Showing posts with label for-profit college. Show all posts
Showing posts with label for-profit college. Show all posts

Thursday, September 26, 2024

Wealth and Want Part 4: Robocolleges and Roboworkers

The rise of online-only education has been a double-edged sword. While it has expanded access to higher education, it has also introduced a new breed of institutions (robocolleges), students (robostudents), and workers (roboworkers). These accredited online universities are for-profit, non-profit, secular, and Christian, but the all share similar characteristics. 

Robocolleges prioritize profit over pedagogy, churning out ambitious and busy working-class professionals in fields like education, medicine, and business--and hundreds of billions of dollars in student loan debt. These schools include Southern New Hampshire University, Grand Canyon University, Liberty University Online, University of Maryland Global, University of Phoenix, Purdue University Global, University of Arizona Global Campus, Walden University, Capella University, and Colorado Tech.  A list of America's largest robocolleges is here.

The Robocollege Model

Robocolleges are characterized by their reliance on technology to deliver education at scale. They often employ automated systems for course content delivery, student assessment, and even faculty interaction. While this can reduce costs, it can also lead to a dehumanized and impersonal learning experience.

  • Aggressive Marketing and Recruitment: Robocolleges often employ aggressive marketing tactics to attract students, including misleading advertisements and high-pressure sales techniques. These tactics can lead students to make hasty decisions without fully considering the financial implications of their enrollment.
  • High Tuition Costs: Robocolleges typically charge significantly higher tuition rates compared to public and nonprofit institutions. This is often justified by claims of providing a superior education or specialized programs, but the quality of education may not always align with the cost.
  • Lack of Faculty Interaction: Many robocolleges rely heavily on pre-recorded lectures and automated feedback systems. This can deprive students of the valuable mentorship and guidance that comes from interacting with experienced faculty.
  • Shallow Curriculum: To maximize enrollment and revenue, robocolleges may offer overly broad or superficial curricula. This can result in graduates who lack the depth of knowledge and critical thinking skills required for professional success.
  • Focus on Quantity Over Quality: Robocolleges often prioritize churning out graduates rather than ensuring their academic excellence. This can lead to a decline in standards and a dilution of the value of their degrees.
  • Limited Academic Support: Robocolleges may have fewer resources and support services compared to traditional institutions, which can make it difficult for students to succeed academically. This can result in increased dropout rates and prolonged time to graduation, leading to higher overall costs.
  • Poor Job Placement Rates: Graduates of robocolleges may struggle to find employment in their chosen fields or secure jobs that pay enough to justify the high cost of their education. This can make it challenging to repay student loans, especially if the loans are based on the expected earning potential of the degree.

The Impact on Professional Fields

  • Education: Substandard educators can harm students' learning outcomes and contribute to a cycle of educational inequality.
  • Medicine: Substandard medical professionals can pose a serious risk to patient safety and health. 
  • Business: Graduates from robocolleges may lack the practical skills and business acumen needed to succeed in the competitive job market. 
  • Government: Graduates may lack essential interpersonal skills like communication, negotiation, conflict resolution, and team building.  

 

Consequences of Student Debt on Roboworkers:

  • Delayed Major Life Milestones: Student debt can delay major life milestones such as buying a home, starting a family, or pursuing further education.
  • Financial Stress and Anxiety: The burden of student debt can lead to significant financial stress and anxiety, impacting overall well-being.
  • Limited Economic Mobility: High levels of student debt can limit economic mobility, making it difficult for individuals to achieve their financial goals and improve their standard of living.

Addressing the Problem

To address the issue of substandard professionals produced by robocolleges, several measures can be taken:

  • Increased Oversight: Regulatory bodies should strengthen oversight of online institutions to ensure they meet minimum quality standards.
  • Transparency: Robocolleges should be required to disclose their faculty qualifications, course delivery methods, and student outcomes.
  • Accreditation Reform: Accreditation standards should be updated to reflect the unique challenges and opportunities of online education.
  • Consumer Awareness: Students should be made aware of the potential risks of enrolling in robocolleges and encouraged to research institutions carefully.

While online education can be a valuable tool, it is essential to hold institutions accountable for the quality of education they provide. By addressing the shortcomings of robocolleges, we can ensure that online learning continues to be a force for positive change in higher education.

Related links:

Robocollege Update (2024)

Robocolleges, Artificial Intelligence, and the Dehumanization of Higher Education (2023)


Friday, September 20, 2024

Student Loans in the US: A Trillion Dollar Tragedy (Glen McGhee)

Adam Looney and Constantine Yannelis have reopened their research on the student loan mess with a new paper from Brookings titled "What went wrong with federal student loans?" The paper talks about what went tragically wrong with student loans in the United States from 2000 to 2020. 

Here are the key points:

1. More people started going to college, especially those who didn't have a lot of money or whose parents didn't go to college. [See note below]
2. To pay for college, many of these new students had to borrow money from the government through student loans.
3. A lot of these new students went to for-profit schools. These are schools that are run like businesses to make money, unlike regular public or non-profit colleges.
4. The problem is that many of these for-profit schools didn't provide a good education. Their students often didn't graduate or couldn't find good jobs after finishing school.
5. Because these students couldn't get good jobs, they had trouble paying back their loans. This caused a big problem for the government and the students.




Now, let's look at Figure 3 Panel B:
This graph shows how many first-generation college students (students whose parents didn't go to college) enrolled in different types of schools. The schools are grouped by how well their students could repay loans. The red line at the bottom represents the best schools - where students usually paid back their loans easily. You can see this line barely goes up over time. The dark blue line at the top represents the worst schools - where students had the most trouble paying back loans. This line goes way up, especially after 2000.

What this means is that a lot of first-generation students, who often didn't have much money to begin with, ended up at the schools where they were least likely to succeed and most likely to have trouble with their loans.

The for-profit schools took advantage of this situation. They aggressively recruited these students, knowing they could get money from government loans. But they didn't focus on giving students a good education or helping them get jobs. Instead, they just wanted to make money for themselves.

This led to a big increase in student debt problems, especially for students who were already at a disadvantage.

Note: This statement refers to trends in college enrollment that occurred in the early 2000s through about 2012. Let me explain the reasons behind this trend and whether it's still true today:

Reasons for Increased College Enrollment
1. Policy Changes: Starting in the late 1990s, policymakers weakened regulations that had previously constrained institutions from enrolling aid-dependent students[1]. This made it easier for more people to access federal student aid and enroll in college.
2. Economic Factors:
- The persistently high return to college education over the last several decades increased demand for higher education[1].
- During economic downturns like the 2001 recession and the Great Recession starting in 2007, the opportunity cost of enrollment was low due to weak labor markets[1].
3. Supply Expansion: The supply of programs surged, particularly open access institutions, online programs, and graduate programs[1]. Many of these new programs were targeted at non-traditional student populations.
4. Demographic Shifts: Between 1990 and 2010, the number of high school graduates increased by 34%[1].

Is it Still True?
The trend of increased college enrollment, especially among disadvantaged groups, has partially reversed since its peak:
1. Overall Enrollment: By 2020, total undergraduate enrollment had declined back to near its level in 2000[1].
2. Demographic Changes:
- Black undergraduate enrollment in 2020 remains only modestly higher than in 2000 - about 10% greater[1].
- White undergraduate enrollment in 2020 was below its level in 2000[1].
- Hispanic enrollment almost doubled between 2000 and 2020[1].
3. First-Generation Students: While 60% of postsecondary students were first-generation in 2000, this share declined to 56% in 2020[1].
4. For-Profit Sector: Enrollment at for-profit institutions, which had surged between 2000 and 2012, has since declined significantly[1].

In summary, while there was a significant increase in college enrollment, especially among disadvantaged groups, from 2000 to 2012, this trend has partially reversed in recent years. However, some changes, like increased Hispanic enrollment, have persisted. The overall landscape of higher education enrollment continues to evolve, influenced by economic conditions, policy changes, and demographic shifts.

Citations:
[1] https://ppl-ai-file-upload.s3.amazonaws.com/web/direct-files/238393/f60f1373-2266-45ed-8960-6656ba110b38/paste.txt
[2] https://www.brookings.edu/articles/first-generation-college-students-face-unique-challenges/
[3] https://www.capturehighered.com/client-blog/landscape-in-flux-2024-enrollment-trends/
[4] https://medicat.com/why-first-gen-college-students-need-extra-support/
[5] https://www.insidehighered.com/news/2019/05/23/pew-study-finds-more-poor-students-attending-college
[6] https://www.forbes.com/advisor/education/online-colleges/first-generation-college-students-by-state/
[7] https://nces.ed.gov/programs/coe/indicator/cpb/college-enrollment-rate

Tuesday, May 14, 2024

College Meltdown 3.0 Could Start Earlier (And End Worse) Than Planned


Chronicling the College Meltdown 

Since 2016, the Higher Education Inquirer has documented the College Meltdown as a series of demographic and business trends leading to lower enrollments and making higher education of decreasing value to working-class and middle-class folks. This despite the commonly-held belief that college is the only way to improve social mobility.  

For more than a dozen years, the College Meltdown has been most visible at for-profit colleges and community colleges, but other non-elite schools and for-profit edtech businesses have also been affected. Some regions, states, and counties have been harder hit than others. Non-elite state universities are becoming increasingly vulnerable

Elite schools, on the other hand, do not need students for revenues, at least in the short run.  They depend more on endowments, donations, real estate, government grants, corporate grants, and other sources of income. Elite schools also have more than enough demand for their product even after receiving bad press.    

The perceived value and highly variable real value of higher education has made college less attractive to many working-class consumers and to an increasing number of middle-class consumers--who see it as a risky proposition. Degrees in the humanities and social sciences are becoming a tough sell. Even some STEM degrees may not be valuable for too long.  Public opinion about higher education and the value of higher education has been waning and many degrees, especially graduate degrees, have a negative return on investment. 

Tuition and room and board costs have skyrocketed. Online learning has become more prominent, despite persistent questions about its educational value. 

While college degrees have worked for millions of graduates, student loans have mired millions of other former students, and their families, in long-term debt, doing work in fields they aren't happy with

Elite degrees for people in the upper class still make sense though, as status symbols and social sorters. And there are some professions that require degrees for inclusion. But those degrees and the lucrative jobs accompanying them disproportionately go to foreigners and immigrants, and their children--a demographic wave that may draw the ire of folks who have lived in the US for generations and who may have not enjoyed the same opportunities.  

Starting Sooner and Ending Worse

The latest phase of the College Meltdown was supposed to result from a declining number of high school graduates in 2025, something Nathan Grawe projected from lower birth rates following the 2008-2009 recession.

But problems with the federal government's financial aid system may mean that a significant decline in enrollment at non-elite schools starts this fall instead of 2025.  

The College Meltdown may become even worse than planned, in terms of lower enrollment and declining revenues to non-elite schools. Enrollment numbers most assuredly will be worse than Department of Education projections of slow growth until 2030

In 2023, we wrote about something few others reported on: that community colleges and state universities would feel more financial pressure from by the flip-side of the Baby Boom: the enormous costs of taking care of the elderly which could drain public coffers that subsidize higher education. This was a phenomenon that should also have been anticipated by higher education policy makers, but is still rarely discussed. Suzanne Mettler graphed this out in Degrees of Inequality a decade ago--and the Government Accountability Office noted the huge projected costs in 2002

Related links: 

Starting my new book project: Peak Higher Education (Bryan Alexander)

Long-Term Care:Aging Baby Boom Generation Will Increase Demand and Burden on Federal and State Budgets (Government Accountability Office, 2002)

Forecasting the College Meltdown (2016)

Charting the College Meltdown (2017)

US Department of Education Fails to Recognize College Meltdown (2017)

Community Colleges at the Heart of the College Meltdown (2017)

College Enrollment Continues Decline in Several States (2018) 

The College Dream is Over (Gary Roth, 2020)

The Growth of RoboColleges and Robostudents (2021)

Even Elite Schools Have Subprime Majors (2021)

College Meltdown 2.0 (2022)

State Universities and the College Meltdown (2022) 

"20-20": Many US States Have Seen Enrollment Drops of More Than 20 Percent (2022) 

US Department of Education Projects Increasing Higher Ed Enrollment From 2024-2030. Really?(2022)

EdTech Meltdown (2023) 

Enrollment cliff? What enrollment cliff ? (2023)

Department of Education Fails (Again) to Modify Enrollment Projection (2023)

Monday, November 27, 2023

Sotheby's Institute of Art on Department of Education's Heightened Cash Monitoring 2 List

Sotheby's Institute of Art (SIA) in New York City is one of only three institutions under the US Department of Education's Heightened Cash Monitoring 2 list for "financial responsibility" problems. 

SIA is owned by Cambridge Information Group, which is the parent company of ProQuest, The School of the New York Times, Hammond's Candies, the Scranton/Wilkes-Barre RailRiders minor league baseball team, and other investments. 

(Seven NY institutions were under HCM2. Source: US Department of Education)

According to the US Department of Education (ED), "schools may be placed on HCM1 or HCM2 as a result of compliance issues including but not limited to accreditation issues, late or missing annual financial statements and/or audits, outstanding liabilities, denial of re-certifications, concern around the school's administrative capabilities, concern around a school's financial responsibility, and possibly severe findings uncovered during a program review."

Also according to ED, "a school placed on HCM2 no longer receives funds under the Advance Payment Method. After a school on HCM2 makes disbursements to students from its own institutional funds, a Reimbursement Payment Request must be submitted for those funds to the Department." Schools in this position are often in such financial hardship that they may close.  

The September 2023 Heightened Cash Monitoring 2 list includes less than 100 schools nationwide and seven schools in New York. A disproportionate number of schools are small religious-based institutions and for-profit vocational colleges. 

Unlike most of the schools on the HCM list, Sotheby's has a prestigious name--and it uses its relationship with the auction house to elevate its brand. According to its vision statement, "Sotheby’s Institute of Art is the global leader in art world education, shaping future generations of cultural stewards and art market professionals."  

And according to its website "Sotheby’s Institute of Art alumni form a network of over 8,000 talented individuals around the world. Our graduates hold leading positions at renowned international arts organisations including Frieze, 1-54 Contemporary African Art Fair, M+, the Institute of Contemporary Photography, the Victoria & Albert Museum, the Guggenheim Abu Dhabi, the Smithsonian Museum of Natural History, the Fine Art Group, the UK National Archives, Cartier, and numerous other galleries, auction houses, museums, luxury brands, art fairs, advisories, law firms and beyond."

The US Department of Education's College Navigator indicates that SIA's student population in the US is about 200. Tuition alone is $56,340 per year. The school's US faculty includes one full-time instructor and 35 part-timers. 87 percent of the students are female; 49 percent are Asian. The school only offers certificates and graduate degree programs. SIA's website does not appear to name any Board members.  

US Department of Education (IPEDS) data also suggest that SIA's expenses have surpassed revenues since 2016-17.  


(Source: US Department of Education)

The Higher Education Inquirer is in the process of gathering more information about the school's finances and whether students should be aware of the HCM status. Other schools on the list have recently closed or are in the process of closing, including Bay State College, King's College, and Union Institute.  

Related links: 

Ambow Education Facing Financial Collapse

A preliminary list of private colleges at risk

Friday, October 20, 2023

National American University Has No Cash

National American University Holdings (NAUH) of Rapid City, South Dakota has no cash.  The company owns National American University and its subsidiary, Henley-Putnam School of Strategic Security.

According to the company's most recent financial statements:

"As of August 31, 2023, the Company had approximately $0.0 million of unrestricted cash and cash equivalents, a working capital deficit of approximately $4.8 million, and a deficit in stockholders’ equity of approximately $1.8 million." 

NAUH has avoided creditors for years and been able to get US government funds, including more than $2M in COVID relief funds in 2020 and 2021.   

National American University's enrollment in 2015 was 9,519 students. Since then, NAU has closed more than 30 campuses in nine states: Colorado (3), Indiana, Kansas (4), Minnesota (5), Missouri (3), New Mexico (2), Oklahoma, South Carolina, South Dakota (3), and Texas (7), and has become an exclusively online school (apart from a small site at Ellsworth Air Force Base).

According to the US Department of Education's most recently published numbers, National American University has approximately 1100 students. The school has no full-time instructors. There is no indication that those students are prepared for the school to close. 


Related link:

National American University and the Subprime College Crash (2018)


Wednesday, October 4, 2023

The Collapse of Ambow Education and NewSchool of Architecture and Design

Ambow Education, the principal owner of the New School of Architecture and Design (NSAD) in San Diego has been cited by the New York Stock Exchange as a Non Compliant Issuer and risks imminent delisting from the exchange. The warning was delivered on September 21, but the company has yet to notify its shareholders.

The Higher Education Inquirer reported on Ambow's financial problems in May 2022.  

In January 2023, Ambow Education's other US school, Bay State College, lost its regional accreditation. After losing its appeal with its accreditor NECHE, Bay State College closed its doors in August. NewSchool of Architcture and Design remains open with less than 300 students. NSAD is currently on Heightened Cash Monitoring by the US Department of Education due to ongoing financial problems.