Another for-profit higher educational institution bites the dust …

September 12, 2016 Phillip Nones Business, Education, Employment ACICS, Ben Miller, Carinthian Colleges, Department of Education, Employment, For-Profit Colleges, Higher Education, ITT Technical Institute

Last week, ITT Technical Institute, a for-profit higher educational institution enrolling ~40,000 students on more than 130 campuses across the country, announced that it is shutting down, while also laying off the lion’s share of its more than 8,000 employees.

This development comes hard on the heels of the closure of Corinthian Colleges last year. Together, it raises the question as to whether such “glorified trade schools” are doing any kind of service to students who seek to better themselves but who don’t have the scholastic record – or the money – to attend traditional two-year or four-year colleges.

There’s no question of the pent-up demand for higher learning. Guidance counselors push continued schooling as the next logical step for high school students, and society in general promotes a college education as the ticket to the good life.

For-profit colleges have benefited greatly from an environment which prizes higher education as the next logical step for high school graduates, and during the Great Recession beginning eight years ago, these schools continued to promote their curricula heavily while churning out more students into what was a very weak job market.

Students graduating from not-for-profit institutions had a hard enough time landing employment in their chosen fields … and for graduates of ITT, Corinthian and other such schools it was even worse.

The U.S. Department of Education had had its eye on both ITT and Corinthian for a number of years. Becoming alarmed at the inability of graduates to pay off their federally funded student loans, the Department ultimately banned both schools from enrolling any new students who rely on federal financial aid – which was nearly all of them, of course.

An angry ITT Technical Institute pronounced the sanctions unwarranted, inappropriate and unconstitutional – amounting to a death sentence.

A news release from the school stated, “These unwarranted actions, taken without proving a single allegation, are a lawless execution.”

As is often the case in such situations, there’s more than meets the eye. At the same time, ITT Technical Institute is also facing fraud charges from the SEC plus a lawsuit from the Consumer Financial Protection Bureau.

Not only that, the institution has been under investigation at the state level in 19 different jurisdictions.

Academic accreditation is also an issue, as the ACICS (Accrediting Council for Independent Colleges & Schools) determined that the school was not in compliance with ACICS’ accreditation criteria. ACICS cited a whole range of questionable practices in admissions, recruitment standards, retention, job placement and institutional integrity.

The school itself, using aggressive and pervasive advertising while pushing its “power packed studies” in fields such as IT, electronics, CAD design and health services, also informed prospective enrollees that credits earned at ITT Technical Institute would be “unlikely to transfer.”

This sorry state of affairs at ITT-TI now makes it that much more difficult for ~40,000 students to pursue their career goals. It’s yet another example of how a laudatory mission can lead to negative consequences for the very people who need help in launching their working lives the most.

Ben Miller, who is a director for post-secondary education at the Center for American Progress, puts the blame nowhere but on the school:

“Years of mismanagement by ITT leadership put it in a position where the Education Department’s action was necessary.”

In the coming years, it will be interesting to see the degree to which other for-profit institutions with far-flung operations – Brightwood/Tesst, Capella, Strayer, the University of Phoenix and others – will fare under the klieg lights of heightened scrutiny.

Cutting Some Slack: The “College Bubble” Explained

July 31, 2016 Phillip Nones Demographics, Economics, Education, Employment, Human Resources, Social Commentary BLS, Bureau of Labor Statistics, College Education, Cost of College, Cost of Education, Dynamics, Education, Heritage Foundation, Higher Education, Student Loan Debt, Student Loans, Workforce, Workforce Trends

There are several “inconvenient truths” contained among the details of a recently released synopsis of college education and work trends, courtesy of the Heritage Foundation. Let’s check them off one-by-one.

The Cost of College

This truth is likely known to nearly everyone who has children: education at four-year educational institutions isn’t cheap. Here are the average annual prices for higher education in the United States for the current school year (includes tuition, fees, housing and meals):

4-year public universities (in-state students): ~$19,550
4-year public universities (out-of-state students): ~$34,000
4-year private colleges and universities: ~$43,900

These costs have been rising fairly steadily for years now, seemingly without regard to the overall economic climate. But the negative impact on students has been muted somewhat by the copious availability of student loans — at least in the short term until the schedule kicks in.

The other important mitigating factor is the increased availability of community college education covering the first two years of higher education at a fraction of the cost of four-year institutions. Less attractive are “for-profit” institutions, some of which have come under intense scrutiny and negative publicity concerning the effectiveness of their programs and how well students do with the degrees they earn from them.

Time Devoted to Education Activities

What may be less understood is the degree to which “full-time college” is actually a part-time endeavor for many students.

According to data compiled by the Bureau of Labor Statistics over the past decade, the average full-time college student spends fewer than three hours per day on all education-related activities (just over one hour in class and a little over 1.5 hours devoted to homework and research).

It adds up to around 19 hours per week in total.

In essence, full-time college students are devoting 10 fewer hours per week on educational-related activities compared to what full-time high school students are doing.

Lest this discrepancy seem too shocking, this is this mitigating aspect: When comparing high-schoolers and full-time college students, the difference between educationally oriented time spent is counterbalanced by the time spent working.

More to the point, for full-time college students, employment takes up ~16 hours per week whereas with full-time high school students, the average time working is only about 4 hours.

Full-Time Students vs. Full-Time Workers

Here’s where things get quite interesting and where the whole idea of the “college bubble” comes into broad relief. It turns out that full-time college students spend far less combined time on education and work compared to their counterparts who are full-time workers.

Here are the BLS stats: Full-time employees work an average of 42 hours per week, whereas for full-time college students, the combined time spent on education and working adds up to fewer than 35 hours per week.

This graph from the Heritage Foundation report illustrates what’s happening:

Interestingly, the graph insinuates that full-time college students have it easier than many others in society:

On average, 19-year-olds are spending significantly fewer hours in the week on education and work compared to 17-year-olds.
It isn’t until age 59+ that people are spending less time on education and work than the typical 19-year-old.

No doubt, some social scientists will take these data as the jumping off spot for a debate about whether a generation of “softies” is being created – people who will struggle in the rigors of the real world once they’re out of the college bubble.

Exacerbating the problem in the eyes of some, student loan default rates aren’t exactly low, and talk by some politicians about forgiving student loan debt is a bit of a lightning rod as well. The Heritage Foundation goes so far as to claim that loan forgiveness programs are leaving taxpayers on the hook for “generous leisure hours,” since ~93% of all student loans are originated and managed by the federal government.

What do you think? The BLS stats don’t lie … but are the Heritage Foundation’s conclusions off-target? Please share your thoughts with other readers here.

Economic Reality Comes to College Campuses

April 29, 2015April 29, 2015 Phillip Nones Economics, Education, Human Resources, Social Commentary College, College Education, College Financial Aid, Corinthian Colleges, Distance Learning, Economics, Education, Higher Education, Student Loans, Sweet Briar College, Tuition, Tuition Rates

Finally, colleges get schooled in Economics 101.

For a long time, “market forces” didn’t really apply to institutions of higher learning — at least not in the classic sense.

In a social environment where nearly everyone buys into the notion that more education is good, government and educators fostered policies where no one need be prevented from getting a college education because of lack of funding.

Accordingly, in the past several decades, loans and grants became easier to obtain than ever.

Unfortunately, one of the consequences of easy money in education was that tuitions rose at a faster rate than the economy as a whole. After all, the third-party money spigot seemed never-ending.

For a good while tuition spikes weren’t a particular concern, because it still seemed as though a college-level education was a great way to earn substantially more money in one’s career — even if racking up student loans at the outset.

But in recent years, we no longer see an automatic positive correlation between a higher education degree and the ability to earn increased income.

In the sluggish economy of the 2000s, a college diploma in the right field may well be a good investment. But with many college majors, oftentimes it isn’t.

The situation is even dicier for the many students who attend community colleges or four-year institutions but who never graduate. The chasm between their educational loans and their earning power is even more deep.

And for those students unlucky enough to attend for-profit institutions like those run by Corinthian Colleges, Inc., which is in the process of closing the last two dozen of its schools across the country, the situation is even worse.

Saddled with student debt, stuck with degrees or half-completed courses of study of dubious value, and with school credits unlikely to be transferred to other schools in order to finish their education, the situation for those unlucky students can only be described as dire.

How did we get to this place?

One big reason is that over the years, many colleges got into the habit of simply expecting sufficient numbers of students to enroll in their institutions regardless of the sticker price to attend. If anything, high tuition “list prices” were a badge of honor.

At the same time, substantial grants (essentially discounts off of the published tuition rates), together with irresistible financial aid packages, continued to attract students to private as well as public institutions of all stripes.

Running in parallel with this were lavish, ongoing projects involving the construction of fancy new dorms, state-of-the-art athletic facilities, and all sorts of other creature-comfort-like amenities to lure students to campus.

And let’s not forget another not-so-welcome outcome of this fantasyland of higher education economics – call it “degree inflation.” With so many students obtaining undergraduate degrees, their “worth” became devalued.

In this high-stakes derby, a BS degree in business is no longer enough – it has to be an MBA. A BS degree in engineering isn’t nearly as prestigious as a Master’s degree or a PhD. There’s really no end to it.

The convergence of these sobering economic and social trend lines makes it pretty clear that the “old” business model is no longer working for colleges and universities. With the economic realities of today, college administrators are discovering that, sooner or later, market forces work. And the resulting picture isn’t very pretty.

So now we’re witnessing the lowest percentage increases in tuition sticker prices we’ve seen in years, across private institutions and even some public ones as well. Bloated administrative staffs — their numbers dwarfing the number of teachers at some colleges — have finally plateaued or even begun to decline.

Being the parent of two children who graduated from college within the past five years, naturally I’ve been quite interested in these trends – and I’ve viewed them pretty close-up.

What I’ve determined is that for years, administrators at many colleges and universities didn’t see themselves as working within a market system — having to compete where market forces were at work. The often-unappealing business of being disciplined by market forces didn’t pertain to them — or so they thought.

That’s certainly not the case anymore.

And there’s another huge factor looming on the horizon: Distance learning. I’ll be here big-time before we know it … and it promises to upend the college education business model as never before.

What are your thoughts on this topic? Please share them with other readers here.

The “ol’ college try” … Not good enough anymore?

May 23, 2011May 24, 2011 Phillip Nones Uncategorized Academically Adrift, Arum, Business, College, Colleges, Community Colleges, Economy, Education, Faculty, Financial Aid, Higher Education, Higher Learning, Josipa Roksa, New York University, News, Nones, Nones Notes, NonesNotes, Phillip Nones, Richard Arum, Richard Vedder, Roksa, Sociology, Steinhardt, Steinhardt School, Student, Student Debt, Student Loans, Students, Thoughts, Twentysomething, Universities, University of Virginia, Vedder

I’ve blogged before about the increasing concerns many people have regarding the quality of college education in America. Now, several new data points should make every parent of college-age kids – or children who will be ready for college soon – take additional notice.

The first interesting news tidbit is that total student debt, which surpassed the country’s credit card debt for the first time in August 2010, now tops $1 trillion. Compare that to student debt being only around $200 billion as late as 2000.

So we’re talking an increase of ~400% in a little over a decade, which is miles more than the inflation rate over this period. Average debt now stands at almost $23,000 per student, which is a spike of ~8% over the past year alone.

And just what are students getting for all the money they’re spending (or borrowing) for their higher education? If you want to know the ugly truth, check out the recently published book Academically Adrift by sociologists Josipa Roksa and Richard Arum [ISBN-13: 978-0226028569 … also available in a Kindle edition].

Based on the information presented in this book, some grads might wish to haul their colleges up on charges of educational malpractice. Full-time instructional faculty has declined from 78% of college teachers in 1970 to only around 50% today.

Roksa and Arum also report that college faculty members spend, on average, just 11 hours per week on instructional preparation and delivery … the rest of their time is spent on research and a slew of administrative activities.

And how about the “quality” of the education that’s being delivered? If we wish to view that in terms of the amount of time students are spending on their studies, the stats aren’t trending in the right direction. The book claims that whereas the typical college student in the early 1960s devoted an average of 40 hours each week to academic work, today’s students now spend only about 27 hours per week on studies. So in what way is the substantial extra money being extracted from students being used to delier a better quality product?

Here’s the next shocker: ~85% of college graduates are moving back home following graduation. This information comes from a 2011 field survey conducted by Philadelphia-based market research firm Twentysomething, Inc. Compared to the firm’s prior surveys, that represents a spike of nearly 20 percentage points in only five years.

Of course, we all know the economy has been a major problem over the past few years, with jobs hard to come by even for seasoned workers. But to learn that fewer than one in six college students are moving out on their own following college graduation means that precious few grads are coming out of school with the ability to land jobs that can sustain an independent lifestyle — however modest.

With stats as dismal as these, is it any wonder why some people are seeking an alternative paradigm for higher education other than the “four years away from home” model? Enrollment figures at America’s community colleges have been skyrocketing. Online education is also booming, despite lingering concerns about learning standards and accreditation.

Some economists such as Richard Vedder are suggesting making radical reforms in the way that financial aid is provided – and to whom – while other observers are pushing for more recognition of learning credentials that take us beyond a BS or BA degree.

Many of these ideas strike at the very heart of what we’ve always been conditioned to believe about a four-year college education as the gateway to a better life. But with today’s reality being so far removed from the theory (fantasy?) … some out-of-the-box ideas and approaches are exactly what are needed now.

A Surprise? College Students are Ambivalent about e-Books

January 20, 2011 Phillip Nones Uncategorized Book Publishing, Books, College, College Education, Colleges, Digital Books, e-Reader, e-Readers, eBooks, Education, Higher Education, iPad, Kindle, NACS, National Association of College Stores, News, Nones, Nones Notes, NonesNotes, On Campus Research, OnCampus Research, Phillip Nones, Publishing, Students, Technology, Textbooks, Thoughts, University

College textbooks — Surprisingly, college textbooks still reign supreme over their digital counterparts.

The digital revolution is having its first and greatest impact on the younger generations. Whether it’s mobile apps, hyper-texting, online gaming, or keeping up on the news without the benefit of the daily paper, they’re the ones most on the cutting edge.

So it might be somewhat surprising to read the results of a survey of college kids about how they prefer to access their textbook information. I’ve blogged before about the racket that is college textbook publishing – a rip-off if ever there was one. So one would think that college students (and their parents if they foot the bill) would be very keen on any advancements that begin to render expensive textbooks obsolete.

But according to a survey conducted in mid-2010 by OnCampus Research, a division of the National Association of College Stores, only 13% of college students had purchased an electronic book of any kind during the previous semester.

And of that percentage, ~56% revealed that the prime mover of their e-book purchase was because it was required course material for class, not because they chose an available e-version over a printed version of the textbook.

What’s more, nearly three-fourths of the students in this survey stated that they prefer printed textbooks over digital versions.

And when it comes to what devices people are using to view their e-books, most are accessing the contents on laptop computers rather than newer devices that have hit the streets in recent times:

 Prefer reading e-books on a laptop computer: ~77%
 Prefer reading on a desktop computer: ~30%
 Prefer reading on a smartphone: ~19%
 Prefer reading on a Kindle or similar e-reader device: ~19%
 Prefer reading on an iPad or similar device: ~4%

Laura Cozart, a manager at OnCampus Research, had this to say about the survey results: “The findings of the report are not surprising. Every new innovation takes time before the mainstream population embraces it.”

Reflecting the current situation, of the NACS member stores that offer digital content, e-books comprise only ~3% of course material sales. But NACS is expecting that percentage to rise to 10% or 15% by 2012.

But the impetus behind that anticipated increase is expected to come from faculty members as they get more familiar and comfortable with the interactive possibilities to enhance their classroom instruction — rather than from those oh-so 21st Century students.

It wouldn’t be the first time the “leading edge” meets the “back edge” going around the other side.

College education in America: What the hey, let’s party!

August 12, 2010August 12, 2010 Phillip Nones Uncategorized Book Review, Chesapeake College, College Education, Colleges, Craig Brandon, Davidson College, Education, Higher Education, Higher Learning, Hillsdale College, Liberal Arts, Liberal Arts Education, News, Nones, Nones Notes, NonesNotes, Phillip Nones, Reviews, Rhodes College, The Five-Year Party, Thoughts, Universities

Just in time for the upcoming school year, a new book has hit the stores that launches a fierce attack against today’s college education in America. As a father of one recent college grad plus another daughter just beginning her sophomore year, The Five-Year Party: How Colleges Have Given Up on Educating Your Child, by Craig Brandon (ISBN #ISBN-13: 978-1935251804) caught my eye.

Brandon is a former education reporter and college writing instructor. What’s his main beef? That college administrators have taken advantage of government loan largesse and other programs to create a campus environment that’s hardly conducive to the disciplined intellectual labor of learning. The way Brandon sees it, college administrators are more interested in students’ pocketbooks than their intellects.

Brandon trains most of his firepower on liberal arts colleges, many of which he characterizes as “education-free zones” where quaint traditional notions of learning – like attending classes and doing assigned homework – have gone by the boards. He cites statistics that only ~30% of students enrolled in liberal arts institutions graduate in four years … and that fully 60% take six years or more to get their undergraduate degrees.

The book outlines the conditions that contribute to these sorry statistics. Extensive student loan and grant programs mean that few if any students ever pay the “book rate” tuition at a private college or university. This has made it easier for institutions to raise tuition rates far in excess of the inflation rate.

Brandon claims it has also led school administrators to tolerate – even abet – the extra years students spend on campus. After all, it’s more money for them to pay officials their lucrative salaries … not to mention bankrolling the country-club like student centers and new athletic facilities that seem to be on every college’s wish list.

And during that extended time on campus, it’s “party on!” Never mind the lower educational standards … it’s easier and far more lucrative for colleges to give students what they want, rather than what they need, to build meaningful careers afterwards.

And what about the instructors? They may well lament the decline in educational standards. But they’ve found out the hard way that to enforce rigorous educational standards in the classroom invites a flurry of negative reviews on student evaluation forms (that are easily accessible online) – reviews that are often linked to tenure and promotion decisions. It’s easier to go with the flow, provide reasonably entertaining lectures … and give out decent grades to all but the worst performers.

But what does this mean for those students who decide to work hard during their college years and to graduate on time? They may end up with a degree that’s devalued in the eyes of employers.

Moreover, the general decline in the value of a college degree affects even those schools that have tried hardest to maintain the traditional rigors of education that once characterized nearly all liberal arts schools – practices such as requiring students to take extensive coursework in subjects that go beyond their chosen field of study.

Colleges like Davidson in North Carolina, Hillsdale in Michigan and Rhodes in Tennessee may make studying and achieving top grades a huge challenge for their students … but their regional reputations mean that those degrees don’t carry much cachet beyond a 300-mile radius of the school.

Meanwhile, students who attend some of the nation’s better-known ivy league universities or “near ivy” institutions sail on through, cafeteria-style, taking only coursework that is easiest or of greatest interest to them.

Who’s the bigger chump then?

It’s a bit painful to read The Five-Year Party … and hard to finish it without feeling pretty depressed about the state of liberal arts education in America. Besides, does anyone know of a liberal arts school or university that has actually gotten a good handle on controlling its spending? I can’t think of one.

This book makes it easier to recognize the merits of America’s community colleges, which help kids start out their higher education in ways that allow them to explore different areas of interest without the distractions of the “party hearty” campus atmosphere – or breaking the family bank for that matter. Institutions like Chesapeake College in my home area on Maryland’s Eastern Shore are doing yeomen work in this regard, and they deserve better recognition for it.