Both Moody and S&P have moved their outlooks on Higher Education negative reasoning that the current business model has run its course and is not sustainable.
The for profit sector of higher education is experiencing significant increases in scrutiny. Given the current debt crisis facing U.S. students and the significant attention profits from the For-Profit-Sector gain in the press it is unlikely to subside soon. Below are a rash of current actions.
Former Federal Prosecutor Patrick Fitzgerald Will Lead Oversight of Company’s Sale and Wind-Down
…the U.S. Department of Education took additional steps to ensure Corinthian Colleges’ students and the American taxpayer are protected by announcing that Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates, under the leadership of former U.S. Attorney Patrick Fitzgerald, has been selected to take on the role of monitoring various aspects of the career college company. As part of an operating agreement reached earlier this month with Corinthian, the Department required that an independent monitor oversee Corinthian’s actions moving forward as the company begins to sell and wind down its campuses over the coming months.
DeVry Education Group Inc. said in a corporate filing on Friday that it was under investigation by New York’s attorney general for possible “false advertising and deceptive practices” in its television ads and website marketing. A letter from the state office requested “relevant information from January 1, 2011, to the present,” the company said.
The Apollo Education Group, parent company of the University of Phoenix, disclosed in a corporate filing on Monday that the U.S. Education Department would conduct an “ordinary course program review” of the university’s financial-aid administration and other areas. From the filing, with the Securities and Exchange Commission:
The review, which is scheduled to commence August 4, 2014, initially will cover federal financial aid years 2012-2013 and 2013-2014, as well as compliance with the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act, the Drug-Free Schools and Communities Act and related regulations.
A Kentucky judge this week affirmed a $147,000 fine against National College, a for-profit institution, over its refusal to comply with a subpoena from the state’s attorney general, the Lexington Herald-Leader reported.
ITT Educational Services Inc. said in a corporate filing on Wednesday that it may face financial restrictions over its failure to file a set of documents with the U.S. Department of Education. A set of financial statements was due to the department by June 30 but was not sent, according to the filing.
Congress requested the report, which was written by a committee that includes industry CEOs, university presidents, a former U.S. senator, and a Nobel laureate. It recommends 10 strategic actions that the nation should take in the next five to 10 years to maintain top-quality U.S. research institutions. The study was sponsored by the Alfred P. Sloan Foundation, John D. and Catherine T. MacArthur Foundation, National Science Foundation, and U.S. Department of Energy. The National Academy of Sciences, National Academy of Engineering, Institute of Medicine, and National Research Council make up the National Academies. They are private, nonprofit institutions that provide science, technology, and health policy advice under a congressional charter. The Research Council is the principal operating agency of the National Academy of Sciences and the National Academy of Engineering.
Within the broader framework of United States innovation and research and development (R&D) strategies, the federal government should adopt stable and effective policies, practices, and funding for university performed R&D and graduate education so that the nation will have a social sciences in our nation, due in 2012 from the American Academy of Arts and Sciences. Research Universities and the Future of America: Ten Breakthrough Actions Vital to Our Nation’s Prosperity and Security stream of new knowledge and educated people to power our future, helping us meet national goals and ensure prosperity and security.
Provide greater autonomy for public research universities so that these institutions may leverage local and regional strengths to compete strategically and respond with agility to new opportunities. At the same time, restore state appropriations for higher education, including graduate education and research, to levels that allow public research universities to operate at world-class levels.
Strengthen the business role in the research partnership, facilitating the transfer of knowledge, ideas, and technology to society and accelerate “time to innovation” in order to achieve our national goals.
Increase university cost-effectiveness and productivity in order to provide a greater return on investment for taxpayers, philanthropists, corporations, foundations, and other research sponsors.
Create a “Strategic Investment Program” that funds initiatives at research universities critical to advancing education and research in areas of key national priority.
The federal government and other research sponsors should strive to cover the full costs of research projects and other activities they procure from research universities in a consistent and transparent manner.
Reduce or eliminate regulations that increase administrative costs, impede research productivity, and deflect creative energy without substantially improving the research environment.
Improve the capacity of graduate programs to attract talented students by addressing issues such as attrition rates, time to degree, funding, and alignment with both student career opportunities and national interests.
Secure for the United States the full benefits of education for all Americans, including women and underrepresented minorities, in science, mathematics, engineering, and technology.
Ensure that the United States will continue to benefit strongly from the participation of international students and scholars in our research enterprise.