As federal scrutiny of for-profit colleges tightens, two prominent proprietary institutions have decided to discontinue the practice of enrolling students who do not have a high-school diploma or a GED but who pass a basic-skills test that allows them to qualify for federal student aid.
Corinthian Colleges Inc. announced last week that it would stop using the tests, known as "ability to benefit" tests. In doing so, company officials cited the tendency of students who qualify by passing the tests to have higher default rates on their loans than their peers who didn't take the test, as well as new federal rules that will change how colleges are held accountable for those defaults. Corinthian's decision follows a similar move by Kaplan Inc., which discontinued use of the tests last fall at some of its institutions.
The ability-to-benefit tests aren't widely used in higher education as a whole, but a number of colleges allow students who pass them to enroll.
In explaining Corinthian's decision, Kent Jenkins Jr., a spokesman for the institution, said students who take the ability-to-benefit test tend to default on their loans at twice the rate of other students. For-profit colleges like Corinthian and Kaplan will need to manage their default rates better, because starting in 2014, the Education Department will hold colleges accountable for defaults of student cohorts for three years after the students graduate or leave college, a year longer than under current law.
Peter C. Waller, chief executive of Corinthian, announced the decision to drop the test last Friday. He said the shift to a three-year measurement, as well as changes in student lending that have put more responsibility on colleges for default management, left them "no choice" but to discontinue enrollment of students who do not have a high-school degree or a GED.
"We're in a better position today to take the steps that will help us reduce risk and preserve our ability to succeed in the future," Mr. Waller said. "Current public policy on cohort default rates has the unfortunate effect of creating disincentives to serve [ability-to-benefit] students."
About 15 percent of Corinthian's students in the last academic year used the ability-to-benefit test. The company, which operates more than 100 campuses across North America, estimates it will lose 16,000 potential students and about $120-million in the next fiscal year as a result of this decision, but it will also lose the risk of higher default rates those students would bring. The 15-percent enrollment of ability-to-benefit students was a decrease from 24 percent the previous year, credited to a greater focus on default management at Corinthian, as well as the growth of its online division, which does not enroll such students.
For Kaplan, meanwhile, Michele Mazur, a spokeswoman, said discontinuing ability-to-benefit enrollment was neither a financial decision nor one that was based on the new three-year measure of default rates. Ms. Mazur said many of Kaplan's campuses stopped enrolling students who passed the test before the three-year window was approved by Congress. She said the systemwide decision, made in October, was mostly about Kaplan's overall concerns with ability-to-benefit, or ATB, students.
"Although we initially began admitting ATB students several years ago as a way to serve this most-underserved student population, over time we developed serious concerns about ATB students' performance," she said.
Ms. Mazur said the decision to stop enrolling them has benefited both Kaplan and people who would have been those students."No one gains when students do not successfully complete their programs and get a job," she said.
Worries About Students' Success and Defaults
The Education Department released data showing what institutions' cohort-default rates would be if a three-year measurement period were already in place. An analysis of that data shows that rates at 183 for-profit colleges were at least 15 percentage points higher in a three-year period than a two-year window, which is the government's current tracking period. In that same period, only 20 nonprofit colleges had increases that large.
Deborah Cochrane, program director at the Institute for College Access and Success, a group that advocates for college affordability, said colleges have a responsibility to make sure that students can succeed after graduation, and the three-year period helps hold institutions more accountable.
"If ability-to-benefit students are of a particular concern, I think the colleges can give them the support they need to succeed at the same level as other students," Ms. Cochrane said. "On the other hand, if they know these students aren't able to succeed at the same rate and they can't offer the support needed to help them, they shouldn't be loading up students who they know are more likely to fail."
Earlier this summer, the Education Department proposed a number of new rules that affect for-profit colleges and ability-to-benefit tests, including those that would establish new requirements for student-aid eligibility and put in place further checks to ensure that tests are being administered fairly and properly.
These rules were proposed because of Government Accountability Office concerns that there hasn't been enough oversight of the ability-to-benefit tests, which must be approved by the Education Department before they are used. Private publishers certify and monitor test administrators. In October, the Education Department said it was putting in place better monitoring practices, a move that was deemed necessary after a GAO report found that testing officials at a for-profit college helped students cheat on an ability-to-benefit test. In general, widespread cheating was not found at colleges that use the tests, but the report cautioned that the lapse in oversight was allowing unqualified students to get federal aid.
"To decrease the likelihood that students will default on their loans, it is critical that [the Education Department[ increase its oversight of federal student-aid eligibility requirements to make sure that only students who have the ability to benefit receive federal funds to attend college," the report stated.
Comments
1. drculbreth - August 26, 2010 at 09:04 am
If students do not have high school diplomas, GED test results, etc. then they should not be enrolled in any college. At some point in time common sense must begin to play into the picture. The Department of Education should require all schools offering college degrees to require diplomas or GED test results. This makes one question whether or not for-profits (having such low standards) truly understand and value the purpose of education. Strict standards must be introduced and all for-profits held accountable for adhering to them. If they fail to adhere to standards, then they should be shut down.
The Department of Education should also review the credentials of employees in administrative positions and require presidents of all non-proft colleges to hold a doctorate degree.
2. whm3113 - August 26, 2010 at 10:21 am
@ drculbreth
"The Department of Education should also review the credentials of employees in administrative positions and require presidents of all non-proft colleges to hold a doctorate degree."
Really? What is the correlation between obtaining a terminal degree that is focused on research and managing a complex organization?
3. jbarman - August 26, 2010 at 12:38 pm
30 years ago, I worked for a private, not for profit IHE that accepted students without high school diplomas or GEDS if the students had spent four years in the military.
Would drculbreth say this school had "such low standards", especially in light of the fact that these individuals were far more mature and at least as academically capable as the high school graduates we accepted?
There is a difference between low standards and alternative ways to measure chances for success.
4. director19 - August 26, 2010 at 01:33 pm
Once again, drculbreth shows what the narrow minded pinhead PhDs think they have for a solution.
I have had ATB programs in the past. Some of the brightest students I have ever had the privilege to teach were in these programs. I am always amazed at how many people are negatively affected by the education system -- most run by PhDs and unions, of course!
Perhaps if we fixed the K-12 system we wouldn't have as many ATBs to take care of. In Alabama, 47% of 9th graders don't graduate. Pitiful to say the least! Thank goodness we have the Alabama Education Association to oversee the teachers in Alabama.
No matter how you pose this, you can't put lipstick on this pig!
5. unusedusername - August 26, 2010 at 02:11 pm
Don't let 'em get to you, drculbreth.
Although I would not favor the government requiring college presidents to have academic doctorate degrees, I certainly think having a president with an academic doctorate is a good idea. A president with a doctorate would realise that the anecdotal argument "Some of the brightest students..." is invalid. The statistical proof given in the original article proves that students without diplomas are much less capable of benefitting from a college education than those who are. The reason why military veterans do well isn't just maturity; it is because they have already passed the Armed Forces Qualifying Test. People with low IQs simply don't get into the military.
People with PhDs realise that people differ in intelligence, and that not everyone has enough to get a bachelor's degree. That is something that a lot of business majors don't quite get.
6. sroyce - August 26, 2010 at 02:25 pm
I believe in California, one does not need a high school diploma, GED, or a passing score on an ATB exam to attend the community college. Do they also have low standards?
7. drculbreth - August 26, 2010 at 04:01 pm
Again, it is obvious that many are clueless as to the purpose of education.
Thank you @unusedusername
8. emwhite - August 26, 2010 at 04:17 pm
I wish the reporter had looked into these ability-to-benefit tests and given us some information about their construction, validity, and cost.
9. der_gadfly - August 26, 2010 at 05:16 pm
I have looked at many of the instruments used to determine ATB. They are typically standardized tests, which are approved by the State Education Department (insert state name here), and are just as valid as the ones used for placement in the public 4 years and CCs to determine remedial placement. In some cases, the cutoff scores required for ATB consideration are higher than those for 'regular' students.
Now, as to denying someone the chance to gain a college education, I offer an anecdote, knowing full well that it is not empirical evidence that has been double-blind peer-reviewed and published in some internationally recognized journal, but nevertheless:
A young woman in her senior year in high school found herself with child (twins to boot). Her family strongly insisted that she abort, but this was not meant to be. She left high school shy by only English, physical education, and a few 'elective' credits. Today, a mother of 5, and grandmother of 3, she rises each morning, reads the Wall Street Journal, completes the New York Times crossword puzzle, then manages her vast investment portfolio online. Upon completing her week as a local delivery driver, she also completes the NYT sunday puzzle, plus numerous other things. She has published a children's book, tutored all of her children through high school math, and all of this without the GED. Following the logic presented above to deny someone of this obvious intellectual stature entry to obtain a college degree seems like elitist-think. So she made poor choices early in life: this does not mean that she should be denied access.
Postscript to the story: the now 50ish woman is completing a degree (partialy online) because there is a chance for her to be promoted at work.
10. yasulh - August 26, 2010 at 06:25 pm
I think that if a student is really serious about their education, they should start by finishing the requirements for their diploma (if possible), or earn the GED. This will get them back into the habit of studying and school work and let them see if they are truly ready for college.
11. softshellcrab - August 26, 2010 at 08:48 pm
I keep posting comments on this blog saying the same thing, that my experience with non-profits (and I have taught on the side for several) is that they are all basically just scams. I know some will say it is true of some, but not others. But every experience I have with a nonprofit is that the "school" is all about money, money, money, and not letting students fail because it wants their money. These are like "prostitute-colleges", and they hand out degrees and good grades like a grocery store hands out free food samples.
12. lgrein - August 27, 2010 at 01:39 pm
Not all ATB entry students are youngsters or even young adults. If the test is valid it provides a better (faster, less expensive and non demeaning) entry avenue for a forty or fifty year old to enter the system. GED classes are aimed at young people and more and more at resent immigrants. Telling a self supporting, native English speaking, middle aged adult to sit through a GED class deters the person from entering school.
13. betterschools - August 27, 2010 at 02:24 pm
An important point is being missed here.
Public and private universities do not want ATB students and, for the most part, will not admit them. When such students do manage to get into a public university, diverse forces operate to drive them out, as public ATB graduation rates show.
For the most part, community colleges will admit at least some of these students, but they are increasingly overcrowded, have long waiting lists for popular programs, and may not offer classes at times convenient to working underclass students. The community colleges serve well but can handle only a fraction of the total need and have no means to ramp up to do more.
For-profits will admit these students and, despite the press you read, they graduate more of them, and more who repay their loans than the publics. (see: http://www.intered.com/storage/deptofed/MotleyFool_GE-Rules.pdf ) The document at this link uses the Department's own loan payback data to show that when public universities serve lower income areas of the United States, they generally perform worse than the for-profits. I examined the analysis carefully and it was difficult to find fault or any material (non-humorous) bias in it.
The feds largely unwarranted attack on the for-profits (a few need to clean up their enrollment practices) is directly responsible for the fact that the for-profits have reluctantly decided that they can no longer serve these students. For many for-profits, this service, that which no other school would take on, was a point of pride. However, since ATB students default at twice the rate of their general admissions, they must let them go to avoid being punished by the feds for these defaults, even though they are lower than the publics' defaults serving the same students.
The arrogance cum irony of the publics is that they do not want any part of these students but they don't want the for-profits to get them either. How abjectly petty of them.
----------------
I know that many of you place principle above personal interest. To those individuals, I invite you to examine the feds ideological driven vendetta against successful for-profits. It is angering to those of us who feel that the federal government should tell the truth and should play fair. They are doing neither.
You can examine a variety of documents pertinent to the federal actions against the for-profits at this link: http://www.intered.com/for-profit-regulation
If you have documents supporting any position on this issue -- pro, con, or otherwise -- I invite you to post them there for everyone to review.
Robert W Tucker
14. der_gadfly - August 27, 2010 at 05:22 pm
I believe that SOME private colleges offer ATB (limited to be sure) programs. I may not be totally correct in this, but I believe that Smith College has a program aimed at non-traditional students, some of whom may not have a GED or HS diploma...
Besides, it is not the colleges that 'permit' this, but the state departments of education. New York DoE has an office dedicated to ATB programs.
The point of an ATB program is that some students just never managed to graduate, and the principles that drove the community college movement in the beginning still apply: provide access. An ATB program, one which is certified by an appropriate licensor, allows students to complete a certain sequence of courses that lead to a dual award: GED and Degree.
15. lizziec - August 27, 2010 at 06:06 pm
I'm all for people having a chance to get a college education, but - if these people are allegedly so "bright" that they should be welcomed into an academic environment, then they should be more than happy to prove it by getting the GED, which cannot be that difficult (judging from the students with GEDs that I've seen at community colleges where I have taught).
I routinely get students in my online/for-profit "college" who I would presume to be "ATB" admits. They write sentences that are undecipherable; they are peppered with key terms from the assignment and large, unrelated words (very often misspelled), in no particular order. The papers/discussion board posts are so bad that if I didn't know better, I would be looking for Allen Funt and his Candid Camera crew, because it is unfathomable that these people passed any kind of screening, but wait!! They passed the ONLY screening required at for-profits... the screening for PELL grant and student loan eligibility.
This practice (admitting ATBs) will stop if the current rules are given some teeth. Many of the students I have observed will never be able to get a foot in the door for a professional interview because when HR downloads their resume/cover letter, they too will look around for Allen Funt and his Candid Camera crew, just before tossing the documents into the trash.
Lizzie C
16. jwdink0066 - August 29, 2010 at 03:51 am
What a sad waste of our educated professional's time. Most of this conversation is useless, as it is mostly opinion and emotion, with a few factoids thrown in. Here is an idea, stop pointing fingers, put down the ego's, stop blaming, and start helping and start fixing. The sheer arrogance in this conversation is repulsive and sickening and wreaks of vanity and fear. No wonder the enitre higher educational system is on the brink of catostophic collapse.
17. jwdink0066 - August 29, 2010 at 03:57 am
I commend those of you who are working toward a conversation with merit and substance. If all were on that same page, the tone of this article would have been much less elitist and more compassionate, geared towards solution finding instead of fault finding. Please continue your work, it is desperately needed.
18. docfox - September 03, 2010 at 02:30 am
betterschools is fond of presenting the reports and analyses of InterEd, Inc. (his/her obvious employer) as some sort of objective, impartial collection of facts, but I encourage everyone to consider the interesting links between InterEd, Inc. and the Apollo Group (University of Phoenix's parent company) when examining their reports (you'll need to scroll down on some of these pages and pay attention to name changes and mergers):
http://starpas.cc.state.az.us/scripts/cgiip.exe/WService=wsbroker1/corp-detail.p?name-id=07181606
http://starpas.cc.state.az.us/scripts/cgiip.exe/WService=wsbroker1/history-detail.p?corp-id=01434491
http://www.faqs.org/sec-filings/091027/APOLLO-GROUP-INC_10-K/p16132exv21.htm