Leader Wants To Strengthen The Business Of Higher Education

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Michel Martin talks with the President of The Career College Association, Harris Miller, about the changes within his organization. Namely, he explains that getting graduation and employment rates up and making sure all business practices are fair and transparent are the big push for his group.

MICHEL MARTIN, host:

I'm Michel Martin, and this is TELL ME MORE from NPR News.

Coming up, we'll talk about pending legislation that would grant legal status to young illegal immigrants who go to college or join the military. It's called the DREAM Act, and we'll tell you more about it in a moment.

But first, all this month we're taking a closer look at issues in education, what's outstanding, what needs improvement and what gets a grade of incomplete in the quest to provide children from all backgrounds the best education possible.

Today, we're looking at the increasingly prominent role of for-profit colleges and universities. According to the General Accounting Office, enrollment in for-profit colleges and universities has exploded in recent years from some 365,000 students to almost 1.8 million in the last several years.

Now, supporters of these schools say these are diverse, affordable and accessible institutions that offer the kinds of practical educational experiences that many students these days want and need.

But a growing number of critics, including leadership in the federal government, are saying that too many of these schools are more interested in collecting tuition and student loan checks than they are in giving students a real education.

So we decided to hear from the organization that represents for-profit colleges. That is the Career College Association. And its president, Harris Miller, joins us here in our Washington, D.C., studios. Welcome. Thank you for coming.

Mr. HARRIS MILLER (President, The Career College Association): Thanks for having me here today.

MARTIN: So first of all, tell us: Who is attracted to the for-profit college experience. Is there a typical student?

Mr. MILLER: Our typical student is what might be referred to, Michel, as a nontraditional student. He or she tends to be older, more like 26 than 18. About 40 percent of our students are minority. Over 50 percent are the first person in the family to go to college. Seventy-six percent are working adults.

So again, this isn't the ideal family where the student has been preparing since they were in utero to go to college directly out of high school. These are people who, for whatever reason, maybe they tried college after high school, it didn't work for them, maybe they decided they weren't ready for college at the time, maybe they went to the military, who wake up at the age of 25 or 26 and say I need this education. I want to go back to school.

MARTIN: Why do you think that your industry is attracting the kind of scrutiny that it is right now? As we said in our introduction, there are a number of people who are looking closely at these institutions and are finding them lacking. Why do you think that this scrutiny has increased?

Mr. MILLER: Well, partly because we're just growing so fast. We've gone from being about 4 percent of higher education 10 years ago to 12 percent now.

Secondly, in terms of what the student actually pays, he or she pays more than you go to a community college. But of course, we don't get the taxpayer subsidy. So the cost is about the same.

And thirdly, unfortunately, there have been some examples documented of some schools that haven't been totally coloring within the lines. And we need to have stronger enforcement of the existing laws, and we're supportive of the effort by Secretary of Education Arne Duncan to go out there and do more investigation to make sure schools aren't somehow going around the rules and regulations that are out there.

MARTIN: When you say that you don't get a taxpayer subsidy, what do you mean? Because many of your students do receive federal student loans, which is a form of subsidy. So what do you mean by that?

Mr. MILLER: Well, the money doesn't go directly to the school. If you attend a community college, the sticker price that you pay as a student may say $4,000, and you think, well, that's the price. But as you know, Michel, there's a big difference between the cost of something and the price of something.

Actually, each student at a community college has about a $10,000 subsidy, whereas our schools, you pay the full sticker price. And what it shows is it's about the same, we're actually a little less than the community colleges. But because the schools don't get a direct subsidy, they have to ask the student to come up with the money to pay for his or her own education.

MARTIN: If you're just joining us, this is TELL ME MORE from NPR News. I'm speaking with Harris Miller. He's the CEO and the president of The Career College Association. That's the group that represents for-profit colleges. And we're talking about contemporary issues addressing those colleges.

So let's talk about the issue that's been very much in the news, which is the default rate on student loans. And as we've pointed out, the number of students receiving these loans is quite high, and the default rate by any standard is quite high. Why do you think that is?

I mean, according to one survey, and I know you probably disagree with this analysis, but according to a survey that got a lot of attention by Bloomberg News, it said that the for-profits have a default rate of some 36 percent. What's your sense of why that is?

Mr. MILLER: What all the research shows, including a report by Mr. Mark Cantor(ph), which is one of the nation's leading experts on financial aid, is default rates are related to the student demographics.

We accept low-income students. We accept first-generation students. And community colleges, which do the same, have similar default rates. Minority-serving institutions, which accept lower-income students, have similar default rates. If Harvard would accept 70-some percent of Pell student eligibility, they'd have similar default rates. But Harvard has about 5 percent of students Pell eligible.

MARTIN: But might not that suggest that you're overselling what it is that you're actually offering? I mean, if that many students are defaulting, does it suggest that perhaps they're not getting the employment that you say they should be getting. That they're not well-prepared for the jobs that are out there, or there is some sort of a disconnect between what you're selling, what they think they're buying, and what the actual result is.

Mr. MILLER: Well, first of all, we encourage every student to be fully informed before she or he makes a choice. But what you find, Michel, is in terms of students who graduate, their default rates are actually pretty low in our sector, less than 10 percent. So they do pretty well.

Most of the defaults occur in students who don't complete. So our biggest challenge is to do a better job of helping students complete.

Now, we do a much better job than community colleges. Over 60 percent of our students do get a degree when they try to get a degree in a two-year program, as opposed to 20-some percent for community colleges.

But if we could get higher graduation rates and completion rates, the default rates will come down.

MARTIN: What about the GAO report in August that found that and they say in the report that they cannot extrapolate this across all institutions.

But they visited 15 different institutions. And in every one of those institutions, those for-profit institutions, some deceptive statements were made either that underplayed the cost, that underreported the true cost of what the student would be paying, or it made statements that they verified were deceptive. What do you say about that?

Mr. MILLER: It was a very troubling report. And, certainly, we believe that every institution, when dealing with a prospective student, needs to fully inform that student and be totally transparent. And we were very disappointed in those results.

So we at our association have stepped up our compliance efforts. We've encouraged the department to go out and do more investigations. We're tightening up our own code of conduct for members of our association. We're doing more training.

MARTIN: And what do you mean you've stepped up your compliance? What exactly are you doing, and what exactly are you putting into place as a compliance mechanism?

Mr. MILLER: We are going to do our own mystery shopping. As you mentioned, the hearing, the GAO did their mystery shopping. We're going to do our own mystery shopping. And if we see troublesome trends in our sector, we're going to go out and focus it.

Secondly, we've stepped up our own training. We've done several webinars just in the last few weeks telling people how to ensure that what you tell the people on the front line is really happening on the front line.

MARTIN: Why not just post your tuition on your websites?

Mr. MILLER: Because the tuition varies. Unlike a traditional college, where whether you major in psychology or history or chemistry, it's all the same price, our programs vary considerably, depending on whether you're focusing on something that's very expensive like a nursing program because that requires a lot of capital expenditure and because the faculty gets paid higher versus someone in business administration.

MARTIN: What's the difference if you go to a hair salon, and you get a simple haircut, it costs one price. If you get color and blow dry you don't know anything about this. But if you get, you know, color or a weave or whatever. But, you know, cosmetology is one of the things that's taught at many of your institutions, the price range varies, and it's all listed on a price card. Why not just list all the prices on your website? What's the difference?

Mr. MILLER: Because before the student enrolls, the student has to be told exactly what his or her particular program will cost because you could deceive someone inadvertently. They could see the bottom price on the website and think that that somehow is the price, when in fact the particular program they've enrolled in might be much more expensive.

So we feel we actually could end up damaging prospective students by having them falsely believe that a program is less expensive than it is. We're better off talking to the student directly and saying program X may only cost $10,000 a year, but the program you want to enroll in is $15,000 a year. We need to be clear about that.

MARTIN: Let me just ask you because this is a question that's arisen with a number of the there are a number of other institutions whose graduation rate is nothing to be proud of. As part of our education series, we spoke to presidents of some of the HBCUs, which also are struggling, some of them with low graduation rates.

And the question is: Are you more focused on enrolling students than you are in actually graduating them and seeing them through completion? I mean, at the end of the day, is the question here that the incentives are to get kids in and to keep them in, not to make sure that they graduate. Is that the problem?

Mr. MILLER: No, the incentive actually is to graduate students from two perspectives. Number one, our schools, unlike traditional schools, actually have to achieve certain graduation rates to maintain what's called accreditation. And they have to maintain accreditation in order for their students to be eligible for federal money.

So there's an actual legal requirement that doesn't exist in traditional higher education.

Secondly, the idea of running a business, which we are running to some extent as educational institutions, we are better off making sure the students complete because then they will recommend our institutions to their friends and their neighbors and their relatives. And the best people to help encourage people to come to our schools are people who've gone through our schools. And if they've had a good experience, they'll generate more students, and that's what we want.

MARTIN: Harris Miller is the CEO and president of what is soon to be the Association of Private Sector Colleges and Universities. He's here with us in our Washington, D.C. studio. Thank you for joining us.

Mr. MILLER: Thanks for having me, Michel.

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