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"Ready for Change.edu? January 11, 2012 - 3:00am By Paul Fain Andrew S. Rosen takes the long view when talking about higher education. As CEO of Kaplan, Inc., he often defends the role of for-profit colleges in an evolving marketplace, peppering versions of his stump speech with tales about the creation of public universities and community colleges. His point is that some skepticism about for-profits is similar to the snobbery those older sectors faced from elite private higher education. Rosen goes further in his debut book, Change.edu: Rebooting for the New Talent Economy, which attempts to paint a picture of higher education's future as well as its history. He also takes a turn as a journalist of sorts - an interesting twist for the former general counsel of the Washington Post Co. - writing about his campus visits to other institutions, a couple of which are Kaplan competitors. The book is ambitious in its scope, particularly for an author with obvious vested interests. But most reviewers have given Rosen high marks. Kirkus Reviews writes: "Incredibly, his argument never comes off as self-serving; the author's thorough exploration of 'Harvard Envy' and the rise of 'resort' campuses is both fascinating and enlightening." Rosen recently answered questions over e-mail about his book, which was released by Kaplan Publishing. Q: The book arrives amid a series of challenges for your industry. What did you hope to accomplish by writing it? A: I've spent most of my life studying or working in education, with students of all ages and preparation levels: top students from America's most elite institutions and working adults and low-income students who have few quality choices to change their lives. I've come to see how the American higher education system (as with K-12) is profoundly tilted in favor of those who already have advantages. Our society keeps investing more and more in the relatively small and unchanging number of students who have the privil

"University Ventures Letter Volume II, #2 Announcing University Ventures Thirty years ago America was an economic basket case. The official unemployment rate in 1982 exceeded 10%, but apples-to-apples unemployment (counting it the way we do today) was over 16%. Inflation was north of 6% and the prime interest rate reached 21.5% in June 1982. Things weren't much better in the UK where deindustrialization had resulted in unemployment over 20% in many regions, and where the 'workshop of the world' became a net importer of goods for the first time ever. It's always darkest before the dawn. So few recognized we were on the verge of a revolution in information technology that would drive productivity increases across almost all industries and create new ones over the next two decades. If there's any consensus at all in today's debate about how to rekindle economic growth, it's the importance of education, and particularly higher education. We need more educated workers to innovate and increase productivity. Not coincidentally, the largest industry that has not seen much in the way of productivity improvements since 1982 is education. All but a handful of the 170 million students currently enrolled at tertiary institutions around the world are learning the way their parents and grandparents learned (often learning virtually the same curriculum). The 'sage on a stage' model remains unchanged, and the well over $1 trillion in annual spending on higher education continues to be directed to the same functions. And so the stage (if not the sage) is set for the world to focus on higher education as it never has before, and for dramatic changes in programs, delivery models, costs and learning outcomes. While the private sector will play a key role in this next revolution, it cannot succeed alone. Traditional universities and colleges - public and private -- will be the crucibles of change, in partnership with entrepreneurs and companies. The

"Is Education a Public Good or a Private Good? January 18, 2011, 10:02 am By Sandy Baum and Michael McPherson Advocates for more generous support of students frequently bemoan what they perceive as a social shift from viewing higher education as a "public good" to viewing it as a "private good." What they mean is that the public gets benefits from people going to college and should not be transferring responsibility for the costs of education to students themselves. This conversation would be more constructive if its terms were more clearly defined and its categories less starkly delineated. The concept of public goods is central to economic analysis of the role of government in the allocation of resources. Public goods are defined by two characteristics: 1) Non-excludability: It is not possible to exclude non-payers from consuming the good. 2) Non-rivalry in consumption: Additional people consuming the good do not diminish the benefit to others. National defense and mosquito control are standard examples of public goods. The military cannot exclude from protection individuals who fail to pay their taxes. If the neighborhood is sprayed for mosquitoes, everyone in the area will benefit, whether or not they have paid. Moreover, I am no less safe if you are also protected by our army and get no additional mosquito bites just because you are also free from the pests. Not many goods are perfect public goods. Some have one characteristic or the other. It is difficult to impose tolls on city streets (the streets are for the most part non-excludable), but traffic congestion is obviously a problem (rivalry). On the other hand, it is easy to prevent people who do not pay from entering a half-empty concert hall (excludable) but their presence (assuming they are well-behaved) would not diminish the enjoyment of those who are listening (non-rival). Higher education is not a pure public good. It is clearly possible to exclude people who do not pay. What people who

"January 31, 2012 'Change.edu' and the Problem With For-Profits 'Change.edu' and the Problem With For-Profits 1 Kaplan Andrew S. Rosen, chief executive of Kaplan and author of a new book on for-profit colleges Enlarge Image By Robert M. Shireman It is clear that Andrew Rosen, the chief executive of Kaplan, wants to leave readers of Change.edu with the idea that for-profit colleges are innovative, efficient, and effective in serving people left out by traditional higher education, and that their bad reputation is the result of unfair attacks. I picked up Rosen's book wanting to see how the power of the market can transform the enterprise and improve student learning. Instead, I am now more concerned about the hazards of for-profit colleges than I was before. The eye-opening, gasp-inducing elements involve Rosen's descriptions of the intense pressures on company executives to produce quick, huge profits for investors by shortchanging students. "An investor who wants to make a quick hit can, at least theoretically, buy an institution, rev up the recruitment engine, reduce investment in educational outcomes," and deliver "a dramatic return on investment." The nefarious temptation is not just theoretical, though, and Rosen says so when he introduces the case of abuses by the Career Education Corporation. "There will always be some leaders who choose to manage for the short term ... particularly when they hold the highly liquid equity stakes that the leadership of private-sector institutions sometimes receive as part of their compensation. This isn't a theoretical issue; it has happened." The word "always" concerns me. Always as in: This can't be fixed? And how many are the "some" who would eagerly dismiss student needs in the pursuit of a rapid, profitable expansion? I would have liked to hear that the contrasting example to CEC is the for-profit college where the investors are committed to the long term and never bring up the idea of a get-rich-quick scheme tha

"Another College Is Sold to a For-Profit May 24, 2010 Lambuth University, a Methodist institution in Tennessee, announced Friday that it has agreed to be sold to private investors, but declined to name the group that is taking over the institution. A week ago, the university said that if it failed to reach a deal by Friday, there was a danger of closure and of failing to meet payroll. Assuming the deal goes through, Lambuth will be the latest example of a financially struggling private college agreeing to be bought out by a for-profit group. Just two months ago, a new for-profit company bought Dana College, a Lutheran liberal arts institution in Nebraska. Share This Story * Bookmark and Share * E-mail * Print Related Stories * Union Push in For-Profit Higher Ed May 24, 2010 * Comparing Higher Ed to Wall Street April 29, 2010 * Pushback on Gainful Employment April 22, 2010 * Going Ahead With Gainful Employment April 21, 2010 * Unnatural Acts April 8, 2010 FREE Daily News Alerts Advertisement The statement announcing the sale said that "President Bill Seymour told the board that this was the best proposal Lambuth has received throughout its year-long process of searching for a suitable partner." The statement also said that the university should be able to submit documents about the shift to its accreditor, the Southern Association of Schools and Colleges, in time for a June review of the change in ownership. Transfer of accreditation from a regional accreditor such as SACS is typically a key enticement for for-profit entities considering the purchase of a private nonprofit college. While changes in ownership subject colleges to an additional accreditation review, such a shift is generally considered far easier than starting from scratch to earn initial accreditation. Some critics charge that these accreditation shifts are a serious loophole in oversight of higher education and that a purchase of a

"Gates Wikipedia University? June 10, 2011, 12:42 pm By Richard Vedder I received an e-mail from James Loynd recently, commenting favorably on an appearance I made on PBS's News Hour. Mr. Loynd asked, "What if the best professors in every department were to video tape their lectures? A student could them work his/her way towards a degree off campus. Even chat-room discussions with grad students could assist the students. Testing could be…not necessarily on campus, maybe even at your local YMCA." Of course, this is not the first time the idea has been suggested, but the question arises: Why are we not moving aggressively to do something like this? More specifically, why doesn't someone-say, the Gates Foundation-hire 100 or so stellar professors in 20 disciplines to offer perhaps 150 to 200 absolutely superb courses online, with testing administered by an outside agency (say, the ACT, SAT, or Underwriter's Laboratories)? Even paying each professor $100,000 per course and allowing for 100 percent overhead, this would cost $30- to $40-million. There would be some expenses for administration and a need to redo lectures every few years, but the whole thing is within the financial capacity of several foundations in the private sector. The upshot would be that a student taking about 32 of the courses would have the equivalent of a B.A. degree, and it could be offered to the student free (with modest per-student private or government subsidies) or at very modest cost. If someone proposed to do this, of course, there would be all sorts of objections. Some would argue you need more disciplines included, more courses, etc. And who would accredit the institution issuing the degree? Most such objections are trivial or bogus-for example, a college student does not have to be offered detailed study in every discipline in order to acquire a body of knowledge over roughly a four-year period that is the equivalent of a decent-quality bachelor's degree. Some fu

Breaking Bad Habits: Navigating the Financial Crisis by Dennis Jones and Jane Wellman The "Great Recession" of 2009 has brought an unprecedented level of financial chaos to public higher education in America. Programs are being reduced, furloughs and layoffs are widespread, class sizes are increasing, sections are being cut, and students can't get into classes needed for graduation. Enrollment losses upwards of several hundred thousand are being reported-and only time will tell whether the situation is even worse. Reports of budget cuts in public institutions in the neighborhood of 15 to 20 percent (Pennsylvania, Virginia, New York, Florida, and California) are becoming common. Halfway through the 2009-2010 fiscal year, 48 states were projecting deficits for 2011 and 2012 (NASBO, 2009). Although states are reluctant to raise taxes, they evidently have less of a problem letting tuitions go up. And up they are going-California, Oregon, Washington, New York, Wisconsin, and Florida announced increases ranging from 10 to 33 percent. The normally tuition-resistant Florida legislature has authorized annual increases in undergraduate tuitions of 15 percent per year until they reach national averages for public four-year institutions. Around the country, the increases are setting off student protests reminiscent of the 1960's, variously directed at campuses, system boards, legislatures, and governors-complete with reports of violence and arrests. The New Normal Higher education has been through tough times before. The pattern of the last two decades has been a zigzag of reductions in state funds for higher education during times of recession, followed by a return to revenue growth about two years after the state coffers refill. But resources have not returned to pre-recession levels. So the overall pattern has been a modest but continuous decline in state revenues. Caption: Percent Change in Appropriations for Higher Education, 1960-2006

"A New Model Community College January 4, 2011 When for-profit companies team up with traditional colleges to offer instruction, many academics object. The Princeton Review inked a deal to offer a nursing program for a Massachusetts community college last year, and faculty unions scoffed that the high price students must pay for the program violated the traditional community college mission of open access and public accountability. Critics said the same about Kaplan's failed deal to take on California students locked out of financially strapped community colleges. In contrast, there has been relatively little controversy over a different kind of partnership between a company and a private college: a joint effort of Tiffin University, a small private institution in northeast Ohio, and Altius Education, a for-profit company based in San Francisco. In 2008, Tiffin and Altius opened Ivy Bridge College, an online community college that offers a general studies associate degree program targeted at traditional-age students who wish to transfer to four-year institutions. Though tuition for an academic year of full-time study is $9,450, which is considerably more than a typical community college would cost, financial aid is available. Tiffin handles the academics - its accreditation extends to Ivy Bridge - and Altius handles the enrollment management."

"January 19, 2011 For Some Colleges, the Road to Growth Is to Go Hybrid By Goldie Blumenstyk Keiser University's announcement last week that it would convert from profit to nonprofit status is a reminder that ownership status doesn't necessarily define a college. Some for-profits operate like nonprofits and "there are nonprofits that look just like for-profits," says Arthur Keiser, the university's co-founder. Even more than that, the conversion is a reminder of the fluidity of the sector and the variety of new ownership models now popping up on the higher-education landscape. They include models like Ivy Bridge College, an online, associate-degree division of Tiffin University that is majority owned by private investors now operating under Tiffin's accreditation, Middlebury College's new language company created in partnership with a publicly traded technology company called K12, and the TCS Education System, an entrepreneurial consortium of both for-profit and nonprofit divisions that was formed last year by the fast-growing Chicago School of Professional Psychology. The sector hasn't yet hit the point at which it's hard to tell the for-profit colleges from the nonprofit ones without looking at their tax returns, but that day may not be all that far off. All of those arrangements are "part of the cutting edge" says Bernard Luskin, a longtime college administrator who is now working with the nonprofit Touro University to rebuild its online-education programs. (Touro sold its online division, TUI, to private-equity investors in 2007.) Public financing and philanthropic support are getting tighter and tighter, Mr. Luskin notes, and "that makes it pretty hard to grow" without these kinds of alternatives."

Private Gains, Public Stagnation March 7, 2011 The median base salary increase for faculty members in 2010-11 was 1.1 percent, with increases of 0.0 percent at four-year public institutions and 2.0 percent at private institutions, according to a report being released today by the College and University Professional Association for Human Resources. For public institutions, this is the second year in a row where the median increase is no increase at all. The median increase for faculty members at private institutions last year was 0.1 percent, so that sector is seeing a real rebound this year. In 2008-9, private institutions also outpaced publics in the size of the median increase in faculty salaries -- 4.0 percent to 3.5 percent.

"January 23, 2012 Outlook for Higher Education Remains Mixed, Moody's Says By Scott Carlson In a report released on Monday, Moody's Investors Service sticks with the mixed outlook for higher education that it established last year: For leading colleges that are well managed and diversified, the market is looking stable. For the rest, not so much. The outlook report, which is released annually at the beginning of the year, says that a majority of colleges-those dependent on tuition or state money-will continue to face challenges in the next 12 to 18 months. Those challenges will, in part, stem from the public's scrutiny of rising tuition and from pressures to keep it down. Analysts at the credit-rating agency also expect demand to rise for admission to the largest and highest-rated institutions, while other colleges may struggle to attract students. The Occupy protests and other events have put intense focus on college tuition. "Tuition levels are at a tipping point, and the cost of college will be a critical credit factor for universities to manage long-term," the report says. "We expect that the pace of future net tuition revenue growth, both on a total and a per-student basis, will be much lower than the strong growth experienced over the past 10 years." A declining yield in admissions is troubling trend, the report notes. Many colleges may appear more selective, but only because more students are applying to more colleges. "Median freshman yield rates (percentage of accepted freshmen who chose to enroll) at both private and public universities have steadily declined over the past five years, highlighting increased competition," the report says. "The trend of declining yield is particularly notable for the lower-rated private colleges, which are increasingly competing with lower-cost public colleges and feeling the most pressure to slow tuition increases and offer more tuition discounting." Demand for some graduate and professional programs, particularly

"Venture Fund for Traditional Colleges January 17, 2012 - 3:00am By Doug Lederman The space between nonprofit and for-profit higher education gets a little more crowded today. University Ventures Fund, a $100 million investment partnership founded by a quartet of veterans of the for-profit and nonprofit education sectors, is the latest entrant in a market that aims to use private capital to expand the reach and impact of traditional colleges and universities. The fund, whose two biggest investors are the German media conglomerate Bertelsmann AG and the University of Texas Investment Management Company, is focused on stimulating "innovation from within the academy," rather than competing with it from the outside, David Figuli, a lawyer and partner in University Ventures, said in an interview Monday. The projects will include helping institutions expand the scale of their academic programs, re-engineer how they deliver instruction, and better measure student outcomes; the first two investments, also announced today, will be creating a curriculum through Brandman University aimed at improving the educational outcomes of Hispanic students, and a company that helps universities in Britain and elsewhere in Europe deliver their courses online. "Most of the attempts to bring about innovation in higher education have come from people trying to buy their way in," Figuli said, citing the many takeovers of traditional institutions by for-profit colleges over the last decade (quite a few of which he helped engineer). "Our way is to find good ideas within the existing institutions and fund those." Figuli, a former general counsel for the South Dakota and Montana university systems, said he and his partners don't buy the critiques of traditional postsecondary institutions as unimaginative or fearful of change. "I've been in higher education for 30-some years, and most of the nonprofit institutions I've worked with have been frustrated by the fact that they're capital-constra

"Outsourced Ed: Colleges Hire Companies to Build Their Online Courses Michael Tricoli, a manager at a medical-device company who has a young daughter, wanted an M.B.A. He got one online from Northeastern U., which outsourced much of his college experience to a private company. By Marc Parry Michael Tricoli was a middle manager looking for a leg up in his career, so he got an online M.B.A. from Northeastern University. Well, not only from Northeastern. Much of his college experience was outsourced to a private company. The company, Embanet, put up millions to start the online business program. Its developers helped build the courses. Its staff talked Mr. Tricoli through the application. It even pays-and, in rare cases, refers for possible hiring-the assistants who help teach students. In exchange, Embanet gets what Northeastern's business dean calls "a sizable piece" of the tuition revenue. He won't say how much. But Embanet's chief executive says its share can swell to a whopping 85 percent. As more colleges dip their toes into the booming online-education business, they're increasingly taking those steps hand-in-hand with companies like Embanet. For nonprofit universities trying to compete in an online market aggressively targeted by for-profit colleges, the partnerships can rapidly bring in many students and millions of dollars in new revenue. That's becoming irresistible to an increasingly prominent set of clients. George Washington University, Boston University, and the University of Southern California, to pick just three, all work with online-service companies. But the new breed of online collaboration can tread into delicate academic territory, blurring the lines between college and corporation. Derek C. Bok, a former president of Harvard University and author of a book on the commercialization of academe, questions companies' encroachment into teaching. He worries that bottom-line thinking will drive decisions about how colleges deliver courses.

"Fixing the Broken Financing Model October 4, 2010 By Darryl G. Greer and Michael W. Klein In the title of a recent paper, David Breneman, a regarded higher education economist, asks: "Is the Business Model of Higher Education Broken?" While he objectively weighs the pros and cons of his question, we answer emphatically, yes! Put simply, the way in which America finances public colleges and universities, which serve over 70 percent of college students nationally, is severely and irreparably broken and needs to be changed. Without a new model, public higher education will fail its principal purpose of providing broad college opportunity, especially to low- and middle-income students and an emerging population of new Americans. Moreover, without a new funding rationale that has transparency and predictability for all funding partners, these colleges will lose the public trust - a critical element in sustaining the American democratic experience through education. Public colleges can achieve the dual goals of public and private benefits only by demonstrating equity and fairness regarding who goes to college; legitimacy for who pays and how; and responsibility for how colleges account for educational outcomes and sustaining the public trust. The solution as we see it should include a new public service corporation model that creates private partnerships; produces new revenue to replace lost public financing; protects and enhances the core educational enterprise; and, thereby, generates greater transparency, accountability and public trust that will support a sustained investment in public colleges. The Problem There is widespread evidence, in addition to opinion, that the longstanding model for financing public colleges that has seemed to work so well in many states for decades, now seems, even with an expected economic recovery, to need radical change. (See the soon-to-be-published "A New Model of Financing Public Colleges and Universities," in On the H

"Six years ago, there were almost three times as many students enrolled in private nonprofit colleges as there were at for-profit institutions. By 2008-9, that ratio had slipped to about 2 to 1. That is just one of many indicators, in data released by the U.S. Education Department Tuesday, of the boom in the sector of higher education alternatively called for-profit/private sector/corporate. The report from the National Center for Education Statistics, "Enrollment in Postsecondary Institutions, Fall 2008; Graduation Rates, 2002 and 2005 Cohorts; and Financial Statistics, Fiscal Year 2008," also provides an initial peek (from a point relatively early in the recession) at how the continuing economic downturn has begun to reshape the enrollment and financial picture of higher education. "

"The Internal Revenue Service's 79-page report on colleges' tax compliance was a thorough reminder of just how big and complex higher education has become. That complexity affirms the concerns of some higher-education experts that many large research universities are placing too much priority on activities that raise the profile and prestige of their institutions but do little to improve undergraduate education. Such activities include contracts for private research and public-private partnerships to market new patents. "In some of these places, undergraduate education has never been a top priority," says Jane V. Wellman, executive director of the Delta Project on Postsecondary Education Costs, Productivity, and Accountability. The issue is whether the increasing amount of support coming from sources outside state tax dollars "is causing these institutions ... to move away from their public mission. The answer in too many cases is, unfortunately, yes.""

"February 13, 2011 Scholars Question New Book's Gloom on Education Doubts are raised about study behind 'Academically Adrift' Scholars of Education Question the Limits of 'Academically Adrift' By David Glenn It has been a busy month for Richard Arum and Josipa Roksa. In mid-January, the University of Chicago Press published their gloomy account of the quality of undergraduate education, Academi­cally Adrift: Limited Learning on College Campuses. Since then the two sociologists have been through a torrent of radio interviews and public lectures. In the first days after the book's release, they had to handle a certain amount of breathless reaction, both pro and con, from people who hadn't actually read it. But now that more people in higher education have had time to digest their arguments, sophisticated conversations are developing about the study's lessons and about its limitations. Many college leaders are praising the ambition of Mr. Arum and Ms. Roksa's project, and some say they hope the book will focus new attention on the quality of undergraduate instruction. When the authors spoke last month at the annual meeting of the Association of American Colleges and Universities, in San Francisco, the ballroom far overfilled its capacity, and they were introduced as "rock stars." But three lines of skepticism have also emerged. Fiirst, some scholars say that Academically Adrift's heavy reliance on the Collegiate Learning Assessment, a widely used essay test that measures reasoning and writing skills, limits the value of the study. Second, some people believe the authors have not paid enough attention to the deprofessionalization of faculty work and the economic strains on colleges, factors that the critics say have played significant roles in the ero­sion of instructional quality. Third, some readers challenge the authors' position that the federal government should provide far more money to study the quality of college learning, but should not otherwise do mu

"January 17, 2012 Investors Backed by Publishing Giant Team Up With Calif. University to Start a Bilingual College By Goldie Blumenstyk A $100-million investment fund backed by the German publishing and media giant Bertelsmann and the endowment for two Texas public university systems is jumping into higher education with two ventures aimed key markets. One is a new bilingual college aimed at Hispanic students, in partnership with an affiliate of Chapman University. The other is a new London-based distance-education company that will assist European universities in creating, marketing, and managing online courses and degree programs. For the yet-to-be-named Hispanic-serving college, the new fund, called University Ventures, will form a partnership with Brandman University, an 11,000-student nonprofit institution now known for serving working adult students at its 25 campuses in California (plus one in Washington State) through online and face-to-face courses. Once known as Chapman University College, it was separately accredited from Chapman three years ago and renamed for a benefactor, the Brandman Foundation, in April. Gary Brahm, Brandman's chancellor, said his institution has a good record in serving and graduating Hispanic students, who make up more than a quarter of Brandman's enrollment. (It claims a six-year graduation rate for students, all of whom now enter with at least 12 credits, of 68 percent.) The new partnership with University Ventures presents a chance "to do something very significant in higher education and to do something very significant in California," he said in an interview on Monday. The program will be aimed at the many students from Spanish-speaking homes who have learned enough English to graduate from high school but either are too intimidated or too inadequately prepared to get through traditional college programs taught fully in English. "This has the opportunity to significantly improve their success," he said. Together, Unive

"Accreditor Takes a Tougher Look at Sales of Colleges By Eric Kelderman Before 2008, the Higher Learning Commission of the North Central Association of Colleges and Schools had a reputation as an accreditor that allowed flexible standards for the burgeoning for-profit education industry, which has rapidly attracted both students and the federal grants and loan dollars they use to pay tuition. But this week, the regional accreditor, which counts many of the largest for-profit education companies among its members, showed that it was serious about changing that reputation. On Wednesday, the commission announced that it had denied a request to transfer the accreditation of Dana College, a small, religiously affiliated college in Nebraska, to a group of private investors that had said it would buy the college and save it from financial ruin. At the same time, the commission rejected a similar proposal for Rochester College, in Michigan."

"Changing Course October 22, 2010 As a growing number of nonprofit colleges hire for-profit companies to lay tracks for their new online programs, academics generally have been the third rail. Technology and information systems are one thing, the colleges say; to outsource teaching and curriculum is quite another. Now, two major e-learning companies have teamed up to disprove that truism. Blackboard and K12, Inc. announced last week that they will begin selling online remedial courses to community colleges beginning next year. The details will be hashed out over the next few months, but the basic outline is this: The companies will design the courses and provide the instructors from K12's stable, and the colleges will offer the courses through their normal catalogs. Some nonprofit institutions that partner with companies on online education have been careful to emphasize their commitment to keeping a wall between the business and technology of online course delivery and the actual instruction. "Some things, we would never turn over to the private sector," Philip Regier, dean of Arizona State University's online programs, said earlier this month, after his institution announced it was going into business with Pearson to help boost its online offerings."