Higher Education for All: The Earnings Gain from A Private Education

23 Dec 2014 /By APSCU Communications 

 

The value of college has been repeatedly affirmed by numerous experts. The gain that degree holders see in their earnings is significant and worth the cost of postsecondary education. The earnings gain that graduates experience is critical to measuring the worth of a degree or credential, but the Department of Education is not taking this into account. Instead they are determining the value of postsecondary education by a static measure of early career earnings that does not take into account graduates’ incomes prior to enrolling.

This approach is shortsighted because it ignores gains over time and tells an incomplete story of the real value of a college education. According to the University of Georgetown Center on Education and the Workforce, individuals who receive a bachelor’s degree experience a lifetime earnings gain of roughly $1 million, thus demonstrating the capricious nature of the Department’s decision to measure only early earnings. As seen in the graph below, based on data from the U.S. Census Bureau’s 2013 Annual Social and Economic Supplement, much of the earnings gains that degree holders experience occur midway through their careers.

One way to better quantify the return on investment for students would be to measure their earnings gains, or the difference between an individual’s earnings before and after receiving a degree from a private sector institution. As has been explained previously, a majority of private sector students study in high return fields, specifically computer/information sciences, business, and healthcare. Thus, we should expect to see significant earnings gains for many individuals who graduated from private sector institutions.

Not surprisingly, according to analysis of survey data and the Department’s gainful employment informational rates, private sector institutions provide graduates who receive an associate’s degree in high demand fields with earnings boosts greater than 100 percent. The chart below shows some examples. These types of earnings gains are completely ignored by the gainful employment regulation.

Rather than arbitrarily using early year earnings, metrics intended to determine student success should take into account the relative increase in earnings to measure the benefits that private sector students receive from their programs. New traditional students choosing higher education institutions are not making a bad investment—they are making smart long-term decisions. Their returns on this investment prove it.

Direct link to article: http://www.highereducationforall.com/earnings-gain-private-sector-education/#.VJ1Hc8ABTA

Higher Education for All: Why Student Choose Private Sector Institutions

23 Dec 2014 /By APSCU Communications 

 

Individuals considering higher education take a number of factors into account when deciding what type of institution is best for them. While each student has a different set of determining factors that influence their decision, many of the students that enroll in private sector institutions are new traditional students. These students are likely to rely on federal financial aid, be older than the average student, work while attending class, and support a family. Thus, our nation’s higher education institutions must be equipped to meet the needs of these new traditional students, and private sector institutions are best suited to do so.

As has been well documented by a number of experts, including members of the New York Federal Reserve, higher education remains an excellent investment for individuals. However, many students, specifically new traditional students, have needs that require the flexible learning opportunities that private sector programs offer. Simply put, many individuals want to further their education because of the value of a degree, but not all can attend the traditional routes offered by public and private not-for-profit institutions.
One of the many ways that private sector institutions offer more flexibility is through distance education. According to data provided by the U.S. Department of Education’s National Center for Education Statistics, “in 2012, a higher percentage of students at private for-profit institutions (46 percent) exclusively took distance education courses than did students at public institutions (8 percent) and private nonprofit institutions (10 percent).” The emphasis that private sector institutions place on delivering instruction to students who are not physically present in a classroom is certainly not traditional, but it offers a degree of flexibility that is often helpful, if not essential, for many new traditional students.

Unfortunately, the U.S. Department of Education’s recently released gainful employment regulation will limit options within higher education for new traditional students by shutting down programs that don’t meet their arbitrary debt-to-earnings metric. Though some argue that students displaced by the closing of these programs will have other options available to meet their education needs, the data indicates otherwise. These alternatives will most likely not be practical or flexible enough to meet the needs of new traditional students. Thus, the gainful employment regulation will deny access to education for millions of students in the coming years.

Direct link to article: http://www.highereducationforall.com/students-choose-private-sector-institutions/#.VJ1HcMABTA

Crain's Chicago Business: DeVry looks to score with new Minor League Baseball deal

December 08, 2014


By: Danny Ecker

DeVry Education Group may not have an athletic program, but the for-profit school is claiming a major stake in baseball.

Aiming to replicate the success it has seen from a marketing partnership with the U.S. Olympic Committee, the Downers Grove-based higher education company today will announce a three-year deal with Minor League Baseball that makes it the official education and career development partner of Major League Baseball's affiliate system.

In addition to signage and promotion at all 160 minor league franchises ranging from rookie leagues to AAA, the sponsorship will include 20 full-ride scholarships available to minor league players, staff, alumni and other team and league employees, as well as reduced tuition for interested players and their spouses.

Both DeVry and the governing body of minor league baseball declined to provide financial details of the contract.

The new deal stands to facilitate academic degrees for the thousands of players and employees involved with the MLB farm teams while also exposing DeVry to roughly 42 million fans that attend minor league games each year.

"These young men spend quite a bit of time focused solely on their baseball career and getting ready for going to the big leagues, but so few of them actually end up making it," said Amanda Geist, DeVry's director of partnership marketing. "Our primary goal is really to help them focus their academic and career goals and prepare them for what comes next in their post-baseball careers."
While the top minor league players are on fast tracks to the big leagues, many minor league players are drafted directly out of high school or before completing their college degree.

That represents hundreds of potential DeVry students each year but also provides a promotional tool. Much of the school's marketing has spotlighted successful case studies showing people balancing work and higher education to earn degrees.

"We want prospective and current students to see themselves in these athletes and say, 'if (that) athlete can balance training and going to college, I can balance working full-time and going to school," said Geist. "It's really about helping athletes focus on what comes next and using those stories to inspire people to go back to school."

DeVry previously had sponsored individual teams like the NFL's Jacksonville Jaguars, the NBA's Philadelphia 76ers and two Major League Soccer teams, but it ditched the strategy a few years ago to redirect marketing dollars toward more national partnerships.

Aside from providing wide-ranging exposure, the deal with Minor League Baseball also may help prospective students look at DeVry in a new light, said Jim Andrews, senior vice president at Chicago-based sponsorship consulting firm IEG.

"There's always that issue of their reputation--people out there that rightly or wrongly see (for-profit education schools) as diploma mills," he said. "Tying in a very popular community activity with minor league teams—it's a good connection for them to make. It makes people like the brand a little bit more and feel a little bit more positive about them."

Minor League Baseball officials approached DeVry about the partnership this year after seeing its success with Team USA Olympic athletes.

A DeVry-USOC sponsorship signed before the 2012 Summer Olympics set up a similar program for athletes to earn degrees while training and competing full-time. The partnership started with six Olympic athletes and has grown to about 200 enrolled today, including American gold medalist bobsledder Steven Holcomb, who was featured in DeVry ads during the games.

Minor League Baseball Chief Marketing Officer Michael Hand said DeVry's education platforms met a need for many players, noting that it typically takes a player six or seven years to reach the major leagues--if they make it at all. Many now have the option to take classes online or at a local DeVry campus.

"Everyone in Minor League Baseball is trying to work to build themselves, and in many cases trying to get to the next level," Hand said. "We thought (a sponsor for) continuing education was a great complement to the lifestyle of the folks that work in the game."

DeVry is one of a handful of new partners that have signed on with the St. Petersburg, Fla.-based governing body of the MLB farm system, marking a shift in Hand's strategy toward leveraging its national reach through sponsorship deals that include all of its teams. Minor league team sponsorships historically have been local—like car dealerships and local banks—because of the community nature of the franchises.

But teaming with a higher education company that touts more than 48,000 students on 80 campuses across 25 U.S. states also helps the league reach a valuable database of potential new fans.
"We like the idea that DeVry, in a non-traditional education setting, doesn't have a school team to go root for," Hand said. "We're optimistic they'll embrace one of the teams in one of our markets."

Publicly traded DeVry is one of many for-profit education hubs that has been battling weak enrollment in recent years. Annual revenue fell by 2 percent in the year ended June 30 to $1.9 billion; its stock price surged by 40 percent since the start of 2014 to around $48 a share.

Direct link to article: http://www.chicagobusiness.com/article/20141208/BLOGS04/141209795/devry-looks-to-score-with-new-minor-league-baseball-deal

Courthouse News Service: For-Profit Colleges Oppose New Higher Ed Rule

Friday, November 07, 2014

By Rose Bouboushian

   (CN) - A new regulation that requires for-profit colleges to prepare students for "gainful employment" will "needlessly harm millions," a trade group alleges in Federal Court.
     The Association of Private Sector Colleges and Universities, a voluntary association of about 1,400 accredited, private postsecondary schools, filed suit Thursday in Washington, D.C., against the U.S. Department of Education, challenging the newly adopted, so-called "gainful employment" rule.
     For-profit schools that belong to the APSCU "support lawful, rational regulations governing financial aid, but the challenged regulations are neither lawful nor rational," the complaint states. "Rather, they are unconstitutional; contrary to Title IV of the Higher Education Act of 1985, as amended; arbitrary and capricious; and otherwise in violation of the" Administrative Procedure Act.
     Adopted on Oct. 31, the regulations "exceed the [Education] Department's statutory authority and depart from settled principles of agency rulemaking," the association claims.
     "The department has already tried and failed to construct a regulatory regime on the basis of the same statutory phrase it invokes now - 'prepare students for gainful employment in a recognized occupation' - in a set of rules it promulgated in 2010 and 2011," the complaint states. "That fruitless attempt spanned several years; left policymakers, schools, and their students facing uncertainty; and needlessly imposed costs on taxpayers."
     But a federal judge in Washington struck that attempt down in 2012 "because a central feature of those regulations - the loan repayment rate test - lacked any reasoned basis," the association claims.
     "Instead of correcting the flaws that rendered its 2011 rule invalid, the department's new rule only repeats and exacerbates them," the complaint continues. "The department has since conceded that there was no reasoned basis for its loan repayment rate test, admitting that it 'has found no expert studies or industry practice,' nor any other alternative support."
     The association says that, "for close to 50 years, Congress has required by statute that certain postsecondary educational programs must 'prepare students for gainful employment' in a recognized occupation or profession to be eligible to participate in Title IV financial aid programs."
     "But until the 2011 rulemaking, that phrase was never understood to mean that a program could only remain eligible for Title IV funding if its recent graduates who received Title IV aid have attained a particular level of earnings relative to the amount of debt that they incurred to attend the program," the complaint continues.
     As authority for "its far-reaching regulatory test," the APSCU "mistakenly relies" on a law that essentially says programs need only prepare students for "a job that pays," the association claims.
     "Indeed, the regulations impose massive disincentives on private sector schools that currently seek to educate low-income, minority, and other traditionally underserved student populations, because, as an historical matter, those demographics are widely recognized as most at risk of failing the department's arbitrary test," the complaint states. "Thus, instead of increasing the availability of higher education, the department's regulations will limit educational opportunities for traditionally underserved groups - leaving those students with diminished access to higher education and potentially causing them to forgo postsecondary education altogether."
     The association insists that "No single, one-size-fits-all statistical test can accurately measure whether all programs in all fields prepare students for gainful employment."
     It wants the court to declare the regulation unlawful and set it aside.
     Douglas Cox and Timothy Hatch with Gibson, Dunn & Crutcher represent the group.
     The regulation is "so unacceptable and in violation of federal law, that we were left with no choice but to file suit," Steve Gunderson, the group's president and CEO, said in a statement. "If successful, our suit will protect student access and opportunity to higher education at a time when the U.S. Department of Education seems interested in limiting choices for students by closing private sector programs."