Showing posts with label DeVry. Show all posts
Showing posts with label DeVry. Show all posts

Thursday, July 26, 2018

Betsy DeVos, the for-profit college industry's best pal, rolls back regulatory protections for students who were defrauded by for-profit colleges

This week, Betsy DeVos, President Trump's lamentable Secretary of Education, proposed new rules for implementing the Department of Education's Borrower Defense to Repayment Program.

The new rules--433 pages long--outline the DeVos regime's procedures for processing fraud claims filed by students who took out federal loans to attend for-profit colleges and were swindled.  The New York Times and Steve Rhode of Get Out of Debt Guy reported on this development, but Rhode's analysis is more comprehensive and insightful than the Times story. Rhode's essay is the one to read.

Millions of Americans have been defrauded by for-profit colleges--literally millions. Corinthian Colleges and ITT Tech filed for bankruptcy, brought down by regulatory pressures and fraud allegations. Those two institutions alone had a half million former students.

Globe University and Minnesota School of Business both lost their authority to operate in Minnesota after a Minnesota trial court ruled they had misrepresented their criminal justice programs.  Last month, the Minnesota Court of Appeals partially upheld the trial court's judgment, finding sufficient evidence to support a fraud verdict on behalf of 15 former students who testified at trial.

In California, DeVry University agreed to pay $100 million to settle claims brought by the Federal Trade Commission that it had advertised its programs deceptively. In the wake of that scandal, the company owning DeVry changed its name from DeVry Education Group to Adtalem Global Education.

The Art Institute, which charged students as much as $90,000 for a two-year associates' degree,
agreed to pay $95 million to settle fraud claims brought against it by the Justice Department, but the settlement is paltry compared to the amount of money borrowed by 80,000 former students.  And there have been numerous small for-profits that have been found liable for fraud, misrepresentation, or operating shoddy programs.

The for-profit scandal is a huge mess. If every student who was defrauded or victimized in some way by a for-profit college were to receive monetary restitution, it would probably cost taxpayers a half trillion dollars.

So how do we fix this problem? The Obama Administration approved rules that would have streamlined the process for resolving student-fraud claims, but Betsy DeVos pulled back those rules just before they were to have been implemented.

The new DeVos rules, summarized by Steve Rhode, put most of the blame on students for enrolling in these fraudulent and deceptive for-profit colleges. According to DeVos' DOE, "students have a responsibility when enrolling at an institution or taking student loans to be sure they have explored their options carefully and weighed the available information to make an informed choice."

DeVos' janky new rules forces fraud victims to continue paying on their student loans while they process their damned-near hopeless fraud claims, while DOE processes those claims--if at all--at a snail's pace.

DeVos nixed the Obama administration's ban against mandatory arbitration clauses that the for-profits have forced students to sign as a condition of enrollment. Sometimes these clauses also bar class action suits. So under Betsy DeVos' administration, many defrauded students will be barred from suing the institutions that cheated them.

Betsy and her for-profit cronies want struggling student debtors to enroll in long-term income-based repayment plans (IBRPs) that last from 20 to 25 years. Payments under those plans are generally so low that student debtors' loan balances are negatively amortizing. Borrowers in IBRPs will see their loan balances go up month by month even if they make regular monthly payments. In other words, most IBRP participants will never pay off their loans.

Some people are predicting the student-loan scandal will eventually lead to a national economic crisis similar to the one triggered by the home-mortgages meltdown. I am beginning to think these doomsday predictors are right. Already we see that student loans have impacted home ownership and may even be a factor in the nation's declining birth rates--now so low that the American population is not replacing itself.

Two things must be done to destroy the for-profit college cancer that is destroying the hopes of millions for a decent, middle-class life:

1) First, the for-profit college industry must be shut down. No more University of Phoenixes, no more DeVrys, no more Florida Coastal Universities.

2) Second, everyone who was swindled by a for-profit school should have easy access to the bankruptcy courts, so they can shed the debt they acquired due to fraud or misrepresentations and get a fresh start in life.

And there is a third thing we need to do. Congress should impeach Betsy DeVos for reckless dereliction of duty and blatant misconduct against the public interest.  Let's send her back to Michigan, where she can enjoy her family fortune as a private citizen and not as a so-called public servant.



References

Mark Brunswick. Globe U and Minn. School of Business must close, state says after fraud rulingStar Tribune, September 9, 2016. 

Christopher Magan. Globe U. and Minnesota School of Business to start closing campusesTwin Cities Pioneer Press, December 21, 2016.

State of Minnesota v. Minnesota School of Business, A17-1740, 2018 Minn. App. LEXIS 277 (Minn. Ct. App. June 4, 2018).

Sarah Cascone, Debt-Ridden Students Claim For-Profit Art Institutes Defrauded Them With Predatory Lending Practices.  Artnet.com, July 23, 2018.

Erica L. Green. DeVos Proposes to Curtail Debt Relief for Defrauded StudentsNew York Times, July 5, 2018.

Claire Cain Miller. Americans Are Having Fewer Babies. They Told Us Why. New York Times, July 5, 2018.

Steve Rhode. A Deep Dive Into the Debtor Blaming 2018 Borrower Defense to Repayment Program. Get Out of Debt Guy (blog), July 25, 2018.

Sunday, June 11, 2017

The for-profit college industry is shrinking: It's time to shut this sleazy sector down

We've known for a long time that the for-profit college industry is a cancer infecting the higher education community. Senator Tom Harkin's committee report, published in 2012, told us that.

The cost of attending a for-profit college is far higher than the cost of enrolling at a public college. Completion rates are low, job prospects for attendees are often bleak. Some for-profits spend more on recruiting than they do on instruction.

 And student-loan default rates at the for-profits are quite high. Forty-seven percent of the 2009 cohort of for-profit college borrowers defaulted on their loans within five years.

Here are the 5-year cohort default rates for selected for-profit colleges, as reported by a 2015 Brookings Institute paper:
  • University of Phoenix-Phoenix campus: 45 percent
  • DeVry University-Illinois: 43 percent
  • Ashford University: 47 percent
  • Kaplan University-Davenport campus: 53 percent
And of course these figures understate the number of for-profit college students who are not repaying their loans because many non-defaulters have their loans in deferment or forbearance and are not making their monthly loan payments.

But the good news is this: the for-profit college industry is shrinking. When the Harkin report came out five years ago, for-profit colleges enrolled 13 percent of all college and university students. In the spring semester of 2017, that figure had dropped to 5 percent. For the industry as a whole, for-profit enrollments dropped 10 percent between spring 2016 and spring 2017.

Part of this drop can be attributed to aggressive enforcement of consumer protection laws by state attorneys general and better regulation by the U.S. Department of Education. In the last two years alone, Corinthian Colleges and ITT Tech closed and went bankrupt. Together these institutions had a half million former students.

Moreover,  potential students are becoming more wary of aggressive for-profit college recruiters. This may explain why enrollments are plummeting at several well-established for-profit colleges, such as University of Phoenix and DeVry.

Now, while the for-profit college sector is shrinking, is the time to shut this sleazy industry down. I think the for-profits are hoping the Trump administration will be friendly to their interests, allowing them to get back on their feet.

But let's  hope the industry is wrong. If President Trump implements policies that reinvigorate the for-profit college industry, it will be the biggest mistake of his administration--far bigger than his goofy dinner conversation with FBI Director James Comey.


The for-profits are shrinking, shrinking!


References

Associated Press. Enrollment is tanking at University of Phoenix, DeVry, and other for-profit colleges, Los Angeles Times, September 22, 2016.

Paul Fain. Enrollments Continue to Slide at For-Profits and Community Colleges. Inside Higher Ed, May 24, 2017.

Tamar Lewin. Senate Committee Report on For-Profit Colleges Condemns Costs and Practices. New York Times, July 29, 2012.

Adam Looney & Constantine Yannelis, A crisis in student loans? How changes in the characteristics of borrowers and in the institutions they attended contributed to rising default ratesWashington, DC: Brookings Institution (2015).

U.S. Senate Committee on Health, Education, Labor and Pensions. For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success. 112 Congress, 2d Session, July 30, 2012.






Monday, March 7, 2016

UC Davis Chancellor Linda Katehi accepted compensation from a textbook publisher: She should be fired

Both hands in the cookie jar . . .

Linda Katehi, Chancellor of UC Davis, received $70,000 for serving on the corporate Board of DeVry Education Group, the owner of a for-profit college being scrutinized by the U.S. Federal Trade Commission. In addition, her DeVry position entitled to her to $100,000 in stock, according to the Sacramento Bee.  Not bad for part-time work.

Since then, the public has learned that Katehi received $420,000 in income and stock for serving on the board of John Wiley & Sons, a textbook publisher.  All of this is in addition to her Chancellor's salary of more than $400,000 a year.

What an outrage! And what is Chancellor Katehi's response to the uproar? She resigned from both her DeVry position and her Wiley position, and she promises to donate her Wiley stock to a student scholarship fund.

Katehi: "sincerely regret . . ."

And then of course Katehi released the standard mea culpa press release in which she said this:
I take my responsibilities as Chancellor of UC Davis, and the entire University of California, very seriously and sincerely regret having accepted service on boards that create appearances of conflict with my deep commitment to serve UC Davis and its students.
Note that she admits to accepting service on corporate boards--not that she accepted money.  And she expresses regret, which is far different from apologizing. And she acknowledges the appearance of a conflict--not an actual one. Yeah, I'd say a university president who takes four hundred grand from a textbook publisher has an appearance of conflict.

This lady needs to be fired. In fact, she should have been fired after the UC Davis pepper spray incident of 2011, when university police officers pepper sprayed a group of seated and nonthreatening student protesters. Katehi said she didn't know police were going to use pepper spray on the students, which is something of an excuse, I suppose.

But UC Davis police officers were sued  for firing pepperballs at student bystanders at an outdoor drinking bash that took place in 2004. One victim lost the use of an eye. The Ninth Circuit ultimately ruled that the police had used an unconstitutional level of force against the students.

So if there is anything this overcompensated clown should have gotten right while serving as UC Davis's chancellor it was control of the campus police. Yet an independent report found that UC Davis police were not authorized to use the specific type of pepper spray that they inflicted on students in the 2011 incident and were not trained to use it correctly.

Blah, blah, blah from UC President Napolitano

Incredibly, Katehi's venality is not exceptional. According to a fine article  written by Diana Lambert and Alexei Koseff for the Sacramento Bee, nine UC chancellors accepted $1.5 million in cash compensation from outside corporations during the  years 2012-2014--and that doesn't include stock options or deferred  compensation!

What does UC President Janet Napolitano have to say about Katehi's behavior? "I deeply value Linda's strong record in helping to make UC Davis a world-class center of scholarship and research, and continue to believe in  the value of her contributions to the University."  Blah, blah, blah.

What Napolitano is really saying is this: The University of California protects its insiders.

It is a pity that UC chancellors are not treated like UC students. If there were any justice in the world, all nine moonlighting UC chancellors would be put before a hand-picked squad of untrained UC Davis police officers and assaulted with pepper spray.

Image result for uc davis pepper spray image

References

Diana Lambert and Alexei Koseff. UC Davis chancellor apologizes, will donate textbook stock to student scholarships. Sacramento Bee, March 4, 2016. Accessible at http://www.sacbee.com/news/investigations/the-public-eye/article64041327.html

Nelson v. City of Davis, 685 F.3d 867 (9th Cir. 2012).  Accessible at http://cdn.ca9.uscourts.gov/datastore/opinions/2012/07/11/10-16256.pdf

Teresa Watanabe. UC Davis chancellor apologizes for controversial moonlighting activities. Los Angeles Tims, March 5, 2016. Accessible at http://www.latimes.com/local/lanow/la-me-ln-uc-davis-chancellor-20160304-story.html

Christopher Edley & C. F. Robinson 2012). Response to Protests on UC Campuses. University of California. http://campusprotestreport.universityofcalifornia.edu/documents/protest-report-091312.pdf
 Richard Fossey. Nelson v. City of Davis: Campus Police Officers Who Injure Nonthreatening Student with Pepper Spray May be Committing a Constitutional Offense. Teachers College Record Online, October 5, 2012. Accessible at: http://www.tcrecord.org/content.asp?contentid=16894

Gordon, L. (2012, September 13).
UC to pay settlement in Davis pepper spray case. Los Angeles Times (online edition). http://articles.latimes.com/2012/sep/13/local/la-me-uc-pepper-spray-20120914

Steve Gorman. University of California cop who pepper sprayed student protesters awarded $38,000. Reuters, October 23. Accessible at: http://usnews.nbcnews.com/_news/2013/10/23/21105239-university-of-california-cop-who-pepper-sprayed-student-protesters-awarded-38000
Judy Lin. Linda Katehi, UC Davis Chancellor, Apologizes for Pepper Spray Incident. Huffington Post, November 22,2013.  Accessible at: http://www.huffingtonpost.com/2011/11/22/linda-katehi-uc-davis-cha_n_1107303.html

Jennifer Medina. Campus Task Forces Criticizes Pepper Srpaying of Protesters. New York Times, April 11, 2012. Accessible at http://www.nytimes.com/2012/04/12/us/task-force-criticizes-pepper-spraying-of-protesters-at-uc-davis.html?_r=0

Cruz Reynoso. UC Davis Taskforce Report, March 12, 2012.  Accessible athttp://ahed.assembly.ca.gov/sites/ahed.assembly.ca.gov/files/hearings/1.%20Reynoso%20Task%20Force%20Report.pdf

Smith, D. (2012, September 20). Yolo DA won’t file charges in UCD pepper-spraying. Sacramento Bee (online edition).  http://www.sacbee.com/2012/09/20/4836866/yolo-da-wont-file-charges-in-ucd.html#mi_rss=Our%20Region


Stripling, J. (2012, April 11). Scathing report on UC-Davis pepper-spray incident faults chancellor and police.Chronicle of Higher Education (online edition). http://chronicle.com/article/UC-Davis-Pepper-Spray-Report/131496/