Romney's Full Sail, Washington Post's Kaplan Among Colleges Flunking Federal Test

On Tuesday, the federal government released information about which career training programs and for-profit colleges are passing -- and which are flunking -- its new "gainful employment" rule.  The Obama administration watered down this regulation last year after a massive lobbying campaign by the for-profit college industry, and the rule imposes only the most minimal standards.  In order to lose eligibility for federal student financial aid, a program must flunk three different tests, so that, for three years in a row:

• 66 percent of the program's former students are not repaying their loans.


• The estimated annual loan payment of a typical graduate is more than 12 percent of his or her total earnings.


• The estimated annual loan payment of a typical graduate is more than 30 percent of his or her discretionary income.

Look at just that first test. Consider an educational program where two-thirds of former students -- graduates and dropouts -- can't pay back their loans. That suggests that the program isn't providing sufficient training to help students build careers. It suggests that the program's tuition is too high. It suggests that many students -- often veterans, people of color, parents struggling to support their families -- are left worse off than when they started.  And it means that taxpayers who pay for federal student grants and defaulted student loans are often left with nothing for the investment.

Why in the world should a program that flunks that test, and related tests, three years in a row, keep getting federal financial aid?  Wouldn't it be much smarter to channel federal aid to programs that are actually helping students get jobs? Who would be against such a common sense provision?

You know who. The people who own the high-priced for-profit colleges that would be in danger of flunking that test and losing access to the $32 billion a year in federal financial aid that goes to for-profit institutions. Led by their trade association, APSCU, big corporations that own for-profit colleges continue to denounce the gainful employment rule and are suing in federal court to overturn it.

Now we know that the fears of these failing schools were well-founded. This year's tests were like a pre-season trial run that doesn't count in the final statistics -- no one will officially flunk out until 2015. But the results show that, of the programs tested, five percent -- 193 programs in 93 different schools -- failed all three tests.  29 percent flunked two out of three, 31 percent failed one out of three, and only 35 percent of the programs tested met all three of these minimal standards.

All of the programs that flunked all three tests are at for-profit colleges. The schools with at least one program that failed all three tests include:

• Full Sail University, praised on the campaign trail by Mitt Romney for its use of innovative strategies to "hold down the cost of their education," when it turns out that Full Sail is the third most expensive college in America.  It also turns out that top executives at Full Sail and its part owner, private equity firm TA Associates, are among the top donors to Romney's campaign and Super PAC, and that an investment firm started by Romney and his son has a business relationship with TA.  TA also owns Vatterott College, home of high-pressure marketing tactics and high student complaint levels. Eight of Vatterott's 39 programs failed all three tests.


• Kaplan College and Kaplan Career Institute, owned by the Washington Post Company. Kaplan is under investigation by at least four state Attorneys General. 68 percent of its college students drop out before graduating.


• The Art Institutes, part of Education Management Corporation, which the U.S. Justice Department and half a dozen states have sued for fraud, alleging the company paid its recruiters based on the number of students signed up, in violation of federal rules. (EDMC denies these claims. It also said Tuesday that there were errors in the new Education Department data.)


• Sanford-Brown, a division of the Career Education Corporation, where 11 of 44 programs failed all three tests, and Westwood College, where 16 of 45 programs flunked.


• Everest College and Universities, part of Corinthian Colleges, Inc., which performed the worst -- 43 out of 143 programs failed each of the three tests.  Corinthian is under investigation by at least six state Attorneys General. Sixty-six percent of its associate degree students drop out, and 36 percent of students default on their loans within three years - the highest default rate of all publicly traded for-profit education companies.

These schools can keep hiring lobbyists, lawyers, and PR firms to fight against reasonable accountability standards. But truth -- and fiscal pressures -- are a strong weapon against a strategy of continuing to rip off students and taxpayers.  Smarter executives will start looking for ways to compete and succeed in for-profit education by actually doing a good job of preparing students for careers.

This article originally appeared on Republic Report. You want to go to there.

 

Follow David_Halperin on Twitter: www.twitter.com/david4america

Comments

[raggedhand]

08:11 PM on 06/27/2012

I teach animation and computer graphics in a high school and many of my students aspire to be game designers. Since many of my students who are avid gamers are also struggling in school (could there be a link here?) when they graduate they aren't eligible for scholarships or don't have the GPA to get in to the state game programs and they look instead to Full Sail and the Arts Institutes. I discourage them from both. They're just not good value for the money and I think the number of freshmen they accept and churn through is unethical.

Full Sail is massively expensive, yet the starting salary of an animator or game designer is very low in comparison. That is, if you get through their course at all. Since both schools don't require SAT scores or even a diploma, they'll take ANYONE who can sign their name to a student loan. Most of those kids flunk out first semester, so the money they borrowed is really going to pay for the upper level classes infrastructure (all of those top drawer computers have to be paid from someone's tuition, the schools don't have endowments) and for the investors. The number of students who manage to graduate with the skills to actually get a job with Pixar or Electronic Arts is in the single digits and I submit those starts are so talented they'd get a job standing naked on a streetcorner making shadow puppets.

[Arctides]

03:44 PM on 06/30/2012

Full Sail used to require two letters of recommendation to even be considered for their program. IIRC, they did away with that requirement about a year ago, and likely did so under pressure to keep their attendance numbers up.

I got my Masters from Full Sail University just last year, and I happened to enjoy the program, find value in the courses, and have no regretted the decision to go there. Likewise, the career center that I've had access to since graduating has been incredibly helpful in allowing me to find work.

Full Sail IS expensive, and they have had to lower their standards to admit people to their programs (I'm unsure of why on both). However, they are not the festering maggot pile of a diploma mill that the Art Institutes is. I'm not saying their program is perfect, and they are a for-profit school, but they are not even a 15th as bad as the Art Institutes. Not even a 50th.

[raggedhand]

08:21 PM on 06/30/2012

Well, you did what I tell my students to do but couldn't get in to that in my post due to the limited wordcount on the Huffpo comments section. 
I always tell my students to get a BA or AA at a cheap school with a good art department, practice their drawing and animation skills and then cherry pick the technical courses they need at places like Full Sail or SCAD.  What they need to do at age 18 is mature a bit and get their drawing and technical skills ripened. They have a great start since so few high schools offer programs like mine (full animation to include 2D, Maya and stop motion) and they'll be well ahead of their peers with a good demo reel at age 22 anyway.
Good luck and I hope you found the job you were hoping for! Animation is a blast, but it's not for wusses. 

[Michael D Ballantine]

05:41 PM on 06/27/2012

There is no price discovery. Link financial aid to outcomes referencing the second two tests. This testing reflects the NCLB Act. That program is a failure and this one will be too. We need to prepare students properly before enrolling in these programs. You can fix a broken student by continuing to teach new things, you hvae the fix the old ones first.

We need education Justice, we need Rocky Anderson.

[boscobelle]

04:29 PM on 06/27/2012

Mr. Halperin writes: Why in the world should a program that flunks that test, and related tests, three years in a row, keep getting federal financial aid?

I ask - why in the world does a for-profit university get federal financial aid in the first place??? How is it possible that a for-profit university gets tax-payer money - aka subsidies? What about the "free market" that Mitt Romney holds so dear?

All I hear about from Republicans is how welfare/medicare/medicaid/food stamps/SS is bankrupting the country yet by far the biggest receipients of welfare are for-profit companies. This is simply insane.

If these universities and companies can't handle the "free market" without receiving tax payer money then LET THEM FAIL. That's Capitalism!

[drkazmd65]

12:38 PM on 06/27/2012

Support your local Community College,... They may have issues, and their own limitations, but at least there is no Profit Motive.

[Ann Oid]

03:04 PM on 06/27/2012

and their graduates actually acquire an education.

[lainie4469]

07:32 AM on 06/28/2012

25% Of my son's graduating class are going to local Community Colleges... Not because they can't afford to go elswhere, but because it's a sound economic choice! The HS he graduated is ranked 42 in NYS. It's noted for it's academic excellence. He was an Honor Student in HS, and a member of the National Technical Honor Society. I think he made an excellent choice....

[jhNY]

12:23 PM on 06/27/2012

Re the Washington Post Corp-- The WP brand, burnished to a blinding luster in the post-Watergate era, somehow, thanks to the efforts of many at the top, is now a dark and dull husk of its former self to many, who would look to the present profit streams of its various enterprises and find in its most profitable one, the makings of a swindle.

[SeenItBefore]

12:18 PM on 06/27/2012

If the federal government wasn't backing these 'degree mills', no one would attend. I suspect collusion between the industry lobbyists and prominent members of Congress.

Degree mills have always been a joke and I have never been fooled when I saw a resume listing the University of West Beverly Hills awarding a PhD in Advertising Management and Consulting to a 20 something.

What shocks me is Federal funding for this complete nonsense. To pay tens of thousands of dollars to buy 'magical beans' when community colleges offer real course loads and complete transfer to accredited state universities, is pure folly.

Having said that, I want announce the opening of The University of West Lakeside Bar and Grill. For a mere $42,000 we will allow hands on experience in the back. You will earn an associate degree in burger flipping, dishwashing and grease trap mucking. You will also receive a student stipend of $7.25 per hour while on site. For further details, send $10,000 to me to hold your place in the university kitchen.

[MS Ind]

09:41 AM on 06/27/2012

Do these testing standards by the Federal government apply to all colleges and universities, or just for-profit?

Don't get me wrong, I think for-profit colleges are largely a scam - they probably really only have a net positive effect on 2 or 3 out of every 10 enrollees. But there are plenty of nearly worthless programs that exist in otherwise competent state universities and private colleges - and these programs need to get the same stress test that for-profits are getting, especially if a large number of the students are taking out student loans.

[demisfine]

09:14 AM on 06/27/2012

Sanford-Brown has sold my co-worker's son part of an associate's degree in veideo game design for $82,000.
Part of a degree.
The course requirements kept changing, the credits are worthless for transfer to a real school, and the degree will never be completed unless the boy re-registers and repeats in sequence classes he's already taken.
The course advisor is of no assistance, just talks in circles and adds student loan upon student loan to the poor kid's burden. They are sharks preying upon vulnerable, non-traditional kids.

[Ann Oid]

03:09 PM on 06/27/2012

What a sorry joke these schools are...you see them advertising "fun" careers on daytime TV.

You TOO could get an exciting job in video game design because you, like, play a lot of video games. Reminds me of George Costanza thinking he was entitled to a job with the Yankees because he liked to watch sports and made interesting comments.

How many people actually have a job in video game design? My guess is somewhere south of 5000. Even if your co-worker's son completed the course, the chances of getting such a job are not as good as the chance he will get hit by lightning.

[demisfine]

04:38 PM on 06/27/2012

They told him he'd have is degree in less than 18 months. Then they kept changing when the requisite classes were offered, and which classes were required to earn the degree.
Frustrated, he tried to transfer his credits to the community college, only to find out the classes he'd completed were worthless.
It's heartbreaking.

[demisfine]

09:11 AM on 06/27/2012

Dumbing down the nation for a profit.
None of the people invested in these "schools" would send their own children or grand children to any of the "schools" mentioned.
They are diploma mills, nothing more.
Doing nothing to educate their students, making real diplomas seem of little value in the process.
If they reduce the value of a REAL education, they weaken the system in total, and can proceed with their assault on public education. Raking in money all the while.

[drkazmd65]

12:34 PM on 06/27/2012

Apparently - they are not even good diploma mills judging by their rates of matriculation with degrees.

[altohone]

08:49 AM on 06/27/2012

Romney has his sticky fingers in every pot of fraud it seems. Not disclosing his financial interest in companies he praises while running to lead our country makes Mitt untrustworthy.

He was literally selling lies on the stump for personal gain.

[violetblurr]

08:02 AM on 06/27/2012

I am a Computer Design and Animation major with a minor in Fire Art and I would be lying if I said I wasn't interested in Full Sail and Art Institutes. They were my dream colleges. I knew they were "for-profit" colleges however, they offered me everything I wanted: classes focused on developing art skills, non-traditional schedules, supposed partnerships with Pixar, DreamWorks, Sony, etc... and a 4 year degree in less than 4 years. They called me every week and even presented in my English class (I had to miss class with a note from the guidance counselor if I wanted to meet with a visiting public university, and I attended public high school!). No one was telling me all of the downsides of these colleges, just my parents telling me I couldn’t afford it. Luckily, I was able to earn a similar degree at a public university. But it is not fair to the hundreds of kids are being lured into these schools and federal dollars are helping them do so! In my opinion, some of that money should go directly into a PSA about for profit colleges, and the poor statistics they produce. But with saying that, I feel as if public university should look at what these schools offer and try to cater to the students who are lured in by perks their perks. More information needs to be put out about them to help students decide where to go to college. Great Article.

[holycowbatman]

06:00 AM on 06/27/2012

Ive worked in higher education for over 25 years and I am VERY famiiliar with all fo these institutions. EDMC/Art Institutes and Full Sail schools/programs are the biggest degree mills in the industry. They charge expensive tuition, forcing students to get excessive student loans, make it difficult to complete the degree programs forcing them to take extra courses/semesters, take out additional loans, and the institutions provide little to no traditional student services or support. The staff are mostly in recruitment and keep packing in new students who want to get into college..but the non-traditional format causes them to struggle, lag behind, gain huge debt, and many dont even graduate or arent employable when they do. Not surprising to me that Romney's son would be associated with a venture like this since it is similar in concept to venture capitalism...invest a little, get a lot out, and not worry about the collateral damage.

[phoenixdoglover]

02:21 AM on 06/27/2012

Great article. There needs to be more reporting on this; it is a national disgrace. I love seeing Kaplan on the list. For a while, there was a Kaplan call center in the same building where I worked. The staff there made cold calls to prospective students and tried to get them to enroll. The call center employees were a shifty lot; turnover was huge; every week guys would be leaving on Friday afternoon with a small box of personal belongings. Their next job was probably selling penny stocks.

[holycowbatman]

06:02 AM on 06/27/2012

Theyre all a shifty lot...even Phoenix was shifty when the first started out...but they have come a long way and are now the standard for how it should be done. I cant speak to the rigor of ALL their programs, but I have employed a number of their graduates and find them to be quite competitive with most community college graduates and in some cases competitive with traditional four year grads as well.

[dmgoss]

07:01 AM on 06/27/2012

Except the difference in price between community colleges and Phoenix is literally pennies on the dollar. It seems fairly obvious that we could do a better job by these students making the cheaper alternative more available, providing opportunities without miring them in debt they will likely spend the rest of their lives paying off.