Blog: CCA President Slaps Down ‘Short Seller’ Eisman in a Big, Beautiful Way

The truth hurts. So for someone who makes a living dealing in lies, over-exaggerations and deliberate omissions, the truth leaves behind a big, whopping purple-blue bruise when it finally comes to light.

Yesterday, Career College Association President and CEO Harris Miller stood before the National Press Club and delivered a whole heap of truth on Steve Eisman. Earlier this month, Eisman published "Subprime Goes to College" in The New York Post, by far the most damaging editorial in the parade of negative news pieces to rock career education this year. The piece predicted the for-profit education sector would be the next industry to experience an implosion the likes of the subprime mortgage meltdown. Eisman made the bestseller list a few years back with his initial soothsaying involving subprime mortgages crashing and burning. When they did, he cashed in as an author and investor.

Today, Eisman is going to testify before the Senate Health, Education, Labor and Pensions (HELP) Committee that is convening a hearing to examine the career college sector. He was invited while our Secretary of Education, Arne Duncan, didn’t make the guest list. In fact, the tentative guest list I saw looked like the hearing is going to be a bonfire gathering with career colleges serving as the kindling. Eisman is among the key testifiers, but now he’s going to sit before Congress with a swollen eye and crooked nose that his slick talk can’t disguise.

Standing before a blue curtain and a spare podium (a set up that will forever remind me of Tiger Woods’ televised apology), Miller launched into his defense of career colleges by directly calling out Eisman on a number of points that amounted to a pubic slap down. A major one.

Miller made the press club visit on his birthday to discredit Eisman, to explain the contrary side to the overstated statistics that the “short seller” has used to gain notoriety in what has been a living nightmare for career colleges. Eisman’s aim as short seller, which Miller pointed out, is clearly to make money on the decline of stocks, not to protect students or taxpayers.

But Miller did more than that. While I haven’t seen every speaking presentation he’s ever made, it would be hard not to call this the man’s best speaking appearance ever. Miller might have had his best moment as CCA’s president, and the sector might have had its best day in a long while as he methodically and logically dismantled the misunderstandings that have driven the gainful employment initiative and a host of other regulations targeting career colleges.

His speech, “Gambling on the Future of Higher Education — Why Students Could Lose,” speech was available via webcast, and it was nearly 50 minutes of uninterrupted pure-gold quotations, intellectual put-downs, better-check-your-facts, and take-thats-don’t-come-backs.

Miller exposed Eisman for what he does, which is talking down an industry so he can make a significant profit when its stock value declines. Of course, some of the rhetoric Eisman spouts in condemning an industry carries with it some occasional half-truths. As Harris Miller put it, “Like a stopped clock, he’s right twice a day.” But for the most part Eisman’s interests lie in misguiding people on critical issues.

Miller’s primary purpose was to explain the absurdities in comparing the career college sector and its students’ borrowing situation to the subprime mortgage crisis. He accomplished this in the first 10 minutes. He explained that the mortgage bubble that finally burst and put many Americans in dire financial straits simply doesn’t exist in the student borrowing realm. And, easily drawing the discussion away from the mortgage debacle and building a new, clearer picture, Miller noted, “The value the student makes in his or her investment grows over time.” Graduates move ahead on their investments in themselves, he said, “by applying their skills at early-stage jobs and climbing the career ladder.”

Unlike houses, he said, “Education lasts a lifetime.”

From there, he moved to discounting Eisman on almost every negative fact he spews in “Subprime Goes to College,” including his assertion that career colleges risk nothing in pumping ill-prepared graduates into the workforce. Forthright and, again, always intellectual, Miller explained that career colleges and even the national (and sometimes international) corporate conglomerations who own them do have something at stake with the graduates they put into the career world, be it a family name with generations in the education field, or the investors that Eisman overlooks in this one aspect of his argument. Schools who don’t meet certain educational metrics, including graduation and placement rates, lose their access to Title IV funds – a fact that in itself shuts down Eisman’s argument.

Miller said that higher education “must change” and that the critical issue it must face is access. He said he “firmly rejected” the stance that a college education should only be available to the affluent. And, while career colleges have come under fire for taking students money, he noted that career college students don’t “waste months and years spinning their wheels either not deciding on a major or pursuing a major only to find it doesn’t fit their interests.”

For a few minutes, he launched a statistical barrage that showed career colleges’ outcome-based approach to learning. Among the more damaging facts to Eisman’s words, Miller noted that career college students graduate from two-year programs at three times the rate of similarly situated students at community colleges. Then, in his strongest statement of the day, he suggested traditional colleges and universities don’t have the ability to teach everyone – and don’t necessarily care what happens to students who don’t make it.

“In large part, our schools treat students like individuals, not like numbers,” he said. “We determine what assistance might be provided to see students through to success. We don’t just say, ‘Look to the left and the right, only three of you are going to succeed. Good luck and goodbye.’” Miller then took his listeners inside classrooms where he said that instructors were often well-known subject matter experts who’d rather instruct students than lead professionals. He followed that up with this doozy: “We spend money on paying faculty who teach students well, not pumping up academic egos.”

He then delved into cohort default rates and the risk that career colleges take in educating at-risk students. He quoted a 2007 stat in which 11 percent of career college students defaulted on loans, but he then noted if you take into consideration the profile of the student borrower, the rate was lower than those students attending historically black college and universities.

For the journalists in the room who’ve never visited a career college, he went on to profile the students and the challenges they face working full-time jobs while balancing their lives that include children and families who aren’t able to provide financial support. While career colleges are leading the innovations in the higher education realm, Miller said the innovations were being driven by the audience our institutions serve.

“Education is changing. Non-traditional students are the change agent.”

This was one of the final golden comments in Miller’s speech. When he was finished talking, there were two or three meager questions taken from the audience and a call-in line, but none of the hard-hitting questions you might expect from a National Press Club with the chance to grill someone from the for-profit education world, as they call it. Milled had obviously delivered a gloves-off street brawl of an argument to protect career colleges. After he’d laid out one opponent, there were no more takers.

When Eisman sits down before Congress today behind a plain desk with his own microphone and glass of water, he’ll do so with his eye pulsating. He took a serious beating yesterday. And, with any luck, it will play out that way before our nation’s leaders. If he sees Harris Miller walking his way in a trademark pin-striped suit, I wouldn’t be surprised if he ducked, covered his face, and walked the other way.

By Kevin Kuzma, Editor, Career College Central










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