Diane Auer Jones is a former Bush administration department of education official who is now employed in for-profit education world. In this aggressive post to The Chronicle's blog, Brainstorm, she takes on some regulatory changes by the Obama administration and posits them as mostly about hindering the uses of information technology. The entire piece includes no mention of her employment or of the fact that the new regulations are intended to cope with quality control issues by some major for-profit competitors.

It will not be long before students in brick-and-mortar classrooms will be required to have clickers in their hands so that they can press the button every 15 minutes to prove they are awake and in the room, and so that a computer can record each time they raise their electronic hand to ask or answer a question. Faculty members will need to preserve thousands of e-mails to show that they interacted with a student, even if he or she missed class on a given day. I guess faculty will be required to keep electronic logs of who visited during office hours, too. ...

You are absolutely correct, Mr. President, that the world has changed. So maybe it is time for your Department of Education to realize that the students of tomorrow will not be educated with chalkboards and overheads, no matter how much those of us who are over 40 wish to relish the glory days of our own college past. I challenge anyone who questions the quality of online education to sign up for an online course to see first hand just what it is like. Go ahead. Do it. Come back and tell us how it was. But for those who have never experienced online learning or teaching first hand, perhaps it is time to stop parroting hearsay and start making some evidence-based observations of their own.

Thank you, Mr. President, for recognizing that technology has changed our world. It is now time to allow technology to change higher education.

Quite an in-depth look at Phoenix University founder, John Sperling, in the context of finances and the current various controversies and political battles around for-profit institutions. For most SCUPers, this article will provide background they have not previously known. 

As a humanities professor at San Jose State University from 1961 to 1973, John Sperling pioneered remedial reading classes for Mexican Americans and courses in social problems for police officers.

Defying the education establishment, he expanded such programs into the for-profit University of Phoenix, now largely online and the biggest U.S. university, with almost 500,000 students. ...

Phoenix’s quest for acceptance was “was one nasty, brutal, bare-knuckled fight,” said Murphy, 64, a screenwriter and producer who is writing a history of the University of Phoenix during his time there. “Everything we did drove traditional education into absolute apoplexy. We didn’t know on Friday if we’d be open for business on Monday.” At the urging of Phoenix’s vice president for product development, Sperling started an online campus in 1989 and stuck with it through unprofitable years. “He persisted when virtually all of the institution was opposed to the idea,” Tucker said. ...

In 1998, 65 percent of Phoenix’s 53,200 students attained degrees, Klor de Alva said. By contrast, two-thirds of the associate’s degree students and half of the bachelor’s degree candidates who entered Phoenix from July 2008 to June 2009 withdrew by August 2010, according to a Senate education committee report. The median length of enrollment at Phoenix is about four months. ...

Because most of its students were low-income and qualified for federal grants and loans, Axia fostered Phoenix’s dependence on its biggest source of funds, the Education Department. Phoenix derived 88 percent of its revenue from federal student aid in the year ended Aug. 31, up from 48 percent in fiscal 2001.

Serena Golden took an introductory economics class from StraighterLine in order to compare that really inexpensive, no-instructor, all on line class to more traditional offerings at more established institutions. She has written a three-part paper on the experience, with lots of interviews with experts and descriptions of her class experience. Her report might not shake you up, but will will make you think about academic planning and academic programs (and budgets).

One interviewee whose name you will know is Carol Twigg of the National Center for Academic Transrormation (NCAT). Golden finishes her third and final report with a summation from Twigg about StraighterLine's product:

“Within the universe of institutions,” Twigg said, “there are high-quality courses and mediocre courses and really lousy courses…. [StraighterLine] is well within the sort of mediocre and above, because of the oversight that’s gone into it.”

“I think it’s certainly a viable option within the panoply of higher education offerings,” she concluded. “How’s that for a lukewarm endorsement?” She paused, laughing.

“It’s as good as the other stuff.”

The "other stuff," of course, is what our institutions do now for lots more money.

Jeff Wendt interviews Robert Tucker of InterEd, who says that - to him - it is seems that the Department of Education has decided that for-profits are an impediment. Tucker has some interesting ideas and perspectives.

[T]he flaws in the Department of Education's regulatory formulation are critical. ED's disclosures tell prospective students who are interested in certain applied degree programs that their degree, earned at a particular institution, is likely to land them the job they seek. However, they are told nothing about time and cost to degree. There is no mention of the opportunity costs of delays. There are no requirements for disclosure if the school is non-profit. Meanwhile, in addition to the possible outcome, does it matter what the buyer may want during the actual educational experience — facilities, amenities, fellowship and a host of other considerations? ...

A one-year delay to degree is typical among public colleges and universities. It can cost the student foregone earnings of say $40,000, plus extra tuition, plus possible additional downstream costs. Such transparent disclosures could eliminate the need for unintelligent regulation and expensive compliance. Since a consumer is likely to be shopping throughout the higher education marketplace for himself and family members, this disclosure, as well as all the others, should apply throughout the marketplace, regardless of the corporate charter of the education provider.

Today's Campus has assembled a set of informative perspectives on what's been happening with for-profits and the feds. Descriptions and links to the five articles:

An academician with multiple doctorates, [Robert] Tucker was Senior Vice President at University of Phoenix in the 1980s and as it came into the public's eye in the early 1990s. Since 1995 he has been helping college executives market and manage their public, private and for-profit campuses. In this interview he shares some astute observations of the wars between the Obama administration and America's for-profit colleges.

Hedge fund operative Steve Eisman says for-profit U.S.higher education "is a bubble like the subprime mortgage crisis, with a 'churn ’em and burn ’em,' commission-driven approach to student recruitment and a ready supply of government-provided debt." "On this last point, at least, he is right," say the editors of The Economist, in a well-researched and well-written article. 

A Boston College graduate, Jo Zakarin is the owner of a small career college.  She is also a commissioner of the accreditor Council on Occupational Education.  She shares some of her experiences as a profit-maker in higher education.  She adds some reasonableness to the political hysteria surrounding ED's regulation of 'gainful employment.'

Washington policy makers are preparing to re-engineer some (or most) of U.S. higher education.  They may actually have all the ammunition they need to do so.  By Jeff Wendt.

We interviewed Ms. Herzing in the summer of 2009, well  before the present storm in career education.  With a B. A. from Brown University Ms. Herzing spent a year as a Fulbright scholar teaching adults in Germany. She earned an MBA from the U of Phoenix in 2001. She rejoined the family business in 1999, becoming its president in 2009. Her family has run the organization hands-on continuously, and it shows in their success.  

The Economist takes a look at American for-profit higher education ... from the outside:

Meanwhile for-profit colleges have started hiring “mystery shoppers” to test their sales practices. The University of Phoenix is working to disconnect recruiters’ pay from the number of students recruited. It is also encouraging students to take on less debt. To reduce the number of dropouts, it is offering students a three-week “orientation” during which they can quit without charge. Kaplan plans to go further, regulators permitting, by offering students a full refund if they drop out during their first term. Mr Graham would like such a refund to be made mandatory, to drive the “bad actors” out of the industry.

The leading for-profit colleges hope to survive by putting their own houses in order and by calling for new regulations that apply to higher education as a whole. And they make another, broader, claim. When the full cost of loans and subsidies is added up they are significantly cheaper for the taxpayer, per graduate, than public and non-profit institutions. Given the Obama administration’s ambitious plans to expand higher education, a rush to impose more burdensome regulations may not be such a good idea.

The Darden School at the University of Virginia did it. Now, the Anderson School of Management at UCLA wants to do it? Are "ideals" at risk? Imagine the planning going on behind the scenes! Here are:

An Inside Higher Ed story by Scott Jaschik;

A report on the Darden School's change from The Public Interest; and

Hhere's the Anderson school's strategic plan, which may be of interest, although we have been unable to find a draft copy of the specific plan for changing funding methods ... yet.

"The driver here is the decline in state support," said Judy D. Olian, dean of the Anderson School of Management at UCLA. She stressed that she did not view the shift as changing the business school's mission or its connection to the rest of UCLA or the UC system. At this point, she said, state support makes up only about 18 percent of the business school's $96 million annual budget, and she said that percentage overstates the contribution because much of the state support is tuition revenue that must go to the state first now before it is returned to the school. In a new model, that revenue would never leave the business school. In the end, the business school would truly lose less than $6 million a year, Olian said. In the 1970s, she said, about 70 percent of the business school's budget came from the state. "The decline makes it easier to say that the gap is not going to be large and we could overcome it," Olian said. And there's more to it than the dollars. Olian noted that California does not have a state budget for 2010-11 so she doesn't know what her budget will be for the year. It would be much better, she said, to have that information and plan accordingly -- and to raise more money from private sources to offset whatever is lost.

For-profit institutions are making a lot of headlines. In a time where it seems to many that higher education needs to rapidly transform, they have that capacity and are doing it. Kevin Carey writes about his time spent with one for-profit entrepreneur, Michael Clifford. Clifford specializes in purchasing dying traditional institutions and making them over into for-profits, such as he did in 2004 with Grand Canyon University.

The reputable parts of the industry are at the forefront of much technological and organizational innovation. For-profits exist in large part to fix educational market failures left by traditional institutions, and they profit by serving students that public and private nonprofit institutions too often ignore. While old-line research universities were gilding their walled-off academic city-states, the University of Phoenix was building no-frills campuses near freeway exits so working students could take classes in the evening. Who was more focused on the public interest? Some of the colleges Clifford bought have legacies that stretch back decades. Who else was willing to save them? Not the government, or the church, or the more fortunate colleges with their wealthy alumni and endowments that reach the sky.

But . . . 

[H]e rejects the Obama administration's proposal to cut off federal aid to for-profits at which student-debt payments after graduation exceed a certain percentage of the graduates' income. In fact, he denies that colleges have any responsibility whatsoever for how much students borrow and whether they can pay it back. He won't even acknowledge that student borrowing is related to how much colleges charge.

That refusal is the industry line, and it is crazy nonsense. As a rule, for-profits charge much more than public colleges and universities. Many of their students come from moderate- and low-income backgrounds. You don't need a college degree to know that large debt plus small income equals high risk of default. The for-profit Corinthian Colleges (as of mid-July, market cap: $923-million) estimated in official documents filed with the Securities and Exchange Commission that more than half the loans it makes to its own students will go bad. Corinthian still makes a profit, because it gets most of its money from loans guaranteed by Uncle Sam.

Paul Kim, of Stanford University, takes a Darwin-influenced look at higher education, nothing among other things, the evolution of the new species called for-profit institutions. As others have noted, recently, by statements like, "I don't see the innovative changes happening that we need." (Dennis Jones of NCHEMS), Kim concludes with:

Today’s higher education ecosystem teems with vibrant organizations, yet the signs of evolution seem less evident, and its clock speed seems to be extremely slow. Either no competition exists among species with dominant power (a shared intellectual monopoly, perhaps?), or environmental pressures have not reached a level sufficient to force evolution. Or — the worst possibility — people might be fine with the way teaching and learning take place today and have little interest in concepts such as open interfaces.

His article is led by four key take-aways:

• To survive and thrive, living organisms, industries, and institutions — including higher education — must evolve or adapt to changing environments.

• The slow evolutionary clock speed and failure to adopt contextualized open interfaces in the higher education ecosystem may threaten its continued survival in the face of new environmental pressures.

• More effective and efficient knowledge creation and distribution can increase the evolutionary clock speed and fuel successful evolutionary changes.

• The higher education ecosystem has produced some projects demonstrating an evolutionary shift in approach that could fuel further successful evolution.

Click on the title, Is Higher Education Evolving?, to access the resource described above. 

Don't miss out on joining nearly 1,500 of your colleagues and peers at higher education's premier planning event of 2010, SCUP–45. The Society for College and University Planning's 45th annual, international conference and idea marketplace is July 10–14 in Minneapolis!

Here's your SCUP Link to "Why Did Wal-Mart Choose American Public University?"

 New York Times writer Micheline Maynard wondered, too, and thus this story (in which SCUP gets a mention).

Wal-Mart surveyed 81 institutions, including for-profits, nonprofits, online universities, brick-and-mortar colleges, and “even some of the open-source, open-platform online offerings that are out there,” said Alicia Ledlie Brew, senior director of Wal-Mart’s lifelong learning program.

It had several criteria: a program with clear, low pricing (American Public charges $250 a credit hour, a price that has not changed in 10 years, Mr. Boston told the UBS audience); one that was accredited; a college that offered a variety of degrees and course subjects; and one that was used to dealing with adult students.

In a survey of employees, more than two-thirds told Wal-Mart they preferred an online college to a physical one.