The New York Times reported last week that the University of Phoenix will be shutting down 115 of its 227 locations over the next year—25 main campuses and 90 learning centers. The roughly 13,000 students affected by the closings (4 percent of the total student body) will have the option of either transferring to the university’s online classes or moving to another physical location. In addition, the Apollo Group, which owns the university, announced it is laying off 800 employees (4.7 percent of the university’s total staff).
The changes surprise some as Phoenix was a booming success for over a decade. However, in 2011, for-profits as a whole began to struggle. Tightened regulations; a poor economy; growing competition from MOOCs and other online providers; and scrutiny of the sector’s unethical recruiting practices, low graduation rates, high default rates, and use of federal funds caused for-profit enrollments to fall significantly relative to other sectors (as discussed in a previous post). And, as enrollments fell, so did revenue. The University of Phoenix was among the hardest hit. Compared with the same fiscal quarter a year ago, student enrollment at Phoenix dropped nearly 14 percent and Apollo’s net income plummeted 60 percent.
So, will the University live up to its name and rise anew from the remains of its finances and reputation? Or could Phoenix’s decline foretell the impending doom of other for-profit institutions? Time will tell.
The U.S. Supreme Court heard arguments yesterday in the landmark affirmative action case Fisher v. University of Texas (UT) (please see our previous blog for more information). Four Justices will need to support UT if it and, potentially, public colleges across the nation are to continue using race and as a factor in admissions decisions. Three justices hearing the case have historically supported affirmative action. A fourth supporter, Justice Kagan, recused herself because she played a role in preparing the Obama administration’s UT-supportive brief. The other five justices have typically expressed doubt over affirmative action’s value. Of these, Justice Kennedy is regarded as the most plausible swing vote. A 4-4 tie would uphold the federal appeals court ruling that UT’s program is constitutional.
Justices seeming to favor Fisher questioned:
- If UT could know it had achieved a desired level of diversity without setting a target and verifying its students’ self-reported race; and,
- Whether an admission process is truly fair if it benefits minority students from affluent backgrounds as much those from poverty. Justice Alito Jr. said: “I thought the whole purpose of affirmative action was to help students who come from underprivileged backgrounds.”
Justices seeming to favor UT questioned:
- Whether Ms. Fisher’s suit is even legal, given UT’s statement that she would have been rejected regardless of race considerations; and,
- Why the Court should change its 2003 decision on Grutter v. Bollinger—“A case into which so much thought and effort went and so many people around the country have depended,” said Justice Breyer.
Both sides agreed that the Court may have led colleges astray in 2003 by ruling that applicants’ race could be considered in order to assemble a “critical mass” of minority students. They said the term “critical mass” (defined by Grutter as the sufficient number of minority students to ensure they feel comfortable speaking out, not isolated) encourages colleges to aim for some numerical threshold of minority students, but such an approach could violate the Court’s ban on college’s use of quotas. After the arguments, the esteemed SCOTUSblog offered that: “Affirmative action is alive but ailing, the idea of ‘critical mass’ to measure racial diversity is in very critical condition, and a nine-year-old precedent may have to be reshaped in order to survive.”
The Court is expected to decide the case in spring or summer of next year.
The NY Times reports that researchers at the Brookings Institution have summarized why college is worth it. Their chart shows the percent of people at each income level who have various levels of educational attainment. Not surprisingly, the conclusion is that more education opens the gateway to better, higher-paying jobs.
A few findings to consider:
- Of the Americans who earn over $150,000, 82 percent had a bachelor’s degree.
- An individual with only a high school diploma is twice as likely, relative to someone with a college degree, to earn less than $40,000 per year.
- Conversely, an individual with a college degree is 9 times more likely to make over $100,000 and 13 times more likely to make more than $200,000 per year when compared to someone with only a high school diploma.
Although half of all UW undergraduates graduate with zero debt, even when factoring in debt, college is still a great investment. The same researchers developed another chart showing the return on investing in one’s higher education relative to the return on investing comparable tuition money in the stock market, long-term Treasury bills, housing, corporate bonds or gold.
Once again, the numbers show that postsecondary education opens the door to higher-paying jobs and more opportunities.
Now that both Democrats and Republicans have adopted party platforms at their respective conventions, what do we know about their plans for higher education? Below is a quick overview of each party’s higher education goals and associated action steps (past, present, or future) adapted directly from the parties’ formally-adopted platforms:
GOAL 1: To make college affordable for students of all backgrounds and confront the burden of loans.
- Removed banks as student loan middlemen, saving more than $60 billion.
- Doubled investment in Pell Grant scholarships.
- Created American Opportunity Tax Credit of up to $10,000 over a 4 year degree.
- Working to help student loan payments be only 10% of a student’s monthly income.
- Pledged to incentivize colleges to keep their costs down.
- Invested over $2.5 billion into strengthening our nation’s Minority Serving Institutions.
GOAL 2: To recognize the economic opportunities created by our nation’s community colleges.
- Invested in community colleges and called for business-college partnerships to train 2 million workers.
GOAL 3: To make this country a destination for global talent and ingenuity.
- Will work to help foreign students earning advanced degrees stay and help create jobs here.
GOAL 1: Improve our nation’s classrooms.
- Address ideological bias that is deeply entrenched within the current university system.
- Protect the public’s investment in state institutions from abuse by political indoctrination.
- Call on State officials to ensure that public institutions be “places of learning and the exchange of ideas, not zones of intellectual intolerance favoring the Left.”
GOAL 2: To address rising college costs and get back to programs directly related to job opportunities.
- Expand new systems of learning (online universities, community colleges, etc.) to compete with traditional 4-year colleges.
- Advance the affordability, innovation, and transparency needed to make lower cost alternatives accessible to everyone.
GOAL 3: To get federal student aid onto a sustainable path.
- Provide families with information necessary to making prudent choices about a student’s future.
- Shift the federal government’s role in student loans from being the originator of loans to an insurance guarantor for private sector student loans.
- Welcome private sector participation in student financing.
- Reevaluate any regulation that drives tuition costs higher.
Voters’ choices on November 6th will determine which party, and consequently which platform, has the greatest impact on the UW. In the meantime, any relevant updates or changes will be added to OPBlog.
In 2009, the National Research Council received a request from Congress for a “report that examines the health and competitiveness of America’s research universities vis-à-vis their counterparts elsewhere in the world”.
Responding to the request, the NRC assembled a 22-member panel of university and business leaders and mandated them to identify the “top ten actions that Congress, the federal government, state governments, research universities, and others could take to assure the ability of the American research university to maintain the excellence in research and doctoral education needed to help the United States compete, prosper, and achieve national goals for health, energy, the environment, and security in the global community of the 21st century”.
The panel released its final report last week under the title Research Universities and the Future of America: Ten Breakthrough Actions Vital to Our Nation’s Prosperity and Security. The following were the strongest themes:
- State and federal governments must increase their investment in research universities, allow these institutions more autonomy and agility, and reduce their regulatory burden: The panel identified the state and federal governments as the key actors in the strategy it proposed; indeed, seven of its ten recommendations were primarily aimed at them. In one of its more ambitious statements, the panel recommended that states should strive to restore and maintain per-student funding for higher education to the mean level for the 15-year period 1987-2002, adjusted for inflation. In Washington, this translates into recommending a per-FTE funding increase of between 70% and 80%. The panel acknowledged that this could be difficult to implement in the near term given current state budget challenges and shifting state priorities, but nevertheless stressed that “any loss of world-class quality for America’s public research institutions seriously damages national prosperity, security, and quality of life.”
- Strengthen the role of business and industry in the research partnership: The panel recommended that tax incentives be put in place to encourage businesses to invest in partnerships with universities both to produce new research and to define new graduate degree programs. It also encouraged business leaders and philanthropists to help increase the participation and success of women and underrepresented minorities in science, technology, engineering and mathematics (STEM).
- Research universities should strive to increase their cost-effectiveness and productivity: The panel recommended that universities should “strive to contain the cost escalation of all ongoing activities […] to the inflation rate or lower through improved efficiency and productivity”. However, it made no mention of the difficulties raised in the previous NRC report on productivity concerning the impact of cost-reduction measures on quality.
The panel’s recommendations are not novel: they have already been made by multiple parties in the higher education sector over the last few years. However, given the weight of the signatures on the report, this document may prove useful in raising the profile of higher education in upcoming budget battles both at the state and federal level.
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