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

Listen to podcast: 5 Things For-Profit Colleges Do WELL When Recruiting Students

The for-profit colleges have really gone throught the ringer lately, especially with the recent report released by the Government Accountability Office which uncovered some fairly questionable admissions marketing practices that some of these colleges are supposedly engaging in. While I think these colleges need to address these issues and ensure these tactics are not being used, I worry this bad press is going to overshadow the good things the for-profit colleges are doing and be yet another excuse for the not-for-profit colleges to refuse to adopt some of the admissions marketing tactics the for-profit colleges have been so successful with. 

I’ve put together this podcast to outline five lessons that can be learned from the way for-profit colleges recruit their students. This is the first podcast from us, so please let us know how you like it.

Happy Hunting!

 Elizabeth Kraus

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

Nelnet will pay $55-million to settle its share of a whistle-blower lawsuit that accuses it and several other lenders of defrauding taxpayers of more than a billion dollars in student-loan subsidies.

The settlement, which Nelnet announced late Friday, is the latest to result from a lawsuit brought by Jon H. Oberg, a former Education Department researcher, on behalf of the federal government.

Rerad the article: http://chronicle.com/article/Nelnet-to-Pay-55-Million-to/123912/?sid=at&utm_source=at&utm_medium=en

Clearly the Senate hearings and public outcry relating to the for profits have resulted in many schools taking notice of the potential exposure and negative attention that could arise if their schools are targeted.  Management teams are weary and Board members are nervous.  Investors as usual are still fearful.  The result is an increased push toward aggressive self policing and investigation.  The thought is that we need do a better job of internal checks and balances to be able to identify and remove any & all bad apples before someone else does it publicly.   The good news is that third parties can help  schools do this on a consistent basis.  Feel free to reach out to us if you would like some assistance in this area, we would be happy to give free advice and introductions.

  If you are a third party and would like to be listed as a service provider in this area please email us: info (at) forprofitedu.com with your URL, contact info and references.  Sorry companies without validated references WILL NOT be listed!

During the Senate hearing the investigator/auditor claims that all schools involved (12) had fraudulent interactions with the fake students/mystery shoppers with hidden cameras.  They pointed out 3 good interactions.  In his summary he said he believes that the general practices of for profits are fraudulent and misleading, under his breath he did mention it was not a scientific and statistical survey.  This is clearly a biased testimony siding with the opinion of who engaged him to do so. 

6 out of 15 times the prospective student was not allowed to speak with financial aid unless and until the signed the enrollment forms, even after repeatedly asking to speak with financial aid.

Many of the Senators however have been stressing the benefits of the for profits and the real goal of graduation rates and they have in some instances stressed how well the for profits in their states have done in comparison to the non profits.

One came out and suggested that the scrutiny be not solely on the for profits but also on the traditionals: http://help.senate.gov/newsroom/press/release/?id=fc74d517-7ca8-438a-9a24-b5c1d1f12752&groups=Ranking

During the closing remarks it became clear that the accrediting agencies are next on the list to be scrutinized

Sen Al Franken today sat on his pedestal and ranted that non profits/traditional should not be investigated as the for profits are…  why not?  If the majority of pell grants and title IV go to the non profits/traditionals why not look at them as well.  Clearly the non profits/traditionals have been lobbying to keep themselves clear from any investigation.  Why doesn’t someone mystery shop some of the traditionals???

Full Committee Hearing – For-Profit Schools: The Student Recruitment Experience

Witnessesreturn to top

Panel I

• Gregory Kutz , Managing Director, Office of Forensic Audits and Special Investigations, U.S. Government Accountability Office, Arlington, VA

Panel II

• David Hawkins , Director of Public Policy and Research, National Association for College Admission Counseling, Arlington, VA
• Michale McComis , Executive Director, Accrediting Commission of Career Schools and Colleges, Arlington, VA
• Joshua Pruyn , former Admissions Representative, Alta College, Inc., Denver, CO

When it was announced that EDMC had selected the small firm double positive as it’s agency of record, many people seemed confused.  At leadscon last week many of the industries largest marketers and agencies were wondering how that happened.  Other however seemed to clearly understand.  The theory isthat they were selected because of the advertising.com connection, in essence a senior exec of double positive was previously the point man for the apollo exclusive with advertising.com.  Clearly EDMC as well as the online unit are being run by former UoP exec’s and thus they pushed the deal thru with doublepos.  Interesting though we all know how the UoP deal with ad.com turned out….. hence their purchase shortly thereafter of aptimus.  Could they be simply doing a try and buy with double positive…

Chumley’s General Session Focuses on SaaS Computing to Help Schools
Drive Revenue, Enrollment and Profitability

Denver, CO – July 7, 2010 – TopSchool’s Vice President of Product Management, Chris Chumley, will be presenting a general session at the upcoming Pennsylvania Association of Private School Administrators (PAPSA) annual conference in Harrisburg, PA. Chumley’s presentation, “SaaS Computing: Best Practices for Increasing Revenue, Enrollment and Profitability,” will take place on Wednesday, July 28, 2010 at 3:10 p.m. Eastern Time.

Chumley will explore successful strategies in using Software as a Service (SaaS) Computing to help schools create competitive advantage, increase revenue, address new markets and build operating efficiencies and improved profitability. Topics will include:
• Leveraging SaaS Computing as an innovative means to reduce IT spending and redirect savings to¬ward improving the business.
• Using SaaS Computing to strengthen an institution’s financial viability, better positioning an institution for M&A activity.
• Combining SaaS Computing with other IT management techniques to drive massive ROI.
• Implementing SaaS Computing to be more agile in addressing new markets quickly and easily.

Chris has spent the last 13 years focused on educational technology both in academia and on the consulting/corporate side, gaining deep insight into their collaborative initiatives. He has extensive experience implementing large student data systems and therefore a wealth of knowledge when it comes to the importance of flexibility and next generation technology. Chris joined TopSchool in 2008 and leads all product management activities, delivering a system that goes beyond a traditional college student information system to better manage and report on data. Prior to TopSchool, he was with Exeter Consulting leading the implementation of student information systems at large public universities.

The Pennsylvania Association of Private School Administrators (PAPSA) represents the more than 320 private career colleges and schools in the Commonwealth before the legislature, state agencies and professional associations. PAPSA is the only association representing all for-profit colleges and schools in Pennsylvania. For more information about the PAPSA event, please visit www.papsa.org.

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