Tuesday, June 13, 2017

College Meltdown: IL, AZ, LA, AL, SC, PA, MI hardest hit


The US College Meltdown is not a fast-moving crash, nor is it felt evenly across the nation. That's why many professionals still deny this characterization of crushing student loan debt and five consecutive years of declining enrollment numbers.

For-profit colleges, HBCUs, community colleges, and small rural private colleges have been hardest hit by the meltdown, while elite colleges and flagship universities continue to rake in tens of billions in revenues.

States and counties display different patterns during the College Meltdown. Four factors in determining where community colleges and second- and third-tier state colleges are most vulnerable to the College Meltdown include : (1) states with declining college enrollments and (2) declining numbers of high school graduates, (3) states that have already been cutting state funding of colleges and community colleges, and (4) states and counties with above average indebtedness.

I am in the process of creating a ranking of those States most vulnerable to the College Meltdown. Is your state listed? Are their any factors that aggravate or mitigate indebtedness and declining youth numbers?

(1) Declining College Enrollment Numbers (>10,000)
  • New York (-30,695)
  • Illinois (-26,089)
  • Michigan (-25,841)
  • Pennsylvania (-18,390)
  • Virginia (-15,613)
  • Massachusetts  (-13,444)
  • Wisconsin (-13,122)
  • Texas (-11,376)
  • Colorado  (-11,039)
  • Maryland (-10,444)

(2) Declining High School Graduates (> 5%) 
(10% or more decline)
  • Illinois
  • Mississippi
  • Michigan
  • Ohio
  • Vermont
  • New Hampshire
  • Maine
  • Rhode Island
  • California
(5% to 10% decline)
  • New Jersey
  • Pennsylvania
  • Wisconsin
  • Alabama
  • Missouri
  • West Virginia
  • Kentucky
  • Indiana
  • Massachusetts

(3) State Funding Cuts Targeting Higher Education (>30% since the recession)
  • Arizona (55.6%)
  • Illinois (54.0%)
  • Louisiana (39.1%)
  • South Carolina (37.0%)
  • Alabama (36.2%)
  • Pennsylvania (33.3%)
  • Kentucky (32.0%)
  • Idaho (30.8%)
  • New Hampshire (30.1%)

(4) State and Local Indebtedness
  • New York
  • South Carolina
  • Rhode Island
  • Washington
  • Florida
  • Kentucky
  • Illinois
  • Connecticut
  • Pennsylvania
  • Massachusetts
  • West Virginia
  • Colorado
  • New Jersey
  • Nevada
  • Hawaii
  • Texas
  • Kansas
  • Louisiana

Tuesday, May 30, 2017

Community Colleges at the Heart of College Meltdown


Community college enrollment has dropped by 1.6 million students (23%) in the last six years.  Even worse, full-time enrollment at community colleges has dropped by 36% over the last 6 years. Source for Data: National Student Clearinghouse.

US college enrollment has dropped by about 2.5 million students over the last six years, but this College Meltdown has not been spread evenly.

For-profit colleges have been hardest hit in their percentage decline of students and campus closings. But community colleges, which may be the best educational value for working families, have been even harder hit in the sheer numbers who are not attending.

While the for-profit college crash has been well documented in the media, the crisis in community colleges has been under-reported.
For-profit colleges have seen a decline of about 600,000 students since their peak, but community college enrollment has declined even more, by 1.6 million.

[Image below:  Most US community colleges have seen enrollment declines. Data from National Center for Education Statistics]

The reaction to the community college downturn has ranged from punitive to progressive: reduced state and local funding, higher tuition, reduced student and family services, fewer teachers, lower educational standards--and free college tuition:
In 2003, 53% of all community colleges offered campus child care. In 2015, only 44% had it.
At the national level, the dearth of reporting on the community college downturn begs more questions:
  1. What community colleges have been hardest hit?
  2. What has happened to all the people who have decided not to go to a community college?
  3. Why do you think the enrollment crisis in US community colleges has been under-reported?

Saturday, May 13, 2017

Charting the College Meltdown


This chart illustrates the mostly downward movement of the College Meltdown.  Overall, revenues to higher education institutions continue to rise, but these numbers mask the many weaknesses in the system.

What we are looking at is unsustainable. 

While elite colleges and brand name colleges will continue to thrive, many for-profit colleges, Historically Black Colleges and Universities, community colleges, and lesser valued public and private colleges will suffer.

This trend may be disturbing for working people and their families, but it is also an opportunity for others to consolidate power and increase profits.


Wednesday, May 3, 2017

"Creative Destruction" in Higher Ed Will Accelerate Under Trump and DeVos


  • 42% of today’s college students are living near or below the poverty line.
  • Student services have been cut substantially since the last recession.
  • Total US college debt has increased to $1.4 trillion.
  • Only about 40% of student loan debtors are paying back more than interest.  
  • US college enrollment has declined 5 consecutive years, with no reasonable expectation that the decline will slow down. 
  • State funding cuts for higher education are continuing in several states, with no new taxes and increasing burdens from Medicaid, pensions, and infrastructure repair. 
  • More than half of all college teachers are low-paid adjuncts.
  • College mergers and closings are expected to increase. 
  • Differences between for-profit and non-profit colleges continue to be blurred. 
All are signs of a long-term crisis in US higher education reinforcing even greater social inequality--what I have coined the "College Meltdown."

Every year, the picture becomes clearer that the College Meltdown is worsening. But vested interests refuse to acknowledge the situation or they claim that the problems are just the first step toward a better, corporate-based solution.

President Donald Trump and Secretary of Education Betsy DeVos promise to accelerate the College Meltdown.
Political conservatives like Richard Vedder have long believed that government funding has artificially inflated college costs, making higher education an increasingly risky proposition. Vedder and others also argue that the College Meltdown is not occurring fast enough, and that unfettered market forces would allow for greater consolidation and "creative destruction."

Trump's long range plans could put these ideas into practice. Already, DeVos has hired people who have worked for the for-profit college industry. And it's not inconceivable that the US could get out of the student loan business, handing the reins back to the banks.

Other conservatives will profit, or at least hedge their bets, from the meltdown. The Koch Brothers, for example, are spending money to shape social policy at Historically Black Colleges and Universities. 

Do you believe that less government oversight and more creative destruction in higher education will make things better? Should banks be in control of student loans with limited oversight?

Wednesday, January 18, 2017

Bibliography of the College Meltdown


Angulo, A. (2016). Diploma Mills: How For-profit Colleges Stiffed Students, Taxpayers, and the American Dream

Armstrong, E. and Hamilton, L. (2015). Paying for the Party: How College Maintains Inequality

Bennett, W. and Wilezol, D. (2013). Is College Worth It?: A Former United States Secretary of Education and a Liberal Arts Graduate Expose the Broken Promise of Higher Education                             

Berg, G. (2005). Lessons from the Edge: For-profit and Nontraditional Higher Education in America

Best, J, and Best, E. (2014). The Student Loan Mess: How Good Intentions Created a Trillion-Dollar Problem

Blumenstyk, G. (2014). American Higher Education in Crisis?: What Everyone Needs to Know

Bousquet, M. (2008). How the University Works: Higher Education and the Low Wage Nation

Breneman, D. et al. (2006). Earnings from Learning: The Rise of For-profit Universities

Cappelli, P. (2015). Will College Pay Off?: A Guide to the Most Important Financial Decision You'll Ever Make

Chung, A. (2012). Choice of For-profit College Economics of Education Review, v31 n6 p1084-1101.

Cottom, T. (2016). Lower Ed: How For-profit Colleges Deepen Inequality in America

Cottom, T. (2014). For-profits Are Us. AFT Higher Education On Campus 33(4), pp. 7–11.

Fabricant, M. (2016). Austerity Blues

Ginsberg, B. (2013). The Fall of the Faculty: The Rise of the All Administrative University and Why It Matters

Giroux, H. (2014). Neoliberalism's War on Higher Education

Golden, D. (2006). The Price of Admission: How America’s Ruling Class Buys its Way into Elite Colleges — and Who Gets Left Outside the Gates

Goldrick-Rab, S. (2016). Paying the Price: College Costs, Financial Aid, and the Betrayal of the American Dream

Halperin, D. (2014). Stealing America's Future: How For-profit Colleges Scam Taxpayers and Ruin Students' Lives

Hentschke, G. et al. (2010). For-profit Colleges and Universities: Their Markets, Regulation, Performance, and Place in Higher Education

Johnson, B. et al. (2003). Steal This University: The Rise of the Corporate University and the Academic Labor Movement

Kinser, K. (2006). From Main Street to Wall Street: The Transformation of For-profit Higher Education

Leach, T. (2008). The Impact of For-profit Privatization on Higher Education in the State of Massachusetts

Levin, H. (2001). Thoughts on For-profit Schools

McGuire, M. (2012). Subprime Education: For-profit Colleges and the Problem with Title IV Student Aid. Duke Law Journal, 62 (1): 119-160

Mettler, S. (2014). Degrees of Inequality: How the Politics of Higher Education Sabotaged the American Dream

Morey, A. (2004). Globalization and the Emergence of For-profit Education

Murphy, J. (2013). Mission Forsaken—The University of Phoenix Affair With Wall Street

Newfeld, C. (2011). Unmaking the Public University

Newfeld, C. (2016). The Great Mistake: How We Wrecked Public Universities and How We Can Fix Them

Perini, M.(2011). A Phoenix Still in Ashes: For-profit Open Admissions and the Public Good

Ruch, R. (2003). Higher Ed Inc.: The Rise of the For-profit University

Selingo, J. (2013). College Unbound: The Future of Higher Education and What It Means for Students       

Stodghill, R. (2015). Where Everybody Looks Like Me: At the Crossroads of America's Black Colleges and Culture                                                                                                       

Vedder, R. (2004). Going Broke By Degree: Why College Costs Too Much             
Washburn, J. (2006). University Inc.: The Corporate Corruption of Higher Education

Monday, December 19, 2016

College Meltdown at a Turning Point


[Image above: Turning Point USA, a neoconservative student group, has grown to more than 1100 high school and college chapters since its founding in 2012.]

The College Meltdown has been developing for decades. But now, it is at a turning point as the Trump Administration enters office.  Most likely, American colleges are headed toward more racial and ethnic tension, less transparency, and more corruption.  And the Trump Administration's solutions, which include privatization and deregulation, may not only accelerate the College Meltdown, their "hands off" approach to civil rights may increase conflicts on campus.

Donald Trump's selection of Betsy Devos and Jeff Sessions as US Secretary of Education and Attorney General have already sent a loud statement to those who research and analyze organizational effectiveness and institutional corruption in education.

The loud statement is that citizens should keep an eye out for even more discrimination, inequality, and fraud in K-12 education and higher education. Non-Christians and "others" with limited financial resources should be particularly concerned. But don't expect to get much information from the corporate controlled media--it would take too much work and it wouldn't be profitable.

For those interested in how education policy plays out over the next four years, we'll also need to know who will lead the Consumer Financial Protection Bureau, Federal Trade Commission, Securities and Exchange Commission, Federal Communications Commission, and how much those agencies will receive in funding for oversight of the US education industry.

Lack of oversight will accelerate opportunities for cronyism, nepotism, theft, lack of transparency, academic cheating, and intellectual dishonesty at the state and local levels

We also expect this increase in wrongdoing and poor decisions to be met with limited resistance and highly framed media attention.

Over the last two decades, tens of billions of dollars have already poured into charter schools despite lack of evidence about their effectiveness. Charter school enrollment has risen from about 300,000 in 1999 to about 2.5 million children in 2015 (about 5% of all school children).

Government-fed media stories may show structural failure that has been existent for generations and corruption that has cropped up in the age of increasing school choice. But ideological perspectives and power will influence which sides get the most attention, the quantity and quality of background information provided, and which stories (if any) gain the most traction.
"School choice," "empowerment," "opportunity," "religious freedom," "union corruption," "failing schools," "local control," "merit pay," "vouchers,"   "political correctness," "safe spaces," and "micro-aggressions" will be terms widely used to frame stories about US education.
For every action by all of these educational players, there will be a set of reactions from multiple sides. Vested interests include banks, private equity, hedge funds, philanthropies and foundations, for-profit and non-profit education and educational services companies, political parties, teachers union leaders, marketing and advertising companies, construction unions, pension funds, lobbying firms, think tanks, public relations businesses, and media outlets.
   Liberals may secretly like vouchers, so their children can get tuition breaks for private school attendance, or chances to get out of dangerous or failing public schools.   
Much of the action will also be at the state and local level and may not be reported by major news outlets.
The Libertarian Cato Institute has created a public schooling "battle ground" map about various neoconservative conservative social issues that are being fought across the country.

Outside players such as student debt groups, adjunct professors, and teacher resistance groups will also be involved, but will likely be marginalized or silenced.

We cannot predict what will happen exactly, but power, influence, and organizational effectiveness will be large determiners of what unfolds. And deals between power players behind the scenes may be vastly different than what is presented in the media.
Some people will profit from the direction the nation's educational policy is going. But a larger number will suffer. We don't expect society as a whole to understand the consequences for quite some time. 
  • Parents with high hopes will place their children in lotteries for high-demand charter schools. But most will be disappointed.
  • About 0.5% of American children are currently enrolled in online charter schools. But this number could expand with deregulation, even if their educational value is in question.

While we construct this article, we suggest that you read three of our previous reports.

We invite feedback and opinions from all sides with interests in the education business and will respond to every comment we receive. Our email is dahneshaulis@gmail.com

Thursday, December 15, 2016

Forecasting the US College Meltdown


Professionals in higher education may deny that a US College Meltdown is occurring, but that doesn't mean it's not here. Arguably, a few variables related to the phenomenon have improved since the economic downturn of 2008-2009, but that's not a return to a healthy situation. That's why I have written more than two dozen articles on corruption, dysfunction, and financial failures in American higher education to document the many facets of the meltdown.

When I speak of College Meltdown, I am referring to the slow-moving decline of US colleges and affiliated businesses, which includes the following variables: (1) increased student loan debt, (2) decreased gainful employment of those who matriculate, (3) declines in student returns on investment (ROI), (4) increased student loan non-repayments, (5) increased student defaults, (6) reduced college enrollment numbers, (7) declines in entrance standards, (8) reductions in college revenues and endowments at less than elite schools, (9) increased use of debt (bonds) to fund colleges, (10) reductions in instructional staff and instructional pay, particularly with the use of adjuncts, (11) increases in class size, (12) college program closing, (13) reduced student services (14) selling of institutional assets, (15) accreditation downgrades, (16) college consolidations, (17) institutional closings, and (18) reduced values and ratings of student loan asset-backed securities (SLABS) .
Total college revenues and expenses have continued to climb, to $342B and $314B in 2015. But the number of community colleges peaked in 2003-2004. And total enrollment at all postsecondary schools combined peaked in 2010-2011.   

These College Meltdown Variables are influenced by a variety of macroeconomic and social variables, including: (1) age demographics, particularly the numbers of college age individuals, (2) family size, (3) family wealth, (4) state and local allocations to higher education, (5) federal allocations to higher education, (6) employment participation, (7) median and quintile personal income of Millennials, (8) K-12 preparedness for college, and (9) immigration numbers.

Professionals have acknowledged certain troubling aspects of the meltdown, especially the student loan debt crisis, but additional components of this problem, which many fail to acknowledge, date back several decades.

Bain Capital ( Denneen & Dretler, 2012) and the New America Fund ( Selingo, et al, 2013) argue that colleges are spending beyond their means, using outmoded teaching methods, becoming less accessible to students and their families, and refusing to be accountable for student graduation and default rates and “gainful employment” numbers.
For me, the question is not whether a meltdown is here, but how quickly it is spreading, which type of schools are most vulnerable and what colleges are in the most immanent danger of failing.

According to Neal McCluskey of the Cato Institute, about 300 colleges closed in 2016. While most were for-profit colleges, many other private and public schools are performing poorly and downsizing.

At first glance, the most vulnerable schools are for-profit colleges, HBCUs, community colleges in cash strapped states, small private liberal arts and Christian colleges, tribal colleges, and public "dropout factories." Low enrollments and downgrades in accreditation are variables that suggest huge problems. But factors such as negative Return on Investment (ROI) should also elicit alarm bells.

In developing predictive models, analysts must consider the dynamic, somewhat unpredictable, and seemingly irrational nature of human behavior. For example, as more working class and middle class people recognize that college is a high risk investment for themselves and their families, a greater number should choose to opt out of school or delay college participation, choose community colleges for the first two years of schooling, or select other majors. But this may not always be the case.
Rational Choice Theory has limitations for understanding college choice. Theories of asymmetrical information, time discounting, and sunken investment, illustrate that people can make sub-optimal decisions about choices even as they gain knowledge.
College administrations can also change their behaviors to survive and thrive in a more competitive environment.