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…

Last nights front line piece was not as one sided as expectst expected.  To view the segment visit: http://www.pbs.org/wgbh/pages/frontline/collegeinc/#

Clearly there were some negative comments made from former employees of a few schools, but overall the segment appeared not completely biased.  What is clear is the necessity and role the for-profit play in helping America again reach the goal of being the nation with the highest college graduation rate.  For-profits spend much more on marketing and utilize more aggressive admissions tactics, but clearly it is what’s needed to gain the attention and help drive the decision to go to college for a growing sector of the population which are not well suited to traditional institutions. 

Other than a few bad employees, some questionable tuition cost benefit equations at a few institutions and some programs of questionable value,  the industry as a whole is providing a beneficial service to the under-served segment of our population. 

I would hope that what comes out of the Govt. sessions addresses only the problems specifically and helps pave way to increased growth opportunity for the majority of the quality institutions.  Using a machete instead of a pair of pruning sheers would be a huge mistake, which would backfire on the educational goals we all share…

Over the last few months both schools and lead generation firms have become increasingly nervous over pending regulation changes.  More schools seem to believe that changes will come effecting cost per lead marketing, most vendors while increasingly stressed just don’t think it will happen.  Arguments can be made against the proposed changes include:

• That lead generators don’t contact/interact with the student prospects
• The the entire process is driven by the prospective student choosing and requesting
• That non-profits buy data on people who aren’t aware and the directly market them
• That the vendors are not in any way involved in the enrollment process
• That the education directories provide a valuable free service for prospective students
• That the lead generators have created much more outreach promoting education

Schools seem to think that if lead gen CPL has to either go away or change that CPC cost per click will remain…that doesn’t make any sense to me as ultimately the value of a click can be identified by conversions just as the value of a lead.  However, many mention that Google CPC is different as they set the price.  Other schools feel that placement fees/clotting fee will become the new normal. 

What do you think?

During long winded negotiated rulemaking for Higher Education, the US DOE proposed defining gainful employment by establishing a 8% debt to income threshold (debt to income is also commonly used for mortgage limits) based on median student debt for recent college graduates with income based either on Bureau of Labor Statistics 25th percentile wage data or actual college graduate earnings. Loan payments would be based on the standard repayment plan (10 years) for the unsubsidized Stafford loan program. For programs that failed to satisfy this standard, the US Department of Education proposed an alternative that requires a loan repayment rate for recent college graduates of 90%. The loan repayment rate measures the percentage of borrowers actively repaying their loans/ and not defaulting. It is a dual to the default rate, but also includes borrowers who are delinquent, in an economic hardship deferment or in forbearance along with borrowers who are in default.

Mark Kantrowitz has written a piece that’s worthwhile reading.  Click the link below to view Marks piece:

http://www.finaid.org/educators/20100301gainfulemployment.pdf