For the time-being the US Department of Education is continuing to act on its evidence about the disservices conducted by for-profit colleges.
For-profit colleges have the highest incidences of failed student loan payments and lower job success rates. One formerly for-profit college conglomerate, Corinthian, offered to turn-around its challenges by making its campuses nonprofit. However, as the Wall Street Journal points out, changing the name does not inherently result in changed practices. I would offer, that a close look at the construct of the nonprofit boards would provide better insight as to the intent by Corinthian. I would further offer that a nonprofit board with true authority and engagement would not only want to correct the wrongs of the former owner, it would want to do better. According to the monitor however, little effort appears to be being made to change what was wrong in the first place although it may be too early to actually tell if employment rates and student loan payment frequencies have improved.
The bottom line: if the once for-profit college has truly changed its stripes, the way the nonprofit conducts its business as indicated by a truly fiduciary-responsible board, would be evident. It would not just have new stripes, it would behave like a different animal.
From the Wall Street Journal:
Zenith Education Group set out two years ago to turn dozens of campuses formerly owned by for-profit giant Corinthian Colleges into premier nonprofit schools, but a new reportfrom an independent monitor overseeing the transition raises questions about the company’s progress.
The monitor, Clark Kent Ervin of the law firm Squire Patton Boggs, listed 69 instances of “unfair” or “misleading” language in the admissions documents the school provides students, in a review he conducted from September to November. None of those claims violate the law, but Ervin’s analysis suggests the school is not being completely transparent with students
Now defunct, Corinthian once operated Everest, Heald College and WyoTech schools around the country. Before it shut down in 2015, critics said the company lured students into enrolling with unrealistic promises of employment. Yet the report suggests that Zenith, the new operator of more than 50 Corinthian campuses, is tiptoeing into the same troubled ground.
A course catalog describing the massage therapy program, for instance, says “upon the successful completion of this program, graduates will have received the education necessary to attain a career.” Ervin argued that the word “attain” could mislead students into thinking they’re guaranteed a job upon graduation.
In its admission agreement, Zenith states that it does not guarantee employment for graduates. But Ervin wants Zenith to go a step further, adding language that would ensure the school does not “imply” that employment is a certainty.
“It is far more likely that a school representative would imply that an applicant could count on a job upon graduation … than that a school representative would guarantee it,” Ervin wrote in the report.
In its response to the report, Zenith called Ervin’s recommendation “unnecessary” and said including the word “imply” in the agreement could prove harmful to students if they take legal action against the school. Ervin said that argument was “unpersuasive, even puzzling.” Zenith also dismissed Ervin’s suggestion it change the catalog language and said it was an “unnecessary revision.”
Ervin took charge of monitoring Zenith’s turnaround in May, after the Education Department fired Hogan Marren Babbo & Rose, a law firm headed by the department’s former general counsel, Charlie P. Rose. That firm had an arrangement with Zenith that raised questions about a possible conflict of interest. Zenith had hired the firm as legal counsel and therefore benefited from an attorney-client privilege obligating the monitor to act in the company’s interest.
In announcing Rose’s termination last March, education officials said the department simply wanted a new monitor with a more investigative and prosecutorial background. Before approving ECMC Group’s acquisition of the campuses and the creation of Zenith to run them in November 2014, the department insisted the company select an independent monitor to make sure the new owner steered clear of the mistakes made by Corinthian.
Earlier reports by the previous monitor showed that cleaning up the mess left behind by Corinthian was taking some time. Zenith was praised for presenting students “fair and balanced” information about its move to cap enrollment or phase out programs with poor completion rates, but chided for inaccurate descriptions of the financial aid process and pressuring prospective students to enroll. Those echoed tactics Corinthian had used.
The results of the latest three-month review turned up one compliance violation. The monitor said a disclaimer in marketing and admissions materials for an Everest campus in Georgia failed to meet state regulations, which Zenith disputes. The company did agree that some of the recruiting calls Ervin reviewed contained exaggerations about financial aid and employment that needed to be remedied.
“Where issues are identified, Zenith devotes the utmost care and attention to an internal review and moves swiftly to incorporate feedback that will improve the student experience,” the company said in a statement to the Washington Post. “While this latest report identifies an isolated number of concerns, ‘zero’ is the only acceptable number of issues across any of our campuses.”
“The students gave the school an assessment of five on a scale of one to 10,” he wrote in the report. “When I asked whether the sentiments expressed by the few were representative of everyone else, nearly every hand went up to indicate assent.”
Though Ervin said there was no way to tell whether that encounter reflected broader sentiment on campus or at Everest locations nationwide, he still found the feedback concerning and believed the school should look into the complaints. Zenith contended that Ervin should in the future address any issues with the provost and verify information “before simply reiterating anecdotal sentiments of a few students as though relevant to Zenith’s regulatory…compliance.”
Ervin shot back that “students’ beliefs as to whether they have been misled as to the quality of their educational program are not just relevant to whether Zenith is complying with the requirements of applicable regulations … but [are] the very essence of them.”
Consumer advocates have long been wary of Zenith and the Education Department’s assurance that the $24 million sale was in the best interest of students. Pauline Abernathy, vice president of the Institute for College Access & Success, said Ervin’s report suggests very little has changed.
“Zenith is engaging in the same misleading and unfair practices used by Corinthian and other predatory for-profit colleges,” she said. “These kinds of enrollment agreements are unheard of at nonprofit colleges, other than those that were converted from for-profit to non-profit.”