Here's a special thanks to whoever invented tabbed web browsing. The feature has become especially helpful in the last week for viewing all the allegations, hateful comments, and reports of investigation targeting career education. The sky above career colleges might appear as though it's falling, but at least I can see it crash in an orderly, tabbed format.
So what web pages do I have open? The first tab is a piece that appeared last weekend in Barron’s, offering a wealth of statistics and stock market trending for education stocks. In the final paragraph, the article suggests that investors avoid education stocks like they are the second coming of Enron. At last count, there were 15 or so comments posted to the article from naysayers and career education professionals, like Michael Clifford of Significant Partners and part-owner Grand Canyon University, which the article actually cites as an example of the good influence private equity money can bring to the sector.
Another tab is open to the University of Phoenix’s response to a report published in ProPublica in which the news publication tracked down a few UOP students who had crummy experiences at the university. They took out student loans that they now can’t repay. The school is portrayed as welcoming any and all warm bodies so they can steal their financial aid checks and then cast them back out into the world of pizza delivery and pet poop pick up.
Still another tab is the ProPublica report itself that limits a quotation from the Career College Association’s Harris Miller about the accounting investigation to a sentence or two.
Finally, the last tab is open to a stock update that attributes the tanking education stocks to the SEC investigation and the negotiated rulemaking discussions held last week in Washington.
I have to admit: My first reaction wasn’t about how I needed to jump in and defend the sector. I do, of course, but that wasn’t my first thought. My first thought was how I was going to read through all the statistics, exchanges, posturing, deliberations and unfortunate student stories in order to make a comment on the web page you’re viewing now.
The negativity is abundant. Suddenly, it’s everywhere. It creates the impression that career education is in real trouble. And, that’s exactly the problem. There’s too much negativity … isn’t there? The journalists who’ve created these reports – and you can read through them all, if you like – offer nothing definite about what’s going to become of career education. That tells me we’re at the beginning of a process rather than the end.
What’s underling all the negativity is the sector’s success. If our schools weren’t achieving too-good-to-be-true revenue figures, the SEC would be nosing someplace else. When the economy is down, people turn to education … and not the kind that takes four years and $50k plus. Is the sector perfect? Nah. Neither are traditional colleges and universities.
So, what’s going to happen? If you use history as an example, it’s clear: career colleges are going to end up with more regulation and stricter reporting standards. Isn’t that how it always turns out? Some schools are playing a little loose – or worse – under in the present regulatory environment. They need to revamp their approaches. But in no way do those schools represent the entire sector. Yet, because of the for-profit label, we’re all made to suffer.
Eventually, with new regulations in place, the market will stabilize, investors will go back to anticipating enrollment figures, and private equity guys will go back to lining the backs of conference rooms and scribbling down the names of potential buyers with hotel ink pens that barely write.
Career education is deeply imbedded in supplying this country’s workforce with much needed jobs. Career education is not a want, it’s a need. Let’s cut to the chase. Give us the new, stricter standards to abide by so we can surprise you once again by overachieving. That’s something we have in common with the people we serve.