Higher Education Inquirer : college meltdown

Showing posts with label college meltdown. Show all posts

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few decades, under the guise of creative disruption, brick and mortar colleges with skilled professors and staff have been replaced by large online robocolleges that hire few if any instructors and offer fewer student services, such as mental health counseling. And community branch campuses have been replaced by online program managers (OPMs) that advertise, recruit, and even write curriculum for regional public universities and elite private colleges, often without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 But as a historical document, the list is telling.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

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, February 20, 2022

College Meltdown 2.0

College Meltdown 2.0 is distinctly different than the College Meltdown that started in 2010.

The first wave of the College Meltdown (2010-2021) resulted in a slow and steady drop in overall US college enrollment, with dramatic losses among for-profit colleges and community colleges. Corinthian Colleges, ITT Educational Services, and Education Management Corporation were three large for-profit chains to close. Small private liberal arts schools and regional universities also experienced losses. More folks were moving into the growing educated underclass.

Elements of College Meltdown 2.0 include publicly held corporations. Click on the image to see the chart (Source: Seeking Alpha)

College Meltdown 2.0 comes as the Coronavirus becomes more manageable. However US fascism continues to advance, student loan debt is slowly approaching $2 trillion, and the 2026 enrollment cliff is just a few years away. This new wave includes remnants of for-profit colleges like National American University, Stratford University, South University, the Art Institutes, University of Phoenix (owned by Apollo Global Management), Career Education Corporation (aka Perdoceo), and DeVry University (owned by Cogswell Education) as well as national accreditor ACICS.

The largest element of College Meltdown 2.0 is federal student loan debt, which appears to be rising to an unsustainable level--as it hamstrings the lives of millions of families. When mandatory student loan payments resume (scheduled for May 1), long-term default rates may range from 30 and 50 percent. It also appears that at least $500 billion of the Federal Student Aid (FSA) student loan portfolio will be unrecoverable.

College Meltdown 2.0 also involves online program managers (OPMs) that service elite schools (2U), regional universities (Academic Partnerships), and subprime robocolleges (Zovio-University of Arizona Global and Graham Holdings-Kaplan-Purdue University Global).

Student loan servicers and private student loan companies (Maximus, Navient, Sallie Mae, Nelnet), publishers and other edtech enterprises (EducationDynamics, Chegg, Barnes & Noble Education, Coursera, and Guild Education) are implicated or at least entangled in the mess. Higher education accreditors and student loan asset-backed securities (SLABS) are also worth monitoring.

Tuesday, March 9, 2021

The Business of Higher Education

Higher education is a multi-trillion dollar industry in the US, if you include endowments, land, and other investments. Journalists and policy people who cover the industry are often quick to put schools and their related businesses into distinct categories, but these categories are oversimplified. One of the biggest oversimplifications is in categorizing schools as "for-profit" and "non-profit."

For-profit higher education has typically referred to institutions operating as profit-seeking businesses, but this ignores three centuries of history, economics, and public policy showing the intermingling of for-profit institutions and non-profit enterprises with a for-profit mentality.

For-profit schools and the for-profit mindset are not new to US education. While elite private religious based colleges were the first schools of higher education, proprietary training was also available during the late 1700s. It could be argued that even then, elite colleges could not have grown without the benefits of enslaving their labor, the ultimate in greed and depravity.

After the US Civil War, through federal legislation (the Morrill Act), state flagship universities were "granted" land stolen from indigenous nations. Private and public black colleges were also formed. For-profit business and trade schools also sprang up in many American cities, serving a growing demand for entrepreneurs and skilled labor. Private non-profit colleges followed suit. As early as 1892, University of Chicago started a correspondence school, a money-making strategy copied by Penn State, University of Wisconsin, and many other universities.

Since the early 20th century, critics have complained about money rather than academics driving traditional university leadership. Thorstein Veblen's book The Higher Learning in America (1918), was subtitled, "A Memorandum on the Conduct of Universities by Business Men." Yale and Harvard also brought on football, which was a big money maker for the schools in the early 20th century. In the Goose-Step (1923), Upton Sinclair named names of those with wealth, power, and influence--including a number of robber barons.

With the help of government funding, higher education grew by leaps and bounds after World War II (the GI Bill) and into the 1960s and 1970s (Pell Grants and federal loans). State universities and community colleges grew in number. In 1972, with the reauthorization of the Higher Education Act, proprietary schools gained access to these funds to become a larger player in US higher education.

By the 1980s, the for-profit University of Phoenix (UoPX) became a pioneer as a mega-university, a school of over 80,000 students with an emphasis on adult learners, convenience, and a business attitude. For-profit schools gained legitimacy as universities like Devry and UoPX became regionally accredited and others created their own national accreditors. In the 1980s and 90s for-profit colleges grew as they became publicly traded corporations with enormous profits and political power.

With profit-driven schools, academic labor was faced with unbundling, where components of the traditional faculty role (e.g., curriculum design) were divided, while others (e.g., research) were eliminated. Colleges resembled academic assembly lines rather than bastions of wisdom. But the marginalization of academic labor was not reserved to for-profit schools.

As this great unbundling was occurring, state flagship universities became enormous research institutions with multiple missions, many of them profit driven. Proponents of privatization, outsourcing from for-profit companies, have said that it "helps universities save money and makes them more nimble and efficient." Moody's Dennis Gephardt, however warns that "more and more are cutting closer to the academic core."

Since the 1980s commercialization in nonprofit and public higher education has accelerated, with universities increasingly involved in enterprises focused on generating net revenue, such as licensing of patents. Indicators of for-profit incursions into nonprofit and public higher education may include university medical centers, corporate sponsored science labs, for-profit mechanisms such as endowment money managers, for-profit fees for service, for-profit marketing, enrollment services and lead generation, privatized campus services, for-profit online program managers (OPMs), privatized housing, private student loans, student loan servicers, student loan asset backed securities, and Human Capital Contracts, also known as income share agreements.

For-profit college enrollment has been in decline since the 2010-2011 school year. University of Phoenix and Devry are shadows of their former selves, and two other big schools, Kaplan University and Ashford University have been transformed into arms of two state universities, Purdue University Global and University of Arizona Global Campus.

But proprietary colleges have not been the only type of colleges in decline. Community colleges and second tier public and private colleges also reported significant enrollment and revenue losses. Community college enrollment, in fact, has declined in absolute numbers more than for profit colleges.

During this decade long decline, what I have referred as the College Meltdown, for-profit mechanisms have gained even ground as government aid and institutional bonds fill in revenue gaps. Today, US higher education marketing and advertising is ubiquitous. The Harvard Business School operates in many ways like a for-profit enterprise. And many elite schools rely on predatory for-profit online program managers to recruit students for elite certificates, adding some pocket change to their already bulging resources.