THE CORPORATIZATION & MECHANIZATION OF HIGHER EDUCATION

 

The Automation of Higher Education (October 1997) by David F. Noble argues that events at two large North American universities "signal dramatically that we have entered a new era in higher education, one which is rapidly drawing the halls of academe into the age of automation. UCLA has spawned its own for-profit company, headed by a former UCLA vice chancellor, to peddle online education (the Home Education Network). ... in Toronto, meanwhile, the full-time faculty of York University ... ended an historic two-month strike having secured for the first time anywhere formal contractual protection against precisely the kind of administrative action being taken by UCLA."  See First Monday reprint

While faculty concerned about their future employment might be expected to react unfavorably to inroads by outside commercial outsourcing providers, there are indications that students at both UCLA and York were less than enthusiastic as well. For example, the student handbook distributed annually to all students by the York Federation of Students contained a warning about the "dangers of online education." In mid-summer, the UCLA administration launched its historic "Instructional Enhancement Initiative" requiring computer web sites for all of its arts and sciences courses by the start of the Fall term, the first time that a major university has made mandatory the use of computer telecommunications technology in the delivery of higher education. In partnership with several private corporations (including the Times Mirror Company, parent of the Los Angeles Times), moreover, UCLA has spawned its own for-profit company, headed by a former UCLA vice chancellor, to peddle online education (the Home Education Network)

CORPORITIZATION OF ACADEMY

LEADING TO HUGE CEO SALARIES FOR PRESIDENTS

There is an ongoing trend to model the university on the basis of a well-oiled corporation.

Part of this approach is giving business executives the role of university president while maintaining CEO salaries to optimize university profitability.

List of Salaries of the University CEOs

 

 

FOR-PROFIT ONLINE SCHOOLS WITH HIGH TUITION AND LOW STANDARDS

For-Profit Online schools have popped up everywhere throughout the country and offer an online university degree with minimal academic standards but with extremely high tuition. If you pay 100K (or, better yet, take it out as a loan), you will pass our courses. That's the bottom line. We just want your 100K or more. It will make our stock/share price go up!

DIPLOMA MILLS

 

Digital Diploma Mills

Deceptive Marketing by For-Profit Colleges Uncovered by U.S. Investigation

Senator Harken Recruiters at U.S.for-profit colleges lied to entice students and encouraged them to commit fraud to qualify for aid, a report by the Government Accountability Office found. The 30-page report said recruiters at four of the colleges encouraged fraud on loan applications, without identifying the institutions. Colleges can be fined as much as $25,000 per violation and lose their eligibility for government financial aid if they've been found to lie to students about their programs, the report said. source

NYT For-Profit Colleges Mislead Students, Report Finds

[source] Among the schools probed were Apollo Group (APOL), University of Phoenix in Arizona, Corinthian Colleges Inc. (COCO), Everest College in Arizona, Washington Post Co. (WPO), Kaplan's Kaplan College in California, and Education Management Corp's (EDMC) Argosy University in Illinois.
The S&P 1500 education services sub industry index initially was slightly lower than the overall market at the start of the hearing, though it recovered later. It was up 0.8 percent in late morning trading while the overall S&P 500 index .SPX was up 0.3 percent.The Career College Association, which represents mostly for-profit occupational colleges, has said the GAO report is troubling and vowed to improve training and standards.

COUNTERFEITING OF DEGREES AND CONSUMER FRAUD
For-profit schools saddle students with the highest debt loads in higher education and the longest odds on actually paying any of it back. And the bulk of that money comes from taxpayers in the form of federally subsidized student loans. The University of Phoenix, for example, reported last year that86 percent of its revenue came from federalTitle IV student aid. It's an investment from which the government gets little in return when students neither graduate nor repay their debt. And it subsidizes an educational industry beholden not to students, but to Wall Street. http://www.studentloanborrowerassistance.org/uploads/2007/03/BytheNumbersJan2010.pdf | http://www2.ed.gov/offices/ODS/regreview/index.html

 

ECONOMIC CLOUT OF FOR-PROFIT COLLEGES AND UNIVERSITIES

 

The nation's 4-year not-for-profit colleges and universities collectively held more than $400 billion in endowments in 2008.

As of 2008, most 4-year postsecondary schools in the United States had endowments of less than $100 million, while only 70 had endowments of $1 billion. [Source] 

Enrollment in for-profit colleges has grown from about 365,000 students to almost 1.8 million in recent years, according to the GAO report.

Congress will extend between $300 billion and $350 billion in the next 10 years under the Pell grant program for education grants.

 

LIST OF FOR-PROFIT UNIVERSITIES WITH SHADY TRACK RECORDS

 

APOLLO GROUP has the Highest Level of Cash in the Education Services Industry (APOL, DV, CECO, EDU, ESI)
Apollo Group Inc. NASDAQ:APOL ranks first with CE of $896.39M
DeVry Inc. NYSE:DV ranks second with CE of $501.68M

The Apollo Group's University of Phoenix: In 2009, Apollo agreed to pay $78.5m to settle a suit over pay schemes for recruiters.

Apollo Group Inc., based in Phoenix, and Pittsburgh-based Education Management Corp. are among the for-profit colleges that received about $26.5 billion in U.S. government grants and loans in 2009.

CAREER EDUCATION CORP. NASDAQ:CECO ranks third with CE of $422.17M.
New Oriental Education & Technology NYSE:EDU follows with a CE of $281.1M
ITT Educational Services Inc. (NYSE: ESI) rounds out the top five with a CE of $280.01M.

USEDU is a market capitalization weighted stock index of for-profit education companies that trade in the U.S. Analysts use Cash Equivalents (CE) as a measure to compare the cash cushion of companies in the same industry.

 

FURTHER EXAMPLES OF MONEY HUNGRY FOR-PROFIT COLLEGES COMPANIES

 

STANLEY KAPLAN

Kaplan, a for-profit college and a wholly owned subsidiary of The Post Co.

started out as the test-prep company founded by Stanley Kaplan. Grayer grew the company through acquisition and aggressive management, shifting its focus toward the high-profit higher education business and expanding overseas. This year, Kaplan is on pace to report revenue of more than $2 billion. Kaplan's third-quarter operating income grew 36 percent on revenue gains of 17 percent this year, compared to the same period of 2007.

 

STRAYER EDUCATION

Strayer Education, Inc. Reports Record Second Quarter 2010 Revenues and Earnings; and Record Summer Term 2010 Enrollments -- Strayer Second Quarter Revenues Up 26% -- -- Revenues for the three months ending June 30, 2010 increased 26% to $159.3 million, compared to $125.9 million for the same period in 2009, due to increased enrollment and a 5% tuition increase which commenced in January 2010.

CAPELLA EDUCATION COMPANY
Capella Education Company, a provider of exclusively online post-secondary education through its wholly owned subsidiary, Capella University http://www.capella.edu

"It's easier nowadays to create one edition for one situation and a different edition for another situation. I don't believe the Texas curriculum will spread anyplace else." -- Bob Resnick, founder of Education Market Research, June 1, 2010

 

McGRAW-HILL COMPANIES

The McGraw-Hill Companies (NYSE: MHP) today approved a regular quarterly cash dividend on the Corporation's common stock. The dividend of $0.235 is payable on September 10, 2010, to shareholders of record on August 26, 2010. The McGraw-Hill Companies has paid a dividend each year since 1937 and is one of fewer than 30 companies in the S&P 500 that has increased its dividend annually for the last 37 years.  The annualized rate of $0.94 per share, which includes a 4.4% increase approved by the Board in January of 2010, represents an average compounded annual dividend growth rate of 9.9% since 1974. http://www.sacbee.com/

McGraw-Hill Education Launches Online Assessment Platform With Unique Speech Recognition Technology to Accelerate English Language Learning in China http://www.prnewswire.com/

McGraw-Hill, a global information and education corporation, together with its local partner ChinaEdu, announced it has created the English Online System (EOS), a pioneering digital platform delivering high quality, research-based assessments aligned with Chinese New English Curriculum standards that will serve China's middle school students.  The new EOS online platform will serve China's large and fast-growing education market, estimated to reach $200 billion this year.

PENGUIN GROUP AND PEARSON

While Penguin results contributed to Pearson's sales and profitability, the other publishing wings of the company continue to drive performance. North American Education remains Pearson's largest business, with 2009 sales of 2.5bn and operating profit of 403m. http://www.justmeans.com/

National Association of College Stores (NACS), which represents about 1,500 bookstores. Digital text e-book sales will reach 18.4% by 2014. Text Book Publishers

Retailers prep for e-book education push​  http://www.dmnews.com/

Apple App Store Volume Purchase Program for Education 8 /11/ 2010
Apple quietly unveiled a new program for educational institutions. The program will allow educational institutions to purchase and download apps from the App Store in volume, and it will also allow developers to offer volume discounting to those institutions. Apple positioning iOS devices as an educational tool, seeing iOS devices, especially the iPad, become more of a player in the textbook reader market.

 

MEDIA

The TV, Political, Industrial Complex Ads are designed to to tell a story. America has the best Politicians money can buy who can afford TV ads that will interrupt their constituency the most amount of times and get them to care and then vote. Politicians make up a story people want to hear; they pay to interrupt people with ads, then tell the story to people who want to hear it. They don't waste their money telling people who aren't interested. Telling them where to find out more about it on their website, then asking them for their email address, which gives them permission to market their message and tell them anything they want. This is supposedly an opportunity to be interactive with their public. TV + Politicians + Social Media are geared to have these conversations that seem to promote transparency, but actually become a means of manipulation.

 

MERGERS AND ACQUISITIONS IN THE EDUCATION INDUSTRY

Berkery Noyes Releases First Half 2010 Education Industry Merger & Acquisition Trends Report and compares it with activity in the four previous sixth month periods from 2008-2009.

 

Revenue multiples in the Education Industry continued their strong upward trend, rising 38% to 1.8, which represents a 200% growth from the low of 0.6 in 1st Half 2009. Despite strong growth in revenue multiples, transaction volume decreased for the fifth straight half-year period, falling 14%, from 86 in 2nd Half 2009 to 74 in 1st Half 2010.  Gains in aggregate deal value had been significant in the past year, but such growth has ceased and total value has regressed 7% from 2nd Half 2009. full report http://berkerynoyes.com

Of the top ten transactions by value, four were financially sponsored: the announced acquisition of SkillSoft plc by Bain Capital, Advent Intl. Corp., and Berkshire Partners LLC for $1.06 billion, Ontario Teachers' Pension Plan's pending acquisition of Acorn Care & Education Ltd. for $245 million, JLL Partners' pending acquisition of Ross Learning LLC for $232 million, and Thoma Bravo, LLC's pending acquisition of PLATO Learning, Inc. for $137 million. These financially sponsored transactions accounted for just 32% of the transaction volume, but comprised 82% of total transaction value within the industry.  The lack of strategic and PE backed acquisitions can be traced back to the Congressional discussion Title IV of the Higher Education Act, the legislation that regulates student financial aid programs.Lawmakers have come to question specific practices within the higher education model and have proposed a set of rules intended to prevent abuses of federal financial aid programs by establishing new eligibility standards both for students and the colleges they attend. This regulatory spotlight on the industry has raised many concerns from investors in the sector and has had a significant impact on the valuations of publicly traded for profit institutions and the volume of M&A in the first half of 2010.

In the K-12 sector, traditional publishers have seen continued softness in their sector due to the constraints state and local governments have experienced with their fiscal budgets.  Although the states have benefited from increased funding from the federal government, most have focused their spending on retaining and compensating teachers, rather than directing spending on additional instructional materials for the classrooms, which has negatively impacted pure play educational publishers.  However, certain technology and digital education providers have benefited from an increased emphasis on data driven decision making, TESTING PRODUCTS which has been the forefront of the current administration's new legislation called Race to the Top.  Experts believe this part of the education sector will see increased growth in the coming years which will result in higher volume of M&A activity.

The Department of Education has put rules in place that would cut off federal aid to schools that are “for-profit” if they have too high a rate of loan defaults or if students do not earn enough after graduation to repay loans. The White House has proposed a formula that takes the debt-to-income ratio of recent graduates and whether students repay their loans on time. The issue here at stake is not whether these institutions get to exist. It is whether they will have mostly the same financial aid access as public and other accredited universities.

9/15/2010 ICF International (ICFI 23.37, +0.48, +2.10%) , a leading provider of consulting services and technology solutions to government and commercial clients, has been awarded a new four-year, $38 million contract by the U.S. Department of Education to support the department's Race to the Top (RTT) program. ICF will provide technical assistance (TA) support directly to RTT grantees as well as to other education agencies. Specifically, ICF will provide a range of TA support from in-person advisories, trainings, and workshops to a Website that will serve as an information resource for stakeholders. Additionally, ICF will establish learning communities where best practices in education can be shared and RTT grantees can collaborate and build relationships that will sustain positive change in their state education systems. ICF is a leading provider of TA services in the field of education. ICF currently provides TA in multiple regions of the federal government's Head Start program and plays a key role for the Regional Educational Laboratory Mid-Atlantic. The RTT contract continues ICF's focus on applying evidence-based practices to improve education for learners of all ages.

 

Education is a Business Big Business as only Merrill Lynch Research can show.

1. Corrupt Department of Education Government Programs designed to funnel money to the politicians' family and friends that cheat the tax payer out of their children's success and the country's commonwealth are caught.

2. Failing Reading Scores is good for business.

3. Building Prison Cells is the Biggest growing Busine$$ in America with 2.4 million prisoners. The United States has six to twelve times as many incarcerated people as other prosperous democracies, (Australia, Canada, France, Germany, Japan, and the United Kingdom), The prison industry successfully sought more prisoners, longer sentences, and maximal possibilities of probation violations and a swift return to custody. The country has 47 million people with a criminal record, (most for relatively trivial offenses,) and prosecutors won more than 90% of their cases. 90% of Americans judged to require confinement for psychiatric reasons are in the prison system. Conrad Black

4. Example of Paige Corruption in Houston Leaving Children Behind

5. One quarter of the children do not finish high school which places an enormous burden on the economy, but ,hey, when kids can't read and there are no jobs, the Privately owned Prison System makes a boat load of money.

6. San Quentin, CA's oldest prison, and the only one that still provides free college-level education to inmates with the Prison University Project.
   The project is a private, nonprofit education program that offers about 300 inmates the opportunity to earn an associate of arts degree. The program was launched in the mid-'90s, soon after Congress voted to axe federal funding to higher education in prisons across the country. The university project in San Quentin is the only accredited, free-of-charge higher education program behind California prison walls. Article and Mp3

7. "Higher Education Is Overrated, Skills Aren't" Harvard blogger Michael Shrage discusses what he calls the "mythical belief" that higher education invariably leads to the most successful career path. Education is a misleading-to-malignant proxy for economic productivity or performance. Knowledge may be power, but "knowledge from college" is neither a predictor nor guarantor of success. You pay for future connections. Eduzealots have done a truly awful thing to serious human capital conversations and analyses around employment. By vociferously championing higher education as key to economic success, they've distorted important public policy debates about how and why people get hired and paid well. Microsoft's Bill Gates, Dell's Michael Dell, Apple's Steve Jobs, Oracle's Larry Ellison and Facebook's Mark Zuckerberg are all college drop-outs.
   Great knowledge is not the same as great skill. Worse yet, decent knowledge doesn't guarantee even decent skills. Unfortunately, educrats and eduzealots behave as if college English degrees mean their recipients can write and that philosophy degrees mean their holders can rigorously think. That's not true. http://www.businessweek.com/

8. You Do Need the Best Kindergarten Teacher whose talent benefits your entire life.

9. STATES Correctional Education Coordinator

CAMBRIDGE

6/11/14 Cambridge University: the Chinese government connection​

"It would seem that a foreign government appointed a professor of politics at Cambridge."
"How, if the foundation’s money came from the family of the head of government of the People’s Republic of China for over a decade, and if the foundation was able to name the first occupant of the chair, can Cambridge demonstrate academic independence?"

Ukraine’s dirty money: the Cambridge University connection, which highlighted the fact that a Ukrainian oligarch who had showered money on Cambridge university to promote a “Cambridge Ukrainian Studies” department had just been arrested in Vienna on an international arrest warrant at the request of the FBI.