Higher Education Inquirer

Tuesday, August 30, 2022

US Department of Education Projects Increasing Higher Ed Enrollment From 2024-2030. Really? (Dahn Shaulis and Glen McGhee)

The US Department of Education (ED) continues to paint rosy projections about higher education enrollment despite harsh economic and demographic realities--and increasing skepticism about the value of college degrees.

Image from Digest of Education Statistics (2022)

Since 2011, higher education enrollment has declined every year--a more than decade long trend. The Covid pandemic of 2020 to 2022 made matters worse with domestic and foreign enrollment-- (temporarily) ameliorated by government bailouts and untested online education. Foreign enrollment continues to languish. And the enrollment cliff of 2026, a ripple effect of the 2008 Great Recession, is now just around the corner.

ED is projecting enrollment losses in 2022 and 2023, but why is it projecting enrollment gains from 2024 to 2030? Apparently, one of the problems is with old and faulty Census projections made during the Trump era that were not corrected.

Based on these Census numbers and other factors, the Department of Education's National Center for Education Statistics (NCES) projects increases in high school graduation numbers. The Western Interstate Commission for Higher (WICHE), in contrast, projects declines in high school graduates starting about 2025. (see graph below).

For ED, relying on overly optimistic projections for high school graduates creates a statistical train wreck that's made even worse by what's not in their formula.

Popular opinion about college has been declining for years, and there is no indication that attitudes will improve. A growing number of younger folks have joined the "educated underclass," becoming disaffected by underemployment and oppressive student loan debt. While progressive policies could change attitudes, deep skepticism about the value of education is an important statistical wildcard.

This is not the first time that the Higher Education Inquirer has questioned overly optimistic US Department of Education projections. While NCES has updated projections from time to time, it seems to have relied too much on the past and been too slow to change.

Related link: College Meltdown 2.0

Wednesday, August 10, 2022

Rebuilding the Purpose of the GI Bill (Garrett Fitzgerald*)

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

The landscape of military-connected students in higher education has been filled with turmoil for the last two decades. The G.I. Bill, a well-earned and financially substantial benefit for student veterans since 1944, has been a lightning rod for this turmoil. With the more recent release of the Post-9/11 G.I. Bill, the benefits have become even more lucrative for the student and therefore, the universities receiving those dollars.

From 2009 to 2020, approximately $60 billion in Post-9/11 G.I. Bill tuition has been paid out to colleges and universities. In light of this cash windfall predatory companies and institutions took advantage. It has caused irreparable harm to hundreds of thousands of military-connected students.

One of the original concepts behind the Montgomery G.I. Bill was to supercharge the country’s economic rebuild after World War II. With college paid for, the country could spread the introduction of millions of veterans into the workforce over a period of time rather than all at once. It also provided, in an unprecedented fashion, a pipeline of trained, skilled and educated candidates for the workforce. It worked. The country saw strong economic growth during this period and one of the primary reasons for this was that student veterans - and their financial benefits - were being put to good use at quality institutions of higher learning.

Fast forward to today, we see veteran graduation rates declining and employment statistics headed in the wrong direction. Coincidentally, a trend we’re also seeing, in parallel, is the immense amount of money paid each year to subprime predatory colleges and universities. These institutions have lost sight of their purpose (education) and are investing millions of dollars into military recruitment for a cut of the financial benefits.

To better showcase this imbalance, in 2017 seven of the top 10 colleges receiving the most G.I. Bill benefits, spent less than one-third of tuition and fees on “academic instruction” (Veterans Education Success). These colleges, coincidentally, are producing far below average graduation and employment statistics - wonder why? They are more focused on military recruitment than what to do with these students once they enroll.

One might ask themself, “how do these bad colleges manage to enroll so many military-connected students?” The answer is that they advertise their programs with substantially more investment than others. Colleges with limited budgets or those looking to enter the military market for the first time, are unable to compete on most lead gen sites and some are even outpriced on sites like Google and Facebook.

The question is what do we do about this crippling issue? Predatory colleges won’t change their ways with the lack of government-backed punishment handed down over the years so the solution has to come from elsewhere. CollegeRecon sees the solution in the way military-connected students research and discover university options.

There has been a need for change in the way military-connected students learn about their education benefits, research degree program pathways and select institutions to enroll in for decades. The VA doesn’t do nearly enough, transition programs are often not effective and selecting colleges based on location or misleading marketing messages is what got us here in the first place.

Over the last 6+ years, CollegeRecon has been building a new standard for the way military-connected students discover and engage with colleges and universities, and vice-versa.

The platform is free for the military and veteran community. It provides impartial and easily digestible information on all the benefits programs available to each individual based on their own military experience and status. It also dives into degree program opportunities, earning credit for service, recommended questions to ask admissions reps, discounts available to military-connected students, etc.

What sets CollegeRecon apart from other online resources is the set of free tools we’ve created to assist men and women with refining school searches, connecting with campus administrators and gaining access to military-affiliated scholarships to offset any out-of-pocket expenses. CollegeRecon has nearly 3,000 active college profiles with information on degrees offered, tuition costs, military support programs, campus facts, etc. If a match is made and the individual is interested in learning more about the institution, he or she can “request info” from a designated point of contact on campus who can help answer questions. An important key to our platform’s success is that members can connect with any college in our network, not just partners.

CollegeRecon is NOT a traditional lead generator where users register an account and have their information sold to 10 semi-matched schools. CollegeRecon members are in complete control of who they request information from and they can even choose to communicate with a school outside of the CollegeRecon environment; we provide links and contact information for all school websites listed in the tool.

For universities, CollegeRecon offers a safe and effective environment to promote their brand and create opportunities for engagement with a targeted audience of college-seeking, military-connected students. With this platform, colleges can get their brand in front of the largest online community of military-connected men and women actively seeking opportunities in higher education.

CollegeRecon aligns with schools to be a transparent, targeted and trusted partner and to provide an even playing field for different types of colleges. CollegeRecon currently works with colleges and universities across the country; including four-year private and public, 2-year colleges, as well as online and campus learning institutions.

Our goal has never been to create high volume, low quality leads. The purpose of the platform is to create awareness for colleges in a brand-safe way while offering a non-predatory environment for prospective students looking to utilize the G.I. Bill or Tuition Assistance.

As we continue to build out the platform’s capabilities and reach within the military and higher ed community, our focus remains set on rebuilding the purpose of the G.I. Bil. That purpose, in our view, is to ensure those who served in uniform are rewarded with a genuine education that leads to career fulfillment and economic prosperity.

*Garrett Fitzgerald is the CEO and Founder of Homefront Alliance, the parent company of College Recon. "GI Bill" is a registered trademark.

Wednesday, August 3, 2022

Visual Documentation of the College Meltdown Needed

The Higher Education Inquirer is looking for images to document the College Meltdown which began in 2010.

The US Department of Higher Education posts hundreds of campus closings each year. Images of these closed schools can be used to document an important part of US higher education history.

Closed campuses vary in size, from high school classrooms, hotel conference rooms, and store fronts, to satellite and branch campuses, to small private colleges, and larger career colleges. Some schools have been repurposed, others demolished, and others remain in disrepair--as ruins--and relics of a more humane (or at least more human) past.

Over the last two decades, the University of Phoenix alone closed more than 500 campuses, many which were conveniently located near US interstate highways. In 2025, UoPX will have just one campus, located in Phoenix, Arizona.

In 2015, Corinthian Colleges and Le Cordon Bleu went out of business. A year later ITT Tech closed all of its doors. The Art Institutes also closed dozens of campuses. In 2018, Virginia College campuses closed, and Kaplan Higher Education sold its remaining properties to Purdue University. Today, only a few Purdue University Global campuses remain. DeVry University has closed many locations, but several ghost campuses, those with few if any students, remain. Ashford University became a fully online University of Arizona Global.

In just a few decades, under the guise of creative disruption, brick and mortar colleges with skilled professors and staff have been replaced by large online robocolleges that hire few if any instructors and offer fewer student services, such as mental health counseling. And community branch campuses have been replaced by online program managers (OPMs) that advertise, recruit, and even write curriculum for regional public universities and elite private colleges, often without the knowledge of the students/consumers.

The US Department of Education's PEPS Closed School Monthly Report has been largely ignored by the media. But as a historical document, the list is telling. Since 1986, approximately 18,000 campus closings have been reported. The peak year for closings was 2016, when more than 1100 schools were reported as closed.

[Bay State College in Boston, Massachusetts, which has partially closed. BSC is owned by Ambow Education., which is in deep financial trouble]

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

Abandoned Long Island College Sits in Disrepair, And Community Says It's A Danger (Greg Cergol, NBC New York)

The Growth of "RoboColleges" and "Robostudents"

PEPS Closed School Monthly Report

Monday, July 11, 2022

Colleges Are Outsourcing Their Teaching Mission to For-Profit Companies. Is That A Good Thing? (Richard Fossey*)

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

Years ago, colleges employed people to perform auxiliary services. University employees staffed the campus bookstore, ran the student union, and performed janitorial services.

Over time, however, universities began outsourcing almost all of their auxiliary services. Barnes & Noble now runs hundreds of college bookstores. National fast-food chains operate stores in countless student unions.

Recently, however, American colleges have gone beyond outsourcing their non-instructional activities. Now, the universities are outsourcing their core mission: teaching students.

According to the Government Accountability Office (as reported in the Wall Street Journal), 550 colleges and universities are partnering with for-profit companies to design courses, recruit students, and manage instruction.

Academic Partnerships, one of the leading for-profit outfits, contracts with universities all over the United States to manage graduate programs--for a hefty fee, of course. Higher Education Inquirer estimates that AP collects about half the revenue from the courses and programs they manage.

2U, another for-profit online instruction provider, has a contract for services with the University of Oregon and gets 80 percent of the tuition for 2U-managed courses. That's a good deal for 2U's stockholders.

What the hell is going on?

As the Wall Street Journal explained, colleges are losing revenue due to declining enrollments. They aren't raising enough money to pay all their administrators and bureaucrats. Thus, hundreds of schools are investing heavily in online academic programs--especially graduate programs--to juice their revenues.

Respected public universities like the University of North Carolina and the University of Oregon have turned to for-profit companies to design or revamp various graduate programs, recruit students, and oversee instruction.

Why don't the professors do those things?

I don't know. Perhaps the faculty don't have the skills necessary to recruit students, manage enrollment, or design academic programs for an online format. Or maybe doing these things is just too fuckin' hard.

I have a professor friend whose dean ordered him to design and teach an online course for a master's degree program managed by Academic Partnerships. He was told the class would be conducted online over five weeks.

My friend was a good soldier and taught the course as directed. He had over 600 online students! When the class was completed, my friend told the dean he would never teach an online course that way again, even if it meant being fired.

As the Wall Street Journal pointed out, students are often unaware that they are taking a course managed by a profit-driven company, not the university.

For example, the University of Texas at Arlington has a big-time financial relationship with Academic Partnerships, which manages graduate programs in nursing, education, business, and public health. Nevertheless, UTA's promotional materials do not disclose that Academic Partnerships manages these online graduate programs.

Students all over the United States are taking out loans to pay tuition bills at public universities in the naive belief that these schools are non-profit entities dedicated solely to the public good.

Most of these students would be surprised to learn that a profit-making company is sucking up a good share of their tuition dollars to enrich their executives and investors.

My take on this? If a public university is so goddamn lazy or incompetent that it has to pay a private company to manage its academic programs, then that university should be closed.

Richard Fossey

*This article originally appeared in Richard Fossey's Condemned to Debt Blog. The blog's URL is https://www.condemnedtodebt.org/

Saturday, June 25, 2022

HEI Investigation: Academic Partnerships

In 2022, Online Program Managers (OPMs) are being scrutinized like their predecessors, for-profit colleges, in the early 2000s. 2U, one of the leaders in the industry, has been particularly singled out as a predatory company, working with elite schools like the University of Southern California, and selling their overpriced master's degrees.

Before that, Kaplan Higher Education and Kaplan Higher Education gained attention for selling off their for-profit schools but maintaining the management services for Purdue University Global and University of Arizona Global.

In this media attention on OPMs, a few companies have been able to avoid much scrutiny, with Academic Partnerships flying below the national media radar for years.

Academic Partnerships (AP) is a mature online program manager that claims to serve more than 50 universities, most regional state universities. The Higher Education Inquirer could only find about half that number. AP also claims to "help universities grow"--without providing much evidence. In some cases, these lesser brand schools have been facing decreasing enrollment and revenues-- and it's not apparent how much AP can help them in the long run.

What we do know is that the OPM receives about half of all the revenues for their work, which includes cheaper privatized marketing, advertising--and recruitment services from enrollment specialists spread across the US.

AP's sales pitch is that they can transform their partner universities and help provide reasonably priced degrees in lucrative career fields (such as RN to BSN programs), but is this happening with all the online degree programs offered? And would some consumers be better off choosing a local community college?

AP's partner universities include:

Arkansas State University
Avila University
Boise State University
Carleton University
Eastern Michigan University
Eastern Washington University
Emporia State University
Florida International University
Louisiana State University Shreveport
Norfolk State University
Northern Kentucky University

Pittsburg State University
Radford University
St. Cloud State University
Southern Illinois University
Southern Oregon University
Southeastern Oklahoma State University
Texas A&M (International University)
University of Illinois Springfield
University of Maine at Presque Isle
University of North Carolina Pembroke
University of Texas at Arlington
University of West Florida
William Paterson University
Youngstown State University

If you teach or study online at one of these AP university partners, what have you observed?

Do instructors maintain the rights to the content they have created?
What are the online classes like compared to face-to-face courses?
What are graduation rates for these online students compared to on campus students?
How much debt do former online students have compared to on campus students?
What kind of jobs are former online students getting compared to on campus students?
Are former online students able to pay off these debts?

Saturday, June 4, 2022

How campuses engage with the climate crisis: a taxonomy (Bryan Alexander*)

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

How might colleges and universities grapple with the climate crisis?

This question is the subject of much of my work now, as you can see from these posts. Researching answers can lead in a wide range of directions, not to mention down some twisty rabbit holes. Today I’d like to avoid those depths and instead look at a very macro, very ten-thousand-foot level. Let’s explore a schematic analysis looking at campuses as institutions and communities, facing perhaps the greatest crisis of the century.

(I draw the following from my forthcoming book on the topic, Universities on Fire.)

To start, let’s break down the different ways by which the climate emergency can hit academic institutions. There’s the direct, environmental way, as storms strike, desertification and aridification expand, fire rage, heat rises, and waters surge through a campus. We can call this the primary impact vector.

Other campus impacts result from the ones crashing through the primary vector. Think of how temperature rises, the intrusion of salt into fresh water, and the arrival of new diseases can sabotage agriculture, which then leads to human misery and economic dislocation. This can reshape the area around some campuses, not to mention challenging a university’s ag programs. It can also injure campuses which enjoy appealing physical grounds in terms of mental health and outreach. Additionally, these ecological shocks can also strike academics directly, through newly arrived diseases. Increased storms can injure a local economy by damaging infrastructure, products, and workers, which can in turn blow back on a local college or university. Let’s place all of these knock-on effects under the header of a secondary impact vector.

Humanity responds to pressures exerted through the primary and secondary vectors, and these responses engage the academy. For example, natural disasters can prompt migration; the tendency of some regions to become uninhabitable will drive even more people to seek new abodes. Economic dislocation (a secondary impact vector) can breed social problems as well as feed extremist politics. Further, as humanity revises its energy production basis to get away from carbon dioxide, all kinds of ripples can work through society, from changes to economics, human spaces, and gender roles. If we extend our response to the crisis to include rethinking society and politics (viz anticapitalism, donut economics, decolonization, etc.), campuses feel the results as they are embedded within society and politics. I think of all of these organized together as the third climate crisis impact vector.

Given this triple threat, how can campuses react? As institutions, as individual people affiliated with schools, as groups within a college or university, academics have a broad range of strategies and responses available. Following the tripartite model above, we can similarly break down the scope or domain of academic action. Seen through our macro lens, academia can act on three levels, starting with the smallest events and actions taking place on campus: The physical campus. From renovating buildings to hosting renewable power generation, turning lawns to forests or gardens, banning carbon-burning vehicles, changing food service, and embracing green computing, academics have institutional grounds and materials as a major ground of action.

The campus in its community. Colleges and universities partner with local businesses, nonprofits, government agencies, and civil society for a range of purposes. The local community can also pressure a campus in many ways, from subjecting it to policies to protests. “Local” can scale up to municipal or other subnational governance, too. In short, there’s potential for productive work as well as friction. In America we call this “town-gown relations.”

Academia on the world stage. Already higher education contributes powerfully to humanity’s climate crisis actions by producing vital research. Individual academics can act as public intellectuals, translating their research for general consumption and influence. The reverse is also true as nation-states and transnational entities implement policies or generate other influences on the academic world. Further, some within the academy – faculty, staff, students – will seek to organize for climate mitigation and adaptation efforts. Indeed, some call on us now to imagine a new, post-carbon civilization; colleges and universities are fertile grounds for such creative work.

(I’ve also been thinking about the various arguments I’ve heard about why campus populations should not seek to change their institution during the climate crisis. Let me set those aside for now, perhaps for a future post just on the topic. That’s a different response category.)

To be fair, we can easily think of responses which cross between these boundaries, such as working with a religious group with a powerful local presence as well as a significant global one. Further, there’s not a hard and fast line between town-gown and academic in the world. I tend these artificial categories to be heuristics, a very rough sketch of possibilities.

How do these two sets of three interact? Let’s play them against each other to produce that beloved tool of futurists, a grid (click on grid for a clearer image):

To explicate this scheme further, I can offer some real world and hypothetical examples for each cell on this grid.

Primary or direct impact: on campus, elevating buildings to allow flood water to pass underneath. In community: students and faculty partnering to construct and maintain a large seawall. In the world: professors publishing research modeling the impact of an Atlantic Meridional Overturning Circulation (AMOC) slowdown.

Secondary impact: on campus, revising sociology curricula to focus on climate-driven social changes. In community: increasing partnerships with local medical care providers and public health authorities to address climate-caused health problems. In the world: students, faculty, and staff lobby national governments to adopt a no-growth economy.

Tertiary or socio-political impact: on campus, setting up an institute for Post-Carbon Society. In community: offering housing and teaching for climate refugees. In the world: scholars advocating in public to block geoengineering.

Let’s stick these into the grid:

Click on grid for a clearer image.

I think that shows the breadth of ways colleges and universities could engage with the climate emergency, both proactively and reactively. It might be useful to give academics a sense of the options they have, and a pointer towards the multi-pronged nature of the threat.

I hope it’s useful to some of you. What do you think of this template as a heuristic?

*Bryan Alexander is an award–winning, internationally known futurist, researcher, writer, speaker, consultant, and teacher, working in the field of higher education’s future. He is currently a senior scholar at Georgetown University. Bryan's next book is Universities on Fire, to be published by Johns Hopkins University Press. This article was originally published at BryanAlexander.org.

Saturday, May 28, 2022

Ambow Education Facing Financial Collapse (Dahn Shaulis and Glen McGhee*)

Ambow touts its place on the New York Stock Exchange (NYSE), but that status may be short-lived.

Ambow Education Holding (AMBO) is facing financial peril--again.

The Cayman Islands corporation, with headquarters in Beijing, People's Republic of China, has had financial troubles before. In 2013, the company was liquidated after allegations of financial improprieties.

Ambow Education was reorganized and quickly found enough capital to branch out, as if nothing had happened in 2013. The company now offers a variety of services, including several for-profit K-12 schools in China. Ambow also claims to have patents in a variety of edtech areas, including educational surveillance. *

In 2017 and 2020, Ambow ventured into US for-profit colleges, acquiring Bay State College (BSC) in Boston and NewSchool of Architecture and Design (NSAD) in San Diego.

According to US Securities and Exchange Commission (SEC) reports, Ambow acknowledges that the People's Republic of China has a powerful influence on the company. How this relates to its US holdings is not apparent--but insiders have questioned the role of Chinese executives and their business practices.

In January 2020, Bay State College settled with the Massachusetts Attorney General for $1.1 million for misleading students and for violating state statutes on aggressive telemarketing practices and inflating job placement figures.

And during the Covid pandemic, BSC has worked with Cisco to track students on campus, which may seem intrusive to some Americans.

"Faculty, staff, and students were each issued a lanyard and a badge holder containing a Bluetooth® Low-Energy (BLE) beacon, which they were required to wear visibly at all times while on campus. Each Meraki AP contains a Bluetooth antenna that listens for intermittent pings emitted by the campus ID badge holders. As people move around campus each day, multiple Meraki APs collect and triangulate the beacon data to track and record their relative location over time. The APs collect and warehouse more than 300,000 data points per day...."

Despite the elimination of its physical library and its receipt of US government bailout funds, Bay State College continues to lose money.

Faculty and staff have departed as enrollment has dropped below 700 students. The school is also facing sanctions from its accreditor, the New England Commission of Higher Education (NECHE).

Bay State College enrollment has declined from more than 1700 students in 2012 to less than 700 today.

NewSchool, has a good record with student outcomes, but has faced issues lately with failure to file reports to the California Bureau for Postsecondary Education (BPPE). Like Bay State College, NSAD has continued to lose money--as enrollment has dropped below 500 students--making current practices unsustainable.

Ambow promises to use "shared services" between BSC and NSAD to increase efficiency. This includes the sharing of key executives. And insiders tell the Higher Education Inquirer they believe this model may be useful if Ambow decides to expand its presence in the US. But sharing key executives between two schools, 3000 miles apart, may be in violation of accrediting policies.

Meanwhile, AMBO shares have been selling below $1 a share since December 17, 2021.

Ambow (AMBO) shares have been trading below $1 a share since December 17, 2021, down 99.76 percent from its peak. (Source: Seeking Alpha). Click on graph for a clearer image.

With a second strike (a second delisting) in the US, it's hard to imagine more capital available. But that hasn't stopped the perpetually confident CEO Jin Huang from trying to wrangle another $100 million from unwary investors.

Both the NYSE and SEC have no comment about this impending meltdown.

*Thanks to Glen McGhee for his analysis of Ambow patents.

Sunday, May 15, 2022

Is Your Private College Financially Healthy? (Gary Stocker*)

College viability is best determined by comparing the private colleges you are considering (Click on the image.)

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

You have worked hard to make higher education a smart, informed investment. You have talked with college admissions counselors, developed a list of preferred colleges, visited the schools in-person or virtually, written the application essays, and filled out the common app. The colleges know a lot about you - and your family’s finances- but what do you know about theirs?

Will your college close? It is a question being asked with increasing frequency by students and their families. There is consensus of college researchers and experts that college closing will continue to happen in 2022 and beyond.

We have reviewed audited financial statements and data collected by the National Center for Education Statistics, and it is reasonable to assume that many small to medium-sized private colleges you may be considering will not have the financial resources to remain viable or even to provide you with the type of education you have come to expect.

We explain how to easily interpret the financial health below.

The consequences for you of choosing a financially challenged and potentially non-viable college include:

*The need to transfer colleges and the emotional and other challenges associated with a college closure
*Potential loss of transfer credits and the need to re-take some classes at the new college
*Faculty and staff turnover at the troubled college
*Safety issues associated with deferred building and grounds maintenance
*Increased time and costs to complete your degree
*A college closure could cost you more than $50,000 in additional costs and lost income from delayed graduation.

Here are some indicators that a private college is at a higher risk of closing.

*Enrollment less than 1,000 with a trend of decreasing enrollment. (Our College Viability App provides you with this information.)
*Endowments less than $50 million
*High tuition discount rates (greater than 50%) that are reflected in lower tuition revenue
*The popularity of the college is decreasing based on the number of students who accept an admissions offer. (Known as 'yield'.)

In most cases, scholarships offered by colleges are simply tuition discounts – like discounts you might get when buying groceries, clothes, or cars. Those scholarships are not funded with real money. If a college is desperate to fill seats, it commonly offers ‘scholarships’ that are not funded by any real money. They are simply lowering the price of tuition to get your enrollment commitment.

Certainly, these tuition discounts are good for students and their families, but they are not always good for the college’s finances. Faculty need to be paid, lights kept on, buildings maintained, and a long list of other expenses are incurred. Decreased revenue from tuition will be one of the leading factors in colleges that choose to go out of business or completely change their business model. Desperate colleges may do desperate things to get you to commit to them.

Below, you will find some straightforward guidance on how to interpret and understand some basic, private college financial, enrollment, and outcome data. We just use 6 pieces of information from 2013-2018 to help you understand how to better compare one private college to another. In general, compare each of the six indicators to look for any big differences among the colleges you are considering.

Quick Summary

FTE (Full-Time Enrollment) should be positive. The larger the increase over the 6 years, the better. If it is a negative number, the trend over these years suggests your college may not be as strong as its competitors with better enrollment numbers.

Admissions yield with a negative number suggests a larger number of students are not accepting a college’s admission offer. A positive number can suggest more students are accepting their admission to a college.

You will want to see the 6-graduation rate increase over the reporting period. More importantly, if you access the College Viability App, click the ‘Grad Rates’ button. Any number around or below 50% is not good. A graduation rate in the 70% and above is a reasonable minimal target.

The change in core expenses should be less than the change in core revenues. When expenses are not keeping up with revenues over a 6-year period, it can be viewed as a significant indicator of bad financial health.

The larger the increase in the endowment assets, the better. Increasing endowments suggest a college maintains a financially fruitful relationship with alumni and other charitable groups. Small increases indicate the college has yet to develop those resources. A negative number in the endowment suggests a college is in deep trouble. It probably has drawn down that money just to keep the lights on – not a good use of endowment funds.

Below is a more detailed description of the factors we track in the College Viability App and how they can help you become more informed about your private college options.

Enrollment:

This effectively shows full-time enrollment for each of the years 2013-2018. It is easy to compare one college’s 6-year trend with another.

Positive trend: FTE stands for full-time enrollment and is a calculation showing how many students would be attending if all were enrolled full time. You want to see consistent increase in the FTE enrollment. Larger enrollment typically provides more revenue to a college.

Negative trend: Either big changes from one year to the next or a consistent decline in enrollment. The first suggests inconsistent discounting and the college may be having difficulty bringing in students without substantial discounts. This hurts their ability to generate revenue to stay financially healthy.

Private college 6-year graduation rates for undergraduates (Click on image.)

College admissions yield, private Minnesota colleges (Click on image.)

Tuition and Fees

The main revenue source for almost all private colleges is tuition and fees. While enrollment is often reflected in the tuition and fees colleges collect, in recent years there has been a lot of market pressure to discount tuition. This has contributed to decreasing tuition and fees and could indicate trouble for a college you are considering.

*Positive trend: Consistent increase in tuition revenue over 6 years

*Negative trend: Consistent decrease in tuition revenue over 6 years

Admissions Yield

A negative number suggests more students are not accepting a college’s admission offer. A positive number can suggest more students are accepting their admission to a college. It is not as strong of an indicator of viability challenges as other factors, but it can build on the pattern seen by other data.

Positive trend: An increasing admissions yield can suggest a college is able to enroll more students who they have accepted.

Negative trend: If the yield is decreasing, for some reason(s) more student are choosing other options instead of enrolling in a college that accepted them.

Endowment

Positive trend: Simply speaking, this number represents financial gifts private colleges have received. While there are different types of gifts, look for those colleges whose endowment has grown more than its competitors. These organizations will have the extra resources to survive tough economic times.

Negative trend: Compare the 6-year changes from all of the schools you are considering. The larger the increase and the higher the overall endowment, the better. If you see that a total endowment amount has decreased in the 6-years of data, it could mean the college is using those funds just to keep the lights on.

As general guidance, any endowment total that is less than $50 million is also reason for concern about a college’s financial health.

6-Year Graduation Rates

The education outcome the College Viability App tracks is 6-year graduation rates. There are typically not big swings in graduation rates over 6 years. Just look for colleges with higher graduation rates.

Positive trend: The larger the number, the better.

Negative trend: A lower percentage suggests a college is not as successful in graduating its students as those colleges with higher percentages. If the graduation rate hovers around 50% or lower, there are legitimate reasons to have concerns about that college’s quality of education and the systems and processes needed to enhance retention and create graduating students.

Core Expenses

It is best to compare both core expenses and core revenues for each of the years listed. Any significant expense imbalance is worthy of concern. If expenses go up year after year, it is reasonable to expect revenues to at least trend upwards also. Watch for colleges whose expenses have increased, but their revenues have not. Remember, you are looking at a 6-year trend. If a college can’t reverse a bad expense and revenue pattern in 6 years, there is reason to be concerned about their viability.

Positive trend: Expenses have either decreased more than the core revenue has decreased, or the increase in core expenses should be a smaller number than the increase in core revenue.

Negative trend: Expenses have increased faster than core revenues, or the decrease in expenses has been slower than the decrease in revenues.

Core Revenues

If revenues are trending downward and expenses are not decreasing in a similar trend, there is reason to consider whether a college with that pattern has the capacity to do what is necessary to survive and thrive. Tuition and fees are part of core revenue. As one goes trends, the other usually goes in the same direction.

Positive trend: Core revenues have increased faster than expenses have increased, or revenues have not decreased as much as expenses have decreased.

Negative trend: Any trend where the revenue decreases is concerning. However, if a college can keep its expense changes in line with its revenue, that works for a while. Any business strongly prefers consistent revenue growth. It’s an indication of a good product or service.

Remember, it is the trends that are most important to consider. If you see differences that concern you among the colleges you are considering, share your concerns with your admissions representative. Ask them to share explanations of why the numbers in any category don’t compare well to other private colleges you are considering. Use their responses and the data in the College Viability App to make a more informed decision about the college(s) you are considering.

Data Source: National Center for Education Statistics - Integrated Postsecondary Education Data System (IPEDS) 2013-2018

We created the College Viability App to provide students and their parents an easy-to-understand resource of what to look for regarding a private college’s financial health. You simply select the colleges you are considering, and we provide you with six years’ worth of comparisons on 6 key viability indicators.

The College Viability App does not predict whether a private college will close or not. It simply provides you with an easy-to-use, customizable comparison of colleges you are considering. Some colleges have performed better than others over the past 6 years. You can compare and make your own judgement. It is important to note that we use the most recent federal data available. There is usually a 12-18 month lag time before a private college's data is posted.

Here is a link to a YouTube tutorial on the College Viability App.

Monday, May 9, 2022

College Meltdown 2.2: Who’s Minding the Store?

The latest report by the Government Accountability Office (GAO) about wrongdoing by higher education online program managers (OPMs) felt disappointing to social justice advocates who watch the space and know the bad actors who were unnamed in the GAO document.

US higher education has always been a racket, but its latest pursuits have gone untouched and even unmentioned. GAO’s behavior, though, is no worse than the many other corporate enablers who are supposed to be minding government funds wasted –or worse yet—used to prey upon US working families.

The US Department of Education has done little lately to safeguard consumers from predatory student loan servicers like Maximus and Navient, or subprime universities like Purdue University Global and University of Arizona Global, and hundreds of small players who offer marginal education leading to less than gainful employment.

The Department of Veterans Affairs has done little lately to protect veterans and their families from being ripped off by subprime schools. At one time, VA was a leader in tracking GI Bill complaints and making them public, but transparency and accountability are far from what they were.

The US Department of Defense (DOD) has been asleep at the wheel with its distribution of DOD Tuition Assistance funds to subprime colleges. Its complaint system is close to nonexistent.

The US Department of Justice (DOJ) and US Securities and Exchange Commission (SEC) have done little to rein in bad actors in higher education, leaving the work to states attorneys general. Hate crimes on campus have also been ignored. In other cases, elite university endowments have received little notice despite eyebrow raising profits. Student loan asset-backed securities are also below their radar.

During the pandemic, The Department of Treasury has failed to adequately oversee funds issued to the Federal Reserve and the Small Business Administration funneled to subprime schools.

The Federal Trade Commission (FTC), which had done an adequate job investigating predatory lead generators and marketing and advertising false claims has been hamstrung by a recent court decision and can no longer fine higher ed wrongdoers. Predatory companies know this and will act accordingly—as criminals do when cops are not on the beat.

What lack of oversight have you seen with federal agencies tasked to protect higher education consumers?

Related link: College Meltdown 2.0

Wednesday, April 27, 2022

Paying the Poorly Educated (Jack Metzger)

Joe Biden was right to propose free Pre-K education for 3- and 4-year-olds and free community college in his initial legislative package, rather than pushing for free public university education and the cancellation of college debt. All four progressive education initiatives would serve the public good by making education more available to millions. However, policies that promote university education do little to help the working class. They also feed into the false and damaging narrative that college is the right path to upward mobility for most people.

While free public universities could be transformative in the very long term, most of the benefits of this policy would go to higher-income families. They are more likely to live in areas with high-quality K-12 schools, and their children also are more likely to have the kinds of social and cultural capital that are especially advantageous for getting into and succeeding in college.

Similarly, while forgiving all or some portion of existing student loan debt would likely benefit low- and middle-income young people, who are more likely to have higher levels of debt than their more affluent contemporaries, this too has limited benefit for the working class, because it only helps those who have gone to college. That’s a large group, but forgiving their debts does nothing for the many others who aren’t in debt because they didn’t go to college at all or for very long.

Free public Pre-K and free community college, on the other hand, disproportionately benefit working-class children and adults. Free Pre-K will not only improve the educational prospects of children, but it also saves families money. For those currently using the cheapest day care, this would save some $10,000 to $15,000 a year – a significant increase in spending power for all income classes, but transformative for low- and middle-income family budgets. What’s more, for low-income parents who currently can’t afford day care and thus can’t work full time or at all, free Pre-K would allow them to work and earn more in the paid workforce.

Likewise, free community college would disproportionately benefit low-income adults and young people who cannot go to college full time because they need to work. Community college education includes apprenticeships and other pre-training that is needed for entry into many middle-wage jobs, including in the soon-to-be-expanding building trades. Free public university would mostly benefit those young people who have more time to take the long road, while free community college is more valuable for working adults who already have work and family responsibilities.

The class-skewed benefits of these initiatives are relatively complicated, but we should also pay attention to the messages they reinforce. Prioritizing free college and student debt forgiveness plays into a toxic narrative that has deep roots in our public discourse: that college-educated people are more valuable, more worthy of public subsidy, than the so-called “poorly educated.” This narrative accepts that college graduates deserve to be paid more, but it also offers a false promise: that the primary way to increase wages and living standards – or more grandly, to restore the American Dream of upward mobility — is for more and more people to get college degrees. Both these messages are false. The first reflects a nearly impregnable professional-middle-class prejudice, but the second is an intellectual error that, if corrected, could burst a professional-class bubble.

College education cannot be a path for widespread upward mobility because a large majority of jobs in our economy do not require a college education or anything like it. 61% require high school or less and another 11% require an associate’s degree, some college, or other postsecondary education – but not a bachelor’s degree. Only 28% of jobs in 2020 required a bachelor’s, a far lower percentage than the nearly 40% of workers over 25 who had that degree.

That is why we find so many men and women with bachelor’s degrees as fast food workers; retail salespersons or cashiers; waiters, waitresses or cooks; freight, stock and material movers; janitors and cleaners; and home health care or child care workers. These occupations are among those with the largest annual job openings , and all of them have median annual wages ranging from $22,740 to $29,510 (that is, less than $15 an hour).

This is a tragedy for college graduates who were told that becoming part of the exam-passing classes would lead to better lives. But for most people doing those jobs, it probably never crossed their minds that they could go to college. Still, that work needs to be done, no matter the educational attainment of the people who do it. The work they do is socially valuable, some of it even “essential,” and those jobs need to be paid a living wage. To be told that the only way to improve your life conditions is through more (and more) education is demoralizing and, especially for those who work alongside college graduates doing the same work, palpably false.

Higher education is a circuitous route to improving one’s economic prospects, a route that will not work for at least a third of those who can afford to take it, and a route that is not realistically available for the majority of our population. If we want to improve wages and conditions, we need to improve them directly, not by producing more college grads.

President Biden’s initial transformative legislative package that got whittled down to Build Back Better (BBB) embodied the understanding that education was neither the answer nor even an important part of the answer for achieving upward mobility. That initial package included a $15-an-hour minimum wage and the union-empowering Pro-Act that were quickly jettisoned because they could not avoid a Republican filibuster the way budget bills can. But, equally or even more important, many elements of Build Back Better provided for a series of enhanced social wages that together would have dramatically improved life prospects across the board – none more important than the package of child care subsidies that included universal free Pre-K.

Social wages explicitly recognize that even with better minimum wages and stronger unions, most wages will not come close to reflecting the collective social value workers provide. Nor are wages going to be sufficient to provide decent incomes for most people most of the time. Reducing the cost of health care, housing, transportation, and child care (all of which BBB would have addressed) increases the real incomes of all workers, and it has the most dramatic effect on low-wage workers.

By prioritizing those workers, most of whom do not have college degrees, the Biden package had the potential to pierce the professional-class prejudice that has dominated public policy. Both Presidents Bush and Obama proclaimed that more and better education was the only way to address our savage inequalities of income, wealth, and opportunity. Biden, by contrast, is the first president in memory to actually brag about creating well-paying jobs that do not require any college.

Alas, Build Back Better – let alone the initial, larger version of itself – is dead for now, and the possibility of a truly transformational package becoming law is probably gone for the immediate future. But a healthy majority of the public and more than 90% of Congressional Democrats supported the core idea of increasing taxes on corporations and the rich in order to transfer money to workers and citizens in ways that could dramatically increase working-class people’s chances for creating better lives. Hopefully, that support shows a shift away from the idea that education is the only path to improved life prospects. A public consensus may be developing that even the poorly educated deserve to earn a good living.

Jack Metzgar

Jack Metzgar is author of the recent Cornell ILR Press book, Bridging the Divide: Working-Class Culture in a Middle-Class Society.

*This article first appeared in Working Class Perspectives.

Wednesday, April 13, 2022

College Meltdown 2.1

The Higher Education Inquirer has added three companies to its College Meltdown watchlist: Ambow Education (AMBO), SoFi (SOFI), and Adtalem (ATGE).

Leading the way is National American University Holdings (NAUH), which is down to less than $50,000 in cash. Ambow Education (AMBO) and Aspen Group (ASPU) are near penny stock territory and Barnes and Noble Education (BNED) and SoFi (SOFI) are also in deep financial trouble.

Declining share price is not the only factor to make the College Meltdown list. Government contractor Maximus (MMS), for example, is on the list for its predatory behavior with student debtors and its own workers, as well as its questionable contracts with the US Department of Education.

Adtalem makes the list for continuing to put lots of working-class folks (particularly women and people of color) into a lifetime of student loan debt.

2U is identified for its fleecing of its clients (universities), end customers (students) and shareholders. In its last annual report, the company told shareholders that the number one risk was that it may never make a profit.

2U (TWOU) Shares have dropped 70 percent over the last year (Source: Seeking Alpha)

Shares of student loan refinance company SoFi (SOFI) are down 70 percent over the last year

(Source: Seeking Alpha)

Barnes and Noble Education (BNED) shares have dropped 66 percent over the last 6 months.

(Source: Seeking Alpha)

Aspen Group (ASPU) shares have declined 82 percent over the last year.

(Source: Seeking Alpha)

Related link: College Meltdown 2.0

Friday, March 25, 2022

Online Program Manager for University of Arizona Global Campus Facing Financial Collapse

Zovio (ZVO), the for-profit online program manager for University of Arizona Global Campus (UAGC)*, is facing a financial collapse.

With three consecutive years of financial losses, Zovio (formerly known as Bridgepoint Education) lost a record $61 million in 2020. Over the trailing 12 months (ttm) the company has lost $76 million. Cash assets have decreased from $357 million in 2016 to $33 million in 2021.

Zovio's cash runway (a key indicator of financial health) is now less than a year from zero, with revenues amounting to a fraction that they once were. Liabilities are also greater than all assets.

Zovio is working with a new CEO, Randy Hendricks, who has limited management experience, and the company has already been pared down to about 1500 full-time employees.

Insiders tell the Higher Education Inquirer that the deal between Zovio and University of Arizona was a deal between people of low integrity and a lack of imagination.

According to the Department of Education's College Navigator, University of Arizona Global Campus has just 194 full-time instructors for about 35,000 students, and many of those full-time instructors are also tasked with management roles: the tell-tale traits of a subprime robocollege.

To make matters worse, ZVO, which was already financially unstable, was recently ordered to pay $22 million in compensation to California students who were defrauded.

While Zovio's 2021 Annual Earnings will not be presented until ~~Tuesday, March 29, 2022~~, there are strong indications that ZVO has reached a point of no return in its balance sheet.

Zovio's Assets (2009-2021) Source: Macrotrends.net

Zovio's Annual Report is coming out weeks late, ~~just before the Securities and Exchange Commission deadline,~~ and ZVO has not presented any revenue numbers to relieve shareholder anxiety.

Since March 18, ZVO shares have been below the $1 per share threshold to remain on the NASDAQ. Thirty consecutive trading days below $1 will trigger the first stages of a delisting from the stock market.

Zovio Share Price, March 3-March 28, 2022 (Source: Seeking Alpha)

What we are seeing looks very much like Corinthian Colleges and ITT Education before they collapsed. Each day, ZVO is getting closer to being delisted from NASDAQ and they are quickly running out of cash.

But what happens to federal government funding and oversight if Zovio collapses? And how about UAGC--will it end up costing Arizona taxpayers?

With UAGC, only a handful of edtech companies could handle such a large transition. Experts we have contacted do not agree on potential surrogates for the online university or whether a surrogate is even necessary.

Will the US Department of Education (ED) try to get another company to take over the business? In the Corinthian Colleges collapse, ED was able to get ECMC to take over operations.

Will the US Department of Education require a special monitor, as they did with Corinthian Colleges?

University of Arizona could hire key executives and personnel, but that could cost the State of Arizona to hire those folks as state employees.

These are issues that need to be addressed by the Department of Education and the State of Arizona now, to avoid another student loan train wreck.

[Post script: On Monday, March 28, 2022, Zovio announced that their 2021 Annual Earnings would be delayed. No new date was reported.]

*University of Arizona Global Campus was previously known as Ashford University. According to the US Department of Education's College Scorecard, Ashford University has a 22 percent 8-year graduation rate. The College Scorecard reported that of student debtors two years into repayment, 32 percent were in forbearance, 28 percent were not making progress, 13 percent defaulted, 12 percent were in deferment, 7 percent were delinquent, 5 percent were making progress, 2 percent were paid in full, and 2 percent were discharged.

Related link: Verdict Against Zovio Adds to Peril for Arizona Global Campus (David Halperin, Republic Report)

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