What he showed was the system that Maryland is trying to put into place with career 'colleges' and taxpayers paying for job-training. As the business owner said, the learning curve for job training was a year or two. The two employees coming through the public job training program were trained to do only that job, so if they want to leave that job or they lose that job, they will have to go back to yet another public job training program for specific training for the next job. IT DOESN'T TAKE A ROCKET SCIENTIST TO SEE HOW THIS EDUCATION SYSTEM WORKS AGAINST THE TAXPAYER AND THE EMPLOYEE!
YOUR MARYLAND INCUMBENT IS PUSHING AS HARD AS POSSIBLE FOR THIS CHANGE IN PUBLIC EDUCATION.
So, what Scott doesn't say because he is not allowed, is that this career 'college' is simply the union apprenticeship program that has been around for decades. Trade unions have a quality on-the-job training program paid for by the union and business that gives certification and employee lifelong skills development and the ability to take that training to many different kinds of jobs. What these men are prepared to do is build nuts and bolts for that company's defense contracts.
The second piece that was mentioned but not emphasized was the $12 an hour start for skilled labor. A living wage starts at $14 an hour, so these young men worked beyond high school for certification to receive poverty wages. Baby boomers know we paid our baby sitters $10 an hour 20 years ago. A starting position like this used to bring $22-28 an hour. Is that business owner able to pay that much? Small businesses may need a break from high wages, but you'll notice that Scott didn't tell us what that business owner was paid for those defense contracts......remember the outlandish prices the government paid for regular items? They still do it.
Scott asked why, with all these unemployed college grads a company would think they couldn't find skilled labor. The answer is that college grads won't work for those wages. What this 'career' college trained for is an entry level position. These men will have to go back for a 4 year apprenticeship program to move forward in that field. Have high school grads ever graduated from K-12 with the skills for entry level jobs like this? NO, they have always simply entered a job and started on-the-job training AND/OR partnered to a 4 year program. So, taxpayers are paying unemployment and job training that the business has always paid.
Shouldn't we just be glad these young men are working? The money being spent on privatized job training is taking away from REAL university funding so large numbers of high school grads are hearing there are no scholarships/grants and state funding of universities fall as all public education funding goes to do corporate job training.
IN MARYLAND, GOVERNOR O'MALLEY AND BALTIMORE MAYOR RAWLINGS-BLAKE AS WELL AS ALL INCUMBENTS ARE WORKING HARD TO MAKE SURE CORPORATIONS ELIMINATE ALL JOB TRAINING EXPENSES IN ORDER TO MAXIMIZE PROFITS!!!
VOTE YOUR INCUMBENT OUT OF OFFICE!!!
November 11, 2012 7:08 PM
Three million open jobs in U.S., but who's qualified?
Millions of jobs are waiting to be filled, but employers say they can't find qualified workers because of "the skills gap." Byron Pitts reports.
The following script is from "Three Million Open Jobs" which aired on Nov. 11, 2012. Byron Pitts is the correspondent. David Schneider, producer.
60 Minutes Web Extra Alcoa CEO: Traditional career path is ''dead'' »
The balance of power in Washington didn't change this week as President Obama and most members of Congress kept their jobs. They'll go back to work and face an unemployment problem that also hasn't changed very much. Every month since January 2009, more than 20 million Americans have been either out of work or underemployed. Yet despite that staggering number, there are more than three million job openings in the U.S. Just in manufacturing, there are as many as 500,000 jobs that aren't being filled because employers say they can't find qualified workers.
It's called "the skills gap." How could that be, we wondered, at a time like this with so many people out of work? No place is the question more pressing than in Nevada. The state with the highest unemployment rate in the country. A place where there are jobs waiting to be filled.
Karl Hutter: Yeah, we hear way too much about the United States manufacturing, we don't manufacture anything anymore. Not true. Not true.
Byron Pitts: Sure, it's Mexico, it's in China--
Karl Hutter: Yeah, yeah, that all went to China, that all went to Mexico. Not true, whatsoever.
Karl Hutter is the new chief operating officer of Click Bond in Carson City, Nev., a company his parents started in 1969.
Karl Hutter: We're still technically a small business, but we're growing quickly.
Byron Pitts: So, you're hiring?
Karl Hutter: We are hiring. We're hiring and we need to find good people. And that's really what the challenge is these days.
Three hundred and twenty-five people work at Click Bond, making fasteners that hold cables, panels and pretty much everything else inside today's planes, ships and trains. Their customers include the Defense Department. The F-35 has 30,000 Click Bond fasteners.
The workhorses in this factory may look old, but they're computer controlled machines that make precision parts, accurate to a thousandth of an inch; the thickness of a piece of paper. Click Bond needs employees who can program the computers, operate the machines, fix them and then check to make sure the results are up to spec.
Ryan Costella: If you look at the real significant human achievements in this country a lot of them have to do with manufacturing or making something.
Ryan Costella is head of Strategic Initiatives at Click Bond. That's another way of saying he's looking ahead to both opportunities and problems facing the company.
Byron Pitts: Sure. So the skill gap, is it across the board? Is it at all levels? Or is it the entry level?
Ryan Costella: I would honestly say it's probably an entry level problem. It's those basic skill sets. Show up on time, you know, read, write, do math, problem solve. I can't tell you how many people even coming out of higher ed with degrees who can't put a sentence together without a major grammatical error. It's a problem. If you can't do the resume properly to get the job, you can't come work for us. We're in the business of making fasteners that hold systems together that protect people in the air when they're flying. We're in the business of perfection. .
Costella says Click Bond ran into trouble when it expanded production and went to buy these machines from a factory in Watertown, Conn. The company didn't have enough skilled labor back home in Nevada to run them, so it bought the entire factory just to get the qualified employees and kept the plant running in Connecticut.
[Conn. worker: You just have to be careful that you don't hit the side.]
Nationwide, manufacturers say the lack of skilled workers is the reason for hundreds of thousands of unfilled jobs; a number Ryan Costella says is about to get bigger.
Ryan Costella: You have a massive wave of baby boomers who are leaving the workforce very soon.
FIRST, NOTE THAT THIS COMPANY IS HEADQUARTERED IN NEVADA, HOME OF SENATE LEADER HARRY REID.....THIRD WAY CORPORATE POLITICIAN EXTRAORDINAIRE. NEVADA IS AFTER ALL HOME OF SHELL COMPANIES AND BUSINESSES USED TO HIDE MONEY OFFSHORE! SO, IT IS DEMOCRATIC LEADERSHIP THAT IS MOVING THIS PUSH TO PRIVATIZE ALL PUBLIC EDUCATION.
NEXT, NOTE THAT THIS CLICK BOND IS POSITIONING ITSELF TO EXPAND GLOBALLY. IT IS NO SMALL FISH. THE ARTICLE MADE ONE THINK THEY HAD TO BUY A CONNECTICUT FACTORY JUST TO FIND QUALIFIED WORKERS......HOOEY......THEY ARE GEARING UP TO EXPAND OVERSEAS AND NEEDED AN EAST COAST FACTORY. WHEN THEY COMPETE GLOBALLY AMERICAN WORKERS ARE COMPETING WITH CHINESE WORKERS. WHEN THE COMPANY IS GEARED TO SUPPLY US INDUSTRIES....AND THERE IS BIG DEMAND IN THIS AREA......THEN WAGES ARE PROTECTED FROM THIRD WORLD LABOR. SO, HAVING COMPANIES CONSTANTLY WORKING TO BECOME GLOBAL RATHER THAN SIMPLY BEING A REGIONAL PLAYER IS BAD FOR THE AMERICAN ECONOMY IN THAT THE WEALTH ALWAYS GOES TO THE TOP.
WE NEED TO SHOUT LOUDLY AND STRONGLY THAT WE WANT DOMESTIC MARKETS FIRST!!!!! DO YOU HEAR YOUR INCUMBENT SAYING GLOBAL MARKETS HURT AMERICAN FAMILIES?????? THEN VOTE THEM OUT OF OFFICE!!!
Align Aerospace is Appointed An Authorized Distributor for Click Bond, Inc.
Carson City, Nevada designer-manufacturer partners with award-winning hardware distributor in Southern California's San Fernando Valley
Download image CHATSWORTH, Calif., July 2, 2012 /PRNewswire/ -- Align Aerospace LLC, a global provider of aerospace fasteners, assembly component and supply chain solutions, has been appointed an Authorized Distributor for Click Bond aerospace products, announced Align CEO Richard C. Organ.
"Our strategic partnership with Click Bond is most significant given both parties' high standards of quality and commitment to providing superior manufacturing solutions for industry," said CEO Richard C. Organ. "The addition of the Click Bond aerospace line adds another dimension to the expansive product offerings currently stocked and sold out of Align's global network."
Click Bond has been a pioneer of advanced fastening solutions addressing a wide array of applications for more than forty years. The family-owned company designs and manufactures an extensive selection of bonded fasteners that eliminate welding, structural penetrations and costly labor assembly while providing lightweight traditional threaded attachment points. Click Bond surface mounted hardware simplifies the installation and support of electrical, fuel, and hydraulic systems, while their rivetless nutplates reduce hole count by two thirds and reduce installation labor time by over 80 percent.
Align Aerospace is a leading supplier of hardware and related components to a broad range of aerospace and defense OEMs and their subcontractors throughout the world. Experts in bid-to-buy, JIT, VMI, lean manufacturing and supply chain management, Align has more than 90,000 unique parts in stock from over 2,000 suppliers ready to ship from its warehouses throughout the U.S. and Europe. Between 1998 and 2011, the Company operated as Pentacon, Eurofast SAS, and Anixter Aerospace Hardware. Align began independent operations in August 2011 as a result of the divestiture of the business by Anixter International to Greenbrier Equity Group.
About Click Bond
Click Bond, Inc. (www.clickbond.com) is the global leader in adhesive bonded fastening systems for industry, delivering solutions that have revolutionized the design and assembly of aerospace, defense, marine, and energy exploration systems.
SOURCE Align Aerospace
Maryland Association of Private Colleges and Career Schools
MAPCCS will be the driving force for the advocacy and development of private college and career schools in the state of Maryland. We will foster quality education
for each student served by promoting accessibility, affordability and diversity for
our member schools; encourage compliance and accountability; participation in
legislative activities; provide professional development; provide networking opportunities and peer support.
MAPCCS Membership Benefits
Member schools enjoy a host of benefits. As the voice of the private career school industry on state and federal legislative issues, member schools ensure the quality of education for all students. Since 1983, more than $2,650,000 in merit scholarships have been offered to deserving high school seniors interested in training which leads directly to careers. MAPCCS members are committed to the continuing education and professional development of their faculties and staffs and sponsor an Annual Conference as well as monthly business and training meetings. Any school interested in the advancement of private career school education may join the Association.
Accreditation and Approvals
All schools are approved by the Maryland Higher Education Commission.
Many MAPCCS schools are accredited by national accrediting bodies. Many schools are also approved for the education of veteran and other eligible dependents.
Credit Transfer Agreements
Several MAPCCS member schools have established credit transfer agreements with Maryland community colleges and other regional colleges and universities. These agreements enable students graduating from a career school with such an agreement to receive a predetermined number of credits toward a college degree. These agreements encourage private career school graduates to continue to pursue post-secondary education. For more information on credit transfer agreements, contact the admissions office of the member school.
Financial assistance is offered at most member schools. Those schools which are nationally accredited may also participate in federal student financial aid programs , such as student loans or grants. The loans or grants are available to eligible students. Interested students should contact the school's financial aid office for more information.
Additionally, all private career schools are eligible to participate in the Jack F. Tolbert Memorial Scholarship program. This scholarship is awarded exclusively to Maryland residents attending Maryland private career schools which demonstrate financial need. Maryland residents attending nationally accredited schools may also participate in the Maryland Senatorial and House of Delegates scholarship programs. For more information, contact the school's financial aid office or the Maryland State Scholarship Administration at the Maryland Higher Education Commission..
President Ed Gillespie
American Beauty Academy
Vice President Matt Daly
North American Trade School
Secretary Antonio S. daRosa
Director of Education
Harmon's Beauty School
Corporate Director of Academic Affairs
Steiner Educaiton Group
Directors-at-Large Jeannie Schwartz
Baltimore School of Massage
Broadcasting Institute of Maryland
ITT Technical Institute
I DO NOT WANT TO DISPARAGE A PERSON'S CAREER GOALS, BUT WE ALL KNOW THAT HIGH SCHOOL GRADS HEAD FOR POST-GRAD EXPERIENCES AS ARE MARKETED TO THEM. IF THE EXPECTATION IS THAT YOU SHOOT FOR FOUR YEAR COLLEGE, THAT WILL BE THE GOAL. IF GRADS ARE BOMBARDED WITH QUICK AND EASY CAREER SOLUTIONS, THEY WILL GO WITH THAT. SO WE ARE WATCHING AS MOST GRADS ARE LURED INTO THESE CAREER PROGRAMS....USING ALL THEIR COLLEGE FUNDING RESOURCES.....FOR WHAT WILL TRAP THEM. HOW MANY HAIRDRESSERS DO WE NEED? HOW MUCH MONEY NEEDS TO BE SPEND FOR ITT TRAINING THAT MIRRORS COMPUTER CLASSES AT PUBLIC LIBRARIES? AS BUSINESSES ARE ALLOWED TO PARTNER WITH COMMUNITY COLLEGES TO CREATE JOB-SPECIFIC PROGRAMS, WE ARE LOSING WHAT WAS THE BEST COMMUNITY COLLEGE SYSTEM IN THE WORLD TO MEDIOCRITY. REMEMBER, THE 1% SEE 90% OF EDUCATION WASTED ON 90% OF PEOPLE IN THE US....SO THEY ARE DISMANTLING WHAT WOULD BE THE SPRINGBOARD FOR MOST FAMILIES TO QUALITY EDUCATION. MEANWHILE, UNIVERSITY OF MARYLAND AND UNIVERSITY OF BALTIMORE GEAR UP FOR THE BEST OF THE BEST IN THE WORLD AS STUDENTS.
THE FACT THAT YOUR MARYLAND INCUMBENT IS ALLOWING THIS FOR-PROFIT EDUCATION INDUSTRY TO NOT ONLY EXIST, BUT TO TOTALLY ENCOMPASS ALL PUBLIC CHOICES IN EDUCATION AND EDUCATION LOAN/GRANT SPENDING ......THESE POLITICIANS ARE SERVING YOUR CHILDREN ON A SILVER PLATTER TO CORPORATE INTERESTS.
VOTE YOUR INCUMBENT OUT OF OFFICE!!!!
The High Price of For-Profit Colleges
The media and policy makers are taking notice of the low graduation rates, high debt loads, and deceptive recruiting practices at many for-profit colleges.
By Barry Yeoman
After Joshua Pruyn earned his undergraduate degree, he looked for a job as a college admissions officer. “I was captain of my hockey team, so I had recruiting responsibilities,” he says. “I thought maybe that would translate into doing some sort of admissions work.” Through a friend of a friend, he was hired by Westwood College, a privately held chain of schools that promises to train busy adults for up-and-coming careers. Pruyn worked for five months at Westwood’s Denver call center. His job was to dial scores of prospective students each day from a list of telemarketing leads and entice them to enroll in the company’s online learning program.
Westwood is part of the growing sector of “proprietary” schools—for-profit career colleges that market to students who want practical rather than liberal arts educations. It operates seventeen campuses in six states in addition to its online program, with associate’s and bachelor’s degrees in fields like web design, criminal justice, game-software development, construction management, automotive technology, and medical assisting. It also offers a master’s degree in business administration.
As the company’s newest hire in 2007, Pruyn quickly discovered his job was to hook as many prospective students as possible with a pitch so persuasive that they’d risk taking on five-figure debt. (Bachelor’s programs run between $58,016 and $76,020.) “It’s more of an emotional thing than it is about the facts,” he says. “If you’re good at it, you can really make them dwell on how crappy their lives are and then envision this life where they’re making five times what they make now in a dream career.” Recruiters who made high enrollment numbers were rewarded with pizza parties and Cancun trips; poor sellers were threatened with dismissal.
The emotional manipulation and “boiler-room” sales environment were only part of what disquieted Pruyn. “The culture of lying was pervasive,” he says. “There simply were no boundaries.” Recruiters misrepresented teacher qualifications, placement statistics, and whether credits would transfer, he says. They invented stories about which companies hired Westwood graduates and how much they paid. “A lot of the times, when you’re lying, you don’t even realize it,” he says. “You get information from another rep or your director and you assume that it’s true.”
The most egregious example for Pruyn was the glowing picture he was told to paint of the job market for video-game developers. Pruyn says he initially trusted his colleagues when they told him graduates commanded exorbitant starting salaries—in one case more than $200,000. When he checked with the company’s career center, he says, he learned that the claim was a flat-out fabrication. Yet some of the prospects he was calling believed his spiel, just as he had believed his coworkers. “There were a lot of kids only a couple of years out of high school,” he says. “It was really easy to pump a student up about the gaming program. And once they get excited, I guess their guard gets let down, and they don’t think about things all the way through. That was probably the saddest part of it all.”
A Potemkin Degree Amanda Turcheck was one of the students who was drawn in by a recruiter’s pitch. She was floundering at a public college in Denver when an acquaintance recommended Westwood. Turcheck and her future husband were intrigued by the school’s computer-aided design and architectural drafting program. “Both of us are hands-on,” she says. “We both like building things in a computer from the floor up.” Westwood offered only an associate’s degree, but the admissions representative assured the couple that it was all they needed. “They told us, ‘You’d get jobs before you’d even graduate,’” she says. “They told us the job market was really big in Colorado—we have a lot of construction all the time.” Not only was Westwood’s name highly valued, she recalls the recruiter saying, but the school’s career center would work tirelessly for them. Besides, Turcheck says she was told, if she and her boyfriend wanted to finish their undergraduate degrees later, their credits would transfer to any school that offered equivalent courses.
The couple graduated in 2009. “Once we got out, we realized that the value of our degree was nothing,” says Turcheck, who is now twenty-six. Employers weren’t hiring applicants without bachelor’s degrees. The school’s failure to deliver a promised internship in the field meant their résumés were thin. “No one even looked twice at our applications,” she says. Finishing their bachelor’s degrees elsewhere would mean starting from scratch because public and private nonprofit schools typically don’t accept Westwood credits. Many proprietary colleges receive accreditation from “national” agencies, which use quantitative criteria like completion and job-placement rates. Liberal arts colleges and universities use “regional” accreditors, which consider factors like shared governance and academic freedom. Because the criteria are different, the credits rarely transfer. MARYLAND'S ANSWER IS TO WEAKEN EVEN FURTHER PUBLIC EDUCATION QUALITY BY EQUATING COMMUNITY COLLEGES WITH CAREER COLLEGES.
Westwood’s career center promised it would forward the Turchecks weekly job leads, she says. It did send periodic e-mails—announcing openings that “had nothing to do with our field,” Turcheck says. “We’d get leads for a part-time bank teller position. Or when the circus was in town, there were some temporary positions helping out.” The mailings included a few jobs in their field, but those required bachelor’s degrees.
Eventually, the couple gave up looking for relevant work. Turcheck kept her old job at a tool store. Her husband, Justin, enlisted in the military. Last year they moved to Abilene, Texas, where Justin works in munitions storage at Dyess Air Force Base. She found a job as a cashier at a Hallmark store. The Turchecks are paying off almost $90,000 in student loans. In retrospect, she says, “I would have been able to go to a community college for a heck of a lot less and learned the same stuff.”
A Lifetime of Debt These stories are not anomalies, according to many scholars, lawmakers, and consumer advocates. Critics say that for-profit career colleges—which, according to industry figures, enrolled 3.2 million students in the United States in 2009—have been plagued by deceptive recruiting practices that lure students into programs they could find elsewhere for much less money. Students often borrow tens of thousands of dollars to attend these schools—only to discover later that their degrees are worthless and their credits won’t transfer. Having racked up enormous debts, they can’t return to school for useful training. Thus, they are caught in a spiral, owing more than they can afford to repay, unable to change that equation, and at risk of garnished wages, ruined credit, and seizure of their income-tax refunds.
“Many for-profit colleges view students as no more than cogs in the profit-making machine, with little concern for their education or success,” said US senator Tom Harkin, Iowa Democrat and chair of the Health, Education, Labor, and Pensions Committee, in a statement last fall. “As many students face a lifetime of debt with no diploma, these schools are enjoying profit margins that place them among the most successful companies in America—profits derived from taxpayer dollars intended to serve as an investment in American students.”
“These schools offer the false hope of being born again as an educated person,” says former St. Louis mayor Clarence Harmon, the ex-president of one such institution, Sanford-Brown College in Hazelwood, Missouri. “But they’re throwing students to the wolves—graduating people who are not competent in fields that may not exist in three or four years.”
Officials at Westwood and similar schools reject these criticisms. They consider stories like Turcheck’s and Pruyn’s part of a “smear campaign” against their industry. They say their institutions deliver an education that is more attuned to the twenty-first-century job market than do public and nonprofit institutions. “Traditional four-year colleges just aren’t keeping pace with the changing needs of a new economy,” says Kristina Yarrington, Westwood’s vice president of marketing. “There is a need for a specialized workforce that’s trained in very specific skills, and that’s exactly what career colleges such as Westwood provide.” She says her company prides itself on small classes, professionally developed curricula, proactive career counselors—and honest talk from recruiters. “Transparency is at the core of who are. We want to be sure that when a student steps into that classroom, they know exactly what they’re getting.”
Still, in 2009, Westwood’s parent company paid the government $7 million to settle a whistle-blower lawsuit claiming that some of its Texas recruiters had inflated job-placement rates and misled students about whether an interior-design program would qualify them to take a state licensing test. (The company admitted no wrongdoing.) Last year it was sanctioned by both state regulators and one of its accreditors.
For Amanda Turcheck, Westwood’s assurances of transparency are as empty as the recruiter’s promises of a booming market. “I feel like an idiot for going to school there,” she says. “It turned out to be such a waste of time and money. I wish I would have never even set foot into that office.”
For-Profits’ “Moon Shot” With the economy in shambles, it’s no surprise that more Americans are enrolling in for-profit career colleges, which blitz the airwaves with promises of fast, focused, hands-on training. The schools offer testimonials from former students—or actors playing former students—who claim to have turned their lives around after attending proprietary schools.
According to Harris Miller, president of the Association of Private Sector Colleges and Universities (the for-profit sector’s trade group), his industry is in “hyperdrive,” with growth rates some years approaching 25 percent. Proprietary schools conferred 84,000 bachelor’s degrees in 2009, up from 49,000 four years earlier. The number of graduate degrees they awarded almost doubled, too, from 36,700 to 67,200. Miller says the for-profit sector is crucial to meeting President Barack Obama’s goal, articulated in his 2009 State of the Union address, of making the United States the global leader in the percentage of adults with college degrees by 2020. “We were very excited with President Obama’s call to arms—his equivalent to the Jack Kennedy moon shot,” Miller says. “Well, how do you get there? You’re talking about, in most cases, figuring out a way to bring in students who have traditionally not been a part of higher education. Community colleges don’t have the financial resources to expand. The career-college sector does have the capacity, the capital, and the nimbleness to create new programs that are tailored to students—not tailored to faculty—and tailored to the marketplace.”
But the sector has also been dogged by media reports, lawsuits, and government investigations that sound a common theme: aggressive recruitment techniques bait students with false promises and then leave them on the hook for loan payments they can’t afford. What’s more, federal statistics call into question the quality of a career-college education. Six-year graduation rates for first-time students in bachelor’s-level programs are markedly low, according to a 2010 report by the US Department of Education: 25 percent at proprietary schools, compared with 55 percent at private nonprofit colleges and universities and 64 percent at public ones. The same report said proprietary schools spend considerably less on instruction than traditional institutions, both in dollars per student and as a percentage of their budgets.
Moreover, student-loan default rates—a reasonable measure of whether alumni have landed decent-paying employment—are dramatically higher at for-profit career colleges. According to 2009 federal data, 24 percent of all proprietary schools that participate in the federal student-loan program have three-year default rates of 30 percent or higher. Only 1 percent of private nonprofits are in the category of 30 percent or higher default rates. Virtually no public four-year institutions are in that category. Overall, the three-year default rate for for-profit colleges is 22 percent, according to figures released by the Department of Education in April 2011. This compares to 7 percent at private nonprofits and 10 percent at public institutions.
“I’m not given to exaggeration, but I kid you not: this is a buyer-beware, nobody’s-looking-over-your-shoulders kind of environment,” says Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers (whose members include proprietary schools). “These entities are basically marketing machines. They’re not really educational providers. In an earlier time, they’d be selling Bibles door-to-door, vacuum cleaners door-to-door. Today, because of the availability of federal money”—$24 billion in federal student loans and grants in 2008–09—“they now peddle so-called education.”
For those buyers who are not savvy enough to beware, the results can be ruinous. “We’re stuck with $40,000 in debt for the next twenty-five years of our life—for nothing,” says Sherri Akers, thirty-three, who took medical-assisting courses at the Melbourne campus of the for-profit Florida Metropolitan University. Her husband, Sean, took pharmacy-assistant classes there. In 2007, parent company Corinthian Colleges paid $99,900 to settle an inquiry over practices at its ten FMU campuses. According to the Florida attorney general’s office, FMU encouraged its recruiters to “sell the dream” without disclosing the low percentage of students who graduate and find better-paying jobs. Nor did the school clearly explain that, because of its national accreditation, traditional schools rarely accept its credits. (“You can go to Harvard with these credits,” FMU’s head recruiter had told the Akerses, she says.) The company admitted no wrongdoing and renamed the school Everest College that same year.
After earning their associate’s degrees, Sherri and her husband had to start from scratch at another school, where they studied radiology. “We make okay money as X-ray techs,” she says. “But we pay $600 a month in student-loan debts, so we really didn’t get anywhere.” Worse, she can’t afford the additional loans she’d need to become a physician’s assistant— her real dream.
“I think every day,” she says, “about what I could have accomplished.”
Cutting Hair For $250,000 a Year While shabby trade schools have gotten periodic attention since the 1980s, the spotlight during the past year has been particularly harsh. In June 2010, the Senate Health, Education, Labor, and Pensions Committee released a study noting that eight publicly traded career-college chains spent 31 percent of their budgets on recruiting and marketing—and a falling share on instruction. A follow-up report in September analyzed sixteen for-profit chains and found that 57 percent of the students who enrolled between July 2008 and June 2009 had already dropped out. Over a three-year span, 1.9 million students had withdrawn from those same colleges—“most with nothing to show for their time in a for-profit school but student-loan debt.” This record of failure, the authors noted, was underwritten by US taxpayers: the same companies received 87 percent of their 2009 revenues from federal student aid, which either originates from or is guaranteed by the government.
In December, Senator Harkin’s committee released the most damning of its reports, charging that proprietary schools were draining the Post-9/11 GI Bill benefits of service members and veterans without delivering an adequate education. The report noted that educational benefits flowing to for-profit career colleges from the Departments of Defense and Veterans Affairs increased sevenfold between 2006 and 2010—some $521 million last year alone. “Outcomes at the for-profit schools receiving the most military educational benefit revenue are questionable,” the report said. Those schools had high withdrawal and low loan-repayment rates.
And last summer, the US Government Accountability Office (GAO) released the results of a special audit of the for-profit sector. The GAO sent undercover investigators to fifteen schools and surreptitiously videotaped the conversations. Recruiters at all fifteen provided “deceptive” information about issues like graduation rates, starting salaries, and tuition costs. (A Washington, DC, recruiter told one investigator he could make up to $250,000 a year cutting hair.) At four schools, admissions representatives urged investigators to commit fraud—for example, by claiming nonexistent dependents on their financial-aid forms. “It certainly appeared a little bit like the Wild, Wild West out there,” Gregory Kutz, managing director of the GAO’s Office of Forensic Audits and Special Investigations, testified at an August Senate hearing.
This is not the first time the federal government has examined the academic Wild West. In 1992, Congress passed several measures designed to curb some of the worst abuses by for-profit career colleges. One of them was a ban on commissions and bonuses for admissions staffers “based directly or indirectly on success in securing enrollments.” The goal was to remove the financial incentive for recruiters to use deception or manipulation.
Under President George W. Bush, though, the Department of Education created twelve loopholes, or “safe harbors,” for colleges wanting to reward successful recruiters. The 2002 rule said that colleges could raise or lower recruiters’ salaries twice a year, as long as “any adjustment is not based solely on the number of students recruited.” (Emphasis added.) As long as 1 percent of a decision is based on factors like “judgment” and “communication skills,” the schools have considered themselves in the clear. “Each one of those safe harbors chipped away at the law’s ability to be enforced,” David Hawkins, director of public policy and research at the National Association for College Admission Counseling, told the Senate last summer.
Still, schools occasionally got in trouble. In 2009, the Apollo Group, the $4-billion-a-year company that owns the University of Phoenix, agreed to pay $67.5 million to the federal government, plus $11 million in attorney’s fees, to settle a whistle-blower lawsuit alleging that recruiters were paid solely based on how many students they enrolled. The lawsuit followed a 2003 Department of Education investigation that reached the same conclusion. Officially, the investigation said, Apollo used a “matrix” of factors to determine salaries. But employees called that formula “a smokescreen” and “a joke.” “More than one recruiter said that managers simply falsified the numbers on the various factors to make the overall evaluation match the enrollment number,” the report said. Apollo officials admitted no fault and said they settled the case to avoid ongoing litigation.
For-profit schools may soon find themselves with considerably less wiggle room. In October, the Obama administration adopted a new regulation eliminating the twelve Bush-era “safe harbors.” Starting July 1, for-profits will no longer be able to consider enrollment figures in how they pay recruiters. Other new rules require career colleges to disclose their graduation and job-placement rates and give the government more authority to crack down on deceptive practices. As this issue went to press, the Obama administration was finalizing—and the industry was battling— another rule that would tie schools’ federal student-aid eligibility to both loan-repayment rates and the income-to-debt ratio of their graduates. In February, the US House passed an amendment designed to block this rule. The Senate had not taken up the measure as of late March. THIS RULE WAS WATERED DOWN TO BE BASICALLY NOTHING. IT GIVES THESE GUYS 3 YEARS TO CHANGE AND THE GOALS DO NOT ADDRESS ALL THE PROBLEMS SITED IN THIS ARTICLE. THE LEGISLATION WAS JUST WINDOW-DRESSING.
Barmak Nassirian of the American Association of Collegiate Registrars and Admissions Officers warns that implementing these new rules “will not really result in a clean system.” Still, they should eliminate some of the most outrageous abuses. “They’re trying to incentivize the sector to do a little more teaching,” he says, “and a little less raping and pillaging.”
Barry Yeoman is a freelance magazine journalist and radio documentarian based in Durham, North Carolina. He writes for AARP: The Magazine, Audubon, Good Housekeeping, OnEarth, and O: The Oprah Magazine. His website, which contains his articles and contact information, is www.barryyeoman.com.