Feb 3, 2017
Ken Steele's 10th annual higher ed "year in review" continues with part 3, a look at the fall – and rise – of for-profit fortunes in 2016.
In the previous two episodes, we looked at the proliferation of free college tuition policies across North America, the rise of anti-intellectualism and protectionism, and some of the implications for international education. (If you missed them, check out part 1 at https://youtu.be/CZ6nuznRV_I , and part 2 at https://youtu.be/AWuE7EhoejI ).
6) FOR-PROFITS
For decades now, massive for-profit schools like the University of Phoenix and Kaplan University have been rewriting the rules of higher education, and transforming the landscape. Last year was their annus horribilis, but also likely marks a turning point to much better times ahead.
For 8 years, the Obama administration aggressively prosecuted for-profit colleges and universities for deceptive marketing, fraudulent enrolments, and high rates of student loan defaults. Collectively, they were receiving more than $20 billion in student loans and $4 billion in Pell Grants, so the Government Accountability Office investigated thoroughly. The GAO’s undercover agents caught recruiters on hidden camera, encouraging students to lie on their loan applications. Major online universities like Phoenix were apparently targeting homeless shelters, and encouraging students with little chance of academic success to apply for substantial financial aid. There was a Senate hearing into For-Profit School recruitment practices, and new, tougher regulations.
Between 2011 and 2015, for-profit universities saw declines of 30% or more in enrolment. Over 5 years, the University of Phoenix alone lost a quarter-million students, and laid off about a thousand employees. Its parent company, Apollo Group, retreated from Canada, closing Meritus University in Fredericton after just a couple of years, in order to concentrate on defending the home front.
Obama’s so-called “gainful employment” legislation, finalized in 2014, aimed to keep student loan payments below 8% of a graduate’s total earnings, and would revoke financial aid eligibility for institutions that graduated students with unmanageable debt levels. Corinthian Colleges faced legal challenges by state and federal agencies, and finally declared it was closing more than 100 campuses in April 2015, including Everest College and CDI Institutes in Canada. In August 2016, ITT Technical Institute lost its accreditation, and it declared bankruptcy within a month, closing 130 campuses and laying off 8,000 employees. In September 2016, Washington revoked the accreditation of ACICS, the Accrediting Council for Independent Colleges and Schools, after 105 years. ACICS accredited hundreds of for-profit and distance-ed colleges and universities. And just last week, in the final days of the Obama administration, it was announced that more than 800 programs failed the Department of Education’s “gainful employment” standards, and therefore risked losing student aid eligibility – 98% of them at for-profit institutions.
But it seems pretty likely that 2016 marks the nadir of fortune for America’s for-profit colleges and universities. President-elect Trump hasn’t articulated his higher education policies, but it seems obvious that the founder of Trump University will have sympathies with other for-profits. After five years using the “university” label without accreditation, the courts forced a name change, but Trump University was closing by that time anyway. The president-elect has made it clear that he is a strong supporter of school choice and charter schools, promising to repurpose about a third of the federal education budget. It seems likely that the Trump administration will deregulate the for-profit sector, or at least relax enforcement of existing regulations. Analysts predict that he may grant a reprieve to ACICS. In the past, Trump has declared that he would completely eliminate the federal Department of Education – possibly eliminating the National Center for Education Statistics and the Pell Grant program as well. Anything his administration does to reduce or relax the federal government’s power over financial aid accreditation will remove the “teeth” from federal legislation like Title Nine, which protects gender equity in athletics and on campus. And Trump has indicated strong support for competency-based degrees, which will likely continue to gain momentum during his term.
Trump’s nominee for Education Secretary, Betsy DeVos, is a reformer of elementary and secondary schools, a strong believer in charter schools, school choice, and voucher systems. She is likely to promote privatization, performance-based government funding, and legislation to further reduce the power of faculty and staff unions. She has been a supporter of religious schools and free speech on campus, and an opponent of political correctness, affirmative action, and same-sex marriage.
Decades of growth in for-profit higher ed were largely undone under two terms of Obama’s administration. Whether you think that’s a good thing or not, the Trump administration is poised to reverse much of the regulation and enforcement that has held back the multinational expansion of for-profit colleges and universities. In Canada and around the world, we need to prepare ourselves for a resurgence of corporate players in higher education. A major shift in the landscape lies ahead.
Excerpts:
Dan Rather Reports – https://youtu.be/Pa1DxUWMsEU
Frontline 2010 – https://youtu.be/08_AuakqdXs
Frontline 2016 - https://youtu.be/Cew6EutvAjE
Fox 5 Atlanta - https://youtu.be/2vhFcKIhm4Y
GAO - https://youtu.be/9PbevtrhEKM
MSNBC - https://youtu.be/JUaMFVDV9PQ
NBC - https://youtu.be/S1XUwbtMxfE
Corinthian hearings - https://youtu.be/tkKmjyuoKyY
Betsy Devos highlights - https://youtu.be/Mc2n9uacQq4
Trump’s school choice proposal - http://www.politico.com/story/2016/09/donald-trump-school-choice-proposal-227915
Next time, we’ll look back at campus challenges and controversies of 2016, in our annual review of higher ed headaches!
(Stay tuned until after the closing credits for some bloopers!)