Thursday, May 30, 2019

A preliminary list of private colleges at risk

At the risk of being tarred and feathered again by education insiders, I am compiling a list of US colleges that are at financial risk. I am well aware that there are hundreds of schools in trouble, and that this list just touches the surface.

Why should I present a preliminary list? Because presently, students are not privy to college finances at private schools that they plan to attend. And judging from the decision in the Mount Ida case, it appears that courts do not favor transparency and accountability to help consumers.

I've tried unsuccessfully to reverse engineer the proprietary information of Jeff Selingo and EY. So instead, I've cut and pasted the 2017 Forbes list of schools with financial grades of "D" or less. The methodology for the grades is here. Wishing that Matt Schifrin would continue this important work, but in the meantime, this is all I have.

This list does not include subprime schools and it's not in any way related to instructional quality or student outcomes. Many of these schools are not even on the US Department of Education's Heightened Cash Monitoring list.

I also apologize to anyone at a school with the same name as a school on the list.*
Three schools on the list, St. Gregory's University, Mount Ida and Green Mountain College, have already closed.

While colleges may appear to be on the verge of financial ruin, there is no telling if the school may be saved by an outside force, such as the US Department of Agriculture. 

Adrian College
Alderson Broaddus College (bailed out by USDA)
American International College
Anderson University*
Anna Maria College
Ashland University
Azusa Pacific University
Baptist Bible College and Seminary (Clarks Summit University)
Becker College
Belmont Abbey College
Benedict College
Bethany College (bailed out by USDA) 
Bethel College-Mishawaka
Bethel University
Caldwell University
Campbellsville University
Carson-Newman College
Chaminade University of Honolulu
Chestnut Hill College
Colby-Sawyer College
Columbia College
Concordia College-New York
Concordia University-Chicago
Corban University
Dominican College of Blauvelt
Elmira College
Emmanuel College
Evangel University
Faulkner University
Felician University
Franklin Pierce University
Georgetown College
Green Mountain College (closed)
Immaculata University
Judson University
Keuka College
Keystone College
Lake Erie College
Lindsey Wilson College
Livingstone College
Long Island University-Brooklyn Campus
Long Island University-C W Post Campus
Malone University
Marian University
Martin Methodist College
Mary Baldwin College
Marygrove College
Marymount Manhattan College
Marywood University
MidAmerica Nazarene University
Midland University
Mount Ida College (closed)
Mount Olive College
Mount St. Mary’s University
Multnomah University
Newbury College-Brookline
North Carolina Wesleyan College
Notre Dame College
Nyack College
Oglethorpe University
Ohio Dominican University
Olivet Nazarene University
Ottawa University-Ottawa
Pace University-New York
Pacific Lutheran University
Pfeiffer University
Philadelphia Biblical University-Langhorne (Cairn University)
Prescott College
Quincy University
Regis College
Rider University
Rockford College
Rockhurst University
Roger Williams University
Saint Gregorys University (closed)
Saint Joseph's College-New York
Saint Martin's University
Saint Mary-of-the-Woods College
Saint Peter's College
Saint Xavier University
Shorter University
Sierra Nevada College
Spring Arbor University
Spring Hill College
The College of Saint Rose
The Sage Colleges
Tusculum College
Union College*
University of Bridgeport
University of New Haven
Urbana University
Utica College
Westminster College*
Wheeling Jesuit University
Wiley College

*There are two or more schools with this name

Monday, May 27, 2019

Can Apollo Global Management stem the bleeding at University of Phoenix?

Related Link: University of Phoenix Collapse Kept From Public Scrutiny, As Ads Continue (2019)
Related Link: The Slow-Motion Collapse of America’s Largest University (2018)
Related Link: University of Phoenix: "Where Dreams Die" (2016)
Related Link: Faux Phoenix or Vulture? (2015, 2018)

The collapse of University of Phoenix has been off the mainstream media radar for years. Only the conservative Daily Caller has bothered to investigate the demise of America's largest university. Since University of Phoenix is subsumed under a hedge fund behemoth, Apollo Global Management, it's very difficult to track the collapse. But the old information that we do have does not look good.

Data from fiscal year 2017 show that University lost money in all of its segments, except for Arizona. And that segment, which included the online division, showed only a slim profit. The total annual loss was about $52 million.

University of Phoenix has created cost cutting measures by closing most of its campuses, but that alone may not be enough to gain profitability. When campuses are closed, enrollment and reputation decline. It's notable that Federal Trade Commission has not publicly stated that they are finished with their investigation either.

The UoPX brand is badly tarnished and perhaps beyond repair. Expensive fantasy land media campaigns like "Discover Your Wings" cannot make up for a declining product or service that depends more on word of mouth and the success of those who attend. Apollo Education and University of Phoenix could declare bankruptcy, as other Apollo Global Management companies have done or threatened to do, but that would bring even more bad attention.

I have attempted multiple times to communicate with University of Phoenix, but they refuse to respond. While stonewalling can prevent misquotes and distortions, "playing dead" is not a good sign for any business.

Saturday, May 18, 2019

JLL Partners facing tough decisions with Fortis Colleges and Institutes

  • Related Link: Fortis page
  • Related link: When College Choice is a Fraud (2016)
  • Related Link: College Meltdown: Where's the Bottom (2019)?
  • Now that many publicly traded for-profit colleges have collapsed, College Meltdown is looking at private equity firms that own subprime colleges.

    One of the most notable for-profit college conglomerates, Education Affiliates, operates Fortis Colleges and Fortis Institutes and other lesser known trade schools.  Fortis schools are managed by EA, but they are owned by JLL Partners, a New York City-based private equity firm.

    At least eight Fortis campuses have closed, leaving 32 locations. But many of the remaining schools have been losing money and 14 are on US Department of Education Heightened Cash Monitoring.

    In 2016-17 (the last year available for data), 21 Fortis locations were unprofitable: Centerville, Cincinnati, Columbia, Cutler Bay, Cuyahoga Falls, Grand Prairie, Houston, Indianapolis, Norfolk, Phoenix, Richmond, Baltimore, Birmingham, Cookeville, Erie, Forty Fort, Lawrenceville, and Nashville.

    The problem from the beginning has not been with instructional quality, but with programs offering limited gainful employment. Schools like Fortis offer programs that often lead to low wage jobs, and low wages make student loan debt insurmountable. Student loan repayment rates for Fortis schools range from 20 to 24 percent.

    So how long can JLL Partners continue to let the red ink continue with these assets? Can cuts be made without cutting instructional quality and student resources? And how can Fortis schools compete with free community college in states like New Jersey, Tennessee, and Indiana, where Fortis campuses exist?

    JLL Partners has many notable investors, including the University of Missouri System, Montana Board of Investments, Colorado Public Employees' Retirement Association, Regents of the University of California, Travelers Companies, and the New Jersey Pension Fund. All of these funds need to pay off their obligations; with New Jersey, the pressure to create substantial returns is enormous.

    JLL Partners also owns Ross Medical Education Centers, ACE Cash Express, CATO Research, Medical Card System, Pioneer Bank, Point Blank Enterprises, Viant, and Xact Data Discovery.

    Thursday, May 2, 2019

    Purdue University Global Continues to Defraud Servicemembers, Veterans, and Working Families

    Related articles:

    "The school that systematically misleads students or enrolls those who don't have the capability of succeeding is unlikely to last long. It will have a difficult time making money, and it will build problematic word of mouth in the community in which it operates."--Kaplan CEO Andrew S. Rosen (p. 169) in
    In August 2018, I posted a report about Purdue University and its new acquisition, Purdue University Global. The Big-10 school purchased the former Kaplan University from Graham Holdings Company for the sum of $1, while Kaplan Higher Education would be paid service fees for managing the business. The deal sounded like a windfall for Purdue University, but it really wasn’t. Purdue University Global is in deep financial trouble, and Purdue University is liable for any losses related to Purdue Global’s fraudulent business activities.
    In my earlier report, I alleged that Purdue University Global was using false claims to enroll working people, especially servicemembers and their families. Their advertising and marketing claims offering a “world-class” education were patently false. But their advertising was compelling to the poorly informed. Purdue Global was also employing QuinStreet, a questionable internet lead generator.

    In truth, Purdue University Global’s educational quality is mediocre at best, and its student outcomes rival some of the worst actors in for-profit higher education. Global's numbers:
    Purdue Global has been able to get away with these fraudulent practices because it does not receive proper oversight. The US Department of Education, the Department of Defense, the Department of Veterans Affairs, the Enlisted Association of the National Guard of the United States, and the Council of College and Military Educators have all looked the other way, as working families, and especially servicemembers and veterans, have been fleeced by the subprime school.

    In April 2019, little has changed in terms of Purdue Global’s fraudulent claims. And as Purdue loses more money (it had a $38 million net operating loss in FY 2018), it will have to make bold moves to survive. While little public information is available, we do know that Purdue Global continues to spend money on television and print ads.
    The ads appearing in the April 15, 2019 editions of the Army, Navy, Air Force, and Marine Times made all the same claim, that the school offered a "world-class" education. Purdue Global also placed ads on tv shows like MTV’s Catfish, which was the ultimate in irony. The show Catfish exposes people who pose as something more than they are, deceiving the person on the other end of the Internet connection.