials for students. While pursuing further reform is necessary, reviewing the implementation of prior efforts is equally important. 
 
2.      Establish a quality standard for certifications and obtain better data on both certifications and certificates.
 
In a section aptly entitled “Confusing choices and quality challenges” the authors begin with the following data from the U.S. Department of Labor: “Tour guides can choose from among nine credentials; chemical technicians decide between 22, while computer network support specialists can choose out of no less than 179 different credentials.” And it is incredibly difficult to determine whether those nine tour-guiding credentials lead to either higher wages or career advancement. The report points out that the American National Standards Institute (ANSI) estimates that less than a fourth of certifications currently offered would meet the standards that their organization has published. If the GAO conducted an investigation of American certification programs, they may find a great deal of ‘deceptive or otherwise questionable statements’ being made to students about the value of the credentials they are offering.
 
3.      Building transitions in CTE into postsecondary programs, within postsecondary education, and to the labor market.
 
The final recommendation distinguishes between the differentiated needs at each transition point within postsecondary CTE – not only entering from secondary school and exiting to the workplace, but also the unique challenges faced by students who seek to move between institutions. While funding for quality and establishing standards for certifications would go a long way in addressing some of these transition challenges, especially in regard to information asymmetry, the authors also point toward strengthening CTE in high schools as a method for building stronger transitions. It harkens back to a discussion in the first chapter pointing out America’s partiality for generalized high school education – or aversion to anything that could be perceived as “tracking.” The authors’ perspectives on building high school CTE transitions are a noteworthy addition to the review.
 
The diversity of CTE in the United States has by and large created a “system” that is not optimally serving students. While decentralization can promote rapid response and innovation, in absence of discerning funding, quality assurance, reliable information, and clear pathways forward, decision-making is a quagmire for students. In one way, the CTE system is quite vibrant – it is alive, constantly changing and evolving. As reforms move forward, it will be important to implement flexible approaches that will grow with the ever-changing landscape of labor and careers throughout the country.

The Academic Graveyard Shift: The Bubble that Didn’t Burst

June 20, 2013
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At least a couple of decades ago, scholars began anticipating the retirement of baby boomers. It was to be a magnificent bursting of the bubble that was created when the U.S. population rapidly expanded in the years following World War II. Years went by, and we watched Dennis Hopper market Ameriprise retirement plans to boomers on TV, by greeting senior citizenship on his own rebellious terms (Mr. Easy Rider was not himself a boomer). We waited. We are still waiting. For those observing higher education faculty, we should go ahead and make ourselves comfortable. Fidelity Investments made headlines this week when it reported its findings from a recent survey on higher education faculty retirement planning, which included, “74 percent of these boomers plan to delay retirement past the age of 65, or never retire at all.”

The Fidelity survey only included benefits-eligible faculty members, which suggests that respondents were full-time faculty (about 40 percent of total U.S. faculty). Even then, without knowing more about how the sample was selected, it’s tough to know exactly what to make of the validity of the findings. However, these data seem to jibe with what many in higher education have observed anecdotally. The other findings from the survey seem similarly plausible: 1) 69 percent of faculty are not retiring for economic reasons; and 2) 81 percent are not retiring for professional reasons (the two groups have some overlap). I’ll take these one at a time:

  1. It is remarkable, but not surprising, that more than two-thirds of full-time faculty members may be feeling a lingering pinch in their wallets. Fidelity’s survey report finds that more than half of those citing economic reasons for holding off retirement (55 percent) are not sure they have enough savings for retirement. To begin with, full-time, inflation-adjusted faculty pay increased by an average of only 7.7 percent in private doctoral universities from 2001-2002 through 2011-2012. The public sector fared even worse where inflation-adjusted pay either decreased or increased by less than 1 percent across institutions during that period. Private master’s and baccalaureate institutions fared only slightly better than the public sector with 1.9 percent and 4.3 percent increases, respectively. Of course, accounts of faculty layoffs, furloughs, pay freezes, and other economically harmful measures at least indirectly related to the great recession of 2008-2009 continue today. Mix in the harrowing psychological experiences of many retirement-age faculty in watching their portfolios implode, and you have some understandable economic uncertainty.
     
  2. Fidelity’s finding that eight in ten full-time faculty are choosing not to retire for professional reasons may be more unexpected to some. It seems many senior faculty really like their work. This finding is not likely to surprise either of two groups, however: those who understand academic freedom is often not fully realized until promotion to full professor or, alternatively, those who believe the academy is rife with lazy faculty, whose job security is nearly absolute.

The glue that may bring these two seemingly incongruous views a bit closer to reconciliation is the acknowledgement that the character of faculty work often changes substantially over the course of a career, and faculty exercise greatest discretion over their own work once they achieve seniority. Some favor teaching to the detriment of research; some favor research to the detriment of teaching; some spend more time outside the university (e.g., consulting, service-learning, action research) to the detriment of commitments on campus; and some choose to pursue heavier university governance responsibilities to the detriment of other work. The point is, one’s notion of what kinds of faculty work are most important tend to color one’s sense of how productive faculty members are. This understanding may be particularly helpful to those criticizing the productivity of senior faculty on grand scale, or those who predict the glut of faculty choosing to push back retirement systemically threatens academic effectiveness.

These latest data suggest the faculty boomer bubble may not burst for some time. This should highlight the importance, now more than ever, of learning exactly how to motivate, support, and manage senior faculty. Just because senior faculty are responsible for a dizzying array of work does not mean all forms of work are strategically equal in importance. Nor does it mean universities can afford for all senior faculty to markedly shift focus away from teaching, away from research, or away from service roles by virtue of their own discretion alone. Key university agents, such as department chairs, deans, and provosts, should be deeply interested in maximizing some of their most valuable assets. They share responsibility with senior faculty themselves for ensuring aging in the profession occurs gracefully.

Student Stories from Gainful Employment Programs UPDATED

June 17, 2013

Last week, Higher Ed Watch took a look at some of the gainful employment policy questions raised in the over 900 public comments submitted to the Department of Education. While policy discussions will ultimately be the most important considerations as the regulatory process moves forward, it's also important to remember that these issues do affect real people. So today we're looking at what some current and former students at these programs had to say in their comments.

Ambition and hope do not pan out in Wisconsin

For many low-income and non-traditional students, going to college can be a source of hope and a chance for a better life, even in spite of fears about not having succeeded academically in the past. That sense of opportunity is prevalent in a combined set of 13 comments from students who now appear to be enrolled in courses at Milwaukee Area Technical College. These comments almost all start on a hopeful note with a sense of excitement for a better life. Many detail previously unachieved academic successes in these programs--high grade point averages, scholarship-winning essays--the type of accomplishment that shows they are college-caliber material. But then the reversal--a degree with no return, a dispute over further debts, no change in status--that leaves them arguably worse off and in debt. (The original comments have been temporarily taken down from Regulations.gov with a request to remove personally identifiable information, so I created a redacted version here.) 

A story from one woman who enrolled at Sanford Brown to become a probation officer encapsulates this emotional roller coaster:

I was so excited about going to Sanford Brown College. I was sold because I was told I could get small class sizes and get extra help if I needed and graduate faster because the courses were 5 weeks long and you went to school year round until you graduated. 
...
I went ahead and took the admissions test and paid $50.00 for it. I was told by the financial aid personnel that I could also write a 500 word paper on why higher education was important and win a $1,500 scholarship. I won the scholarship because of the paper I wrote. I was so excited and proud of myself. I was looking forward to the wonderful future my 3 kids and I were going to have. I was going to finish college and finally have a career which I loved which was helping people. I was assured by all the admissions people at Sanford Brown College that I had made the right choice to attend that college. They all were so friendly and seemed to want this as much as I did.
 
But it was not to be. After attending from August 2006 to September 2008, the woman believed she had graduated but ended up not being able to do so after a dispute with the institution over whether she still had an outstanding balance on her account. She never ended up finding a job in the criminal justice field and owes $25,000 in student loans and cannot transfer her credits. Now the campus she attended, which had a 27.5 percent student loan default rate in the last year and charged the lowest income students a net price of nearly $18,000, is shutting down. 
 
Those who went from the highs of success to the disappointing workforce reality pulled no punches on their sentiments. For example, one student in the Milwaukee area who graduated from a dental assisting program at Everest College in 2011 wrote: "My intentions were to give my children a better future by bettering myself through education. Everest ripped that dream away from me and is the reason I am struggling today with a $12,000 loan." A student who finished at Everest with a 4.0 grade point average in the same program had the same reaction, calling her experience the "beginning of a long unfinished nightmare."
 
[UPDATE: On Twitter, Robert Kelchen notes that the Milwaukee branch of Everest College closed after placing only 95 out of its 1,585 students in jobs since opening in October 2010. An Inside Higher Ed article from February also notes that Milwaukee is increasing scrutiny of for-profit colleges.]

Confusion rules the day

Given all the work that's been done to raise questions about some gainful employment programs, it's fair to ask why students are still choosing to enroll in certain ones that already have bad outcomes (see 27 percent default rate at Sanford Brown). The answer, at least partially, appears to be confusion. Lack of clarity around costs, expected return, likelihood of finishing, transfer opportunities, and ability to pass licensing tests whether credits would transfer, and whether they will even be able to sit for the necessary licensing tests pop up again and again in a host of comments. (See for example, this comment about trying to get an animation degree or page 4 of the document labeled "student complaints.")

Confusion can be one way to shift personal responsibility away from the individual and to the program, but it also seems to be a symptom of our opaque higher education system and false quality assurance provided by accreditation. In a working transparent market, concerns about cost, transfer, etc. should not be happening. The fact that they are again reiterates the importance of efforts like the College Scorecard and Financial Aid Shopping Sheet, which try to standardize information to help with comparisons may be some assistance, but are struggling to get widespread adoption.

But better information is not enough unless either: 1) consumers change their behavior and take a more skeptical and less trusting approach to choosing colleges or 2) they have a better quality assurance that the institutions where they can take their aid have been sufficiently vetted to merit a more trusting relationship. Right now, students face the worst of both worlds thanks to accreditation. With the imprimatur of accrediting agencies (and thus by implication the Department of Education), accreditation provides a false sense of security for students that breeds an implicit level of trust toward the institution that may not be warranted. Unlike a mechanic you've never used before, a student trusts her accredited college will charge her a reasonable price and give her a service that works. And she does that because some other group of people have reviewed the college to check its quality. Experts in higher education have signed off on it, so why shouldn't she trust that seal? And so students trust that their accredited institution will offer accredited law degrees in their state--but that's not always true, as a student from Iowa found out when he tried to get a law degree from a program whose lack of recognition from the American Bar Association meant California was the only state in which he could become a lawyer. Or they might assume that their credits could be used at colleges beyond the one they are currently attending., which was not the case for many students who tried to take their coursework from proprietary institutions to Milwaukee Area Technical College.

Solving this issue of trust can be done one of two ways. First, Congress could change the requirements around accreditation to compel these agencies to actually set clear standards for outcomes and results--including things like having necessary programmatic accreditation--which would likely result in closing some institutions and accreditors for poor performance. Or, we could go the opposite way and acknowledge that accreditation is not a meaningful indicator of anything and students should not assume that just because a college gets federal student aid that means they should assume it's any good. The former is extremely difficult politically. The latter is not only hard to accomplish but would make the path into college even more confusing for low-income students that currently have to trust and rely on their financial aid office for help navigating Federal grants and loans. Either way this issue indicates more must be done to think about not just what information consumers use for their decisions, but also how they interact with the colleges they are considering attending.

Does this really require a college credential?

Also implicit in the trusting attitude of students is the assurance that program will be what it says it is--training that will provide them access to a job. Now in any system, some programs will be better than others and there will always be a few duds.  And commenters did identify some that appeared to be not very good--students discussed outdated or insufficient equipment (imagine learning how to work with braces on half a mouth) or instructors without sufficient content knowledge. But assumed in all of those comments is the idea that the program would have been better had those deficiencies just been corrected. Never would a student assume that the degree itself is fundamentally not reflective of how the fields they are preparing for actually operate. Yes one student who attended  Sanford Brown in the Milwaukee area found out that misalignment problem was exactly what her program suffered from:
 
The majority of companies hiring for Billing have on the job training for people who have been hired by the company including Aurora Healthcare. ... The HIPPAA, JCAHO and Medical Terminology courses are being given as on the job training as free computer based learning courses. Positions in Coding for hospitals are impossible to get into without years of experience. The Certificate I received has not been useful to me and is not worth the $17,000 I now owe. 
 
The commenter raises a point that goes beyond the idea of whether a program merits the price charged and debt incurred to instead ask is it even aligned with fields or occupations where postsecondary education really provides an advantage for entry and advancement? In the case of the coding program, she suggests that even an extremely good program would not have been worth it because that is not how the coding industry works. This isn't a derivative of the "bachelor's degree holders working in restaurants" argument, but rather the idea  that even someone who gets employment in the relevant field may not actually need that credential. It's a challenge to the idea that if a college or university offers a program it is by definition "postsecondary." 
 

Signs some schools are taking steps to improve--is it enough?

To be sure, there's a lot of comments that do no paint a flattering light of the programs and the institutions that offer them. But there are some rays of light suggested in the comments. Some institutions have shut down poor-performing programs, while others have closed entire branches that did not appear to be succeeding. Outside the comments, the University of Phoenix and Kaplan University have been among the large institutions to get noticed for offering trial periods and experimenting with new curricula to boost quality. In these cases, schools do appear to be responding to market forces in positive ways. The task ahead then is to figure out how to keep driving those kinds of changes so that stories of future students can focus only on the hope and not the disappointment and regret that followed. 

What Reading 900+ Comments Tells Us About the Coming Gainful Employment Re-Regulation

June 13, 2013

Circle September 9 on your calendars. That's the date according to a Federal Register notice published yesterday that the Department of Education will bring together a committee to develop new regulations defining gainful employment. While it had been clear since a notice published in mid-May that the Department was going to be considering gainful employment in its next round of rulemaking, yesterday's announcement provides exact timing for negotiations, as well as the types of negotiators to be considered. 

With the first negotiating session still not for several months, it is going to be some time before the Department puts forth any public proposal, but with more than 900 public comments already submitted in response to initial thoughts on the regulatory agenda, there's already some clear indications of what we can expect to see from a policy standpoint. In a separate post I'll put up some of the more interesting comments received from students. (New America also submitted its own comments on the regulations, which can be found here.)

Arguments in favor--stronger, more comprehensive

By far the largest number of comments came similar short submissions calling for a stronger rule and protections for students and taxpayers (see here for an example). On the more substantive side, a few themes emerged:

The gainful employment rule should be stronger: Multiple comments cited the 2011 rule's "nine strikes and you're out" policy whereby a program had to fail each of three measures for three years straight as being overly generous. Several comments called for initiating penalties for programs that failed two out of the three measures. Others, such as those from The Institute for College Access and Success argued for a higher threshold on the repayment rate based upon prior studies of delinquency and default as well as how Congress set thresholds for cohort default rates. Not surprisingly, among the most thoughtful and creative comments were those from Robert Shireman, the former Department official who helped craft the initial set of regulation. Shireman's comments suggested a new structure that would draw distinctions between institutional and program eligibility depending on repayment rates, with debt to earnings tests used if repayment rates fell below a certain level.

Accountability in this space is about more than just gainful employment: Many comments touched on the idea that gainful employment is only one piece of an accountability framework that also includes cohort default rates and the 90/10 rule. Given that, many commenters stressed the need for the Department to address the use of deferments and forbearances by some institutions to keep their default rates low by limiting the number of students that could default during the measurement window. Similarly, commenters also stressed the need to consider tactics like delaying the disbursement of student aid funds so some dollars would not count as part of the 90/10 calculation for a given year.

Relief for borrowers at failing programs: The final gainful employment regulation never included any relief for borrowers that had debt from a program that eventually lost eligibility on the grounds that discharge requirements were statutory and could not be changed. This time, several comments, such as those from the National Consumer Law Center, stressed that borrowers in programs that lose eligibility should be given relief much the same way that those who attend institutions that shut down receive assistance.

Job placement matters: The comments also included several submissions from attorneys general from states such as Colorado, Illinois, and Kentucky. One issue these focused on is the importance of greater clarity in definitions of successful job placement. Inaccurate, misleading, and outright fraudulent have been an ongoing problem at some proprietary institutions for many years, but the lack of a clear definition can make enforcement of the issue more complicated (the Department's National Center for Education Statistics did hold a technical review panel on creating a definition a few years ago, but did not end up putting together a definition).

Arguments against--wait for reauthorization 

Not surprisingly, there was a pretty clear divide on whether the Department should approach the gainful employment rule again, and what to do so if it does. In general, proprietary colleges and their lobby groups argued that the Department should delay action on the grounds that Congress would be scheduled to reauthorize the Higher Education Act in short order (see page 2 of the comments from the industry's main lobby group, the Association of Private Sector Colleges and Universities for a typical form of this argument). Since reauthorizations these days have a cicada-like periodicity  that's effectively calling for a delay of many years.

In a similar vein, several institutions also brought forward the idea that the gainful employment rule should be applied to all types of institutions, not just a subset of programs at public and private nonprofit institutions and essentially all programs at proprietary colleges. DeVry and LIM College had the clearest forms of this argument, while Strayer University took a slightly different approach, arguing why it resembles other institutions that are not subject to the gainful employment requirement and should thus be excluded. (Whether including more programs is legally allowable, a good policy idea, or just something that would be designed to get other sectors of higher education opposed is debatable.) 

By far the two most thoughtful and interesting comments from those opposed to gainful employment came from Strayer University and Champion College Services, which provides default management and would have provided gainful employment support if the rule were still in effect. Strayer's comments suggests relying on the cohort default rate to set thresholds and penalties, while Champion put forth an argument for creating a repayment rate that is based on the number of borrowers, not dollars, and define "repayment" as not being in default or more than 120 days delinquent. Other ideas more commonly raised included allowing institutions to limit the amount of debt a student can take on and risk-adjusting the measures based upon the characteristics of students enrolled. 

Not surprisingly then, we're already clearly headed for a pretty significant divide on the policy questions in gainful employment. In a subsequent post I'll pull out some of the more interesting submissions from former students and faculty at proprietary institutions. 

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