Saturday, June 29, 2019

Laureate Education: Here For Good?

Related link: Vultures Coming After Laureate (2016)
Related link: Laureate Education Turned Against Democracy in Turkey and Latin America (2016)
Related link: Department of Justice Gives Green Light to Laureate Education to Continue Corruption (2018)

Baltimore-based Laureate Education Inc. (LAUR) is fighting for survival. The international for-profit system of colleges is no longer backed by the Clinton Foundation. Its founder Doug Becker was ousted in 2018 with an enormous golden parachute. And its rich and powerful investors are getting more impatient. After corruption scandals in Chile, Turkey, Spain, and now Brazil and after four years of downsizing, Laureate's slogan, "Here For Good" must be posed as a question rather than a statement.

For a decade and a half, CEO Doug Becker went on a buying spree of colleges across the globe, with a boatload of famous people to pitch for them. But since 2015, Laureate has sold or shut down more than 30 schools, and it faces enormous headwinds in the countries where it continues to operate. 2018 and 2019 have been particularly difficult. This year, LAUR even threatened to sell its big US moneymaker, subprime Walden University.
Walden grants more doctorates to African Americans than Howard University, Jackson State, and Georgia State combined.
Brazil, Laureate's largest segment, is facing reducing revenues after student aid was cut. Brazil's President, Jair Bolsonaro, who is terrible for the country is a wild card at best for Laureate. In earlier years, someone in the company might have been able to bribe officials, but those days are probably gone.
Laureate cut corners in Brazil, though, by allegedly forging documents and hiring teachers for classes they weren't qualified for.
While Laureate has continued to pare down its $3.5B debt to just above $2B, most of its profits have come from selling off more than 30 schools. Here's a list of the schools it has sold, closed, or lost contracts with since 2015. More are likely to be sold off in 2019 and 2020. Laureate sold off Bilgi University, but forgot to mention the terrible details.
  1. Centro Universitário do Norte – UniNorte (Brazil) (sold 2019)
  2. Les Roches Jin Jiang International Hotel Management College (China) (sold 2016)
  3. Xi'an Jiaotong-Liverpool University XJTLU (China) (Laureate's online program partnership with the university was discontinued in 2018. The degrees were awarded by University of Liverpool.)
  4. European University--EUC (Cyprus)
  5. Universidad de Las Americas--UDLA (Ecuador)
  6. École Centrale d’Electronique (France)
  7. École Supérieure du Commerce Extérieur (France)
  8. Institut Français de Gestion (France)
  9. BiTS--Business and Information Technology School (Germany)
  10. Pearl Academy (India) (in sale negotiations as of May 2019)
  11. University of Petroleum and Energy Studies--UPES (India) (in sale negotiations as of May 2019)
  12. Domus Academy (Italy)
  13. Nuova Accademia di Belle Arti (Italy)
  14. Universidad del Desarrollo Profesional--UNIDEP (Mexico)
  15. Université Internationale de Casablanca (Morocco)
  16. University of Liverpool (Laureate's online program partnership with the university was discontinued in 2018. All degrees were awarded by University of Liverpool.)
  17. University of Roehampton (Laureate's online program partnership with the university was discontinued in 2018. All degrees were awarded by University of Roehampton.)
  18. Instituto Tecnologico del Norte (Peru)
  19. Universidade Europeia de Lisboa (Portugal) (sold 2018)
  20. Instituto Português de Administração de Marketing (Portugal) (sold 2018)
  21. Monash University (South Africa) (sold 2019)
  22. Universidad Europea de Madrid (Spain) (sold 2018)
  23. Glion Institute of Higher Education (Switzerland and UK)
  24. Universidad Europea de Valencia (Spain)
  25. Universidad Europea de Canarias (Spain)
  26. Bilgi University (Turkey) (sold 2019)
  27. National Hispanic University (US) (closed 2015)
  28. Santa Fe University of Art and Design (US) (closed 2018)
  29. Kendall College (US) (sold 2018)
  30. University of St. Augustine for Health Sciences (US) (sold 2019)
  31. Stamford International University (Thailand) (sold 2019)
  32. Royal Academy of Culinary Arts (Jordan) (sold 2016)
  33. Al Kharj Female College of Excellence (Saudi Arabia)
  34. Higher Institute for Paper and Industrial Technologies--HIPIT (Saudi Arabia)
  35. Higher Institute for Power and Water Technologies--HIWPT (Saudi Arabia)
  36. Jeddah College of Excellence (Saudi Arabia)
  37. Mecca Female College of Excellence (Saudi Arabia)
  38. Riyadh Polytechnic Institute--RPI (Saudi Arabia)
  39. Riyadh Tourism & Hospitality College of Excellence (Saudi Arabia)
  40. Al Nammas Female College of Excellence (Saudi Arabia)

Wednesday, June 19, 2019

College Mania!: An Open Letter to the NY Fed (Opinion)

I just about had a heart attack reading the headlines from two NY Federal Reserve researchers in Buffalo, that college was still a "good investment" despite the costs. The authors, Jaison R. Abel and Richard Deitz, showed a few graphs indicating that college completion still resulted in significant wage premiums, and muttered something about “back of envelope” projections to prove their point.

Are these people mad? Have they not read Annie Nova (CNBC), Jillian Berman (Marketwatch) or Mike Vasquez (Chronicle of Higher Education)? Have they not glanced at Wikipedia or or bothered to use IPEDS help? Have they read Suzanne Mettler’s “Degrees of Inequality”? Have they ever heard of the or College Meltdown? Don't they listen to Dave Ramsey on the radio? The answer is no and probably no, no, no, no, no, no, definitely not because it’s too heavy, no, no, and no.

Have these guys no understanding of the outrageous costs of higher education: tuition, housing, board, text books, transportation, computers, fees, officially licensed college t-shirts, football tickets, concert tickets, pizza, beer, drugs, pregnancy tests, and who know what all else?

Don't they know about the millions who are underemployed after college, the millions that have delayed leaving home, delayed marriage, delayed having children, and delayed starting businesses? Don’t they know anyone who is suffering from the College Meltdown? Have they ever heard of the “gig economy” or talked to an “adjunct professor”? Don't they have friends or coworkers who have nervously cosigned on loans for their children?

Speaking of businesses, haven’t these NY Fed guys figured out that there is a failing for-profit college system, Bryant & Stratton College, luring people with slick ads, whose corporate headquarters is literally two blocks from their office? A school whose target demographics include single mothers with jobs and people with two jobs, who already can't make ends meet?

In 2019, subprime Bryant & Stratton College will be luring hardcore gamers with their esports programs. BSC already has junior college basketball at the dwindling Buffalo campus.

If you read the small print in the NY Fed article, these two wise guys from Buffalo oh so briefly mention that the wage premium doesn’t apply to 25 percent of the people who start. They note that the wage premium is muted in the 40 percent who don’t finish college. And the wealth premium, you know, the actual return on investment after trying to pay off the loans? Forget about it.

They don’t mention that college students are selling their bodies ("Sugar Babies") across the US or selling drugs to get through college. (For the record, I sold my body very cheap to the US Army for an ROTC scholarship to get out of Western Pennsylvania).

These guys don’t mention that more than 40 percent of all student debtors are not paying off their principal. Or that millions of Millennials with student debt are delaying marriage and kids, not starting families or businesses. And by having fewer kids, they are setting the nation up for another phase of the College Meltdown in 2026.

Nor did they note that peak enrollment was in 2010-11 and that numbers have decreased every year since then. I suppose they’d say that was all due to a great economy, like so many others who do not live near reality, even in Buffalo. Really, it would never have anything to do with outrageous prices or record-setting inequality.

And wait a second. Aren’t these two the guys who wrote College is Not for Everyone, back in 2014? What has happened? Have they too contracted College Mania?

Perhaps the men are talking about the business of education, which has been a good investment for some. The higher ed “racket” involving dorm building, restaurant building, gyms and climbing walls.  Or the student loan business that’s booming and student loan asset-backed securities also known as SLABS. Or the online program managers that actually run colleges online. Or the marketing and ad agencies that are profiting hand over fist, as some students literally live in their cars or struggle with hunger. Or maybe they are talking about the bright future behind unregulated “human capital contracts” (What could go wrong?).

But why should I be so angry, literally fed up? The NY Fed is not the only organization feeding the “College Mania!” It’s everyone, aside from Dave Ramsey, Thomas Frank, and too few others. But who reads Thomas Frank? Hopefully it’s the same people who read the two guys from the NY Fed. 

Saturday, June 8, 2019

Enrollment declines, campus closings, economic losses and the hollowing out of America

Once again, the National Student Clearinghouse report on college enrollment was enlightening, and devastating. US college enrollment has been declining steadily for at least eight years, and community colleges and for-profit colleges are hardest hit--but that's only part of the story.

State by state losses are not uniform. It appears that they mirror the hollowing out of America.

National Student Clearinghouse reported losses in 40 states, most notably in Alaska, Hawaii, New Mexico, Oregon, and Montana, and Illinois, Michigan, Wisconsin, Ohio, Indiana, Missouri, Oklahoma, Maryland, West Virginia, Florida, and South Carolina, all which have significant and complicated rural histories. 

State      F2011       F2018   Loss/Gain
Alaska 35,473 24,910 31.80%
New Mexico 144,202 111,916 22.30%
Hawaii 65,638 52,043 20.70%
Michigan 633,576 496,668 21.60%
Illinois 758,074 598,316 21.10%
Oregon 253,403 204,007 19.40%
Missouri 411,508 338,230 17.80%
West Virginia 169,510 140,558 17.10%
Montana 55,945 46,610 16.70%
Minnesota 420,655 354,820 15.60%
Arkansas 178,628 151,238 15.30%
Louisiana 261,494 224,534 14.10%
Kentucky 277,688 239,774 13.70%
Indiana 402,850 349,547 13.20%
Oklahoma 211,151 182,507 13.60%
Pennsylvania 755,158 654,165 13.30%
Ohio 689,862 599,111 13.20%
Wisconsin 350,803 304,478 13.20%
Maryland 387,487 337,683 12.90%
North Dakota 56,359 49,329 12.40%
Wyoming 32,729 28,904 11.70%
Iowa 221,732 196,511 11.30%
Nebraska 141,944 126,561 10.80%
New York 1,191,463 1,063,775 10.70%
New Jersey 421,196 379,812 9.80%
Mississippi 180,310 163,428 9.40%
Kansas 203,748 184,721 9.30%
Massachusetts 477,423 433,745 9.10%
Florida 1,077,332 985,508 8.50%
Colorado 320,626 294,234 8.20%
Virginia 529,007 486,141 8.10%
Maine 70,051 64,383 8.10%
Washington 343,300 316,814 7.70%
Vermont 43,201 39,965 7.50%
South Carolina 246,121 229,940 6.60%
North Carolina 555,392 521,522 6.10%
Tennessee 320,979 302,520 5.80%
Rhode Island 72,722 68,503 5.80%
District of Columbia 77,652 73,813 4.90%
California 2,559,423 2,466,138 3.60%
Georgia 525,734 511,152 2.80%
Nevada 112,736 109,995 2.50%
Alabama 294,853 289,738 1.70%
Connecticut 193,381 187,010 1.40%
Delaware 56,103 56,196 0.00%
South Dakota 45,398 46,980 3.50%
Texas 1,431,062 1,485,924 3.80%
Idaho 96,649 100,937 4.40%
Arizona 427,789 448,323 4.80%
Utah* 254,731 344,895 35.40%
New Hampshire* 78,112 152,065 94.70%

A county by county analysis of enrollment patterns could provide even more understanding. In this case, we also see significant declines in urban areas that have been deindustrialized, depopulated, and underfunded. 

Enrollment losses in some cases lead to campus closings, and in some cases these campus closings lead to economic hardship. Conservative economist Richard Vedder has been observing enrollment losses in the Midwest for years. And Elizabeth Hewitt described in detail the economic ripple effects for small college towns in a 2019 Hechinger Report. But the story was mostly about New England. And from what the NSC reports, some of the biggest losses are outside New England and the Midwest.

What's happening in your neck of the woods? Can someone tell us what's happening on in Alaska, Hawaii, and New Mexico, where enrollments are decreasing dramatically and for so many years? Is it just that the economy is doing well, or are there other important stories to tell?

Wednesday, June 5, 2019

Purdue University doubling down with subprime Purdue University Global

Despite severe and growing financial losses and several campus closings, Purdue University Global (PG) is being kept alive by its famous cousin, the real Purdue University. now prominently displays and links to Purdue University Global.  Purdue’s leaders also proudly support PG as its online school for adult learners, who they acknowledge are not in the same class of students as those at the real Purdue.  

The scheme has gotten so fraudulent that Purdue University Global (formerly Kaplan University) is freely appropriating Purdue's 150-year history, its world-class reputation, and its famous alumni in creating an unethical if not illegal bait and switch throughout social media.

Purdue Global is not a world-class institution. Its educational quality is mediocre, and its student outcomes rival some of the worst actors in for-profit higher education. Global's numbers:
  • 83 percent (320 of 1,910) of PG instructors are low-wage adjuncts
  • spends only 18 cents for every dollar it receives in tuition
  • 20 percent 6-year graduation rate
  • 26 percent student loan repayment rate
  • 53 percent student loan default rate over 5 years
  • More than 30 percent of its enrollees do not even pass basic composition.*
But that's not the story that Purdue University Global says with the help of QuinStreet, a predatory lead generator.

Recently, I visited the online chat that Purdue University Global uses to enroll students, and what I found was extremely disturbing. Not only did they use the Purdue University history, but also its world-class reputation to sell the school. One enrollment person mentioned astronaut Neil Armstrong in trying to sell me a degree.

How long can this scheme continue? Judging by word of mouth, not too long.

*Information provided by Purdue Global insider.