Showing posts with label Laureate Education. Show all posts
Showing posts with label Laureate Education. Show all posts

Monday, September 26, 2016

Department of Education strips the Accrediting Council for Independent Colleges and Schools (ACIS) of its accrediting authority

DOE drops the hammer on ACICS

Last week, the U.S. Department of Education announced that it is stripping the Accrediting Council for Independent Colleges and Schools (ACICS) of its accrediting authority. As Donald Trump might put it, this is a HUUGE deal.

ACICS is the biggest accrediting body for the for-profit college industry. As of last June, ACICS accredited 245 schools enrolling about 800,000 students. All those schools must be credentialed by an accreditation agency approved by DOE in order to obtain federal student aid money. So when DOE decertified ACICS, it put more than 200 for-profit institutions at extreme risk of closing.

Why did DOE take such drastic action against ACICS?

Why did DOE take this drastic action? DOE accuses ACICS of lax oversight of the  for-profit college industry. Two large for-profits filed for bankruptcy recently--Corinthian Colleges and ITT Tech; both companies were accredited by ACICS. Other for-profits have been investigated for fraud, misrepresentation, and high-pressure recruiting tactics.

The industry as a whole has notoriously high student-loan default rates. According to a Brookings Institution report, almost half of a recent cohort of for-profit students defaulted on their student loans within five years of beginning repayment. Ben Miller, a senior spokesperson for the Center for American Progress, approved of DOE's action: "With its lengthy track record of shoddy oversight--that has led to billions of dollars squandered--ACICS had abused the public's trust and could not be allowed to continue granting access to federal dollars."

What will happen to the 200 plus colleges and schools that were accredited by ACICS?

What will happen to the 200 plus for-profit colleges that are no longer accredited by a DOE-approved accrediting body? Assuming ACICS loses its appeal of DOE's decision, which seems likely, for-profit colleges will have 18 months to obtain accreditation by another DOE-approved accreditor.  That will be very difficult to do--especially for small for--profit colleges,  As one West Virginia educator explained: "There aren't thousands of accreditors that schools can go to, there's really just a handful. They all have very specific niches to fill." And those accrediting bodies will likely be deluged with applications from colleges that were formerly accredited by ACICS.

In short, the fall of ACICS will inevitably have a domino effect on for-profit colleges. Those that don't quickly become re-accredited by a DOE-approved agency will lose access to federal student-aid money and will collapse. When the colleges collapse, their students' studies will be disrupted. The vast majority of all for-profit students took out federal student loans to finance their tuition. If their college closes, they will have just two choices:  They can transfer to another institution that will take their former college's credits or they can apply to DOE to have their loans  forgiven under DOE's"closed school" exemption process.

Does DOE have a sinister motive in disrupting the for-profit college industry?

The Obama administration will say its drastic action against ACICS is a justified response to the accreditor's shoddy oversight of the for-profit college industry. And maybe that explanation is sincere.

But why did DOE wait until the waning days of President Obama's second term in office to act? I wonder whether DOE might be intentionally disrupting the for-profit college industry so that inside players can step in and scoop up some faltering for-profit colleges in order to reap huge profits.

When Corinthian Colleges filed for bankruptcy last year, DOE engineered a deal for a subsidiary of Educational Credit Management Corporation to buy some of Corinthian's operations. ECMC's unit bought 56 of Corinthian's campuses for only $24 million. Who benefited financially from that deal?

And Apollo Education Group, owner of the University of Phoenix, is being bought out by a consortium of equity groups led by Martin Nesbitt, President Obama's former campaign manager and president of the Obama Foundation.  Tony Miller, a former Deputy Secretary of Education,  will run the University of Phoenix. Cozy!

Time will tell us what is going on here. The for--profit college industry is a sleazy business, and I have argued repeatedly that DOE should shut it down. DOE's decision last week to strip ACICS of its accrediting authority is a big step toward doing just that.

But if we see more political insiders come in and buy struggling for-profits as Martin Nesbitt is doing with the University of Phoenix, that may be an indication, that DOE's death sentence for ACICS is nothing more than a calculated play to drive down the value of for-profit colleges so that powerful financial interests can scoop them up.

One thing we know for sure: Bill and Hillary Clinton are very close to the for-profit college racket. Bill, we remember, got paid nearly $18 million to serve as "Honorary Chancellor" of Laureate Education Group; and Hillary is tight with Goldman Sachs, which has an ownership interest in a for-profit education company.

Image result for bill clinton and laureate education


Lauren Camera. Education Department Strips Authority of Largest For-Profit Accreditor. U.S. New & World Report, September 2, 2016. Accessible at

Paul Fain. Federal panel votes to terminate ACICS and tightens screws on other accreditors. Inside Higher Ed, June 24, 2016. Accessible at

Jake Jarvis. In wake of ACIS decision, a crisis for WV's for profit schools. Charleston Gazette-Mail, September 25, 2016. Accessible at

Ronald Hansen. Apollo Education sale 'golden parachute' could be worth $22 million to executives. Arizona Republic, March 8, 2016. Accessible at

Rosiland S. Helderman and Michelle Ye He Lee. Inside Bill Clinton's nearly $18 million job as 'honary chancellor' ofr a for-profit college. Washington Post, September 5,  2016. Accessible at

Abby Jackson. An embattled for profit education company partly owned by Goldman Sachs keeps downsizing. Business Insider, June 13, 2016. Accessible at

Patria Cohen and Chad Bray. University of Phoenix Owner, Apollo Education Group, Will Be Taken Private. New York Times, February 8, 2016. Accessible at

John Sandman. Debt Collector ECMC Closes Deal for Corninthian College Campuses., February 9, 2015. Accessible at

Soyong Kim. Apollo teams with Washington insider for education deal. Reuters, January 12, 2016. Accessible at

Tuesday, April 19, 2016

Hillary Clinton's ties to the for-profit college industry: If she becomes President, expect the status quo

The for-profit college industry has had a good run. For years, it has sucked up about a quarter of all federal student-loan money, while only enrolling about 12 percent of the nation's students.

The for-profits have reaped big profits, and why not? Some of them spend more on recruiting than they do on instruction.  Most of their revenues (nearly 90 percent for most for-profit colleges) come from the federal student-loan program, and their docile students passively sign the  loan documents that are pushed in front of them by the for-profits' efficient student processors.

And if anyone accuses them of fraud or misrepresentation--hey, no problem. Most for-profits force their students to waive their right to sue somewhere in the enrollment documents.

For years, the for-profits have greased the wheels on their gravy train by making strategic campaign contributions to important people in Congress and by hiring Washington lobbyists to protect their interests. Everyone from Mitt Romney to Florida Congresswoman Debbie Wasserman Schultz got a little money from the for-profits, and so adequately regulating this gang of pirates is out of the question.

Will things change if Hillary is elected President? It's very unlikely. Here are a few tidbits of information about Hillary and Bill Clinton's ties to the for-profit industry that come from a recent article by Michael Stratford.

  • Bill Clinton worked for Laureate Education, which has for profit colleges all over the world. According to Stratford's article, Bill earned $16.5 million between 2010 and 2014 working for Laureate. In fact, Bill Clinton served as honorary chancellor for Laureate International Universities  until last year, when he resigned  shortly before Hillary launched her campaign. 
  • Hillary earned $225,000 making a speech to Academic Partnerships, a for-profit company that makes big bucks partnering with public universities and turning face-to-face courses into online courses that Academic Partnership oversees. 
  • Several of Hillary Clinton's campaign-fund bundlers have worked as lobbyists for Apollo Group, the parent company of University of Phoenix. (And by the way, Barack Obama's "best friend," Martin Nesbitt, is making plans to buy Apollo Group.)
David Halperin, an investigative reporter who has done a good job reporting on the for-profit industry, praised Hillary for taking a "strong, principled stand against predatory for-profit college companies," but I am highly skeptical.

When I was growing up, I was taught that there are only two kinds of snakes: dead ones and live ones. Similarly, with perhaps a few exceptions, there are only two kinds of for-profit colleges: the ones that exploit the student-loan program to the detriment of their students, and the ones that have closed.

Former President Bill Clinton speaks to students at Laureate’s Universidad Latina in Costa Rica.


Frank Cerabino. Failed medical college was reliable source of campaign money. Palm Beach Post, November 2, 2015.

David Halperin. Top Democratic Lawyer Pushed Pentagon to End U. of Phoenix Suspension. Huffington Post, March 17, 2016.

Richard Rubin. Hillary and Bill Clinton Mad $139 Million in Eight Years., July 31, 2015.

Charles M. Smith and Dina Rasor. For-profit colleges are bankrolling Romney to keep to keep student loan money flowing., June 14, 2012.

Michael Stratford. Hillary Clinton's ties to for-profit education companies. Inside Higher Education, April 18, 2016.