Search This Blog

Wednesday, February 23, 2022

The Power of Recognizing Higher Ed Faculty as Working-Class (Helena Worthen)

Just over 20 years ago, Michael Zweig published The Working Class Majority: America’s Best Kept Secret. At that year’s How Class Works conference at SUNY Stony Brook, academics from history, political science, labor and industrial relations, and other fields debated Zweig’s use of the term “working class.” Some thought it was a throwback to the 1930s or a tip-off that someone was a Marxist. But even at a conference attended by many academics from working-class backgrounds, no one pointed out that academics are working class. Twenty years ago, academia still seemed like a middle-class or even an upper-class job, even though that had started to change in the mid 1970s.Young academics expected that if they did “all the right things,” they would get tenure and live happily ever after.

That expectation was wrong in 2002, and it’s even worse now, as this grim report shows. Nearly 75% of faculty in higher education are precarious workers, more like restaurant and hospitality workers, gig performers, contract healthcare workers, and delivery drivers than the tenured professor. They are hired on a per-class, per-semester basis. They do not control the conditions of their work. They often lack access to offices, professional development, research funds, and opportunities to collaborate with peers or vote in faculty meetings. They may be asked to take on a new course with a week or less warning. Many are told what textbooks to use and what tests to give. They are likely to have to apply for a new campus parking permit or library card every semester. But they also don’t get personal respect. They are vulnerable to management whim, favoritism, harassment, and simple forgetfulness, not to mention a complaint from a single disgruntled student who wanted a better grade.

Many contingent faculty are shocked to realize that college teaching is a working-class job. But recognizing that can be liberating. Thinking about ourselves as “working class” clarifies our understanding of our contingency by helping us identify with the 99% instead of the 1%. It can also inspire us to build alliances to improve our conditions and our industry.

First of all, it helps us appreciate and identify with our students, who are increasingly working class, and like us, probably working more than one job to make ends meet. We see their problems as our problems and become open to talking about common solutions. In turn they can see more accurately what it takes to be an academic and live the paradox of “love the work, hate the job.”

Second, it helps us understand and appreciate graduate student’s efforts to win the right to be recognized as employees (not “apprentices” on a stipend) who rely on their jobs for living. Graduate student organizing is one of the hottest areas in the campus labor movement – and possibly in the labor movement overall — these days, with wins coming in from unions like USW at the University of Pittsburgh, UE at University of Iowa, UAW at Harvard and the University of California and SEIU at Duke, Northwestern, Saint Louis University, and American University, just to name a few.

Third, thinking of ourselves as workers can help us understand the value of building campus labor coalitions, organizations that include not just academics but also clerical workers, the trades, transportation, custodial, food service, and technical workers. Such coalitions create power through the interdependency of all the workforces in a college or university.

Fourth, concerns about the working conditions of contingents can form a basis for solidarity with the privileged 25% who are tenured and tenure-line faculty. They usually resist this idea, but the reality of how their work has changed provides a strong argument. Over the worklives of senior faculty, colleges and universities tightened their belts, drained resources from the classroom, built arenas instead of libraries, created freestanding “foundations” that were outside faculty control, and engaged in a series of internet-based shocks like contracting out administrative functions like payroll to IT companies, putting journals on line, shifting classes to Blackboard and Moodle, experimenting with MOOCs, and much more. At the same time, requirements for tenure-track hiring and promotion were raised, contingent faculty became the majority, and administrative and advising work for tenure-line faculty increased. Some schools hired CEOs to run institutions like businesses. With all this, tenure-line faculty were progressively cut out of the full exercise of shared governance. All this degraded the institution of higher education, and not just for the contingent majority. These changes affect students, tenure line and contingent faculty, and staff alike.

The good news is that some are organizing for change. Higher Education Labor United (HELU), a new organization that came out of the organizing around College for All, has been endorsed by 117 locals from eight national unions and organizations. HELU uses the term “labor” broadly: its membership includes unions representing clerical, staff, and other workforces as well as faculty. The leadership team comes from colleges and universities in 29 states. HELU aims to establish a national strategy for higher education, something that the traditional faculty unions, AAUP, NEA and AFT, were never able to cooperate to achieve.

To get this rolling, HELU is convening a free Winter Summit, February 23-27, on Zoom. The conference will feature four afternoons of workshops and several keynote presentations, all focused on three goals: coordinate the surge of higher education worker organizing across the country, develop federal policy proposals to reverse the trends that have damaged higher education over the last several decades, and support politicians who will advance a program of democratizing higher education. Members of endorsing organizations will have opportunities to participate in decision-making.

The vision guiding the young leaders of HELU is broad working-class mobilizing to address the crisis in higher education. To accomplish that, it’s time for faculty see themselves as members of the working class and stand together to fight for change.

Helena Worthen, University of Illinois

This essay first appeared in Working-Class Perspectives. Thank you Helena Worthen, Sherry Linkon, and John Russo for permitting us to reprint this important article. 

Helena Worthen is the co-author, with Joe Berry of Power Despite Precarity: Strategies for the Contingent Faculty Majority in Higher Education (Pluto, 2021). She has worked and taught as a labor educator and teacher unionist in California, Iowa, Pennsylvania, and Illinois.



 

Related link: Working-Class Perspectives  

Sunday, February 20, 2022

College Meltdown 2.0

College Meltdown 2.0 is distinctly different than the College Meltdown that started in 2010. 

The first wave of the College Meltdown (2010-2021) resulted in a slow and steady drop in overall US college enrollment, with dramatic losses among for-profit colleges and community colleges. Corinthian Colleges, ITT Educational Services, and Education Management Corporation were three large for-profit chains to close. Small private liberal arts schools and regional universities also experienced losses.  More folks were moving into the growing educated underclass.  


Elements of College Meltdown 2.0 include publicly held corporations.  Click on the image to see the chart (Source: Seeking Alpha) 

College Meltdown 2.0 comes as the Coronavirus becomes more manageable.  However US fascism continues to advance, student loan debt is slowly approaching $2 trillion, and the 2026 enrollment cliff is just a few years away.  This new wave includes remnants of for-profit colleges like National American University, Stratford University, South University, the Art InstitutesUniversity of Phoenix (owned by Apollo Global Management), Career Education Corporation (aka Perdoceo), and DeVry University (owned by Cogswell Education) as well as national accreditor ACICS. 

The largest element of College Meltdown 2.0 is federal student loan debt, which appears to be rising to an unsustainable level--as it hamstrings the lives of millions of families.  When mandatory student loan payments resume (scheduled for May 1), long-term default rates may range from 30 and 50 percent.  It also appears that at least $500 billion of the Federal Student Aid (FSA) student loan portfolio will be unrecoverable.  

College Meltdown 2.0 also involves online program managers (OPMs) that service elite schools (2U), regional universities (Academic Partnerships), and subprime robocolleges (Zovio-University of Arizona Global and Graham Holdings-Kaplan-Purdue University Global). 

Student loan servicers and private student loan companies (MaximusNavient, Sallie Mae, Nelnet), publishers and other edtech enterprises (EducationDynamics, Chegg, Barnes & Noble Education, Coursera, and Guild Education) are implicated or at least entangled in the mess.  Higher education accreditors and student loan asset-backed securities (SLABS) are also worth monitoring.  

Related link: 2U Virus Expands College Meltdown to Elite Universities






Tuesday, February 15, 2022

Terri Givens and “Radical Empathy: Finding a Path to Bridge Racial Divides”

[This article is part of the Transparency-Accountability-Value series.]

Terri E. Givens is a seasoned (and storied) political science professor currently teaching at McGill University, in Montreal, Canada.  Professor Givens has recently produced two essential books on the politics of race: “Radical Empathy: Finding a Path to Bridge Racial Divides” and “The Roots of Racism.” 

While there are a number of outstanding historical and social science works to inform readers about racial issues, Radical Empathy is valuable for moving folks towards justice and solidarity—in Trumpian times that are challenging at best. 

One valuable tool for her has been to weave her own individual stories of geography, personal evolution, social location (not just race, but also class and gender), privilege (being middle class) and vulnerability with social and larger historical forces (what C. Wright Mills called The Sociological Imagination).  

By sharing our stories, all of them, it's hard to be just enemies.  And when we can see our similarities and respect our differences (at least some of them) maybe we can even move together.  

But understanding is not enough.  And radical empathy takes practice.  Lots of practice. 

Rather than describe Professor Given’s work, it would be best to provide some free resources for Radical Empathy.

Radical Empathy - Google Books

Radical Empathy Reader’s Guide

Book launch: Radical Empathy (with Julie Lythcott Haims - YouTube)

Tuesday, February 8, 2022

One Fascism or Two?: The Reemergence of "Fascism(s)" in US Higher Education

The Higher Education Inquirer is conducting an extensive investigation of the reemergence of fascism in US higher education.  The examination aims to: define and operationalize the concept of fascism, investigate the roots of American fascism since the 17th century, and chronicle the most important cases of fascism in US higher education today.  As part of a democratic process, we ask readers to be involved in the research and writing of this project.  

Reader Input

Additions and corrections will be made with input from readers of the Higher Education Inquirer.  Please add your comments in the section at the bottom. For those who wish to remain anonymous, you can provide feedback by emailing me at dahnshaulis@gmail.com. 

Definition(s) of Fascism(s)

The word fascism has been used by politicians and American writers on the Left and Right for generations.  It may not be possible to create a consensus of what fascism is, or how it appears in US society. This space is likely to be edited as more comments are received.  


*Laurence W. Britt, the author of Fascism Anyone, described 14 elements of fascism here

*Italian historian Umberto Eco described 14 elements of fascism here.

*Yale professor Jason Stanley explains "How Fascism Works" here.  

Origins of Fascism in US Higher Education 

US higher education was founded on the taking of land from indigenous people, and oppressing people of color for four centuries. Enslaved Africans and their descendants were part of the origin and continuation of elite American schools for two hundred years.  White, Protestant, males from elite backgrounds had most of the higher educational opportunities--and the names of robber barons and tobacco magnates (Stanford, Carnegie Mellon, Johns Hopkins, Duke) became part of the elite pantheon.  Thorstein Veblen and Upton Sinclair provided a great deal of information on this. 

While there has been more democracy at times, people of color, women, and working-class folks have been excluded or discriminated against for all of US history.  The federal government (Department of Defense, CIA) and US corporations (particularly federal contractors) have also held great importance in the direction of higher education, servicing their most oppressive anti-democratic, colonial elements.  

In the 21st century, historians Craig Steven Wilder and others dug up the white supremacist roots of elite universities. In a zero-sum game, historically privileged groups and individuals may also feel aggrieved and oppressed when others succeed or are placed ahead of them in line.    

Propagation of Fascism in 2022 (Contemporary Examples in No Particular Order) 

This section will evolve with the help of reader comments.  Here are some preliminary examples of varying importance: 

Role in Mass Surveillance 

"Savage Inequalities" in the K-12 Pipeline 

Hunger, poverty, prostitution, and drug sales among college students 

Sexual assault of college students

Anti-intellectualism in America

Rise of Charlie Kirk, Turning Point USA, Turning Point Action, and Students for Trump  

Turning Point USA's Professor Watchlist

Police State and Strong Military Supported 

Use of Propaganda and Disinformation to Oppress "Minorities" and Empower Big Corporations

Predatory Marketing and Advertising 

Legalization of Hate Speech in US Higher Education 

Book Burning and Censorship in US Society

Role of Corporate Power in Higher Education (e.g. Boards, Endowments, Contracts)

Role of Elite Families in Higher Education (e.g. Walton Family Foundation, Koch Brothers) 

Land Theft Through Gentrification and College Expansion 

Tax Avoidance by Elite Schools to Rob Public Coffers 

Colleges Colluding to Limit Financial Aid 

Role of Higher Education in Educating Reactionary Judges and Politicians

State-Sponsored Think Tanks to Support Elites and Oppress Others (e.g. Liberty Institute at University of Texas)

Bomb Threats Against Historically Black Colleges and Universities

End of Affirmative Action for African Americans but Continued Use of Legacies 

Reduction of Needs Based Grants and Scholarships 

Management Corruption, Robocolleges, and the Loss of Labor Power in US Higher Education 

Expenditure of Elite Endowment Funds to Fund Anti-Democratic Organizations

Role of NCAA Football in Promoting Oppressive Values (No Wages, Poor Safety, Sports Gambling) 

Role of US Universities in Supporting Human Rights Violators (e.g. Russia, People's Republic of China) 

Role of US Universities in Undermining Foreign Efforts in Democratization  

Use of "Credentials" as a Legal Form of Discrimination 

Non-Disclosure Agreements

Anti-Union Efforts in Higher Education

Student Loan Peonage, Declining Social Mobility, and the "Educated Underclass"


Related link: US Higher Education and the Intellectualization of White Supremacy

Related link: UT Austin President Eats Cake in a Pandemic (Austin Longhorn*)

Related link: Coursera IPO Reveals Bleak Future For Global Labor

Related link: Guild Education: Enablers of Anti-Union Corporations and Subprime College Programs

Related link: Maximus, Student Loan Debt, and the Poverty Industrial Complex

Related link: Community Colleges at the Heart of College Meltdown

Related link: The Tragedy of Human Capital Theory in Higher Education (Glen McGhee*)

Related link: Higher Education Inquirer: The Growth of "RoboColleges" and "Robostudents"

Related link: SLABS: The Soylent Green of US Higher Education


Dahn Shaulis

Higher Education Inquirer






Thursday, February 3, 2022

"20-20": Many US States Have Seen Enrollment Drops of More Than 20 Percent (Glen McGhee and Dahn Shaulis)

In 2013, Futurist Bryan Alexander aptly talked about peak college enrollment in the United States.  And over the last decade or so, higher education enrollment has declined in almost every state. Now at least 18 US states have experienced enrollment drops greater than 20 percent--and five more are close to that threshold.  

People can watch the College Meltdown in real time at thelayoff.com. 

Enrollment declines are the result of several interrelated economic and demographic shifts.  Reduced populations of college age people, economic distress, growing inequality, and migration are some of the interacting factors. College is expensive and time consuming for working folks.  

While programs like College Promise can help with shoring up community college enrollment, they cannot make up for deep social and economic problems. Online learning has made school more convenient, but the quality and value of several of America's robocolleges (colleges largely free of full-time instructors) is often substandard.  

For many working-class families, college is no longer perceived as the golden ticket to upward social mobility. And a growing educated underclass, based on their own personal experiences with underemployment and student loan debt, are skeptical about the value of higher education for their children--if they choose to have children. Many are not.  

Without significant change, we estimate that the 2026-27 enrollment cliff is likely to put almost every US state above a 25 percent decline over the last 15 years.  With another economic meltdown, the numbers could get worse without major reform--smart social reform--not reform that lines the pockets of the rich and powerful.  

Though consumer demand for college has declined significantly, college costs have not.  Increasing federal funding, though, especially to subprime robocolleges like Purdue University Global, Liberty University, University of Phoenix, and University of Arizona Global Campus may not lead to lower college prices, better quality curriculum, or better jobs at the end of the pipeline.   


*major colleges' data missing from the chart

(Source: National Student Clearinghouse) 



Sunday, January 30, 2022

How University of Phoenix Failed. It's a Long Story. But It's Important for the Future of Higher Education.

The failure of University of Phoenix (UoPX) is more than a dark moment in higher education history.  It should act as a lesson learned in the higher ed business. Executives at 2U, Guild Education, Coursera, Liberty University, Purdue University Global, University of Arizona Global, Chegg, Academic Partnerships, Pearson PLCNavientMaximus and other for-profit and non-profit entities must take heed of the mistakes and the hubris of Phoenix, the wisdom of its cofounder John D. Murphy, and the silencing of important worker voices.  

For several decades of the 20th century, hundreds of University of Phoenix campuses dotted the American landscape, conveniently located in cities and growing suburbs, off major highways. Founded in 1973, America's largest university became a for-profit darling of Wall Street in the 1980s and 1990s, and the provider of career education for mid-level managers in corporate America and public service. A Phoenix degree was the ticket to promotions and salary increases.  

During its zenith, the school was backed by dozens of lawyers and DC lobbyists and a number of politicians and celebrities--including Nancy Pelosi, John McCain, Shaquille O'Neil, Al Sharpton, and Suze Orman. UoPX bought the naming rights to the Arizona Cardinals' pro football stadium in 2006. And in 2010, enrollment at the University of Phoenix stood at nearly a half million students.  The school even had an enormous presence at US military installations across the globe. University of Phoenix's presence was everywhere.* 

Phoenix's stock rose for many reasons. It was a leader in educational innovation. It was convenient and affordable for upwardly social mobile workers.  Its profits were large, and its labor costs were relatively low because UoPX hired business leaders and experts in the field, not tenured scholars, to teach part-time.  

But something went horribly wrong along the way.

In the 2010s, University faced government and media scrutiny for its questionable business practices, its declining graduation rates, and its part in creating billions in student loan debt. And when workers voiced their concerns, they were silenced in a variety of ways, from threats and intimidation to firings. 

This enrollment collapse has now lasted a dozen years and counting.  

Today, as a miniscule portion of Apollo Global Management's portfolio, UoPX's enrollment numbers are less than 100,000--and few of its physical campuses remain open during the Covid pandemic. It's not known how many campuses, if any, are financially viable.  

University of Phoenix enrollment, 2009-2016 (Source: US Department of Education) 

There are a several reasons why University of Phoenix is just a shadow of what it was. Businesspeople and lobbyists blame government regulation and oversight; others blame the relentless pursuit of quarterly profits and corrupt Apollo Group CEOs, including Todd Nelson.

Having talked to co-founder John D. Murphy and read his book Mission Forsaken, what I found out was that University of Phoenix began failing three decades earlier, during the Ronald Reagan era, when US companies chose to invest less in their workforces.  When this post-Fordist shift happened, US companies reduced benefits for workers, and divested in the education and training of mid-level executives.

In order to keep the company growing in the face of this retrenchment, UoPX shifted its mission, from educating America's upwardly mobile workers to enrolling anyone--at any cost. The company could only decline as it preyed upon consumers and silenced its workers.   After 2010, enrollment counselors were signing up people who were woefully unprepared academically and financially for college work.  

By 2014, about 1 million University of Phoenix's alumni were saddled with more than $35 billion in student loan debt    

US Student Loan Debt by Institution (Source: Brookings, Looney and Yannelis, 2015)

In 2017, Apollo Group sold the company to Apollo Global Management, an investment behemoth, along with Vistria Group and the Najafi Companies.   As part of its holdings, the school was a tiny portion of its portfolio. Barak Obama's close friend, Anthony Miller, was paid to be Board president.  

Among national universities, UoPX is now ranked near the bottom in social mobility according to the Washington Monthly.

In January 2022, as a sign of its continued unraveling, Apollo Education appointed George Burnett, a former executive of three failed or predatory companies, including Alta College and Academic Partnerships, to be Phoenix's newest President. 

UoPX's problems are a symptom of an economic system that despite the hype cares little about workers: a system that today looks at labor costs as something to be reduced--rather than an investment. With few exceptions, America's most powerful corporations: Amazon, Walmart, Target, Yum Brands, McDonalds--rely on low-wage labor and automation to make a huge profit. Companies in medicine, finance, and tech have smaller labor numbers--and while work may be lucrative at the moment, it's becoming more precarious.

*In the early 2010s, Apollo Group, Phoenix's former parent company, spent between $376 million and $655 million a year on ads and marketing.  









Related link: Guild Education 

Sunday, January 23, 2022

Maximus, Student Loan Debt, and the Poverty Industrial Complex

The Higher Education Inquirer is taking a close look at who's invested in Maximus, the enormous social welfare profiteer. Maximus has been servicing student loan defaulters for years and has now taken over Navient's federal student loan business, branding it Aidvantage

Since 1995, Maximus (MMS) has grown from $50 million in annual revenues to more than $4 billion in 2021. 

Maximus (MMS) Share Price 1995-2022
(Source: Seeking Alpha) 

With an army of more than 35,000 workers, Maximus' clients include 28 US agencies: the Internal Revenue Service, Department of Commerce, National Oceanic and Atmospheric Administration, Bureau of the Census, Patent and Trademark Office, Federal Student Aid, Department of Defense and US Army, Department of Veterans Affairs, Homeland Security, Health and Human Services, Medicare and Medicaid, Department of Labor, Office of Personnel Management, Securities and Exchange Commission and many more. 

As a contractor to Federal Student Aid (FSA), Maximus has more than 13 million student loans to service.  Its four contracts with the US Department of Education total almost $1 Billion.  

While CEO Bruce Caswell made more than $6 million in total compensation last year, Maximus' customer service representatives, the people who have to make the calls to the growing number of student loan defaulters, make less money than workers at Walmart. 

Maximus has recently posted federally contracted jobs on Indeed for $13.15 an hour in Texas and South Carolina, even though the federal minimum wage has been raised to $15 an hour. Wages for Maximus workers in other states are reportedly even lower, as little as $10 an hour in Kentucky and other states with regressive economies.   

Maximus' largest institutional investors include BlackRockVanguard Group, and State Street Corp--three financial behemoths.  BlackRock has $10 trillion in Assets Under Management (AUM), Vanguard Group has about $7 Trillion in Assets Under Management, and State Street has almost $4 Trillion in AUM. 

Bank of New York Mellon, Wells Fargo, and Bank of America each own 900,000 shares or more. 

Public retirement funds, including public school teachers retirement funds (see table below), are directly and indirectly invested in the Poverty Industrial Complex and the student loan mess through Maximus and other large corporations. 


Maximus' strategic partners include AWS, Microsoft, Oracle, and Cisco.  

Social justice advocates have to wonder, how can the student loan system be fixed if the US establishment has a vested interested in the mess?  
 
Maximus (MMS) Top Institutional Investors 



List of Public Funds Directly Invested in Maximus

Alaska Department of Revenue 
California PERS
California State Teachers Retirement System
Colorado PERS
Florida Retirement System
Pennsylvania Public School Retirement System
Teachers Retirement System of Kentucky
Louisiana State Employees Retirement System
Ohio PERS 
New Mexico Educational Retirement Board
New York State Retirement System
New York State Teachers Retirement System
Ontario Teachers Retirement System
Oregon PERS
State of Tennessee Treasury
Teachers Retirement System of Texas
State of Wisconsin Investment Board










Monday, November 15, 2021

More Transparency About the Student Debt Portfolio Is Needed: Student Debt By Institution

It's commonly known that US student loan debt is now about $1.7 trillion and that more than 44 million Americans are laden with this debt.  It's also known that student debt is not a problem for everyone who goes to college or everyone who takes out loans.  

Student loan debt is not equally distributed: while the children of elites can go to school without incurring debt and find meaningful work after graduation, working families are burdened because so many cannot find decent, gainful employment after dropping out or even after graduating from college--work that would enable them to repay their loans.

Student loan debt is also not distributed equally among the schools that generate the debt.  Working class people who have the opportunity to get to elite schools may incur less debt there than by attending state universities--but others who attend these elite schools, especially online at the graduate level, may not be so lucky.  

Those who attend subprime colleges, and who take the wrong majors, may incur debt they can never repay.  

And the multitude of debtors in between, the many millions going to less than elite schools, are having to restrict their dreams as they pay back their loans.  

The US Department of Education and other organizations publish important information on student loan debt.  The College Scorecard, for example, gives consumers information on the debt they can expect, gainful employment after attending, and the numbers on student loan repayment.   The Washington Monthly also ranks colleges, and important numbers, like social mobility rankings and amount of principal paid are in the rankings. The Century Foundation and The Institute for College Access and Success (TICAS) also contribute to our knowledge. 

But there are glaring gaps in our current knowledge about student loan debt, knowledge necessary for establishing greater transparency and accountability.  

One of the most important knowledge gaps is in learning about student debt by institution.  In 2016, Adam Looney and Constantine Yannelis presented a conference paper on student loan debt that listed student loan debt by institution.  

Table 5 in this report showed an important aspect of the debt, of accumulated debt, the percent of principal still owed on debt, and the 5-year student loan default rate.  University of Phoenix attendees had an estimated $35 billion in accumulated debt, outpacing Walden University.  And Argosy, Strayer, Capella, DeVry, American Intercontinental, and Nova Southeastern attendees owed more money than the principal of their loans, 5 years after the loans were taken out.  Kaplan University (know known as Purdue University Global) had a 5-year student loan default rate of 53 percent, and Ashford University (know known as University of Arizona, Global Campus) and Colorado Technical Institute had 5-year student loan default rates of 47 percent.  These subprime colleges, in effect, were draining the student loan portfolio while providing a service that hurt many of their customers.  

Even some big brand name schools like NYU, University of Southern California, Penn State, Arizona State University, Ohio State, University of Minnesota, Michigan State, Rutgers, Temple, UCLA, and Indiana University had students with enormous amounts of debt that they were having to pay off.  


The data in this study were from 2009 and 2014.  What has happened since then at the institutional level?  What schools today are draining the student loan portfolio and financially crippling those who have attended?  Consumers and tax payers should be allowed to know.  

Related link: The College Dream is Over (Gary Roth)

Related Link: USC Pushed a $115,000 Online Degree. Graduates Got Low Salaries, Huge Debt (Wall Street Journal-Lisa Bannon and Andrea Fuller) 

Related link: A crisis in student loans? How changes in the characteristics of borrowers and in the institutions they attended contributed to rising loan default ( Looney and Yannelis, 2016)

Related link: College Meltdown Expands to Elite Universities

Related link: What happens when Big 10 grads think "college is bullsh*t"?

Monday, September 6, 2021

The Tragedy of Human Capital Theory in Higher Education (Glen McGhee*)


Have you ever wondered why US student loan debt has soared past all other debt but mortgages, to more than $1.7 trillion?  Did you know $500 billion of that outstanding student loan debt will never be paid back to the US Treasury and that this huge black-hole is sucking the life from Millennials in debt peonage?  

And did you know all of this mess can be attributed directly to a set of misguided economic nostrums that go by the name of "Human Capital Theory"?

This is the tragedy of deeply flawed Human Capital Theory.  Having hijacked notable successes with professionalization (remember: not everyone can be a "professional"), human capital theorists in the early 1960s worked to spread and legitimize the idea that "learning means earning."

The sinister-side is that for the lucky ones, the motto proved true.  But today's grievously high debt burdens and the growing number of precarious jobs for those not so lucky contradicts the idea that "learning means earning."  

The seeds of Human Capital Theory have been growing for more than century, first through Madison Avenue marketing and then University of Chicago myth making. 

Here's an ad from September 1920 issue of Popular Science Monthly that makes the point: the possession of knowledge means higher wages. In this case, the 1920's proprietary “correspondence” schools and colleges relied heavily on this basic message to sell themselves -- what was later to become the central tenet of Human Capital Theory.


The naivete of these one-hundred year old advertisements is obvious now. We know better; whether it's through our own bitter experience, or the experience of those around us -- life is not so simple. Such simplicity has been debunked, and the idea itself that knowledge always translates into higher earnings has lost its appeal.

But at the time, these advertisements picked up on the massive surge in economic changes -- the new jobs, new occupations, new companies -- sweeping the county. Commerce and business life expanded and was transformed in numerous ways. Using 1880-1930 census data, Cristina Groeger shows how upper-class elites benefited far more than, say, those suffering from racial discrimination that barred them completely from higher-wage employment.

Sadly, Human Capital Theory does not take any of this into account. Racial and gender-based discrimination through our social institutions is, unfortunately, completely missing from Human Capital Theory. Learning does not equal earning when you lack access to job opportunities due to discrimination, or when you were born to a certain set of parents at a certain place, at a particular point in time.

For those lucky enough to ride the wave of growing prosperity, the slogan was true. And that's what has been driving support for Human Capital Theory -- it's just a glimpse in a 100 year old rear-view mirror. Public policy at the federal level, state level -- and even local support of education -- has been premised on the myth that financial support of education "equals earnings" -- for everyone. This is, of course, not true for those faced with wage stagnation, high unemployment and under-employment, automation, out-sourcing of good jobs, and skill erosion -- all these factors come into play and complicate the picture.

Worse yet is the global reach of these misguided directives to developing nations to spend freely on education.

In 1960, Theodore Schultz highlighted the importance of human capital for economic development among poor nations in his presidential address to the American Economic Association. “Human capital investing” soon became a priority among economic development specialists and policy makers through the World Bank and the efforts of the Chicago School. "Learning means earning" became World Bank gospel, linking GDP and economic growth with a nation's investment in higher education. The Chicago School apparently falsified the direction of causality between higher education and economic growth, resulting in additional tragical consequences on a global scale.

Not all economists, however, are so deeply committed to Human Capital Theory.

In fact, the number of dissenters is on the rise, and include Phillip Brown, Hugh Lauder and Sin Yi Cheung, the authors of The Death of Human Capital?

University of Oxford economist Kate Raworth has developed "doughnut economics" as an alternative approach, even going so far as to encourage "guerrilla economics" and declaring "it's time to vandalize the economic textbooks"!

David Blanchflower, former Bank of England governor and Dartmouth economics professor, is another highly vocal critic of human capital theory. Cristina Groeger's History of Education in Boston 1880-1930: The Education Trap is another critique that runs the length of an entire book.

Gradually, the human capital theorists that were so popular in the 1960s and 1970s are being replaced by a new cohort that isn't interested in supporting outdated dogma.

But tragically, the damage has been done, and economists need to be held accountable. They can start by joining those that are denouncing Human Capital Theory.

*Glen McGhee is the Director of the Florida Higher Education Accountability Project (FHEAP)

Wednesday, July 21, 2021

SLABS: The Soylent Green of US Higher Education

Michael Bright of the Structured Finance Association defends the role of NRSRO's at the House Financial Services subcommittee on NRSROs, July 21, 2021


Bill Harrington of the Croatan Institute has been sounding the alarm bells. Mr. Harrington is telling everyone that he can, that the market for privately securitized student loans is corrupt, and that oversight of the securities and their related derivatives has been almost nonexistent.

SLABS, Student Loan Asset-Backed Securities, are private and federally insured student loans that are bundled, rated, and sold in tranches to institutional investors as bonds. In other words, the private debt of student debtors and their families is turned into investments that are considered low risk, but in some cases high yield. The most lucrative investments are the most toxic loans. 

This cache, a mix of old FFELP government backed loans (the program ended in 2010) and private sector loans may be valued at about $245 billion but is referenced in untold billions more of complex financing instruments such as structured investment vehicles, stocks and unsecured corporate debt and repurchase facilities.  About 11 million people still owe money from the FFEL program. 

SLABS are rated from AAA to B (junk) but all are marketed as safe and the demand is greater than the supply.  No one outside of the industry knows who actually owns the financial instruments, but it's assumed they are almost always large institutional investors such as banks, state and municipal funds, and retirement funds. 

Since at least 2015, SLAB sellers have extended the maturity dates of some SLABS by decades to avoid lowering their ratings.  Issuers are known to game the system by shopping around for better credit ratings.  

In May 2020, Morningstar accepted a $3.5 million fine for failing to separate its credit ratings and analysis operations from its sales and marketing efforts.  But they denied any wrongdoing.

Who oversees the SLAB industry?  Three raters:  Moody's, Standard & Poor's, and Fitch Ratings.  These companies are paid to rate the SLABS, and are also tasked for government oversight as Nationally Recognized Statistical Ratings Organizations (NRSRO's).  The credit rating agencies not only rate SLABS, they are paid to rate them by the loan issuers, like Navient and Nelnet, causing a potential conflict of interest.  

How much of a problem are SLABS as an investment?  What's the real risk?  Chances are that they are a much greater risk than they appear, and that's how it's framed in the SMU Law Journal article by Samantha Bailey and Chris Ryan titled "The Next "Big Short": COVID-19, Student Loan Discharge in Bankruptcy, and the SLABS Market." 

Metaphorically, SLABS are like Soylent Green, the subject of the dystopian movie that came out in 1973 and portrayed a chaotic New York City in 2022.  It's not until the end of the film that audience is told that the food that people were fighting for, Soylent Green, was actually people, processed for consumption.  


In 2021, SLABS are human lives, in the form of crippling debt, packaged for consumption: consumed by a range of big investors including big banks and pension funds.  

"It is up to each and every one of us, to decide where we wish to direct our focus. Is it fear, or forgiveness? Suffering or thriving? When we accept the principles of quantum physics, we understand that we are all entangled as one singular organism," said Allison Pyburn, student loan expert and author of the upcoming book, "The Great Unwind."



Friday, July 9, 2021

Academic Capitalism and the next phase of the College Meltdown (updated January 26, 2022)

It appears we have entered a new phase of Academic Capitalism and the College Meltdown. The previous phase involved College Mania! and the growth of the "educated underclass" (including gig workers, adjuncts and postdocs), Wall Street over-speculation, the divestment of corporations from employee benefits, and the rise and fall of for-profit colleges: Corinthian Colleges, ITT Tech, Education Management Corporation, Apollo Group, Education Corporation of America, and Laureate Education.  

Enrollment at proprietary schools is down about 40 percent from its peak in 2010 and higher education enrollment has dropped every year for the last decade.  In absolute numbers, community colleges have taken the largest hit.  Regional public universities have also experienced large enrollment declines.

At other schools, student aid has shifted from "needs based" to "merit based" making college choice for low- and moderate income families an even riskier choice

Student loan debt has crippled millions of working families, but neoliberal experts at Goldman Sachs and the Federal Reserve do not see a significant problem. 

According to the Federal Reserve, the student debt problem is ameliorated by the decline in births to people of lower socio-economic status.  The FED has also consistently reported that the debt is not a huge drag on the economy (less than 0.05 percent per year). Those developments, along with an anemic but growing student debt movement, have meant that the chance for progressive and meaningful change is limited under the Biden administration, but possible in the long run.  

This new phase of the College Meltdown has strong roots in the 1980s and involves the continued growth of the educated underclass (including elite overproduction in higher education) and more bulls*t jobs, the privatization of public higher education, the proliferation and consolidation of online program managers (OPMs) working for name brand and lesser known schools, non-profit subprime colleges, robocolleges, continued grade inflation, and the fall of the US federal student loan program. In 2020 and 2021, higher education also received three massive federal bailouts.  

Larger developments include the resurgence of authoritarianism, the hollowing out of America, and the global climate change crisis.  Despite these glaring existential problems, a looming college enrollment cliff in 2026, and growing dismay by working families, irrational exuberance and false optimism continues among most college business officers and middle-class consumers.  

Will austerity and excesses in the system lead to even more dramatic failures? Will the states and federal government ask for more transparency and accountability of the government funds that keep the system afloat?

What should we be observing in this new phase:  

1. The growth (and power) of the "educated underclass"

2. The effects of student loan debt on working families and social institutions (including religion and the economy) 

3. The state of the student loan forgiveness movement and popular opinion about student loan forgiveness

4. The health of the US Department of Education's Student Loan Portfolio

5. The growth of Online Program Managers

6. The degree that public universities are serving their citizens

7. The amount of money spent on marketing and advertising in higher education

8. Analyses of the FED, big banks, and rating agencies about the K-12 pipeline, higher education, student loan debt, and the growth of the educated underclass 

9. Local, state, and federal responses to "savage inequalities" in the K-12 pipeline, student loan debt, and the growth of the "educated underclass"

10. The rise of authoritarianism/neofascism in US education and the US as a whole  (e.g. mass surveillance, anti-intellectualism, hate crimes)

11. In deference to Bryan Alexander and his upcoming book "Universities on Fire" I must include global climate change as a phenomenon that must be observed and dealt with.  Failure to address this existential problem makes the other issues irrelevant.  

References

This article was updated November 11, 2021 to include a link to elite overproduction in higher education and on January 26, 2022 to include a list of recent references.  

Thursday, July 1, 2021

The Growth of "RoboColleges" and "Robostudents"


In a previous Higher Education Inquirer article, I presented frightening full-time faculty numbers at some large online universities which I call "robocolleges."  Full-time faculty at these robocolleges, in fact, are nearly nonexistent. Bear in mind that all of them are regionally accredited, the highest level of institutional accreditation, and the list includes well-known public university systems as well as for-profit ones.  

Robocolleges have de-skilled instruction by paying teams of workers, some qualified and some not, to write content, while computer programs perform instructional and management tasks. Learning management systems with automated instruction programs are known by different names and their mechanisms are proprietary.  As professor jobs are deskilled, tasks can be farmed out at reduced costs.  

Besides the human content creators who may be given instructional titles, other staff members at robocolleges are paid to communicate with students regarding their progress. The assumption is that managing work this way significantly reduces costs, and it does, at least in the short and medium terms.  However, instructional costs are frequently replaced by marketing and advertising expenses to pitch the schools to prospective students and their families.  Companies like EducationDynamics and Guild Education have filled the niche of promoting robocolleges to workers at a reduced cost but their overall impact is minimal.  

Meanwhile,  companies like Chegg profit from this form of learning, helping students game the system in greater numbers, in essence creating robostudents.  

The business model in higher education for reducing labor power and faculty costs is not reserved to for-profit colleges.  Community colleges also rely on a small number of full-time faculty and armies of low-wage contingent labor.  

In some cases, colleges and universities, including many brand name schools, utilize outside companies, online program managers (OPMs), to run their online programs, with OPMs like 2U taking up as much as 60 percent of the revenues.  OPMs can perform a variety of jobs, but are best known for their work in enrollment and retention.  Prospective students may believe they are talking to representatives of a particular university when in fact they are talking to someone from an outside source.  Noodle has disrupted the OPM model by selling their services ala carte, but only time will tell whether it has an impact, or whether schools will merely find less costly outsourced servicers.  

Outsourcing higher education has been a reality in US higher education for decades. And automation is also part of education, as it should, when it performs menial tasks, such as taking roll and doing preliminary work to determine student cheating.  It's likely that more schools will become more robotic in nature to reduce organizational expenses.  But what are the long-term consequences with long-term student outcomes, when automation is used to perform higher level tasks, and when outsourced individuals act in the name of brand name colleges?  

To get a small glimpse of this robocollege phenomenon, these schools cumulatively have about 3000 full-time instructors for more than a half-million students.  

American Intercontinental University: 51 full-time instructors for about 8,700 students.
American Public University System has 345 F/T instructors for more than 50,000 students. 
Aspen University has 34 F/T instructors for about 9,500 students.  
Capella University: 216 F/T for about 38,000 students.
Colorado State University Global: 34 F/T instructors for 12,000 students.
Colorado Technical University: 59 F/T instructors for 26,000 students.
Devry University online: 53 F/T instructors for about 17,000 students.
Grand Canyon University has 461 F/T instructors for 103,000 students.*  
Liberty University: 1072 F/T for more than 85,000 students.*
Purdue University Global: 346 F/T instructors for 38,000 students.
South University: 0 F/T instructors for more than 6000 students.
Southern New Hampshire University: 164 F/T for 104,000 students.
University of Arizona Global Campus: 194 F/T instructors for about 35,000 students.
University of Maryland Global: 193 F/T instructors for 60,000 students.
University of Phoenix: 127 F/T instructors for 96,000 students.
Walden University: 206 F/T for more than 50,000 students.

*Most of these full-time instructors are faculty at the physical campuses.