Stephen Burd: All Related Content

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A Crash Course in California Politics

  • By
  • Stephen Burd,
  • New America Foundation
January 21, 2014 |

On June 6, 2007, the California attorney general’s office was on the verge of suing Corinthian Colleges for intentionally and blatantly lying to prospective students about the company’s record of placing graduates into jobs. The AG’s complaint against the giant, publicly traded for-profit higher education company had been written, and a request prepared for a preliminary injunction to bar Corinthian from continuing to make false claims about its job placement rates.

Signing Away Rights

  • By
  • Stephen Burd,
  • New America Foundation
December 17, 2013 |

Education Department Slow to Recover Millions from Sallie Mae | Huffington Post

December 5, 2013

The delay in recovering the funds is “ridiculous,” said Stephen Burd, a senior policy analyst focusing on education at the New America Foundation. “It's an abrogation of duty,” he added. Education Secretary Arne Duncan meanwhile faces criticism for not ...

Financial Aid Priorities Fall Short of Student Needs | Democrat & Chronicle

November 14, 2013

Stephen Burd, a senior education analyst at the New America Foundation and author of the organization's recent report on financial assistance, said that Fisher's formula for financial assistance is typical — but also points to the discretion colleges have in how much they expect a student to take out in loans.

Click here to read the full article.

Why George Washington U. is Doing Low-Income Students a Favor

October 29, 2013
Over the last two weeks, George Washington University has been all over the news for lying to its students about its admissions policies. For years, GW has said that it is “need blind” when in fact it isn’t. Every year the university chooses not to admit a certain percentage of students not because of grades or test scores or what admissions officers see as being a “good fit.” Rather they don’t admit these students simply because their families are low-income.

Most of the news coverage has been critical of the school for doing financially needy students a disservice. But, in fact, the opposite is true. GW is actually doing these individuals a tremendous favor since the school does such a lousy job supporting the small share of low-income students that it does enroll.

GW does not come close to meeting the full financial need of the low-income students it admits. Instead, it leaves these students with substantial funding gaps – forcing them to take on hefty debt loads. In 2011-12, GW students from families making $30,000 or less faced a daunting average net price – the amount students pay after all grant aid has been exhausted – of nearly $21,000 per year. That means low-income families have to pony up the equivalent of 70% or more of their annual income for their children to attend GW.

Now it’s true that GW has a relatively small endowment for its size. But this isn’t just a question of money. It’s also one of priorities. The university is a very active participant in the “merit-aid” wars. According to data the school provided the College Board, 19 percent of freshmen had no financial need yet received “merit” scholarships from the university in 2011-12, with an average award of over $17,000. Meanwhile, only 12 percent of GW freshmen received Pell Grants, which go to the most financially needy students.

GW is clearly more interested in recruiting, enrolling, and funding wealthy students than financially needy ones. For that reason, the low income students that GW passes over should know that they dodged a bullet.

The Code of Conduct That Wasn’t

October 23, 2013

Two years ago, a for-profit college industry group unveiled a voluntary code of conduct for its members. The organization, known as the Foundation for Educational Success, said that the code would “provide strong new student protections; guidelines for training, enrollment, and financial aid; and include an enforcement mechanism to ensure that participating schools adhere to the principles of the new standards.”

More than a dozen for-profit college companies, including Career Education Corporation and Kaplan Higher Education, pledged to abide by the code. Meanwhile, the industry’s stalwart supporters in Congress held up the code as evidence that the sector could police itself.

At the time, I wrote a post on Higher Ed Watch questioning whether this was “a serious effort to improve industry standards or simply a public relations gambit that the group hopes to use to stave off any further government attempts to rein in the industry?”

Well now we have our answer. According to a report in The Chronicle of Higher Education this week:

Today hardly any trace of the effort can be found. The Foundation for Educational Success, which was coordinating the effort, no longer exists…In addition, the foundation’s Web site was dormant as of Friday, displaying only a notice from stating that the domain name expired on September 7 and was pending renewal or deletion. As of Monday, the domain had had apparently been bought and the Web site converted to a health blog unrelated to for-profit higher education.

Need I say more?

[For more on this, check out David Halperin's excellent reporting in the Huffington Post.]

Obama Administration Should Stop Punting on For-Profit College Job Placement Rates

October 17, 2013

[This post is largely adapted from a previous post that ran on Higher Ed Watch in October 2011.]

Last week I argued that the U.S. Department of Education needs to develop a single, national standard that for-profit colleges would be required to use when calculating job placement rates. Department officials could go a long way in achieving this by revisiting a proposal they offered in the summer of 2010 that would have established a standard methodology to use when determining these rates.

Currently, the federal government leaves it up to accrediting agencies and states to set the standards that for-profit schools must use to calculate the rates, and to monitor them. The only exception is for extremely short-term job training programs, which must have employment rates of at least 70 percent to remain eligible to participate in the federal student loan program.

In June 2010, as part of a package of draft regulations aimed at improving the integrity of the federal student aid programs, the administration proposed extending the standards that short-term programs are required to use to all for-profit college and vocational programs that are subject to the Gainful Employment rules. The proposal was met with a firestorm of protest from for-profit college officials, as the federal methodology is much more strict than that used by accreditors and state agencies.

For example, under the Education Department’s requirements, students are only considered to be successfully placed if they have been employed in their field or a related one for at least 13 weeks within the first six months after graduating. In comparison, some accreditors and state agencies apparently allow schools to consider a graduate to be successfully placed if they work in their field for as little as a day.

Meanwhile, the Education Department has established a strict regulatory regime to make sure the rates are not rigged (the extent to which the agency actually holds short-term programs to these standards is unclear). Institutions are required to provide documentation proving that each of the graduates included in their rates is employed in the field in which he or she trained. According to the Department’s rules, acceptable documents “include, but are not limited to, (i) a written statement from the student’s employer; (ii) signed copies of State or Federal income tax forms; and (iii) written evidence of payments of Social Security taxes.” 

To be fair, for-profit colleges were not the only institutions that objected to the proposal. Community colleges and state universities that have training programs that fall under the Gainful Employment requirements also complained that the plan was too stringent. These institutions may have found these requirements to be especially daunting since they generally have not had to track job placements before.

A Recipe for Failure

How did the Education Department’s political leaders respond to this criticism? They punted. Instead of sticking to their guns or devising an alternative proposal, they kicked the issue to the National Center for Education Statistics (NCES). Under the final program integrity regulations, which were released in October 2010, the Department directed the NCES to convene a Technical Review Panel “to develop a placement rate methodology and the processes necessary for determining and documenting student placement” that schools would be required to use to fulfill this mandate.

But putting NCES in charge of developing a federal standard for calculating these rates turned out to be a major blunder. First, this was not an assignment that the NCES had sought out or has typically been asked to do. After all, the Department was not just asking the center to provide technical assistance in devising a new methodology but to take the reins in setting a new federal policy in this highly contentious and controversial area. Second, the Technical Review Panel that the Department chose to carry out this assignment included a number of representatives from schools that were opposed to this effort.

All of this was a recipe for failure. So it was hardly a surprise that, after two days of discussions on this topic in March, the review committee was not able to reach an agreement. The panel suggested in a final report on its deliberations that "the topic be explored in greater detail by the Department of Education.” Translation: This is a job for the Department, and not NCES.

The Education Department's hands have been tied since because the final regulations explicitly require schools to use "a methodology developed by the National Center for Education Statistics, when that rate is available." In the meantime, the job placement rates that for-profit colleges are required to disclose under the new rules are the same ones they report to accreditors and state regulatory agencies. As I've written previously, the methodologies that for-profit schools use to calculate these rates vary state by state and accreditor by accreditor, making them impossible to compare. And because neither accreditors nor state regulators have historically put much of an effort into verifying these rates, the schools don’t seem to have any qualms about gaming them.

As Department officials rewrite the Gainful Employment rules, they need to revisit this issue. Otherwise, prospective students will have to continue relying on faulty information when choosing whether to attend a for-profit college.

Lack of Standard Definition for Job Placement Rates Fuels Abuses

October 15, 2013

Last Thursday California Attorney General Kamala D. Harris filed a lawsuit against Corinthian Colleges accusing the company of deliberately deceiving prospective students and investors about the company’s record in placing graduates into jobs. The California AG’s action comes just two months after New York Attorney General Eric T. Schneiderman reached a $10.25 million settlement with Career Education Corporation over similar charges.

The two cases together underscore the need for policymakers to develop a single, national standard that for-profit colleges would be required to use when calculating their job placement rates and to establish a strict regulatory regime to make sure that the rates are not rigged. U.S. Department of Education officials have the opportunity to establish such standards when they rewrite the Gainful Employment regulations.

Currently, the federal government leaves it up to accreditation agencies and states to set the standards that for-profit schools must use to calculate the rates and to monitor them. The only exception is for extremely short-term job training programs, which must have employment rates of at least 70 percent to remain eligible to participate in the federal student loan program.

As a result, the methodologies that for-profit colleges use to calculate these rates vary state by state and accreditor by accreditor, making them impossible to compare. And without a single standard in place, the schools can easily game the system.

Take Career Education Corporation, for example. According to the NY AG’s findings, officials at the company’s health education schools counted graduates as being employed if they worked for a single day at community health fairs. In some cases, school officials allegedly arranged for these fairs to be held so that they could pump up their institutions’ job placement rates.

These practices were not devised and carried out by “rogue” employees. The investigation found that “high-level Career Services managers” at the company’s headquarters “not only knew about the practice of counting employment at single one-day health fairs as ‘placements,’ but explicitly condoned and even encouraged the practice of recording such employment as ‘placements.’”

Meanwhile, the California AG found that in large part the placement rates that Corinthian Colleges (CCI) has disclosed cannot be substantiated. “The data in the disclosures published on or about July 1, 2012 for all campuses in California and online campuses does not match or agree with the data in CCI’s own database system and/or in student files,” the lawsuit states. “In numerous cases, the placement rate data in CCI’s files shows that the placement rate is lower than the advertised rate.”

For example, Corinthian “advertised job placement rates as high as 100% for specific programs when, in some cases, there is no evidence that a single student obtained a job during the specified time frame,” the AG’s office wrote in a press release announcing the lawsuit.

Some of Corinthian’s Everest College campuses went as far as paying temp agencies to place graduates in short-term jobs to help the schools meet the minimum job placement rates required by their accreditors, the lawsuit states. Others appear to have fabricated the data. In many cases, the documentation needed to verify placements was just plain missing.

The AG’s complaint includes excerpts from internal company e-mails showing that top Corinthian executives were fully aware of the problems with the data but did little about them. “Corinthian Colleges, Inc.’s CEO and/or senior management were, at all relevant times, aware of the falsity, inaccuracy, and unreliability of job placement data and the statements they made concerning the data yet they did not disclose that fact to consumers or investors, or take any action to make consumer disclosures and statements to investors accurate,” the lawsuit says.

These cases show that the Education Department needs to create a single national job placement rate standard that makes clear exactly what types of practices are allowed and which are not. And it needs to develop a strict regulatory regime that will hold for-profit colleges accountable for these types of abuses.

Students rely heavily on job placement rates when deciding which career college program to attend. The least we can do is make sure that schools are not cooking the books on the rates they disclose.

History Repeats Itself at Corinthian Colleges

October 10, 2013

In 2007, California’s then-Attorney General Jerry Brown filed a lawsuit against Corinthian Colleges accusing the company of deliberately and persistently misleading prospective students and regulators about its schools’ job placement rates. Brown ultimately reached a settlement agreement with Corinthian, requiring the giant for-profit higher education company to pay a $6.5 million fine and provide some restitution to students who had been deceived.

Corinthian, however, didn’t have to admit to any wrong-doing. Nor does it appear to have learned its lesson and changed its behavior.

On Thursday, California Attorney General Kamala D. Harris filed a new lawsuit against Corinthian accusing the company’s of deliberately and persistently misleading prospective students and regulators about its schools’ job placement rates. “According to the complaint, CCI advertised job placement rates as high as 100% for specific programs when, in some cases, there is no evidence that a single student obtained a job during the specified time frame,” the attorney general's office wrote in a press release.

For Corinthian Colleges, it’s like déjà vu all over again.

Coming Soon: An International Student Recruiting Scandal

October 10, 2013

Are non-profit colleges headed for a major recruiting scandal of their own involving the use of commissioned salespeople?

Federal law prohibits colleges from providing “any commission, bonus, or other incentive payment based directly or indirectly on success in securing enrollments” to admissions officers. Congress put the incentive compensation ban in place in 1992 as part of a broader effort to crack down on unscrupulous for-profit schools that were enrolling unqualified, low-income individuals to get access to federal student aid funds. But in doing so, lawmakers created a double standard that many traditional colleges are now taking full advantage of: the prohibition doesn’t apply to the recruitment of foreign students because they are not eligible for federal student aid. In other words, it is perfectly legal for colleges to make commissioned payments to recruiters for each international student they enroll.

This has become a major issue in recent years because there has been an explosion of growth in the enrollment of international students at colleges across the country. According to an article in the latest edition of the Washington Monthly’s College Guide, the number of foreign students attending colleges in the U.S. “has ballooned by roughly 200,000” over the past six years to a total of more than 764,000.

Public universities, facing declining state revenues, have been especially aggressive in seeking to attract international students who can pay full freight. Top state schools have "doubl[ed] or even quadrupl[ed] their total international enrollments in just a few years," particularly by increasing "their undergraduate Chinese student enrollment dramatically," the Washington Monthly reported.

Because many colleges are reluctant to go to the expense of sending their own admissions officers overseas, many schools rely on third-party international recruitment agencies to find students, and pay them a per-student commission for their services. An investigation by Bloomberg News in 2011 found that the agents also typically charge students a hefty fee, and sometimes even require them to hand over a portion of any scholarships they receive. While there may be many reputable agents, there are also plenty of sketchy ones, who “often misrepresent or conceal their U.S. affiliations,” and offer false promises to lure students in, Bloomberg reported. Agents have also been accused of writing students’ college application essays and falsifying the high school transcripts they send schools.

Alarmed by such reports, the National Association for College Admission Counseling (NACAC) in 2011 reminded its members that they were barred from providing per-student commissions both here and abroad. “Reducing the basis for compensation to the number of students enrolled in any circumstance introduces an incentive from recruiters to ignore the student interest in the transition to postsecondary education, and invites complications involving misrepresentation, conflict of interest, and fraud at the expense of the student,” the organization wrote at the time.

The organization’s stance outraged a significant share of its members, who argued that banning such practices was unrealistic and would cripple the ability of many colleges to recruit foreign students. They said that efforts by a group known as the American International Recruiting Council, which is made up of colleges and international recruiting agencies, to set standards and credential foreign agents were sufficient to ensure ethical practices.

After two years of fierce debate, NACAC backed down in September. The group is now allowing its members to “use incentive-based agents when working with international students outside the U.S.” as long as they follow new guidelines ensuring “accountability, transparency, and integrity.” The organization will spend the next year fleshing out just what these guidelines should be.

But considering that many of NACAC’s members flouted the ban in the first place, who’s to say that they will pay more than lip service to the new standards?

Despite NACAC’s change of heart, the group’s initial concerns still stand. Paying recruiters for each student they enroll simply invites abuse -- as the over-riding incentive these individuals have is to reel in students, whether it’s in the best interest of these students or not .

As I’ve written before, colleges should not allow expediency and the promise of great riches cloud their better judgment. Providing per-student commissions to international agents, who otherwise have no real ties or loyalty to the schools, is a recipe for scandal.

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