CAPPS - Avocacy and Communication Professional Development

California Association of Private Postsecondary Schools

Major Papers 15-1 against For-Profit Education

08/28/2014

MRC.org. August 25, 2014.

The Obama administration continues its push to regulate for-profit colleges and national media outlets have joined in and overwhelmingly taken the side of bigger government.

Three top newspapers – The New York Times, the Los Angeles Times and USA Today – portrayed for-profit education negatively by a factor of 15-1 in roughly three years of news coverage.

The outlets have been laying the groundwork for more regulations, repeatedly painting for-profit education as a problem in need of solutions. The industry has been criticized for “exploitive and fraudulent practices” that “prey on veterans with misleading ads.” The colleges were bashed for their cost, their lobbying and “woefully inadequate education.” Journalists paid little attention to the challenges of educating students that more traditional schools would not accept.

A Feb. 20, 2014, New York Times article on a lawsuit against one for-profit company took the typical template of the news coverage. “Though they vary widely in quality, for-profit schools have drawn scrutiny in recent years for aggressive recruiting, high prices, low graduation rates and heavy borrowing by students who often have poor job prospects afterward,” wrote the Times.

New York Times editorials followed that broad-brush attack. It even called them “predatory schools” in April 2014, and “predatory colleges” in May.

Obama Administration Revives Attack on For-Profit Colleges

The administration has been targeting for-profit education for several years. The first version of its new regulations was overturned by a judge in 2012. The latest round of lawmaking was announced in March 2014 when the government set “new steps to address growing concerns about burdensome student loan debt by requiring career colleges to do a better job of preparing students for gainful employment.” That was part of a Department of Education press release headlined: “Obama Administration Takes Action to Protect Americans from Predatory, Poor-Performing Career Colleges.”

The Obama administration told colleges they would have to meet new “gainful employment” standards “or risk losing access to taxpayer-funded federal student aid.” New rules designed to make sure the classes lead to job placement are due to come out in October of 2014.

Inside Higher Ed explained the new regulations in a May 24 article: “Gainful employment is an attempt to set minimum debt-to-earnings and loan-default rate thresholds on vocational programs at for-profits, community colleges and nonprofit institutions.”

But there is a major catch. The new regulations don’t impact traditional schools. “However, the only degree programs that would fall under the regulations are housed at for-profits,” wrote the publication.

The government attack on the industry has been wide ranging – from enormous to petty. The government has forced the shutdown of one of the biggest for-profit colleges and pushed questionable statistics that claimed high school dropouts made more than most for-profit college graduates. That last part led to a dust-up with The Washington Post where the Education Department spent more than 3,200 words trying to dispute a Post piece questioning its statistical claims.

The industry has been fighting back. “The for-profit-college industry’s trade association, backed by a 100-page report by economists, is coming out swinging against the U.S. Department of Education’s draft ‘gainful employment’ regulation,” wrote The Chronicle of Higher Education on May 27.

It has a lot to fight. The administration has been working hand-in-hand with Sen. Tom Harkin, D-Iowa, and their efforts have received strong media support. Sometimes by what they have reported and often by what they have ignored.

Other than education industry press, one issue that the media have barely covered was the impact of the move to massively regulate the industry.

“Up to 44 percent of students at for-profit colleges could lose access to federal financial aid under proposed ‘gainful employment’ regulations, according to a new report from the sector’s trade group,” wrote Inside Higher Ed on May 27, 2014.

The media said very little about that report or industry concerns despite the fact that millions of students were having their educations put at risk.

Inside Higher Ed continued: “Because of gainful employment, the study found, more than 2 million students at for-profits would lose access to federal aid during the next decade. That is double the department's estimate. And the report found a potential high end of as many as 7.5 million students losing aid.”

Reporting Attacks For-Profit Education

None of the three papers the MRC’s Business and Media Institute studied did an even-handed job covering for-profit education. The New York Times did the most on the subject, with 27 stories. Negative articles outnumbered positive ones about the industry by a factor of 11-1 (22-2, with 5 neutral).

The Times stories consistently made ample room for industry critics, including politicians and little room for any defense. One story focused on the Wilfred Academy beauty schools. That Feb. 26, 2014, story focused on the collapse of the school in the 1980s.

But the end of the story was the kicker, as the Times tied it to a current school being sued. “Last week, a lawsuit was filed against a for-profit trade school in New Jersey, accusing it of taking in individuals with criminal backgrounds, psychiatric problems and wildly varying aptitudes, students they knew could not find gainful employment after the course,” Emily S. Rueb wrote for the Times. “Like Wilfred, the school relied heavily on federal student aid dollars,” she added.

The Los Angeles Times also skewed its reporting heavily against the for-profit education industry. It published 16 negative stories and only one positive one. The stories called the schools “GI Bill Profiteers,” and accused them of “aggressive recruitment” and “poor teaching quality.” The LA Times focused heavily on one troubled college – Corinthian – based nearby.

The only positive story the LA Times did was a piece on the University of Antelope Valley that was actually paying employers up to $2,000 for every student they hired. The paper devoted just 298 words to that good news. That was less than one-fifth the 1,600 words devoted to the GI Bill story. The article, headlined, “College pays bosses who hire graduates,” was also buried inside the newspaper on page B-4.

While USA Today had no positive stories, it actually reported more neutral stories than negative ones (8 neutral and 7 negative).

Government Helps Shut Down Corinthian Colleges

Corinthian Colleges, Inc. was one of the largest companies in the for-profit education field. But government had set out to take it down. It largely succeeded in July 2014.

The Los Angeles Times reported heavily on problems at the Santa Ana, Calif.,-based company – 11 full stories about what the paper called on July 16, 2014, “one of the most problematic players in the troubled for-profit college industry.” The stories featured complaining former students and angry former employees, along with the occasional comment from a company executive.

What they downplayed was the role the government played in targeting, attacking, cutting off money and forcing the company to shut down nearly its entire operation. According to the LA Times’ own coverage, “the Department of Education last month put a 21-day hold on Corinthian’s access to federal student loan and grant money – the source of nearly 85% of its revenue.”

Yet, the government still claimed it was surprised by the resulting shutdown and “didn’t know their cash situation,” according to the July 8, 2014, Chronicle of Higher Education. “The department didn’t expect its mid-June move would set off the chain of events that, three weeks later, led to the company’s agreement with the department to sell its 85 United States-based colleges and close down its remaining 12,” the paper said it claimed. 

A July 12, 2014, article admitted Corinthian “has been in the cross hairs of federal and state investigators for more than a year.”

But none of the LA Times headlines reflected the role the government had in shutting down the schools. “Corinthian selling 85 campuses; O.C.-based for-profit college corporation is under scrutiny from state, U.S. regulators,” read one headline. Another called it, “A ‘smoke and mirrors’ lesson,” blaming the schools.

The LA Times coverage also reflected the tone of the government attack. The July 16 story featured three different unhappy current or former employees and three angry students. The story admitted the “company’s rapid enrollment growth, peaking at more than 110,000 students in 2010.” But no one who was happy with their education at Corinthian was quoted.

The New York Times wrote two stories specifically about Corinthian’s collapse on its news pages, depicting the government against a “Wall Street darling” that “seemed to be able to coin money from the federal government and from desperate students.”

The Times portrayed the government regulators as helpful. “Confronted with warnings it would be responsible for hurting so many students, the [Education] department blinked” and agreed to modify its initial plans.

A July 9, 2014, New York Times editorial actually used the government action that crushed Corinthian as a rationale for more government involvement. The Times said the situation “makes clear that the rules need to be strengthened and that federal oversight generally needs to be broadened.”

Lies, Damned Lies and Statistics

Even The Washington Post called out Education Secretary Arne Duncan for claims he made about salaries of for-profit college graduates.

Duncan told a White House news conference March 14, 2014, an incredible statistic. “Of the for-profit gainful employment programs that our department could analyze, and which could be affected by our actions today, the majority — the significant majority, 72 percent — produce graduates who on average earned less than high school dropouts,” he claimed.

But the Post’s Fact Checker Glenn Kessler gave that claim two Pinocchios, the paper’s measurement for lying. The column went into great detail why the statistic was bogus. “In straining for a striking factoid, the Education Department went too far,” Kessler wrote.

“Officials also confirmed that graduates of 57 percent of private institutions — a list that includes Harvard’s Dental School but also child-care training programs — earn less than high school dropouts,” he went on.

According to Inside Higher Ed, “Advocates for the sector had pushed back on the validity of the department's prominently featured assertion that graduates of 72 percent of programs at for-profits make less than high school dropouts.” As the publication concluded, “The Post looked into the argument on its ‘Fact Checker’ blog, and sided with for-profits.”

The battle didn’t end there. The Education Department spent more than 3,200 words in response, claiming the Post “appears to be misreading a statistic.” The department went on to detail 25 separate bullet points in response to the column under the heading “Exploring the Claims of the Washington Post’s ‘Fact Checker.”

The Education Department blog defended the planned “gainful employment” rule and urged readers “Please take the time to read what’s below and decide for yourself.”

Relying On the Harkin Report

The high school dropout stat wasn’t the only source for confusion. The most common source for attacks on for-profit education was a 2012 report from Democratic Sen. Tom Harkin. This report made numerous allegations that news sources have continued to repeat, though many didn’t cite him or the report explicitly. The most common of these statements was the assertion that $32 billion in taxpayer-funded student loans go to for-profit colleges each year.

Since the release of Harkin’s report, roughly one-third (11 stories out of 36 stories) of all for-profit education stories either cited it or quoted Harkin, allowing his attacks to define much of the coverage.

While the report came out in 2012, it was still being referenced a year later by both the LA Times and USA Today. USA Today reminded readers on July 24, 2013, “A 2012 investigation by the Democratic-controlled Senate Health, Education, Labor and Pensions Committee slammed the for-profit industry.” On Sept. 9, 2013, the LA Times once again cited Harkin in a story attacking Corinthian Colleges.

Harkin, who chairs that committee, even has a section on his Senate website devoted to the “For-Profit College Investigation.” His office had worked on the report for two years.

“For-profit colleges account for only 10 percent of students enrolled in higher education, but those students receive 23 percent of Federal student loans and grants, and account for 44 percent of defaults,” Harkin claimed in September 2010. Most reports adjusted that 10-percent number to 13-percent in later stories.  

The New York Times called the Harkin report, “a voluminous, hard-hitting indictment of almost every aspect of the industry.” In that more-than 1,200-word Times article attacking the for-profits, there were just 16 words of a statement from the Association of Private Sector Colleges and Universities (APSCU), which represents for-profit schools.

The rest of the piece helped promote many statistics the industry challenges, but are commonly used by the press.

Those included the claim that 96 percent of students borrow money for their for-profit educations and at least 42 percent of these students default on their loans. The Harkin report also claimed that 22.7 percent of for-profit revenue goes to recruiting and marketing while only 17.2 percent goes to actual instruction.

The APSCU responded on their website to many of these points, often using Department of Education data. Just none of that appeared either in the Times article.

Their response addressed a key point that critics simply didn’t take into account the demographics of those who attend for-profit colleges. Essentially, for-profit education reaches students that traditional two-year and four-year colleges have ignored. But that included many people with lower-paying jobs, less education who were naturally more at-risk for defaulting on loans.

While the newspapers seldom examined the demographic issue, they did touch on it. A New York Times article on Feb. 26, 2014, showed how for-profit colleges had seen a huge increase in attendance and results. “For-profits make up the fastest growing segment of higher education, accounting for 20 percent of the two-year associates degrees grated in the United States, up from 8 percent two decades ago,” Eduardo Porter wrote. “The share of bachelor’s degrees has risen to 7 percent, from virtually nothing.”

But the article added an essential argument and cited a Harvard study to do it: “They have achieved these gains even though their students are poorer and more diverse than those attending state institutions and private nonprofit colleges, according to research by David Deming, Lawrence Katz and Claudia Goldin of Harvard University.”

According to APSCU, 62 percent of students are 25 or older, 50 percent already have children, 35 percent work full-time and 80 percent are financially independent from their families. That same citation shows the equivalent numbers for traditional schools, and they are dramatically lower. APSCU’s response to Harkin also explained that 40 percent of the students are black or Hispanic and one-third are single parents, all groups under-served by traditional institutions of higher learning.

Because students are drawn from those individuals that traditional colleges have ignored, a full 94 percent of them are eligible for financial aid.

The Democratic Attack on For-Profit Education

The administration and Harkin had prominent left-wing support in the fight against for-profit education. The Young Invincibles, one of the groups pushing for more regulation, has strong left-wing ties. The group is a project of the Center for Community Change, and has received $11,050,000 from George Soros’ Open Society Foundations (OSF). OSF has given more than $550 million to top liberal causes in the U.S. since 2000.

Young Invincibles’ parent organization also received money from the liberal Democracy Alliance. Seventeen Democracy Alliance partners gave $2.15 million to the Center for Community Change in 2013 alone. A recently leaked briefing book for the Alliance stated that "progressives' long term success hinges on our ability to fundamentally change our current political system." The Democracy Alliance was created to consolidate the efforts of wealthy liberal donors such as George Soros and his son Jonathan, Tom Steyer and Robert Mckay.

Another way this politicization became apparent was through political donations. Reporters repeatedly complained about for-profit colleges and their political donations. A July 24, 2013, USA Today article explained that House Education Committee Chairman Rep. John Kline, R-Minn., had received $138,340 from “the political action committees, employees and lobbyists of for-profit schools.”

The paper called that number “a dramatic upsurge.” But that same article left out some key facts about the political donations of traditional colleges.

According to OpenSecrets.org, “individuals involved in education contributed more than $60 million to federal candidates” during the 2008 and 2012 election cycles. That’s 433 times more than Klein received. “They've typically favored liberals; over the past decade, the worst year for Democrats was a cycle in which their party received 73 percent of the cash,” the site reported.

The site, which tracks campaign finance, showed that Kline only received a total of $194,200 for all of 2013. And that total placed him fourth among congressmen, behind two Democratic senators and one Democratic candidate.

In fact, Kline was the only Republican in the top eight recipients of education industry dollars. The other seven received a total of $1.3 million in 2013. Democrats also dominated 14 of the top 20 funding spots – or 70 percent.

However, the party divide wasn’t universal. Eighteen members of each party signed a letter “to oppose the current Department of Education gainful employment rule.” 

Newspapers Make It Clear They Oppose For-Profit Schools

The spin against for-profit education is unsurprising. All three newspapers studied also editorialized against the schools in 2014, standing by traditional colleges and universities. That anti-industry push has been influential. Several other prominent papers also opposed for-profit colleges – The Des Moines Register, Sacramento Bee and Kansas City Star – and called for more regulation.

The New York Times did what it usually does and called for more regulation, saying, “the rules need to be strengthened and that federal oversight generally needs to be broadened.” According to the Times editorial board: “That’s the only way to shield students and taxpayers from exploitive or irresponsibly managed for-profit institutions that rely on federal student aid for up to 90 percent of their revenue.”

The Times wrote at least eight editorials critical of for-profit schools just during the study period.

The Los Angeles Times complained that student loans for the schools were a bad idea. “For-profit colleges that wildly exaggerate their graduates' success and talk prospective attendees into taking on extraordinary debt are not only harming their students but costing taxpayers billions of dollars on wasted Pell grants and defaulted federal student loans,” wrote the Times. It urged the administration to “set rules to stop schools from overpromising to attract students.”

Lumping for-profit education in with the infamous "bridge to nowhere," and bankrupt solar energy company Solyndra, USA Today tried to blur the political lines a bit. The paper’s editorials called for-profit schools “a racket” and said some are “more interested in harvesting federal money than they are in educating students.”

Methodology

The Media Research Center’s Business and Media Institute analyzed education stories in three top general interest newspapers. The MRC examined USA Today, The New York Times and Los Angeles Times. The other two papers landing in the top five for circulation are The Washington Post and Wall Street Journal. The Journal was not included because it focuses mostly on finance. The Post was deliberately excluded because it had close financial ties with the industry for part of the study period.

Stories from all three papers from June 1, 2011, through July 31, 2014, were analyzed to see what arguments they used – for or against for-profit education or neutral. To count as either a positive or negative story, the positive or negative arguments had to be more than 1.5 to 1 either direction. Casual mentions, editorials and columns were excluded.