Saturday, November 24, 2018

Ashford University Deceiving Consumers, Violating Department of Defense Regulations

Since its inception in 2005, Ashford University has been an overly priced, low value educational institution with questionable ethics and poor student outcomes.  As a result, servicemembers and veterans have filed a disproportionate number of complaints about the school through the Department of Defense, Department of Veterans Affairs, and the non-profit Veterans Education Success.[i][ii][iii]
Ashford and its parent company Bridgepoint Education (BPI) have also been the subjects of investigations,[iv] lawsuits, and legal and out-of-court settlements for a continuing series of unethical and illegal business practices: taking advantage of wounded service members[v], falsifying student retention data,[vi] robocalling prospective students,[vii] and deceiving students about private loans.[viii]  All of these practices violated elements of the Department of Defense’s Memoranda of Understanding (“DOD MOU”) signed by one or more Bridgepoint executives in 2011 and 2014.[ix]  

Recently, Ashford University and Bridgepoint have also been under scrutiny by VA for making false statements about the location of the school’s main business location.  While this may not be a violation of the DOD MOU, it does exemplify the company’s repeated unscrupulous behavior[x]

VA’s GI Bill Comparison Tool states that Ashford University has a 16 percent graduation rate and 23 percent student loan repayment rate.  The page carries a warning because of its problems with GI Bill certification in California, and its current lawsuit as a defendant against the State of California. [xi]
According to authors from the US Treasury and Stanford University, Ashford University also carries a 47 percent 5-year cohort default rate (CDR). [xii]

Despite its horrendous record, Ashford University has received hundreds of millions of dollars in DOD TA money and Department of Veterans Affairs GI Bill funds.  According to the Center for Investigative Reporting, almost all of Bridgepoint’s money comes from federal government programs, which also includes Pell Grants and federal student loans in addition to TA and GI Bill funds.[xiii]   

2017 State of California Lawsuit
In its recent 40-page civil complaint against Bridgepoint Education and Ashford University, the Attorney General of California stated that the company and its university systematically deceived consumers, including veterans, through:

(1) a high pressure sales culture,

(2) false or misleading statements concerning financial aid and costs of attendance,

(3) misrepresentations regarding transferability of credits, and

(4) misrepresentations regarding employment prospects.[xiv] [xv]

While all of these items are pertinent to service members and veterans, items 3 and 4 appear most applicable to stipulations in Ashford University’s DOD MOU.[xvi]
In Ashford University’s Memorandum of Understanding with the Department of Defense, the school  agreed to provide specific consumer information to servicemembers, including information about financial aid and transferability of credits.  Judging from the State of California’s civil complaint, there is no indication that Ashford was providing this information. 

To the contrary, Bridgepoint and Ashford employees systematically deceived consumers about financial aid and transferability of credits:

False or Misleading Statements Concerning Financial Aid and Costs of Attendance (pp. 11-16 in the State of California’s Civil Complaint)
“In its efforts to lure in prospective students, Ashford systematically made false or misleading statements about students’ ability to obtain federal financial aid and the school’s costs of attendance.”  
“For example, Admissions Counselors commonly told consumers that federal financial aid would cover all their costs of attending Ashford University, or that they would receive certain kinds of federal financial aid, when the Counselors either had no basis, for making those promises.” 
“At the same time, Ashford misrepresented to consumers that it could not be determine final financial aid awards until after enrollment, and then it failed to issue the final awards until it was too late for students to withdraw without liability.  This led many to incur unexpected debts for tuition and fees they owed due to a shortfall in their final award.” 
“In another repeated tactic, Admissions Counselors enticed consumers by telling them that they could use federal financial aid for non-educational expenses, even though federal law prohibits this conduct.” 
“Admissions Counselors also made numerous other representations concerning various aspects of financial aid eligibility, a complex topic on which they were unprepared to provide guidance, as well as the costs of attending Ashford.” 
“Unlike other schools, Ashford does not send financial aid award letters until after a student enrolls, giving Admissions Counselors ample opportunity to make false forecasts about financial aid in their sales pitches to consumers.”
“In one common form of representation, Ashford told prospective students who had not yet filled out a FAFSA or received a financial aid award letter that they would not have to pay any “out of pocket costs.” 
“For many consumers, these kinds of misrepresentations made Ashford University seem more affordable than it actually was….Students ended up owing Ashford unanticipated out-of-pocket balances, or had to take out more loans than they expected.

“Ashford also told students and prospective students that final determinations about financial aid could not be made until after the student enrolled, and it required students to enroll without first receiving a financial aid award letter.  Ashford then waited until students were well into their coursework to send the financial aid award letters.  In reality, it was possible for Ashford to make final determinations prior to enrollment, just as many other colleges and universities do. Waiting to process financial aid until after an enrollment allowed Ashford to prevent prospective students’ financial concerns from getting in the way of Admissions Counselor’s quests to close their sales.”  

Elements of the MOU pertaining to financial aid (pp. 4-5):

f. Before enrolling a Service member, provide each prospective military student with specific information to locate, explain, and properly use the following ED and CFPB tools:

(1)  The College Scorecard which is a planning tool and resource to assist prospective students and their families as they evaluate options in selecting a school and is located at:

 (2)  The College Navigator which is a consumer tool that provides school information to include tuition and fees, retention and graduation rates, use of financial aid, student loan default rates and features a cost calculator and school comparison tool.  The College Navigator is located at:

 (3)  The Financial Aid Shopping Sheet which is a model aid award letter designed to simplify the information that prospective students receive about costs and financial aid so they can easily compare institutions and make informed decisions about where to attend school. The Shopping Sheet can be accessed at:

 (4)  The “Paying for College” webpage which can be used by prospective students to enter the names of up to three schools and receive detailed financial information on each one and to enter actual financial aid award information.  The tool can be accessed at:

g. Designate a point of contact or office for academic and financial advising, including access to disability counseling, to assist Service members with completion of studies and with job search activities.

(1)  The designated person or office will serve as a point of contact for Service members seeking information about available, appropriate academic counseling, financial aid counseling, and student support services at the educational institution;   (2) The point of contact will have a basic understanding of the military tuition assistance program, ED Title IV funding, education benefits offered by the VA, and familiarity with institutional services available to assist Service members. 

h.  Before offering, recommending, arranging, signing-up, dispersing, or enrolling Service members for private student loans, provide Service members access to an institutional financial aid advisor who will make available appropriate loan counseling, including, but not limited to: 
(1)  Providing a clear and complete explanation of available financial aid, including Title IV of the Higher Education Act of 1965, as amended. 
(2)  Describing the differences between private and federal student loans to include terms, conditions, repayment and forgiveness options. 
(3)  Disclosing the educational institution’s student loan Cohort Default Rate (CDR), the percentage of its students who borrow, and how its CDR compares to the national average.  If the educational institution’s CDR is greater than the national average CDR, it must disclose that information and provide the student with loan repayment data. 

Misrepresentations Regarding Transferability of Credits (pp. 16-23 in the State of California’s Civil Complaint)
“Ashford falsely told consumers that their prior credits would transfer into Ashford University.”
“Ashford also systematically misrepresented the extent to which Ashford University credits can transfer to other universities. Ashford’s Admissions Counselors routinely enticed prospective students with the promise that Ashford University offers them the flexibility to study online at a pace convenient to them, earning credits that they can later apply to other, less flexible, schools that the student was considering.”
“Ashford’s sales teams also told consumers that because Ashford University was regionally accredited, its credits were certain or likely to transfer to other schools….In other instances, Admissions Counselors have stated that Ashford University are accepted at specific schools, such as University of Southern California, UCLA, UC Berkeley, UC San Diego, and Harvard.” 
“Ashford also made misrepresentations regarding the transfer of credits from ongoing and future casework. Ashford University student and Army Reserve veteran P.M. was deceived by false promises that credits he earned at a community college while attending Ashford University would transfer to Ashford….As P.M. approached graduation at Ashford, he was alarmed to discover that Ashford had capped the amount of credits he could transfer….because Ashford broke its promise to accept all of the community college credits, P.M. had to spend additional time in school at Ashford University to make up for lost credits under the lower housing allowance. As a result he also fell behind in his rent, had to take another job to keep up with the bills, and his credit score suffered. Second, because GI Bill benefits are not unlimited, he wasted some of his veterans’ benefits by spending them on coursework he was unable to put toward a degree.”
This violates the following provision of the Ashford University’s DOD MOU:

“(1) Disclose its transfer credit policies and articulated credit transfer agreements before a Service member’s enrollment.  Disclosure will explain acceptance of credits in transfer is determined by the educational institution to which the student wishes to transfer and refrain from making unsubstantiated representations to students about acceptance of credits in transfer by another institution.” (p.7) 

Misleading and Deceptive Use of "Military Friendly" and "Best For Vets" Logos

Ashford University continues to use logos that are deceptive.  Promotional materials show that Ashford University claims to be "Military Friendly" and "Best For Vets."  But these designations are no longer valid.  

[iii] Veterans Education Success has reported 113 complaints from servicemembers and veterans regarding Ashford University.

[iv] Ashford University was a major focus of the PBS/Frontline documentary, College Inc.

In 2011, in Senate Hearings, Senator Harkin referred to Ashford University as “an absolute scam.”

[xv] Bridgepoint Education is also presumably under investigation by the State Attorneys General in New York and North Carolina.  This is in addition to the company’s settlement with the Consumer Financial Protection Bureau.

Saturday, November 17, 2018

DOD, VA Get Low Grades for Helping Vets Make College Choices

The Department of Defense (DOD) and the Department of Veterans Affairs (VA) are tasked with helping servicemembers and their families make successful transitions to civilian life.

The Department of Defense offers college classes on base through their education centers. They also provide free education opportunities through DOD Tuition Assistance (TA). DOD offers a tool called TA Decide to help servicemembers choose schools and a short series of classes for outgoing servicemembers, called the Transition Assistance Program (TAP). The US Army also has Army University which puts all military education in one place.

VA claims to offer individual counseling for transitioning servicemembers and veterans seeking information about post-military careers and education. This includes a career tool called Career Scope and an online tool for selecting schools, called the GI Bill Comparison Tool.

How well are these education and career programs working? It would certainly appear from the available data that DOD and VA are failing many servicemembers, veterans, and their families.

I have reached out to DOD for information about the effectiveness of DOD TA, TA Decide, US Army University, and other programs but have not gotten any feedback. I have also tried to connect with VA but they also have not responded.

According to Student Veterans of America and their NVEST report, 46 percent of all people using the GI Bill do not finish school, and 25 percent use their hard earned GI Bill on for-profit colleges. In 2017, CBS News also reported that 40 percent of all GI Bill money goes to for-profit colleges. To make matters worse, some of the worst actors in the subprime college sector (like University of Phoenix, Ashford University, Colorado Tech, and Purdue University Global-Kaplan) get a large amount of TA and GI Bill money.

[Image below from GI Bill Comparison Tool shows the schools with the most GI Bill students. Downloaded 11-8-2018. ]

In 2011, the Government Accountability Office (GAO) reported that DOD had done some work on ensuring greater accountability from online schools, but that more needed to be done. Since 2017, DOD has made two review of schools receiving TA funds, but the information has not been released to the public. US Army University also continues to partner with subprime colleges such as University of Phoenix, DeVry, and Ashford University.

Related links:

8 tips to help vets pick the right college (Military Times)

Veteran Mentor Network on LinkedIn

Warrior Scholar Project

Service to School

Veterans Upward Bound

Tuesday, October 23, 2018

Private College Revenues and the US College Meltdown

According to National Center for Education Statistics charts, public higher education institutions overall experienced increased revenues in recent years, but private colleges saw a $46 Billion loss in revenues from 2013 to 2015.

Bear in mind that the numbers are not up-to-date, so this pattern may have improved, stabilized, or worsened since 2016. But with student enrollment continuing to decrease, declining private college revenue numbers may be a harbinger of a larger meltdown.

In 2016, EY suggested that as many as 805 colleges faced significant challenges due to low enrollment numbers and unsustainable finances.

Some of private college revenue losses may due to a tuition discounting. In any case, drops in institutional revenues for a significant period require cost cutting, which frequently means cuts in teachers, staff, and financial aid. Conditions at individual private colleges may be vastly different, from thriving and growing to downsizing and closing.

Sunday, October 14, 2018

College Enrollments Continue Decline in Several States

[Updated 10-20-2018]

Although the National Student Clearinghouse numbers won't be out until December, a cursory look at news articles over the last month suggests that US higher education enrollment will be down again in 2018-19.

This is not surprising news, given that only a minority of colleges surveyed by Inside Higher Education/Gallup had met their enrollment goals by June.

Thousands of learning sites and campuses have closed over the last seven years, and the trend looks like it will continue. You can track the school closings here.

For-profit colleges continue to downsize, although they aren't reporting numbers. However, many University of Phoenix and Virginia College campuses will be closing. Harrison College campuses closed abruptly leaving thousands of students shunted to other questionable subprime schools, like National American University.
University of Phoenix campuses will be closing in Albuquerque, Atlanta, Chicago, Colorado Springs, Columbia SC, Detroit, El Paso, Honolulu, Philadelphia, Virginia Beach, and several locations in California and Florida.
Community colleges are also expected to lose students for the foreseeable future.
In Illinois, freshman enrollment was down 20% at Western Illinois University and Southern Illinois University at Carbondale. 

In New Mexico, enrollment is down 7% at University of New Mexico and 5% at Santa Fe Community College. New Mexico State's enrollment dropped by 1% but the school is facing a $3.3 million shortfall. 

In Montana, enrollment at the University of Montana declined 7.6%.

In Hawaii, enrollment as University of Hawaii campuses saw drops at University of Hawaii-Hilo (3.8%), Hawaii Community College (6.6%) and UH-Maui (6.4%).

In Pennsylvania, enrollment was down for the eight consecutive year, a drop of 4%Indiana University of Pennsylvania experienced a 9% enrollment drop this semester. Cheney University's numbers were down 37%.

In New Jersey, Cumberland County College is merging with Rowan College at Glouchester County after years of enrollment declines.

In Michigan, enrollment is down 1.5% at Western Michigan and Grand Valley State.

In Mississippi, enrollment at universities and community colleges decreased by 1%. The greatest decline was at Jackson State, which saw a 10% decline.

In Missouri, enrollment is down at Crowder College (8%), Missouri Southern State University (2.7%) and Pittsburg State University (4%). University of Missouri increased enrollment significantly after rebranding itself.

In Nebraska, enrollment increased at Creighton, but decreased at all University of Nebraska campuses.

In Arkansas, enrollment is down 1.3%. University of Arkansas at Little Rock had an enrollment drop of about 10%.

In Wisconsin, UW system-wide enrollment was down 2,598 students or 1.5%.

In Kansas, University of Kansas, Kansas State and Pittsburg State all recorded declining enrollment.

Community college numbers in Oregon continue to drop, particularly at Lane Community College, where enrollment is down 11%.

In West Virginia, WVU-Parkersburg reported a 3% drop.

In Ohio, University of Akron's enrollment fell 7%. Enrollment dropped about 3% at Kent State, also with a decline in foreign students.

In North Dakota, the University of North Dakota experienced a 4% loss in enrollment. North Dakota State also had a 4% loss, resulting in an estimated $5M less in revenues.

In Iowa, enrollments dropped at Northern Iowa (5.8%), Iowa (1.6%), and Iowa State (2.8%. Hawkeye Community College had a 6% loss.

In Arizona, enrollments at Maricopa Community Colleges have declined after it was ruled that Dreamers were not eligible for in-state tuition. 

Nationwide, enrollment may also be influenced by recent declines in the number of foreign students.
There are some notable rises in enrollment. North Carolina is seeing increases after making tuition affordable with its NC Promise program. Texas and Utah are also likely to see continued gains in college numbers as more people move to their states.

Related articles:
College Meltdown: State By State Changes
Subprime College Crash Continues Under the Radar
Private College Revenues and the US College Meltdown
US Department of Education Fails to Recognize College Meltdown
College Meltdown: NY, IL, MI, PA, VA hardest hit
Community Colleges at the Heart of College Meltdown
Charting the College Meltdown

Tuesday, October 2, 2018

Visa Mill Promoters Drop $760K on Key Republicans and NY Governor Andrew Cuomo

According to Federal Election Commission (FEC) records, individual members of Thompson Education Center have spent at least $710,000 for the 2017-2018 election cycle, all on Republican efforts. 

[Image below from Open Secrets.]

Backers of Thompson Education Center, Lianbo Wang and Sherry Li, have already donated at least $600,00 to the Trump Victory fund. They also donated $55,000 to New York Governor Andrew Cuomo in 2014. 

Thompson Education Center (TEC) is a project, backed by Chinese-American investors, to create a private college in Sullivan County, New York. The school would house up to 2500 students, presumably Chinese nationals seeking US visas.
Information about the school is sketchy. Press releases from 2016 and 2017 stated that TEC would build a nursing school, a culinary center, and a conservatory for film and tv.
[Image from NTD, suggesting that the Thompson Education Center could become a high-end visa mill for Chinese nationals.]

In 2013, the original $6 billion China City project was supposed to include a Chinese theme park, two hotels, a Chinese cultural museum, and a casino. But public opposition has resulted in a more modest plan that remains mostly on the drawing board.

Is the China City/Thompson Education Center project a threat to US security or a business scam? Possibly both.

Buying Political Influence

[FEC documents show that Sherry Li and Lianbo Wang have made major contributions to Donald Trump, the Republican National Committee, and key Republicans.]

[Image below shows political contributions that Sherry Li has made to state and local politicians, including Andrew Cuomo, as well as politicians in Sullivan County, where the China City/Thompson Education Center is planned.]

[Image below from Yahoo Finance shows that Sherry Li spent time in DC in 2017 to influence key Republicans, including Steve Stivers, head of the National Republican Congressional Committee.]

Trying to Follow the Money

Not much is known about Li or Wang, but a brief article revealing their political donations and activities appeared in the Daily Best last year. Apparently, their Oyster Bay Long Island residence has also been the headquarters for the United Nations Mao Zedong Foundation and several other businesses.

[Image below from downloaded 10-2-2018 shows several business at the Li and Wang residence.]

[Image below: The New York State Department business entity database lists 15 companies under China City of America.]

Securities and Exchange Commission documents show transfer of ownership from Chinese corporations to the US and other business dealings, but the origins of Sherry Li's wealth are cloudy.

[Image below from Defeat China City of America on Facebook indicates relationships between Sherry Li and Chinese businesses.]

Press releases by the Thompson Education Center are located here.
[Image below: The Thompson Education Center twitter account has not shown any entries since June 2018.]

[Image below from shows Sherry Li and her assistant at a black tie event in 2018. It appears that Thompson Education Center has few if any other employees.]
Preliminary research results in many more questions: about the citizenship status of Lianbo "Mike" Wang, capital flow from China through the 15 China City businesses and other enterprises, the tax status and detailed plans of the Thompson Education Center, and their possible ties to the Chinese Communist Party.

Monday, September 24, 2018

Higher Learning Commission: Accreditation Is No Sign Of Quality

"Yet in practice, accreditors—who are paid by the institutions themselves—appear to be ineffectual at best, much like the role of credit rating agencies during the recent financial crisis." David Deming and David Figlio in Accountability in US Education: Applying Lessons from K–12 Experience to Higher Education (2016)

As a watchdog of America's subprime colleges and a monitor of the College Meltdown, I can tell you that institutional accreditation is no sign of quality. Worse yet, accreditation by organizations such as the Middle States Association, Western Association of Schools and Colleges, and the Higher Learning Commission is used by subprime colleges to lend legitimacy to their predatory, low standard operations. 

[Image below: DeVry University uses its accreditation to lend credibility to its brand.]
According to the US Department of Education, the Higher Learning Commission (HLC) accredits 946 Title IV schools, including some of the nation’s most well-respected public and private colleges. As the America’s largest accreditor, it is a gatekeeper to its member schools collecting close to $40B annually in Title IV funds and many billions more from the Department of Defense (Tuition Assistance) and Department of Veterans Affairs (VA) GI Bill.

The Higher Learning Commission monitors excellent schools like University of Chicago, University of Colorado, University of Michigan, Notre Dame, and University of Wisconsin. But it also accredits a number of subprime schools, including Colorado Technical University, DeVry University, University of Phoenix, Walden University, National American University, and Purdue University Global.
On the three pillars of regional accreditation: compliance, quality assurance and quality improvement, the Higher Learning Commission gets a failing grade by supporting subprime colleges.

Insiders in higher education have been well aware of the corruption inherent in accreditation, but few speak of it publicly. The way the system works, accreditors like the Higher Learning Commission receive most of their their money from member schools, which gives them a vested interest in keeping their customers viable, even among their worst or most predatory performers.

Despite protests from the American Association of University Professors, The Higher Learning Commission has been accrediting for-profit colleges since 1977 and ethically questionable schools for nearly 20 years. In 2000, Executive Director Steven Crow defended the HLC's accrediting of Jones University, an online for-profit college that is no longer in operation.

Rather than acting as auditors, higher education accreditors for decades have acted as shills for whomever they accredit, and that can include some of the most predatory and substandard schools in America.
"I really worry about the intrusion of the profit motive in the accreditation system. Some of them, as I have said, will accredit a ham sandwich, and I think it's very important for us to make sure that they're independent and not being bought off by the Internet." -Mary A. Burgan, General Secretary of the American Association of University Professors (2000)
Many accreditors are part of a larger organization called the Council for Higher Education Accreditation (CHEA), which acts more as a barrier than a supporter of educational quality.
So who's watching the accreditors? In reality, it's no one.
[Image below from CHEA shows Higher Learning Commission dues for member colleges. Over the last 30 years, the Higher Learning Commission has received millions of dollars from subprime schools like University of Phoenix.]

The US Department of Education does very little or nothing in terms of overseeing higher education quality, and the Trump-DeVos administration has done a great deal to roll back the modest regulations enacted by President Obama.

In July, an internal investigation showed that the US Department of Education was not properly watching the accreditors, and it's very likely the situation will worsen. The agency is in the process of reviewing accreditation and accreditors, but the foxes are submitting more comments then the hens.

Saturday, September 8, 2018

National American University and the Subprime College Crash


NAUH and the Subprime College Crash
While subprime college college companies like Corinthian Colleges (COCO), Apollo Group (NASDAQ:APOL), DeVry University (DV), ITT Educational Services (ESI), and Education Management Corporation (EDMC) made the greatest profits and the greatest losses over the last two to three decades, National American University Holdings (NAUH) has been flying under the radar.

The reason for so little attention: NAUH is a small cap company with about 35 small ground campuses. Their campuses are spread out across the US West and Midwest, including Ellsworth Air Force Base near Rapid City, South Dakota. The company also has a few real estate holdings in South Dakota.

NAUH's shares have never risen to the heights of other subprime colleges that have already crashed. Its peak was $12--more than eight years ago.

According to the National Center for Education Statistics, NAUH's 3-year student loan default rate is 24% and their student loan repayment rate is 27%. Their graduation rate is 13-35%, depending on the campus. 

Worse yet, NAUH is targeting service members and veterans even more as the company lies at the brink of delisting. That's something that could get negative media attention.

Downward Trajectory
NAUH has made some money by scavenging from other failed schools, including Everest College (once part of the infamous Corinthian Colleges), ITT Tech, Brown Mackie College, Wright Career College, Career Point College, and Westwood College. But overall it has been on a three-year streak of earnings losses. NAUH's last reported gains were in February 2015.

Revenues are also down, way down. According to NAUH's last quarterly report, "FY 2018 annual revenues were $77.2 million, compared to $86.6 million in the prior year."
National American University's campuses are small, but most are too expensive to maintain. It appears that more than a dozen schools have closed or are in the process of closing.

Revenue + Earnings
(2015) 117.9M (-6.7M)
(2016) 96.1M (-8.2M)
(2017) 86.6M (-7.8M)
(2018) 77.2M (-12.3M)

Nearly all students are now learning online or through hybrid education. NAU has 4,6817 students in its online programs, 617 students at its campuses, and 747 students attend hybrid learning locations.

(2015) 9,519
(2016) 8,185
(2017) 6,703
(2018) 5,648

In 2016, National American University began closing campuses.  In 2018, they continue to consolidate and downsize.  

National American University Campus Populations 
(Source: National Center for Education Statistics)

Salem, VA  980
Kettering, OH  22
Lexington, KY 233
Youngstown, OH  34
Albuquerque, NM (2) 190+163
Austin, TX (2) 222+?
Bellevue, NE 98
Bloomington, MN 68
Brooklyn Center, MN 125
Burnsville, MN 44
San Antonio, TX  287
Centennial, CO  176
Colorado Springs, CO (2) 196 + 152
Ellsworth AFB, SD  295
Garden City, KS  48
Georgetown, TX   138
Houston, TX   77
Independence, MO  255
Indianapolis, IN  96
Lee's Summit, MO    154
Lewisville, TX  107
Mesquite, TX   105
Overland Park, KS  207
Rapid City, SD  1,346
Richardson, TX  150
Rochester, MN  81
Roseville, MN  99
Sioux Falls, SD  219
Tulsa, OK  172
Watertown, SD  70
Aurora, Co (Westwood teachout site) ?
Wichita, KS (2) 130+90
Kansas City, MO  149 

It Gets Worse
National American may gain some attention--in a bad way--because it shows few signs that it can survive.

The 2018 year started out rough, with the unsealing of a False Claims lawsuit by a former NAUH official. The lawsuit alleged that the school defrauded the US government out of millions of dollars in a student aid program, unlawfully paid bonuses to university employees for recruiting students and rigged the accreditation for its medical assisting program.
As part of its cost cutting, almost all of NAU's students are now online, which usually results in lower graduation rates--and more students who cannot repay their student loans.
NAUH has now been been forced to mortgage its properties for $8M in order to maintain liquidity. The loan is with Black Hills Community Bank. While the conditions may be favorable, maybe too favorable, business deals like this sound reminiscent of other subprime colleges before they failed.

NAUH Cash (in thousands)
(2015) 23,300
(2016) 21,713
(2017) 11,974
(2018) 5,324

NAUH's debt surpassed its equity value in May 2018. 

At this point, only one investor stands between NAUH and delisting--T. Rowe Price, a huge company that can afford to lose a little money in spots. But with all other institutional investors out, how long will T. Rowe Price keep their shares?

Tuesday, August 21, 2018

The Slow-Motion Collapse of America’s Largest University

[While most of my higher education analysis has been statistical in nature, it’s important to look at qualitative and historical aspects of higher education. The collapse of University of Phoenix is one of those important stories.]

From 1976 to the early 2000s, the University of Phoenix established itself as a leader in educational innovation for working adults.

Hundreds of the school’s campuses and learning sites dotted the American landscape, conveniently located near interstate off ramps. Phoenix turned hotel meeting rooms and retail spaces into learning centers for busy strivers. For those who could not attend those schools, University of Phoenix created an online presence that was unsurpassed, with small class sizes and working professionals with real world experience as instructors. 

Phoenix’s founder John Sperling was considered a genius for bringing education to adult professionals and other nontraditional students. A former university professor and self-described enemy of the academic elite, Sperling became friends with the political and business elite. Higher education’s billionaire was a notable friend of California Congresswoman Nancy Pelosi--and he appeared on Oprah.

Like the prosperity preachers who filled American television, Sperling offered the keys to success to anyone who would listen. Instead of Jesus, though, he was selling higher education.

In 2007, the limitations of online education, the adjunctification of labor, and the University of Phoenix became more evident in a New York Times article that revealed the school’s subprime graduation rate.

Rather than improving educational quality, Phoenix and its parent company, Apollo Group, became all about the numbers. At the highest level, Apollo was shooting for a half million students, which sounded laudable. Apollo Group branched out into associate degrees, and it reached out to students outside North America.

But the truth is that the company had to cut corners to meet these numbers.

In a scheme called “The Matrix”, enrollment representatives were rewarded for meeting enrollment numbers. And with that, enrollment representatives would do almost anything to get asses in classes.  Apollo Group’s CEO Todd Nelson took the school to its highest numbers. But these numbers would come at a cost. The school faced enormous pressure from federal and state agencies.

The 2010 Harkin Commission and Aaron Glantz’s investigations with the Center for Investigative Reporting a few years later showed Phoenix to be a school that would use any means necessary to make a profit. Phoenix became a joke in popular culture, skewered by comedians John Stewart and John Oliver.

[In recent years, University of Phoenix's Wikipedia page looked more like a criminal rap sheet than an institution of higher education.]

With the doubling of class sizes, that motivation has been stripped away. I can barely keep up with the minimal requirements of my job, to say nothing of the additional effort I used to put in. There is no time for extras; the students are a blur. I find myself hoping they drop out and doing little to nothing to keep them in class, because each drop equals a bit of relief for me.--University of Phoenix instructor, 2018
In 2016, Apollo Education Group was taken over by Apollo Global Management, a corporate behemoth  known to buy failing companies and stripping them of assets, and then selling them at a profit. Along with the sale, friends of President Obama--Tony Miller and Marty Nesbitt--were brought in to make the deal seem to be an act of educational reform. 

[Image below: Apollo Education still has more than two dozen lobbyists in DC, but the money to Washington may be dwindling. Source: Open Secrets]

In 2018, the school’s marketing strategy has been to look backward, at the deceased founder John Sperling, and the adult night classrooms that are all but gone.  

In a Trumpian world where history doesn't matter, the University of Phoenix is an unexamined relic of the 20th century.  Enrollment is down an estimated 80 percent from its peak and more than 450 campuses and learning sites have closed.  At least half of the campuses that have remained open are no longer taking new students, suggesting that they will close in the next 18 months.