It seems a foregone conclusion that Mitt Romney will be the Republican nominee for President.  He is ironically considered by the Republican establishment to be the most electable among the candidates now left in the race.  From my more or less disinterested perch, I can’t see him being elected.  In other words, nominating Romney is tantamount to ensuring Obama another four years—not a bad thing necessarily, but certainly not what the Republicans seek. 

Three recent articles bolster my view.  I’ll get to the other two in another post.  The first was in the Sunday (January 15, 2012) New York Times, above the fold, left column.  It detailed Romney’s claims that for-profit colleges offer a competitive (in price) alternative to higher education, and revealed that Romney’s professed admiration of the for-profit college industry was the result of some hefty campaign donations received from officers and investors in the colleges, particularly the officers of a little-known school in Florida called Full Sail University, which purports to specialize in the entertainment industry.  From the article:

Mr. Romney offered another unsolicited endorsement for “a place in Florida called Full Sail University.” By increasing competition, for-profit institutions like Full Sail, which focuses on the entertainment field, “hold down the cost of education” and help students get jobs without saddling them with excessive debt, he said.

Mr. Romney did not mention the cost of tuition at Full Sail, which runs more than $80,000, for example, for a 21-month program in “video game art.”

Nor did he mention its spotty graduation rate. Or, for that matter, that its chief executive, Bill Heavener, is a major campaign donor and a co-chairman of his state fund-raising team in Florida.

That team, Mr. Romney said last fall when he appointed Mr. Heavener, “will be crucial to my efforts in Florida and across the country.”

Mr. Romney offered another unsolicited endorsement for “a place in Florida called Full Sail University.” By increasing competition, for-profit institutions like Full Sail, which focuses on the entertainment field, “hold down the cost of education” and help students get jobs without saddling them with excessive debt, he said.

Mr. Romney did not mention the cost of tuition at Full Sail, which runs more than $80,000, for example, for a 21-month program in “video game art.”

Nor did he mention its spotty graduation rate. Or, for that matter, that its chief executive, Bill Heavener, is a major campaign donor and a co-chairman of his state fund-raising team in Florida.

That team, Mr. Romney said last fall when he appointed Mr. Heavener, “will be crucial to my efforts in Florida and across the country.”

It’s not clear exactly what returns might be achieved from spending $80,000 for what amounts to a community college certificate in video game art, but one can readily imagine that the same $80,000 might be put to better use starting a business, or learning a more concrete skill than video game art.  Is art even teachable?  A matter for a different discussion. 

I have some minimal experience in the for-profit college scene that might shed some, admittedly anecdotal, light on the subject of whether for-profit colleges offer a competitive alternative to the present university/community college patchwork post-preparatory educational system. 

A few years back, having grown a bit bored at the mind-numbing exercise of preparing, closing and processing real estate mortgage loans day after day, I answered an ad in the local paper for an “economics instructor”, thinking a little part-time teaching might get me out of my real estate closing rut.  I don’t have a master’s level degree in economics, but the ad said that the job only required thirty hours of college-level work in economics, and some sort of master’s degree.  My law degree fit the bill for the master’s requirement, and I had majored in economics as an undergraduate, with quite a few more than 30 hours at it, so I was qualified.  It turns out they were desperate for an instructor for two scheduled classes of econ 101 required of their business school graduates, and so I was hired on the spot, with instruction to begin almost immediately.  I was given a syllabus and the textbook and told to show up that weekend for an orientation session.  The following week classes would begin. 

Practically the whole of the orientation session was devoted to explaining how important it was that attendance in class be strictly monitored, and that each absence be followed up with a phone call to the student to ensure they stayed in class.  This seemed strange to me.  These were grownups, mostly working at jobs during the day and attending classes in the early morning (one of the classes I taught met at 8:00 am Mon-Wed-Fri; the other at 6:00 pm Tues-Thurs).  How could I be responsible for whether they showed up for class or not?  I figured if a student wanted to learn, and there was something I could teach them, they would show up, just like happens at any other college.

The rest of orientation stressed the importance of keeping to a rigid schedule of exactly the allotted time for instruction.  Class was never to be let out early, not even after a quiz.  Before even starting, I got the sense that all I would be doing was babysitting a bunch of grownups as they punched a ticket required of some degree program.  I had initially relished the idea of getting back into economics theory and practice, yet it seemed that teaching a basic foundation in economics was pretty close to the least of the priorities the school had for the class.  Little did I know.

The course had a strict syllabus I was to follow.  It required four quizzes (50% of the grade), a final exam (25%), and a paper (25%).   After grading the first quiz, I began to understand what was really going on.  I created the quiz from questions at chapter’s end in the textbook we were using.  The textbook provided answers to all the questions it posed.  I worded the questions exactly as they were posed in the book.  It was a multiple choice test, with the answers worded exactly as the book had them.  Yet roughly three-quarters of my students failed (70% was required to pass).  I was flabbergasted.  Anyone that could read at a level sufficient to simply recognize words, even without understanding their meanings, should have been able to ace the tests.  The next quiz garnered the same results.  Three quarters of my students were in danger of failing, and failure was verboten at this college for anyone that showed up and paid their tuition.  My boss, the “doctor” of something, nudged me to ensure wholesale failure did not occur.  So for the third quiz, I handed out the test prior to administering it, and discussed each question in class, giving which of the choices was correct.  They were then allowed to take the test home and “study” for the quiz the following class session.  Thus, all they had to do was memorize the right answer for each question.  Even then, there were a couple of people, out of a total of about thirty students, who failed to hit the seventy percent mark. 

The “paper” was even worse.  All the students had to do was turn in a couple of typed pages covering some aspect of an economic theory or practice in which they were interested, choosing the topic for themselves.  They had to have two sources, one of which could not be the internet.  It was after receipt of the papers that I realized most of the students were functionally illiterate.  They could read words, but rarely understood their meanings, and struggled mightily when it came to constructing a coherent, grammatically-correct sentence.  By this time, I had realized the scam, and mostly given up on teaching them anything about economics, never mind grammar and vocabulary.  If their paper met the minimal criteria—two typed pages and two sources, one of which wasn’t the internet, they got an “A”.  If not, I returned the paper to them and allowed them to fix it so it did. 

The final exam was no less a scam.  All I did was combine the four quizzes they had already taken, which by then they already had all the answers to, and stapled them together.  “Reviewing” for the exam constituted me reading the number of the question and its answer, while they copied it down (again).  Yet, even there, two out of the thirty were unable to pass.

One person failed to show up for the exam.  Figuring that administrative burden to see that the students showed up to class was over, I didn’t call to see why, except during the exam, and never got an answer, so I gave her a zero.  I figured, who would miss a final exam without contacting the instructor and letting them know why?  The school didn’t like that, so asked if I could show up to proctor her exam at another time.  I refused, but my boss, “doctor” of something that he was, offered to do so.  I let him. 

Like Romney, I too had believed these colleges offered a price-competitive alternative to public and private universities, but even that proved to be a sham.  I was paid $1,250 for each class I taught, making my total compensation something like $25/hour for classroom time, about half that when preparation and administrative time was considered.  Towards the end of the quarter, I asked the students how much they paid to take the class.  It was $750/hour.  It was a three-hour class, so the school basically made $65,000 on the course ($750x3x30=67,500-2,500 (my pay)=$65,000.   There is nothing price-competitive about a net variable margin of 27 times costs, especially when the fixed costs of the classrooms I was using, in a building in a run-down section of town, could not have been anything but minimal. 

It seemed incredible to me that the students, more or less all of whom toiled at low-wage jobs, if employed at all, could afford to pay the school $2,250 to take a class that did not and could not ever teach them anything remotely useful; how could something that was impossible to understand ever hold any promise of usefulness for them?  So I asked them how they paid for it.  “Student loans”, was the chorus in reply.  No doubt, I thought, federally-guaranteed student loans, which explained the fetish with attendance records and class duration.  For its students to qualify for federally-guaranteed student loans, the school would have to be accredited, and part of the accreditation criteria is that enrolled students actually attend class, and that classes are actually held at the times allotted for them.  Perhaps the only reasonably capable student out of the thirty claimed to have already incurred over $40,000 in student loans, and he was yet two years from receiving an information technology degree in the business school. 

I quit after the one semester.  I had just spent ten years digging myself out of the muck of the subprime mortgage loan-closing business, which is where I had started as a real estate closing attorney.  I had no desire to do so again in a part-time education career.  Make no mistake, for-profit colleges are to the higher education industry what subprime mortgage companies are (or now, mostly were) to the real estate mortgage industry.   Both of them prey on marginal candidates (a great many of them minorities), by offering to lend them money underwritten by the federal government to purchase things which they don’t need and they can’t profitably use.  The clients (the borrowers and students) are simply the mules for the traffickers in educational fraud whose business is securing a slice of the government largesse devoted to higher education.  The traffickers get the money provided by the government for their bogus classes.  The putative students, in the rare chance that they stick with the degree program, receive a meaningless degree.  The taxpayers pay the tab when the students default. 

As I learned during my brief and unhappy tenure as a for-profit instructor, I was not there to teach anything, but to create the illusion of teaching and educating, just as the students were there to create the illusion of learning.  That Mitt Romney believes this sort of fraud is what makes America great speaks to either his utter naïvete, or perhaps, to something more sinister.  Full Sail University, and establishments like it (the one in which I taught), are capitalist only to the extent they exist to make profitable cash flows out of government largesse.  And of course, the owner of Full Sail University is a private equity fund, TA Associates, quite similar to Romney’s ex-firm Bain Capital, and its manager is not coincidentally a big contributor to a super PAC created by several Romney ex-staffers.

In the mind of an investment banker or private equity fund manager, the source of the cash makes no difference.   If a certain amount of fraud (practically 100% in my case) is required, that’s okay too, so long as it can be covered up and culpably denied.  But a wise politician ought easily be able to see through this charade, and act to protect the people being exploited, i.e., the students and the taxpayers.  That Romney is either too stupid or too self-interested to do so speaks volumes about how a future Romney Administration might govern.

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