October 27, 2021

Crossing to the Dark Side? An Interview-Based Comparison of Traditional and For-Profit Higher Education

american enterprise institute

American Enterprise Institute recently published a paper on comparison between for profit education and non-profit education.

 

In the past year, for-profit higher education providers have
been thrust into the spotlight. The fastest growing postsecondary
sector has come under unprecedented scrutiny
from policymakers, regulators, and the media. Critics
have zeroed in on a range of concerns, from perceived
dubious recruiting tactics and overblown promises about
students’ future employability to excessive student debt
and problematic default rates. For their part, for-profits
have deployed a formidable lobbying apparatus to argue
that their efforts are being unfairly maligned with applesto-
oranges comparisons that do not do justice to the
important education access they provide to previously
underserved students.
Largely missing from the debate, however, has been a
more detailed look at how traditional and for-profit institutions
differ in important areas like administration,
instructor experience, mission and governance, data collection
and use, and student recruitment and retention.
This paper is an effort to get beyond sensationalized headlines
and examine these questions from the point of view
of individuals who have moved from the traditional to the
for-profit sector—or kept a foot in both. These insiders
highlighted a variety of characteristics they say distinguish
the for-profits where they work from the nonprofit institutions
with which they are also familiar.

Trial, Error, and Measurement. Perhaps the biggest appeal
of for-profits for those who have joined the sector is that
they are relatively new postsecondary institutions—works
in progress in which experimentation is encouraged and
inevitable.

Rethinking the Faculty’s Role.

Practical Instruction and Student Support.

Click Here to read the complete paper

Exclusive Invitation ForProfit EDU group members to attend The Capital Roundtable’s conference on Private Equity at a discount

ForProfitEDU would like to extend an exclusive invitation to you to attend The Capital Roundtable’s conference on Private Equity Investing in For-Profit Education Companies, being held on Thursday, January 12 in New York City.

As a partner, we have the privilege to put your name on our VIP list, allowing you to register for a special rate of $995 — $400 off the standard registration price.

This day-long conference is being chaired by Chris Hoehn-Saric, Senior Managing Director at Sterling Partners, and features 20 experts.

For registration or inquiries, just call Anna Fagan at 212-832-7300 ext. 0, or email her at afagan@capitalroundtable.com. Please be sure to mention our name”ForProfitEDU.com”.

For more details, click link below:
http://capitalroundtable.com/masterclass/Capital-Roundtable-For-Profit-Education-Private-Equity-Conference-2012.html

I hope to see you on January 12 for what promises to be a great day.

Have a Wonderful Holiday!

P.S. Since we expect this conference to attract a strong attendance, please register as soon as possible to reserve your seat.

Is For Profit Education Dead?

for profit education dead?

New article by Michael Clifford on significant Ventures

Some would say that the for-profit postsecondary sector is on its last legs… DOA. Capitalism.” He calls this framework for success his Four Gospels of Higher Education:

Fifteen publicly traded education companies have seen their stocks decline by 33% on average since December 2009 versus a 5% increase for the S&P 500. Media accounts abound of allegations regarding improper practices at publicly traded companies, including marketing misrepresentation and fraudulent reporting of placement rates. Twenty state attorneys general are investigating for-profit institutions. No other sector has been as demonized as the for-profit sector has among state and federal politicians over the past several years.

to read the article in its entirety: http://significantfederation.com/eblast/2011.09.14/landing/

 

Despite inaccuracies & heavy criticism, Department of Education Moves Ahead With ‘Gainful Employment’ Rule

Well so many of us tried & cried but it looks as though it’s moving ahead…

In its campaign to block the adoption of a new federal rule measuring how colleges prepare students for “gainful employment,” the for-profit-college industry and its allies have attacked the credibility of the Department of Education, questioning the processes it has followed in developing the new regulation and its competency in managing the kind of data that could eventually be used to cut off vital federal aid.

But despite the well-heeled opposition and recent evidence that the message is taking root — fueled in part by notable missteps by the Education Department in calculating data on default rates and by the yet-to-be explained errors of the Government Accountability Office in its widely publicized undercover investigation of several for-profit colleges — a retreat on the rule isn’t looking likely.

That became clearer last week when the department confirmed that it had made final revisions to the proposed gainful-employment rule and sent it on to the White House Office of Management and Budget, the final stop before it is made public in the Federal Register.

Click link below for full article text.

THE CHRONICLE OF HIGHER EDUCATION

Source:
The Chronicle of Higher Education

 

EDU PE conference standing room only

The capital round table event last week at the University Club was standing room only.  They had to bring out additional tables to accommodate the surge in attendance.  Lots of strong speakers, companies & industry power players delivered yet another strong event.  Clearly the most influential gathering of PE investing in education and educational service companies. 

Here were a few of the speakers:

CHAIRED BY

 Bruce A. Eatroff, Partner

Halyard Capital

  •  Diane Auer-Jones, Career Education Corp.
  • Jonathan P. Barnes, Halyard Capital
  • Jay N. Bartlett, Parthenon Group LLC
  • Erik L. Brooks, ABRY Partners LLC
  • William C. Clohan, Assoc. of Private Sector Colleges & Universities
  • John F. Cozzi, AEA Investors LP
  • Christopher L. Curran, Education Growth Partners
  • Lincoln E. Frank, Quad Partners LLC
  • Marcelo Gigliani, Apax Partners LP
  • Michael B. Goldstein, Dow Lohnes PLLC
  • James J. Goll, BMO Capital Markets Corp.
  • Jonathan N. Grayer, Weld North LLC
  • Carter W. Harned, Leeds Equity Partners LLC
  • Robert Lytle, Parthenon Group LLC
  • Jonathon Newcomb, Coady Diemar Partners LLC
  • Jason Palmer, Kaplan Ventures
  • Chip Paucek, 2tor Inc.
  • Nina S. Rees, Knowledge Universe Education LP
  • Jason Rosenberg, Sterling Partners
  • Kenneth D. Salomon, Dow Lohnes Government Strategies LLC
  • Joshua N. Schwartz, East Wind Advisors LLC
  • Jeffrey M. Silber, BMO Capital Markets Corp.
  • Jason Stoffer, Maveron LLC
  • Peter O. Wilde, Providence Equity Partners LLC

Huffington Post Article about Kaplans “Bad Practices”

 

The Huffington post recently posted a strikingly negative article about Kaplan.  Link to article is below.  The industry is clearly headline material for tv, print and online articles all unfortunately negative, why cant the industry get some positive press?  Any of us who have actually been to a graduation at a forprofit school can attest to the lives that have been changed as well as the appreciation from the families and friends.   

At Kaplan University, ‘Guerilla Registration’ Leaves Students Deep In Debt

http://www.huffingtonpost.com/2010/12/22/kaplan-university-guerilla-registration_n_799741.html?page=1 adamlane

BMO Conference was Packed as expected!

Yesterday was the BMO annual Back to School conference in NYC.  As expected in this active political climate relating to the sector,  it was packed.  First I want to congratulate BMO for the excellent job they did, they not only put out a great agenda with the top tier participants, they also provided a quality environment for networking, private discussions and of course plenty of food & beverage. 

Almost every session was standing room only with people listening closely to what the power players were saying relating to current operations, government proposed changes and the potential effects on their businesses.  Also it was great to hear such organized demonstrations of the faults inherent within the proposed rule making.  I only wish many of the news outlets would broadcast those messages before the proposed changes become rules.  While CNBC was there networking and doing some interviews we have yet to see many of the concrete negative attributes of the proposed changes made public with the national media.  Hopefully that will change soon. 

Clearly there are many conflicts with the governments intended goals regarding educating America and the actual negative outcomes the proposed rules will result.  Who is going to push the value of college to those consistently neglected.  Who is going to take the risk of trying to educate those who need it most, but represent the biggest default risk?  Clearly there are many conflicts with the discussions relating to the cost/waste of tax payers money on the forprofits and the reality of actual cost to the tax payer without them.  Clearly they are not comparing apples to apples with the facts and figures, rather shouting sound bites and political buzz words to seek attention in the active political climate.

Also, Steve Eisman the industry short attended some of the conference, what are the odds his mind was open to any of the data presented…

University of phoenix & nexus research first report on most efficient systems of higher education

Two years ago, the founders of the University of Phoenix announced plans that they were going to create an independent, nonpartisan research institute to examine significant educational issues affecting nontraditional students and for-profit higher education. Industry analysts, excited to get a peek into the loads of data that Phoenix and other proprietary institutions track about their students and teaching methods,were excited about the news.

The report, “For-Profit Colleges and Universities: America’s Least Cost and Most Efficient System of Higher Education,” lofts praises of the University of Phoenix and other for-profit colleges. It postures that many of the problems of the industry highlighted in Congressional hearings and flow of negative news accounts are not systemic, and also dishes an attack on traditional colleges as “studies in inefficiency.”

the full report is available here: http://nexusresearch.org/1/NexusStudy8-31-10.pdf

Apollo group’s position paper on Higher education

The Current State of Higher Education in America and the Vital Role of Proprietary Colleges and Universities

Gregory W. Cappelli Co-Chief Executive Officer of Apollo Group and Chairman of Apollo Global

America is at a crossroads with respect to how the nation’s higher education system will adapt to meet the needs of today’s learners.  

At Apollo Group, we are concerned that the country will not meet the national education goals set forth by President Obama without an adaptable postsecondary system that operates differently than it has in the past–a system that embraces diversity and innovation.

More Americans than ever need a college degree and are seeking access to higher education. 

Jobs today require higher education, yet out of 132 million people in the labor force, more than 80 million don’t have a bachelor’s degree, and 50 million adults have never even started college. These individuals are increasingly looking for ways to remain competitive and advance in their careers in today’s global economy.

Those seeking access to higher education are less prepared than in the past and require greater support.

High school dropout rates are now approximately 55% in many major cities like New York and Los Angeles. Even more concerning, many students who do graduate cannot perform at the twelfth grade level in reading or math.

Over 70% of today’s students are now categorized as “non-traditional” students.

Our colleges and universities must meet the needs of today’s learners who have families and professional obligations that make it incrementally challenging to pursue a college degree.

Traditional colleges and universities are the backbone of the U.S. higher education system, but they alone cannot meet the country’s needs.

This system, which is exclusive by design, was built to meet the needs of a different era when only a small portion of the nation’s workforce needed a college degree. Today’s globally competitive, knowledgebased economy requires a more broadly educated society.

President Obama has set forth three important goals for the U.S. higher education system which are critical to the country regaining its standing as a global leader in education.

 On a sobering note, we estimate that without proprietary schools, meeting these goals would cost U.S. taxpayers more than $800 billion over the next ten years.

Accredited, degree-granting proprietary institutions, which have been a strong source of innovation, play a critical role in the future of education.

These institutions provide access to students who previously have been left behind by or excluded from the traditional higher education system. Well managed proprietary institutions can meet the demand for education at a significantly lower cost to society.

Link to the complete white paper: http://www.apollogrp.edu/Investor/Reports/Higher_Education_at_a_Crossroads_FINALv2[1].pdf

“Sector Under Siege?”,

An article with that title was published on the website Inside Higher

Education.  In their opinion the gainful employment rule is expected to be excluded from next

week’s education proposal.   The article outlines that the Office of Management and Budget

included a note in the Federal Register concluding that the DOE’s proposed program integrity

rules could have a major economic impact, a designation that would require the DOE to

strengthen the evidence necessary to justify the need for the regulation.  Furthermore, the article mentions

that the designation is believed to be a major reason why the DOE has (according to reports

from several sources Thursday, though unconfirmed by department officials directly) decided

to omit the gainful employment proposal from the proposed regulations expected to be

released next week.  This if the outcome follows the assumption will bring smiles to many of the faces I saw at last

weeks CCA.  Lets hope!