Saturday, May 18, 2019

JLL Partners facing tough decisions with Fortis Colleges and Institutes

  • Related Link: Fortis Layoff.com page
  • Related link: When College Choice is a Fraud (2016)
  • Related Link: College Meltdown: Where's the Bottom (2019)?

  • Now that many publicly traded for-profit colleges have collapsed, College Meltdown is looking at private equity firms that own subprime colleges.

    One of the most notable for-profit college conglomerates, Education Affiliates, operates Fortis Colleges and Fortis Institutes and other lesser known trade schools.  Fortis schools are managed by EA, but they are owned by JLL Partners, a New York City-based private equity firm.

    At least eight Fortis campuses have closed, leaving 32 locations. But many of the remaining schools have been losing money and 14 are on US Department of Education Heightened Cash Monitoring.

    In 2016-17 (the last year available for data), 21 Fortis locations were unprofitable: Centerville, Cincinnati, Columbia, Cutler Bay, Cuyahoga Falls, Grand Prairie, Houston, Indianapolis, Norfolk, Phoenix, Richmond, Baltimore, Birmingham, Cookeville, Erie, Forty Fort, Lawrenceville, and Nashville.

    The problem from the beginning has not been with instructional quality, but with programs offering limited gainful employment. Schools like Fortis offer programs that often lead to low wage jobs, and low wages make student loan debt insurmountable. Student loan repayment rates for Fortis schools range from 20 to 24 percent.

    So how long can JLL Partners continue to let the red ink continue with these assets? Can cuts be made without cutting instructional quality and student resources? And how can Fortis schools compete with free community college in states like New Jersey, Tennessee, and Indiana, where Fortis campuses exist?

    JLL Partners has many notable investors, including the University of Missouri System, Montana Board of Investments, Colorado Public Employees' Retirement Association, Regents of the University of California, Travelers Companies and advised by Neuberger Berman, and the New Jersey Pension Fund. All of these funds need to pay off their obligations; with New Jersey, the pressure to create substantial returns is enormous.

    JLL Partners also owns Ross Medical Education Centers, ACE Cash Express, CATO Research, Medical Card System, Pioneer Bank, Point Blank Enterprises, Viant, and Xact Data Discovery.

    Thursday, May 2, 2019

    Purdue University Global Continues to Defraud Servicemembers, Veterans, and Working Families

    Related articles:

    "The school that systematically misleads students or enrolls those who don't have the capability of succeeding is unlikely to last long. It will have a difficult time making money, and it will build problematic word of mouth in the community in which it operates."--Kaplan CEO Andrew S. Rosen (p. 169) in Change.edu
    In August 2018, I posted a report about Purdue University and its new acquisition, Purdue University Global. The Big-10 school purchased the former Kaplan University from Graham Holdings Company for the sum of $1, while Kaplan Higher Education would be paid service fees for managing the business. The deal sounded like a windfall for Purdue University, but it really wasn’t. Purdue University Global is in deep financial trouble, and Purdue University is liable for any losses related to Purdue Global’s fraudulent business activities.
     
    In my earlier report, I alleged that Purdue University Global was using false claims to enroll working people, especially servicemembers and their families. Their advertising and marketing claims offering a “world-class” education were patently false. But their advertising was compelling to the poorly informed. Purdue Global was also employing QuinStreet, a questionable internet lead generator.

    In truth, Purdue University Global’s educational quality is mediocre at best, and its student outcomes rival some of the worst actors in for-profit higher education. Global's numbers:
    Purdue Global has been able to get away with these fraudulent practices because it does not receive proper oversight. The US Department of Education, the Department of Defense, the Department of Veterans Affairs, the Enlisted Association of the National Guard of the United States, and the Council of College and Military Educators have all looked the other way, as working families, and especially servicemembers and veterans, have been fleeced by the subprime school.

    In April 2019, little has changed in terms of Purdue Global’s fraudulent claims. And as Purdue loses more money (it had a $38 million net operating loss in FY 2018), it will have to make bold moves to survive. While little public information is available, we do know that Purdue Global continues to spend money on television and print ads.
     
    The ads appearing in the April 15, 2019 editions of the Army, Navy, Air Force, and Marine Times made all the same claim, that the school offered a "world-class" education. Purdue Global also placed ads on tv shows like MTV’s Catfish, which was the ultimate in irony. The show Catfish exposes people who pose as something more than they are, deceiving the person on the other end of the Internet connection.

    Monday, April 15, 2019

    Are Brand Name Coding Bootcamps the New Higher Education Scam?

    "Boootcamps may not be technically a scam, but they come awfully close."--Richard Kenneth Eng, former Project Team Leader at ATI Technologies (1993-2000)

    My friend Tom Cal at the Veteran Mentor Network has alerted me about the proliferation of coding bootcamps and their reluctance to tell consumers what they need to know to make good decisions.

    Are these bootcamps meeting all their hype?
    Are they getting their graduates good jobs in coding?
    The short answer is that we don't know.

    The problem is that there is almost no transparency or accountability. That's even though some of these schools are eligible to accept the GI Bill.


    David Halperin has exposed WozU, but how many other brand name coding bootcamps are not working?

    Brand name schools like Penn, Cal Berkeley, Georgia Tech, Northwestern, UCLA, North Carolina, University of Texas, George Washington, and Rutgers would seem to have quality, but are their bootcamps really what they say they are?

    Related article: 8 tips to help vets pick the right college (Military Times)


    Sunday, March 31, 2019

    College Meltdown: Where’s the Bottom?


    How long will this continue? Judging by surveys, and national, local, and business news, it doesn't look good. Further analysis of the terrain reinforces my opinion that the College Meltdown will continue for the foreseeable future.
    Some investors in higher education may be hoping for an economic downturn, because the industry has typically been counter-cyclical. But this time, there may be no guarantee that a recession will improve the financial condition of the industry. Elite schools, for example, rely heavily on investments rather than student enrollment, for capital, and a stock market decline could damage their bottom lines.

    Tuesday, March 19, 2019

    University of Phoenix Collapse Kept From Public Scrutiny, As Ads Continue

    Public information about University of Phoenix has been kept under wraps since 2016, when the school was sold to Apollo Global Management, a large private equity firm where Apollo Education is one of more than 50 assets under management.
     
    While the University of Phoenix still advertises nationally on television shows such as God Friended Me*, its workers and former workers continue to talk off the record about their school's dire situation, and the lengths that the company will take to keep the numbers up.

    Behind the scenes at UoPX, enrollment has continued to drop, teachers and enrollment reps have been fired, and campuses continue to shutter. 

    University of Phoenix campuses will be closing in Albuquerque, Atlanta, Charlotte, Chicago, Colorado Springs, Columbia, South Carolina, Detroit, El Paso, Honolulu, Jersey City, Philadelphia, Tucson, Virginia Beach, and several locations in California and Florida.

    But there is no story, so far, in the news about the collapse of America's largest university, because confirmable information is difficult to obtain. The University of Phoenix media room does not return calls or emails. And the culture of silence at the school prohibits the truth from coming out.


    *University of Phoenix advertisement appeared during a new episode of God Friended Me, 3-17-2019.

    Related links:

    The Slow-Motion Collapse of America’s Largest University

    Observations of the College Meltdown in Real Time

    Higher Learning Commission: Accreditation Is No Sign Of Quality

    Wednesday, March 6, 2019

    IPEDS Trend Generator illustrates lower enrollment, less revenues, fewer jobs at for-profit colleges

    NCES data show that jobs at for-profit colleges have declined every year since 2012

    The newest US Department of Education IPEDS data show that enrollment, revenues, and jobs have decreased dramatically in the for-profit college sector. 


    Enrollment at for-profit colleges dropped from a peak of 2.4 million in Fall 2010 to 1.3 million in Fall 2017.  That's an enrollment drop of 1.1 million.  

    This, in turn, has led to less revenue and fewer workers. 

    Revenues at for-profit colleges peaked in 2011 at $29.6B and dropped to $19.4B in Fall 2017. That's a drop of more than $10B a year from its peak. 

    For-profit college employees peaked at 295,887 in 2012 and the number dropped to 176,441 by Fall 2017. That's a loss of more than 120,000 jobs.
    Decline in enrollment, revenues, and employees (2010-present)

    Fall/Year    Enrollment    Revenues              Employees
    2010           2,430,657      29,603,059,000     295,476
    2011           2,368,440      33,889,758,000     288,882
    2012           2,174,457      32,196111,000      295,887
    2013           2,000,883      29,643,714,000     258,098
    2014           1,883,199      27,310,167,000     241,134
    2015           1,629,393      24,007,022,000     214,656
    2016           1,437,452      20,804,128,000     191,083
    2017           1,345,633      19,446,382,000     176,441 

    You can create graphs and tables yourself using the updated data at the IPEDS Trend Generator.

    Current conditions in the for-profit college industry may actually be worse, judging by the Fall 2018 assessment by National Student Clearinghouse, which had reported an additional 15 percent decline.  However, NSC's original press release has been removed.  

    The data also do not consider more recent losses, such as the collapse of Education Corporation of America (which includes Brightwood College and Virginia College) or Dream Center Education Holdings (which includes Argosy, Art Institutes, and South University

    One confounding issue is that for-profit colleges Grand Canyon University and Purdue University Global (formerly Kaplan) have moved to the non-profit side.  Ashford University is also working on having its tax status changed from for-profit to non-profit.











    Tuesday, February 26, 2019

    Observations of the College Meltdown in Real Time

    While College Meltdown utilizes government, industry, and non-profit data, the information is often stale by the time it is analyzed. Social media, however, provide unique insights into the US subprime college crash, the student loan mess, private college closings, downsizing at state colleges and universities, college financial and political scandals, and other college-related crises as they happen. One important site is TheLayoff.com.

    TheLayoff.com has provided a platform for real-time observations and information for more than a decade. In the case of the subprime college crash, workers chronicled the collapse of Corinthian Colleges, ITT Tech, Education Management Corporation, Education Corporation of America, and other for-profit colleges as they happened.

    Workers posting on TheLayoff.com also provided insight into businesses that surrounded the for-profit education industry, such as ECMC, a student loan servicer, and ACICS, one of the industries accreditors.

    As the subprime college crash continues, some of the most interesting pages to watch are: Dream Center Education Holdings and the Art Institutes, University of Phoenix, DeVry University, Graham Holdings and Kaplan University (servicer of Purdue University Global), Laureate Education and Walden University, Bridgepoint Education (parent company of Ashford University), and Career Education Corporation (parent company of Colorado Technical University and American Intercontinental University).

    The Dream Center layoff page has been particularly active as its schools and former schools, the Art Institutes, Argosy University, and South University, collapse and $13 million in federal aid meant for student stipends has been reported missing.

    National American University's death watch is here.

    University of Phoenix's layoff page has also been a valuable source about student enrollment, layoffs, and unethical practices that have undermined the

    Other pages to watch the larger college meltdown include LendingTree, student loan servicers such as Navient, Sallie Mae, and Nelnet, predatory internet lead generators such as QuinStreet, private Christian colleges such as Liberty University, HBCUs like Bethune-Cookman University, non-profit institutions like Baker College, and public universities such as Western Illinois, Southern Illinois, Eastern Michigan, University of Akron, University of Central Oklahoma, University of New Mexico and New Mexico State, University of Alaska, Anchorage and University of Alaska Fairbanks.

    With austerity, downsizing, mergers and closures, layoff pages at private and public colleges may also gain importance.  Green Mountain College, Hampshire College, College of New Rochelle , and Southern Vermont College are the latest victims.


    Related link: College Enrollments Continue Decline in Several States
    Related link: America's Most Endangered Private Colleges in 2019
    Related link: Deceived by DeVry
    Related link: Purdue University and Its Subprime College Cousin Committing Fraud
    Related link: College Meltdown Shows Few Signs of Slowing in 2019

    Tuesday, February 19, 2019

    America's Most Endangered Private Colleges in 2019


    Related article: Endangered Colleges include HBCUs, Small Religious Colleges (2016)
    Related article: Another American College to Close (Bryan Alexander, 2019)
    Related article: Private College Revenues and the US College Meltdown (2018)
    Related article: College Meltdown Shows Few Signs of Slowing (2019)


    In 2016, Jeff Selingo and EY published a report stating that more than 800 US colleges were facing major downsizing, mergers, and closures. But their report did not list the schools most likely to fail. It would appear that higher education and business insiders, including government agencies and credit rating agencies, know which schools are likely to merge or fail, but they are unwilling to share it with the public.

    The Department of Education publishes a list of schools in financial trouble, called the Heightened Cash Monitoring List, but the list is small and is not the best predictor of future school failures. The PEPS School Closings list is helpful, but it's most often a post-mortem of colleges that have already failed.

    Would it be possible to create a list by examining just a few variables? I would suggest these variables, in combination, when looking at the survivability of individual US private colleges:

    Enrollment <1000 students, and at least
    Five consecutive years of student enrollment losses, and at least
    Five consecutive years of revenue declines, and
    Revenue declines of more than 15% over the last 5 years, and
    Endowments less than $5 million

    What variables do you think should be included? And what are the intangibles that must be considered? For example, HBCUs have been able to survive for decades despite lack of government support. Loss of accreditation, on the other hand, can be a death sentence for almost any college.

    Saturday, January 26, 2019

    Deceived by DeVry

    Subprime DeVry University Continues to Deceive Consumers
    In 2019, DeVry University continues to deceive consumers through its DeVry website and online recruiting. As a subsidiary of Cogswell Education and Palm Ventures, a shoe-string operation in comparison to its previous parent company, matters could get worse. This briefing illustrates some of Devry’s current deceptive practices.

    Lack of Transparency Used For Location Bait and Switch 
    As a selling tool, DeVry University claims to have more than 45 convenient locations. However, it has closed about 50 campuses and learning sites between 2011 and 2019. Closures have occurred in cities throughout the U.S., including Pittsburgh, Detroit, Houston, Indianapolis, Memphis, Milwaukee, Minneapolis, Portland (OR), Seattle, St. Louis, and Tampa. DeVry’s campus closing determinations have been far from transparent, even to employees
    In January 2018, several DeVry schools we believed were planned for closure remained on the “Find a Location Nearest You” map. These locations included Anaheim, Bakersfield, Cherry Hill, Colorado Springs, Dayton, Oakland, Oklahoma City, and Palmdale. By July 2018, all of of these learning locations were reported to the US Department of Education as closed schools. While these locations have been removed from DeVry’s map, prospective students had been led to believe that the locations existed.
    Typically, the school closing process, known as “teach out,” takes 12-18 months. But in the case of DeVry’s closings, teach outs have occurred with less warning, leaving students and teachers little time to react to their campus closings. This lack of transparency has also allowed DeVry to sell its convenient locations even as it plans to close campuses that may be closest to prospective students. With a recent history of campus closings and the sale of DeVry to Cogswell Education, we anticipate several additional closings of “convenient” but unprofitable learning locations that may already be slated for closure.

    Financial Aid Bait and Switch
    DeVry has advertised a variety of loan options, including Federal Direct Loans, Federal PLUS Loans, Perkins Loans, and private student loans.
    Although DeVry provides a list of potential lenders for private student loans, interest rate information does not appear to be readily available from the site.
    When consumers use the Department of Education's College Navigator to get the net price for DeVry, they are redirected to a DeVry lead generator.
    Pricing inconsistencies exist. One anonymous DeVry insider said this about the pricing:
    There are three completely different total program costs potentially given to prospective students and differing lengths of the programs."
    "DeVry’s admissions advisor’s cost calculator used to sell DVU on the phone, shows one amount. The website’s tuition chart lists something totally different, and finally the academic catalogue lists a third completely different figure with students."
    "Also most admissions advisors are telling prospective students it is possible to complete a bachelor’s degree in 2 years 8 months! Then Student Finance tells students the truth that its 4 years at best due to lack of course availability and practicality (not taking 20 credit semesters). The catalogue info backs up Student Finance."
    "I can’t understand how DOE or someone hasn’t caught that yet. You could call an advisor today go through their admissions planning and get cost 1, then look in the website tuition chart for 2, then look in the catalogue for a 3rd totally different cost and time est. your advisor just told you."
    Former DeVry students owe more than $12 billion in student loan debt. The 5-year student loan default rate at DeVry is 43 percent. 

    TechPath and Other Claims about Cutting Edge Technology
    DeVry leads its potential customers to believe they will be learning innovative skills using cutting edge technology. DeVry advertises its TechPath program, a “distinctive learning approach that grew out of the understanding that students need a different kind of education to prepare them for a world that’s tech-intent, constantly changing and connected as never been through the digital mesh.”
    DeVry insiders, however, have reported that campuses have not kept up with technology. And online teaching may be counterproductive for many students.
    Brookings Institution Research indicates that the average DeVry University student takes two-thirds of his or her courses online with negative effects on course GPAs and persistence.

    Decline in Educational Quality
    Teaching staff have reported that educational quality has declined significantly as online class sizes increased. One former instructor stated:

    “And, with the cap removed, faculty were teaching 40 or more students in online classes in a cultural contest that promoted the student to customer, obviating any faculty authority to establish rules and at times, even basic human decency. The ax, ever ready to fall on our necks, had us all rather desperately seeking other employment, while doing all we could to "persist" (pass) students with the highest possible grades, futilely hoping to preserve our ECE (student evaluation) scores. Students who lacked skill, who couldn't even submit work, their backs to the wall, often lashed out verbally and in the evaluation process. A student caught plagiarizing could get pay back at evaluation time, and they did….”

    A former instructional designer who worked at DeVry more than five years added that "You will not have a voice...DeVry "used to be innovative and desired to push the edges of online education courses with creative solutions to interactivity...but leadership changed and bean counters began shaving copper at the downfall of the student learning experience...such a sad demise from the glory days."

    DeVry Claims to be Military Friendly 

    DeVry enrollment representatives claim that DeVry is military friendly, and the website states “[f]rom training Army Air Corps instructors on electronic devices in the 1940’s to being one of the first schools approved to accept the original G.I. Bill following WWII, we’ve been education and supporting America’s military personnel and the veteran community for decades.”

    However, VA’s GI Bill Comparison Tool reveals more than 200 student complaints, as well as a caution warning related to the recent Federal Trade Commission settlement and how the school is operating under Heightened Cash Monitoring.

    While DeVry campuses claim to offer various veterans programs, including VetSuccess on Campus, 8 Keys to Veteran Success, and a Student Veteran Group, one DeVry employee stated that "Students are tossed around by an organization that doesn't care nor have a clue of what it's doing. Disabled Veterans ADA Accommodations are not properly managed or enforced."

    Tuesday, January 15, 2019

    College Meltdown Shows Few Signs of Slowing in 2019

    The US College Meltdown has been occurring for at least eight years, and there are few signs that it will slow down in 2019. 

    Image below: Members of student debt group "I Am Ai" protesting fraud by the Art Institutes. (Credit: Ami Schneider)





    Related articles: