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. 

Related link: College Meltdown 2.2: Who’s Minding the Store? 

Related link: One Fascism or Two?: The Reemergence of "Fascism(s)" in US Higher Education

Related link: College Meltdown 2.1 

Related link: The Growth of "RoboColleges" and "Robostudents"

Related link: The Higher Education Assembly Line

Sunday, May 15, 2022

Is Your Private College Financially Healthy? (Gary Stocker*)

 


College viability is best determined by comparing the private colleges you are considering (Click on the image.)

[This article is part of the Transparency-Accountability-Value series.] 

You have worked hard to make higher education a smart, informed investment. You have talked with  college admissions counselors, developed a list of preferred colleges, visited the schools in-person or virtually, written the application essays, and filled out the common app. The colleges know a lot about you - and your family’s finances- but what do you know about theirs?

Will your college close? It is a question being asked with increasing frequency by students and their families. There is consensus of college researchers and experts that college closing will continue to happen in 2022 and beyond.

We have reviewed audited financial statements and data collected by the National Center for Education Statistics, and it is reasonable to assume that many small to medium-sized private colleges you may be considering will not have the financial resources to remain viable or even to provide you with the type of education you have come to expect.




We explain how to easily interpret the financial health below.

The consequences for you of choosing a financially challenged and potentially non-viable college include:
 
*The need to transfer colleges and the emotional and other challenges associated with a college closure
*Potential loss of transfer credits and the need to re-take some classes at the new college
*Faculty and staff turnover at the troubled college
*Safety issues associated with deferred building and grounds maintenance
*Increased time and costs to complete your degree
*A college closure could cost you more than $50,000 in additional costs and lost income from delayed graduation.

Here are some indicators that a private college is at a higher risk of closing.

*Enrollment less than 1,000 with a trend of decreasing enrollment. (Our College Viability App provides you with this information.)
*Endowments less than $50 million
*High tuition discount rates (greater than 50%) that are reflected in lower tuition revenue
*The popularity of the college is decreasing based on the number of students who accept an admissions offer. (Known as 'yield'.)

In most cases, scholarships offered by colleges are simply tuition discounts – like discounts you might get when buying groceries, clothes, or cars. Those scholarships are not funded with real money. If a college is desperate to fill seats, it commonly offers ‘scholarships’ that are not funded by any real money. They are simply lowering the price of tuition to get your enrollment commitment.

Certainly, these tuition discounts are good for students and their families, but they are not always good for the college’s finances. Faculty need to be paid, lights kept on, buildings maintained, and a long list of other expenses are incurred. Decreased revenue from tuition will be one of the leading factors in colleges that choose to go out of business or completely change their business model. Desperate colleges may do desperate things to get you to commit to them.

Below, you will find some straightforward guidance on how to interpret and understand some basic, private college financial, enrollment, and outcome data. We just use 6 pieces of information from 2013-2018 to help you understand how to better compare one private college to another. In general, compare each of the six indicators to look for any big differences among the colleges you are considering.

Quick Summary

FTE (Full-Time Enrollment) should be positive. The larger the increase over the 6 years, the better. If it is a negative number, the trend over these years suggests your college may not be as strong as its competitors with better enrollment numbers.
 
Admissions yield with a negative number suggests a larger number of students are not accepting a college’s admission offer. A positive number can suggest more students are accepting their admission to a college.
 
You will want to see the 6-graduation rate increase over the reporting period. More importantly, if you access the College Viability App, click the ‘Grad Rates’ button. Any number around or below 50% is not good. A graduation rate in the 70% and above is a reasonable minimal target.
 
The change in core expenses should be less than the change in core revenues. When expenses are not keeping up with revenues over a 6-year period, it can be viewed as a significant indicator of bad financial health.
 
The larger the increase in the endowment assets, the better. Increasing endowments suggest a college maintains a financially fruitful relationship with alumni and other charitable groups. Small increases indicate the college has yet to develop those resources. A negative number in the endowment suggests a college is in deep trouble. It probably has drawn down that money just to keep the lights on – not a good use of endowment funds.

Below is a more detailed description of the factors we track in the College Viability App and how they can help you become more informed about your private college options.

Enrollment:

This effectively shows full-time enrollment for each of the years 2013-2018. It is easy to compare one college’s 6-year trend with another.

Positive trend: FTE stands for full-time enrollment and is a calculation showing how many students would be attending if all were enrolled full time. You want to see consistent increase in the FTE enrollment. Larger enrollment typically provides more revenue to a college.

Negative trend: Either big changes from one year to the next or a consistent decline in enrollment. The first suggests inconsistent discounting and the college may be having difficulty bringing in students without substantial discounts. This hurts their ability to generate revenue to stay financially healthy.




Private college 6-year graduation rates for undergraduates (Click on image.)

 


College admissions yield, private Minnesota colleges (Click on image.)


Tuition and Fees

The main revenue source for almost all private colleges is tuition and fees. While enrollment is often reflected in the tuition and fees colleges collect, in recent years there has been a lot of market pressure to discount tuition. This has contributed to decreasing tuition and fees and could indicate trouble for a college you are considering.

*Positive trend: Consistent increase in tuition revenue over 6 years

*Negative trend: Consistent decrease in tuition revenue over 6 years


Admissions Yield

A negative number suggests more students are not accepting a college’s admission offer. A positive number can suggest more students are accepting their admission to a college. It is not as strong of an indicator of viability challenges as other factors, but it can build on the pattern seen by other data.

Positive trend: An increasing admissions yield can suggest a college is able to enroll more students who they have accepted.

Negative trend: If the yield is decreasing, for some reason(s) more student are choosing other options instead of enrolling in a college that accepted them.

Endowment

Positive trend: Simply speaking, this number represents financial gifts private colleges have received. While there are different types of gifts, look for those colleges whose endowment has grown more than its competitors. These organizations will have the extra resources to survive tough economic times.

Negative trend: Compare the 6-year changes from all of the schools you are considering. The larger the increase and the higher the overall endowment, the better. If you see that a total endowment amount has decreased in the 6-years of data, it could mean the college is using those funds just to keep the lights on.

As general guidance, any endowment total that is less than $50 million is also reason for concern about a college’s financial health.
 

6-Year Graduation Rates

The education outcome the College Viability App tracks is 6-year graduation rates. There are typically not big swings in graduation rates over 6 years. Just look for colleges with higher graduation rates.

Positive trend: The larger the number, the better.

Negative trend: A lower percentage suggests a college is not as successful in graduating its students as those colleges with higher percentages. If the graduation rate hovers around 50% or lower, there are legitimate reasons to have concerns about that college’s quality of education and the systems and processes needed to enhance retention and create graduating students.
 

Core Expenses

It is best to compare both core expenses and core revenues for each of the years listed. Any significant expense imbalance is worthy of concern. If expenses go up year after year, it is reasonable to expect revenues to at least trend upwards also. Watch for colleges whose expenses have increased, but their revenues have not. Remember, you are looking at a 6-year trend. If a college can’t reverse a bad expense and revenue pattern in 6 years, there is reason to be concerned about their viability.

Positive trend: Expenses have either decreased more than the core revenue has decreased, or the increase in core expenses should be a smaller number than the increase in core revenue.

Negative trend: Expenses have increased faster than core revenues, or the decrease in expenses has been slower than the decrease in revenues.


Core Revenues

If revenues are trending downward and expenses are not decreasing in a similar trend, there is reason to consider whether a college with that pattern has the capacity to do what is necessary to survive and thrive. Tuition and fees are part of core revenue. As one goes trends, the other usually goes in the same direction.

Positive trend: Core revenues have increased faster than expenses have increased, or revenues have not decreased as much as expenses have decreased.

Negative trend: Any trend where the revenue decreases is concerning. However, if a college can keep its expense changes in line with its revenue, that works for a while. Any business strongly prefers consistent revenue growth. It’s an indication of a good product or service.

Remember, it is the trends that are most important to consider. If you see differences that concern you among the colleges you are considering, share your concerns with your admissions representative. Ask them to share explanations of why the numbers in any category don’t compare well to other private colleges you are considering. Use their responses and the data in the College Viability App to make a more informed decision about the college(s) you are considering.

Data Source: National Center for Education Statistics - Integrated Postsecondary Education Data System (IPEDS) 2013-2018



We created the College Viability App to provide students and their parents an easy-to-understand resource of what to look for regarding a private college’s financial health. You simply select the colleges you are considering, and we provide you with six years’ worth of comparisons on 6 key viability indicators.

The College Viability App does not predict whether a private college will close or not. It simply provides you with an easy-to-use, customizable comparison of colleges you are considering. Some colleges have performed better than others over the past 6 years. You can compare and make your own judgement. It is important to note that we use the most recent federal data available. There is usually a 12-18 month lag time before a private college's data is posted.


Here is a link to a YouTube tutorial on the College Viability App.

Monday, May 9, 2022

College Meltdown 2.2: Who’s Minding the Store?



The latest report by the Government Accountability Office (GAO) about wrongdoing by higher education online program managers (OPMs) felt disappointing to social justice advocates who watch the space and know the bad actors who were unnamed in the GAO document.  

US higher education has always been a racket, but its latest pursuits have gone untouched and even unmentioned.  GAO’s behavior, though, is no worse than the many other corporate enablers who are supposed to be minding government funds wasted –or worse yet—used to prey upon US working families. 

The US Department of Education has done little lately to safeguard consumers from predatory student loan servicers like Maximus and Navient, or subprime universities like Purdue University Global and University of Arizona Global, and hundreds of small players who offer marginal education leading to less than gainful employment.

The Department of Veterans Affairs has done little lately to protect veterans and their families from being ripped off by subprime schools.  At one time, VA was a leader in tracking GI Bill complaints and making them public, but transparency and accountability are far from what they were.

The US Department of Defense (DOD) has been asleep at the wheel with its distribution of DOD Tuition Assistance funds to subprime colleges.  Its complaint system is close to nonexistent. 

The US Department of Justice (DOJ) and US Securities and Exchange Commission (SEC) have done little to rein in bad actors in higher education, leaving the work to states attorneys general.  Hate crimes on campus have also been ignored.  In other cases, elite university endowments have received little notice despite eyebrow raising profits.  Student loan asset-backed securities are also below their radar. 

During the pandemic, The Department of Treasury has failed to adequately oversee funds issued to the Federal Reserve and the Small Business Administration funneled to subprime schools. 

The Federal Trade Commission (FTC), which had done an adequate job investigating predatory lead generators and marketing and advertising false claims has been hamstrung by a recent court decision and can no longer fine higher ed wrongdoers.   Predatory companies know this and will act accordingly—as criminals do when cops are not on the beat. 

What lack of oversight have you seen with federal agencies tasked to protect higher education consumers? 

Related link: College Meltdown 2.0

Related link: Maximus, Student Loan Debt, and the Poverty Industrial Complex

Related link: 2U Virus Expands College Meltdown to Elite Universities

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

Related link:  Charlie Kirk's Turning Point Empire Takes Advantage of Failing Federal Agencies As Right-Wing Assault on Division I College Campuses Continues

Related link: The Colbeck Scandal (South University and the Art Institutes)

Related link: When does a New York college become an international EB-5 visa scam?

Related link: One Fascism or Two?: The Reemergence of "Fascism(s)" in US Higher Education

Wednesday, April 27, 2022

Paying the Poorly Educated (Jack Metzger*)

Joe Biden was right to propose free Pre-K education for 3- and 4-year-olds and free community college in his initial legislative package, rather than pushing for free public university education and the cancellation of college debt. All four progressive education initiatives would serve the public good by making education more available to millions. However, policies that promote university education do little to help the working class. They also feed into the false and damaging narrative that college is the right path to upward mobility for most people.

While free public universities could be transformative in the very long term, most of the benefits of this policy would go to higher-income families. They are more likely to live in areas with high-quality K-12 schools, and their children also are more likely to have the kinds of social and cultural capital that are especially advantageous for getting into and succeeding in college.

Similarly, while forgiving all or some portion of existing student loan debt would likely benefit low- and middle-income young people, who are more likely to have higher levels of debt than their more affluent contemporaries, this too has limited benefit for the working class, because it only helps those who have gone to college. That’s a large group, but forgiving their debts does nothing for the many others who aren’t in debt because they didn’t go to college at all or for very long.

Free public Pre-K and free community college, on the other hand, disproportionately benefit working-class children and adults. Free Pre-K will not only improve the educational prospects of children, but it also saves families money. For those currently using the cheapest day care, this would save some $10,000 to $15,000 a year – a significant increase in spending power for all income classes, but transformative for low- and middle-income family budgets. What’s more, for low-income parents who currently can’t afford day care and thus can’t work full time or at all, free Pre-K would allow them to work and earn more in the paid workforce.

Likewise, free community college would disproportionately benefit low-income adults and young people who cannot go to college full time because they need to work. Community college education includes apprenticeships and other pre-training that is needed for entry into many middle-wage jobs, including in the soon-to-be-expanding building trades. Free public university would mostly benefit those young people who have more time to take the long road, while free community college is more valuable for working adults who already have work and family responsibilities.

The class-skewed benefits of these initiatives are relatively complicated, but we should also pay attention to the messages they reinforce. Prioritizing free college and student debt forgiveness plays into a toxic narrative that has deep roots in our public discourse: that college-educated people are more valuable, more worthy of public subsidy, than the so-called “poorly educated.” This narrative accepts that college graduates deserve to be paid more, but it also offers a false promise: that the primary way to increase wages and living standards – or more grandly, to restore the American Dream of upward mobility — is for more and more people to get college degrees. Both these messages are false. The first reflects a nearly impregnable professional-middle-class prejudice, but the second is an intellectual error that, if corrected, could burst a professional-class bubble.

College education cannot be a path for widespread upward mobility because a large majority of jobs in our economy do not require a college education or anything like it. 61% require high school or less and another 11% require an associate’s degree, some college, or other postsecondary education – but not a bachelor’s degree. Only 28% of jobs in 2020 required a bachelor’s, a far lower percentage than the nearly 40% of workers over 25 who had that degree.



That is why we find so many men and women with bachelor’s degrees as fast food workers; retail salespersons or cashiers; waiters, waitresses or cooks; freight, stock and material movers; janitors and cleaners; and home health care or child care workers. These occupations are among those with the largest annual job openings , and all of them have median annual wages ranging from $22,740 to $29,510 (that is, less than $15 an hour).

This is a tragedy for college graduates who were told that becoming part of the exam-passing classes would lead to better lives. But for most people doing those jobs, it probably never crossed their minds that they could go to college. Still, that work needs to be done, no matter the educational attainment of the people who do it. The work they do is socially valuable, some of it even “essential,” and those jobs need to be paid a living wage. To be told that the only way to improve your life conditions is through more (and more) education is demoralizing and, especially for those who work alongside college graduates doing the same work, palpably false.

Higher education is a circuitous route to improving one’s economic prospects, a route that will not work for at least a third of those who can afford to take it, and a route that is not realistically available for the majority of our population. If we want to improve wages and conditions, we need to improve them directly, not by producing more college grads.

President Biden’s initial transformative legislative package that got whittled down to Build Back Better (BBB) embodied the understanding that education was neither the answer nor even an important part of the answer for achieving upward mobility. That initial package included a $15-an-hour minimum wage and the union-empowering Pro-Act that were quickly jettisoned because they could not avoid a Republican filibuster the way budget bills can. But, equally or even more important, many elements of Build Back Better provided for a series of enhanced social wages that together would have dramatically improved life prospects across the board – none more important than the package of child care subsidies that included universal free Pre-K.

Social wages explicitly recognize that even with better minimum wages and stronger unions, most wages will not come close to reflecting the collective social value workers provide. Nor are wages going to be sufficient to provide decent incomes for most people most of the time. Reducing the cost of health care, housing, transportation, and child care (all of which BBB would have addressed) increases the real incomes of all workers, and it has the most dramatic effect on low-wage workers.

By prioritizing those workers, most of whom do not have college degrees, the Biden package had the potential to pierce the professional-class prejudice that has dominated public policy. Both Presidents Bush and Obama proclaimed that more and better education was the only way to address our savage inequalities of income, wealth, and opportunity. Biden, by contrast, is the first president in memory to actually brag about creating well-paying jobs that do not require any college.

Alas, Build Back Better – let alone the initial, larger version of itself – is dead for now, and the possibility of a truly transformational package becoming law is probably gone for the immediate future. But a healthy majority of the public and more than 90% of Congressional Democrats supported the core idea of increasing taxes on corporations and the rich in order to transfer money to workers and citizens in ways that could dramatically increase working-class people’s chances for creating better lives. Hopefully, that support shows a shift away from the idea that education is the only path to improved life prospects. A public consensus may be developing that even the poorly educated deserve to earn a good living.

Jack Metzgar

Jack Metzgar is author of the recent Cornell ILR Press book, Bridging the Divide: Working-Class Culture in a Middle-Class Society.

*This article first appeared in Working Class Perspectives.

Related link: The College Dream is Over (Gary Roth)

Related link: The Power of Recognizing Higher Ed Faculty as Working-Class (Helena Worthen)



Wednesday, April 13, 2022

College Meltdown 2.1

The Higher Education Inquirer has added three companies to its College Meltdown watchlist: Ambow Education (AMBO)SoFi (SOFI), and Adtalem (ATGE).  


Leading the way is National American University Holdings (NAUH), which is down to less than $50,000 in cash.  Ambow Education (AMBO) and Aspen Group (ASPU) are near penny stock territory and Barnes and Noble Education (BNED) and SoFi (SOFI) are also in deep financial trouble. 

Declining share price is not the only factor to make the College Meltdown list.  Government contractor Maximus (MMS), for example, is on the list for its predatory behavior with student debtors and its own workers, as well as its questionable contracts with the US Department of Education


2U is identified for its fleecing of its clients (universities), end customers (students) and shareholders.  In its last annual report, the company told shareholders that the number one risk was that it may never make a profit.  



2U (TWOU) Shares have dropped 70 percent over the last year (Source: Seeking Alpha) 




Shares of student loan refinance company SoFi (SOFI) are down 70 percent over the last year 
(Source: Seeking Alpha)




Barnes and Noble Education (BNED) shares have dropped 66 percent over the last 6 months.
(Source: Seeking Alpha)




Aspen Group (ASPU) shares have declined 82 percent over the last year. 
(Source: Seeking Alpha) 


Friday, March 25, 2022

Online Program Manager for University of Arizona Global Campus Facing Financial Collapse

Zovio (ZVO), the for-profit online program manager for University of Arizona Global Campus (UAGC)*, is facing a financial collapse.

With three consecutive years of financial losses, Zovio (formerly known as Bridgepoint Education) lost a record $61 million in 2020.  Over the trailing 12 months (ttm) the company has lost $76 million.  Cash assets have decreased from $357 million in 2016 to $33 million in 2021.  

Zovio's cash runway (a key indicator of financial health) is now less than a year from zero, with revenues amounting to a fraction that they once were.  Liabilities are also greater than all assets.  

Zovio is working with a new CEO, Randy Hendricks, who has limited management experience, and the company has already been pared down to about 1500 full-time employees.  

Insiders tell the Higher Education Inquirer that the deal between Zovio and University of Arizona was a deal between people of low integrity and a lack of imagination.  

According to the Department of Education's College Navigator, University of Arizona Global Campus has just 194 full-time instructors for about 35,000 students, and many of those full-time instructors are also tasked with management roles: the tell-tale traits of a subprime robocollege.  

To make matters worse, ZVO, which was already financially unstable, was recently ordered to pay $22 million in compensation to California students who were defrauded.  

While Zovio's 2021 Annual Earnings will not be presented until Tuesday, March 29, 2022, there are strong indications that ZVO has reached a point of no return in its balance sheet.


Zovio's Assets (2009-2021) Source: Macrotrends.net

Zovio's Annual Report is coming out weeks late, just before the Securities and Exchange Commission deadline, and ZVO has not presented any revenue numbers to relieve shareholder anxiety.

Since March 18, ZVO shares have been below the $1 per share threshold to remain on the NASDAQ. Thirty consecutive trading days below $1 will trigger the first stages of a delisting from the stock market.

Zovio Share Price, March 3-March 28, 2022 (Source: Seeking Alpha)
 

What we are seeing looks very much like Corinthian Colleges and ITT Education before they collapsed. Each day, ZVO is getting closer to being delisted from NASDAQ and they are quickly running out of cash.

But what happens to federal government funding and oversight if Zovio collapses?  And how about UAGC--will it end up costing Arizona taxpayers?  

With UAGC, only a handful of edtech companies could handle such a large transition.  Experts we have contacted do not agree on potential surrogates for the online university or whether a surrogate is even necessary.  

Will the US Department of Education (ED) try to get another company to take over the business? In the Corinthian Colleges collapse, ED was able to get ECMC to take over operations. 

Will the US Department of Education require a special monitor, as they did with Corinthian Colleges?

University of Arizona could hire key executives and personnel, but that could cost the State of Arizona to hire those folks as state employees. 

These are issues that need to be addressed by the Department of Education and the State of Arizona now, to avoid another student loan train wreck.  

[Post script:  On Monday, March 28, 2022, Zovio announced that their 2021 Annual Earnings would be delayed.  No new date was reported.]  

*University of Arizona Global Campus was previously known as Ashford University.   According to the US Department of Education's College Scorecard, Ashford University has a 22 percent 8-year graduation rate. The College Scorecard reported that of student debtors two years into repayment, 32 percent were in forbearance, 28 percent were not making progress, 13 percent defaulted, 12 percent were in deferment, 7 percent were delinquent, 5 percent were making progress, 2 percent were paid in full, and 2 percent were discharged.

Related link: Verdict Against Zovio Adds to Peril for Arizona Global Campus (David Halperin, Republic Report) 

Wednesday, February 23, 2022

The Power of Recognizing Higher Ed Faculty as Working-Class (Helena Worthen*)

Just over 20 years ago, Michael Zweig published The Working Class Majority: America’s Best Kept Secret. At that year’s How Class Works conference at SUNY Stony Brook, academics from history, political science, labor and industrial relations, and other fields debated Zweig’s use of the term “working class.” Some thought it was a throwback to the 1930s or a tip-off that someone was a Marxist. But even at a conference attended by many academics from working-class backgrounds, no one pointed out that academics are working class. Twenty years ago, academia still seemed like a middle-class or even an upper-class job, even though that had started to change in the mid 1970s.Young academics expected that if they did “all the right things,” they would get tenure and live happily ever after.

That expectation was wrong in 2002, and it’s even worse now, as this grim report shows. Nearly 75% of faculty in higher education are precarious workers, more like restaurant and hospitality workers, gig performers, contract healthcare workers, and delivery drivers than the tenured professor. They are hired on a per-class, per-semester basis. They do not control the conditions of their work. They often lack access to offices, professional development, research funds, and opportunities to collaborate with peers or vote in faculty meetings. They may be asked to take on a new course with a week or less warning. Many are told what textbooks to use and what tests to give. They are likely to have to apply for a new campus parking permit or library card every semester. But they also don’t get personal respect. They are vulnerable to management whim, favoritism, harassment, and simple forgetfulness, not to mention a complaint from a single disgruntled student who wanted a better grade.

Many contingent faculty are shocked to realize that college teaching is a working-class job. But recognizing that can be liberating. Thinking about ourselves as “working class” clarifies our understanding of our contingency by helping us identify with the 99% instead of the 1%. It can also inspire us to build alliances to improve our conditions and our industry.

First of all, it helps us appreciate and identify with our students, who are increasingly working class, and like us, probably working more than one job to make ends meet. We see their problems as our problems and become open to talking about common solutions. In turn they can see more accurately what it takes to be an academic and live the paradox of “love the work, hate the job.”

Second, it helps us understand and appreciate graduate student’s efforts to win the right to be recognized as employees (not “apprentices” on a stipend) who rely on their jobs for living. Graduate student organizing is one of the hottest areas in the campus labor movement – and possibly in the labor movement overall — these days, with wins coming in from unions like USW at the University of Pittsburgh, UE at University of Iowa, UAW at Harvard and the University of California and SEIU at Duke, Northwestern, Saint Louis University, and American University, just to name a few.

Third, thinking of ourselves as workers can help us understand the value of building campus labor coalitions, organizations that include not just academics but also clerical workers, the trades, transportation, custodial, food service, and technical workers. Such coalitions create power through the interdependency of all the workforces in a college or university.

Fourth, concerns about the working conditions of contingents can form a basis for solidarity with the privileged 25% who are tenured and tenure-line faculty. They usually resist this idea, but the reality of how their work has changed provides a strong argument. Over the worklives of senior faculty, colleges and universities tightened their belts, drained resources from the classroom, built arenas instead of libraries, created freestanding “foundations” that were outside faculty control, and engaged in a series of internet-based shocks like contracting out administrative functions like payroll to IT companies, putting journals on line, shifting classes to Blackboard and Moodle, experimenting with MOOCs, and much more. At the same time, requirements for tenure-track hiring and promotion were raised, contingent faculty became the majority, and administrative and advising work for tenure-line faculty increased. Some schools hired CEOs to run institutions like businesses. With all this, tenure-line faculty were progressively cut out of the full exercise of shared governance. All this degraded the institution of higher education, and not just for the contingent majority. These changes affect students, tenure line and contingent faculty, and staff alike.

The good news is that some are organizing for change. Higher Education Labor United (HELU), a new organization that came out of the organizing around College for All, has been endorsed by 117 locals from eight national unions and organizations. HELU uses the term “labor” broadly: its membership includes unions representing clerical, staff, and other workforces as well as faculty. The leadership team comes from colleges and universities in 29 states. HELU aims to establish a national strategy for higher education, something that the traditional faculty unions, AAUP, NEA and AFT, were never able to cooperate to achieve.

To get this rolling, HELU is convening a free Winter Summit, February 23-27, on Zoom. The conference will feature four afternoons of workshops and several keynote presentations, all focused on three goals: coordinate the surge of higher education worker organizing across the country, develop federal policy proposals to reverse the trends that have damaged higher education over the last several decades, and support politicians who will advance a program of democratizing higher education. Members of endorsing organizations will have opportunities to participate in decision-making.

The vision guiding the young leaders of HELU is broad working-class mobilizing to address the crisis in higher education. To accomplish that, it’s time for faculty see themselves as members of the working class and stand together to fight for change.

Helena Worthen, University of Illinois

This essay first appeared in Working-Class Perspectives. Thank you Helena Worthen, Sherry Linkon, and John Russo for permitting us to reprint this important article. 

Helena Worthen is the co-author, with Joe Berry of Power Despite Precarity: Strategies for the Contingent Faculty Majority in Higher Education (Pluto, 2021). She has worked and taught as a labor educator and teacher unionist in California, Iowa, Pennsylvania, and Illinois.



 

Related link: Working-Class Perspectives  

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 US fascism advances, the Coronavirus Pandemic becomes more normalized, student loan debt approaches $2 trillion, and the 2026 enrollment cliff is just a few years away.  This wave includes remnants of for-profit colleges like zombie college National American University, Stratford University, South University, the Art InstitutesUniversity 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), student loan repayments may be low enough to result in long-term default rates between 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 (MaximusNavient, Sallie Mae, Nelnet), publishers and other edtech enterprises (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.  

Related link: 2U Virus Expands College Meltdown to Elite Universities






Tuesday, February 15, 2022

Terri Givens and “Radical Empathy: Finding a Path to Bridge Racial Divides”

[This article is part of the Transparency-Accountability-Value series.]

Terri E. Givens is a seasoned (and storied) political science professor currently teaching at McGill University, in Montreal, Canada.  Professor Givens has recently produced two essential books on the politics of race: “Radical Empathy: Finding a Path to Bridge Racial Divides” and “The Roots of Racism.” 

While there are a number of outstanding historical and social science works to inform readers about racial issues, Radical Empathy is valuable for moving folks towards justice and solidarity—in Trumpian times that are challenging at best. 

One valuable tool for her has been to weave her own individual stories of geography, personal evolution, social location (not just race, but also class and gender), privilege (being middle class) and vulnerability with social and larger historical forces (what C. Wright Mills called The Sociological Imagination).  

By sharing our stories, all of them, it's hard to be just enemies.  And when we can see our similarities and respect our differences (at least some of them) maybe we can even move together.  

But understanding is not enough.  And radical empathy takes practice.  Lots of practice. 

Rather than describe Professor Given’s work, it would be best to provide some free resources for Radical Empathy.

Radical Empathy - Google Books

Radical Empathy Reader’s Guide

Book launch: Radical Empathy (with Julie Lythcott Haims - YouTube)

Tuesday, February 8, 2022

One Fascism or Two?: The Reemergence of "Fascism(s)" in US Higher Education

The Higher Education Inquirer is conducting an extensive investigation of the reemergence of fascism in US higher education.  The examination aims to: define and operationalize the concept of fascism, investigate the roots of American fascism since the 17th century, and chronicle the most important cases of fascism in US higher education today.  As part of a democratic process, we ask readers to be involved in the research and writing of this project.  

Reader Input

Additions and corrections will be made with input from readers of the Higher Education Inquirer.  Please add your comments in the section at the bottom. For those who wish to remain anonymous, you can provide feedback by emailing me at dahnshaulis@gmail.com. 

Definition(s) of Fascism(s)

The word fascism has been used by politicians and American writers on the Left and Right for generations.  It may not be possible to create a consensus of what fascism is, or how it appears in US society. This space is likely to be edited as more comments are received.  


*Laurence W. Britt, the author of Fascism Anyone, described 14 elements of fascism here

*Italian historian Umberto Eco described 14 elements of fascism here.

*Yale professor Jason Stanley explains "How Fascism Works" here.  

Origins of Fascism in US Higher Education 

US higher education was founded on the taking of land from indigenous people, and oppressing people of color for four centuries. Enslaved Africans and their descendants were part of the origin and continuation of elite American schools for two hundred years.  White, Protestant, males from elite backgrounds had most of the higher educational opportunities--and the names of robber barons and tobacco magnates (Stanford, Carnegie Mellon, Johns Hopkins, Duke) became part of the elite pantheon.  Thorstein Veblen and Upton Sinclair provided a great deal of information on this. 

While there has been more democracy at times, people of color, women, and working-class folks have been excluded or discriminated for all of US history.  The federal government (Department of Defense, CIA) and US corporations (particularly federal contractors) have also held great importance in the direction of higher education, servicing their most oppressive anti-democratic, colonial elements.  

In the 21st century, historians Craig Steven Wilder and others dug up the white supremacist roots of elite universities. In a zero-sum game, historically privileged groups and individuals may also feel aggrieved and oppressed when others succeed or are placed ahead of them in line.    

Propagation of Fascism in 2022 (Contemporary Examples in No Particular Order) 

This section will evolve with the help of reader comments.  Here are some preliminary examples of varying importance: 

Role in Mass Surveillance 

"Savage Inequalities" in the K-12 Pipeline 

Hunger, poverty, prostitution, and drug sales among college students 

Sexual assault of college students

Anti-intellectualism in America

Rise of Charlie Kirk, Turning Point USA, Turning Point Action, and Students for Trump  

Turning Point USA's Professor Watchlist

Police State and Strong Military Supported 

Use of Propaganda and Disinformation to Oppress "Minorities" and Empower Big Corporations

Predatory Marketing and Advertising 

Legalization of Hate Speech in US Higher Education 

Book Burning and Censorship in US Society

Role of Corporate Power in Higher Education (e.g. Boards, Endowments, Contracts)

Role of Elite Families in Higher Education (e.g. Walton Family Foundation, Koch Brothers) 

Land Theft Through Gentrification and College Expansion 

Tax Avoidance by Elite Schools to Rob Public Coffers 

Colleges Colluding to Limit Financial Aid 

Role of Higher Education in Educating Reactionary Judges and Politicians

State-Sponsored Think Tanks to Support Elites and Oppress Others (e.g. Liberty Institute at University of Texas)

Bomb Threats Against Historically Black Colleges and Universities

End of Affirmative Action for African Americans but Continued Use of Legacies 

Reduction of Needs Based Grants and Scholarships 

Management Corruption, Robocolleges, and the Loss of Labor Power in US Higher Education 

Expenditure of Elite Endowment Funds to Fund Anti-Democratic Organizations

Role of NCAA Football in Promoting Oppressive Values (No Wages, Poor Safety, Sports Gambling) 

Role of US Universities in Supporting Human Rights Violators (e.g. Russia, People's Republic of China) 

Role of US Universities in Undermining Foreign Efforts in Democratization  

Use of "Credentials" as a Legal Form of Discrimination 

Student Loan Peonage, Declining Social Mobility, and the "Educated Underclass"


Related link: US Higher Education and the Intellectualization of White Supremacy

Related link: UT Austin President Eats Cake in a Pandemic (Austin Longhorn*)

Related link: Coursera IPO Reveals Bleak Future For Global Labor

Related link: Guild Education: Enablers of Anti-Union Corporations and Subprime College Programs

Related link: Maximus, Student Loan Debt, and the Poverty Industrial Complex

Related link: Community Colleges at the Heart of College Meltdown

Related link: The Tragedy of Human Capital Theory in Higher Education (Glen McGhee*)

Related link: Higher Education Inquirer: The Growth of "RoboColleges" and "Robostudents"

Related link: SLABS: The Soylent Green of US Higher Education


Dahn Shaulis

Higher Education Inquirer






Thursday, February 3, 2022

"20-20": Many US States Have Seen Enrollment Drops of More Than 20 Percent (Glen McGhee and Dahn Shaulis)

In 2013, Futurist Bryan Alexander aptly talked about peak college enrollment in the United States.  And over the last decade or so, higher education enrollment has declined in almost every state. Now at least 18 US states have experienced enrollment drops greater than 20 percent--and five more are close to that threshold.  

People can watch the College Meltdown in real time at thelayoff.com. 

Enrollment declines are the result of several interrelated economic and demographic shifts.  Reduced populations of college age people, economic distress, growing inequality, and migration are some of the interacting factors. College is expensive and time consuming for working folks.  

While programs like College Promise can help with shoring up community college enrollment, they cannot make up for deep social and economic problems. Online learning has made school more convenient, but the quality and value of several of America's robocolleges (colleges largely free of full-time instructors) is often substandard.  

For many working-class families, college is no longer perceived as the golden ticket to upward social mobility. And a growing educated underclass, based on their own personal experiences with underemployment and student loan debt, are skeptical about the value of higher education for their children--if they choose to have children. Many are not.  

Without significant change, we estimate that the 2026-27 enrollment cliff is likely to put almost every US state above a 25 percent decline over the last 15 years.  With another economic meltdown, the numbers could get worse without major reform--smart social reform--not reform that lines the pockets of the rich and powerful.  

Though consumer demand for college has declined significantly, college costs have not.  Increasing federal funding, though, especially to subprime robocolleges like Purdue University Global, Liberty University, University of Phoenix, and University of Arizona Global Campus may not lead to lower college prices, better quality curriculum, or better jobs at the end of the pipeline.   


*major colleges' data missing from the chart

(Source: National Student Clearinghouse) 



Sunday, January 30, 2022

How University of Phoenix Failed. It's a Long Story. But It's Important for the Future of Higher Education.

The failure of University of Phoenix (UoPX) is more than a dark moment in higher education history.  It should act as a lesson learned in the higher ed business. Executives at 2U, Guild Education, Coursera, Liberty University and Purdue University GlobalChegg, Academic Partnerships, Pearson PLCNavientMaximus and other for-profit and non-profit entities must take heed of the mistakes and the hubris of Phoenix, the wisdom of its cofounder John D. Murphy, and the silencing of important worker voices.  

For several decades of the 20th century, hundreds of University of Phoenix campuses dotted the American landscape, conveniently located in cities and growing suburbs, off major highways. Founded in 1973, America's largest university became a for-profit darling of Wall Street in the 1980s and 1990s, and the provider of career education for mid-level managers in corporate America and public service. A Phoenix degree was the ticket to promotions and salary increases.  

During its zenith, the school was backed by dozens of lawyers and DC lobbyists and a number of politicians and celebrities--including Nancy Pelosi, John McCain, Shaquille O'Neil, Al Sharpton, and Suze Orman. UoPX bought the naming rights to the Arizona Cardinals' pro football stadium in 2006. And in 2010, enrollment at the University of Phoenix stood at nearly a half million students.  The school even had an enormous presence at US military installations across the globe. University of Phoenix's presence was everywhere.* 

Phoenix's stock rose for many reasons. It was a leader in educational innovation. It was convenient and affordable for upwardly social mobile workers.  Its profits were large, and its labor costs were relatively low because UoPX hired business leaders and experts in the field, not tenured scholars, to teach part-time.  

But something went horribly wrong along the way.

In the 2010s, University faced government and media scrutiny for its questionable business practices, its declining graduation rates, and its part in creating billions in student loan debt. And when workers voiced their concerns, they were silenced in a variety of ways, from threats and intimidation to firings. 

This enrollment collapse has now lasted a dozen years and counting.  

Today, as a miniscule portion of Apollo Global Management's portfolio, UoPX's enrollment numbers are less than 100,000--and few of its physical campuses remain open during the Covid pandemic. It's not known how many campuses, if any, are financially viable.  

University of Phoenix enrollment, 2009-2016 (Source: US Department of Education) 

There are a several reasons why University of Phoenix is just a shadow of what it was. Businesspeople and lobbyists blame government regulation and oversight; others blame the relentless pursuit of quarterly profits and corrupt Apollo Group CEOs, including Todd Nelson.

Having talked to co-founder John D. Murphy and read his book Mission Forsaken, what I found out was that University of Phoenix began failing three decades earlier, during the Ronald Reagan era, when US companies chose to invest less in in their workforces.  When this post-Fordist shift happened, US companies reduced benefits for workers, and divested in the education and training of mid-level executives.

In order to keep the company growing in the face of this retrenchment, UoPX shifted its mission, from educating America's upwardly mobile workers to enrolling anyone--at any cost. The company could only decline as it preyed upon consumers and silenced its workers.   After 2010, enrollment counselors were signing up people who were woefully unprepared academically and financially for college work.  

By 2014, about 1 million University of Phoenix's alumni were saddled with more than $35 billion in student loan debt    

US Student Loan Debt by Institution (Source: Brookings, Looney and Yannelis, 2015)

In 2017, Apollo Group sold the company to Apollo Global Management, an investment behemoth, along with Vistria Group and the Najafi Companies.   As part of its holdings, the school was a tiny portion of its portfolio. Barak Obama's close friend, Anthony Miller, was paid to be Board president.  

Among national universities, UoPX is now ranked near the bottom in social mobility according to the Washington Monthly.

In January 2022, as a sign of its continued unraveling, Apollo Education appointed George Burnett, a former executive of three failed or predatory companies, including Alta College and Academic Partnerships, to be Phoenix's newest President. 

UoPX's problems are a symptom of an economic system that despite the hype cares little about workers: a system that today looks at labor costs as something to be reduced--rather than an investment. With few exceptions, America's most powerful corporations: Amazon, Walmart, Target, Yum Brands, McDonalds--rely on low-wage labor and automation to make a huge profit. Companies in medicine, finance, and tech have smaller labor numbers--and while work may be lucrative at the moment, it's becoming more precarious.

*In the early 2010s, Apollo Group, Phoenix's former parent company, spent between $376 million and $655 million a year on ads and marketing.  









Related link: Guild Education