Santa Claus’s Trade Infractions

This is highly amusing.

Santa Claus’s Trade Infractions

Dear Santa

It is with regret that I am serving you with a Section 415 Cease and Desist order in the matter of delivery of gifts and/or presents on the occasion of the Night Before Christmas on behalf of Mr. and Mrs. Dean (hereafter “My Parents”).

My Parents note the following violations of international trade rules which constitute a prima facie case of unfair competition...

CCAP: A Personal Reflection

By Richard Vedder

As Christmas nears, I am reminded that Jesus Christ had 12 disciples who helped him in his ministry during his life and especially after his death. Many of us, in our own way, have our own disciples. I roughly have 12 disciples at CCAP, employees who have made the mission possible and provided much joy in my life. In Ohio, the disciples are the Whiz Kids --students of extraordinary talent. If Peter and Paul were first among equals among Christ's Apostles, so Matt Denhart is my Peter, and Jonathan Robe is my Paul amongst the Whiz Kids. These guys are simply spectacular in their dedication to our mission, and have shown a competence, a maturity, a degree of innovation that is simply extraordinary amongst persons of their age (about 22).

Today, I want to tell you a little bit about Jonathan, because if America had more Jonathans we would have far fewer social problems, far more prosperity,
and a higher quality of life. Sadly, he is moving on, having just graduated from Ohio University as a Honors student in electrical engineering. He will be attending Oxford University beginning next month. He was the top student in EE at Ohio University at the time of his graduation.

Whenever, I needed anything quick --I could call on Jonathan. Facts about student
loan default rates, per student spending on colleges in North Dakota, the growth in non-academic staff in public universities --whatever I needed, Jonathan found it --quickly, accurately, and without complaint. He also authored, with me, some studies on a variety of issues, some non-related to CCAP, and showed a maturity in his writing rarely found among persons so young.

Jonathan owes his success, I think, to several things that are increasingly rare in America. First, of course, he is a bright kid, possessing a lot of genetic human capital (high IQ). God gave him that, and he has been a good steward of that gift. Second, he has wonderful, devoted, loving parents and grandparents who inculcated
into him a sense of personal responsibility, honesty, and integrity. Two things helped here: a strong and unwavering Christian faith and home schooling. Jonathan never went to a formal school until he attended college, a remarkable achievement since there are 10 children in his family.

As Americans become more secular, less connected with family, and more willing than ever to send their kids to mediocre schools, it is not surprising that we have dramatic dropout rates from high school and college, and score low relative to students from other nations on international tests. The "Little House on the Prairie" environment that Jonathan grew up in is increasingly rare.

As I muddle through my 52nd year in American higher education, it is a joy knowing that I am going out with a bang --with superstar students who make me as enthusiastic
about American higher education and its potentialities as I was in 1958, when as a geeky 17 year old, I entered Northwestern University to begin a lifelong adventure that I have loved. And Jonathan Robe has been there with me for several of those years, and I am grateful --and wish him the best on what, no doubt,
will be a promising future.

Death to Accreditators?

By Richard Vedder

Judith Eaton, Mother Superior of the accrediting agencies in America (head of the Council of Higher Education Accreditation) probably breathed a sigh of relief when Margaret Spellings, Sara Tucker and others packed their bags at the end of the Bush Administration. The era of intense scrutiny of accreditation was, it was hoped, over. In fact, the opposite has occurred: the accrediting folks are on the ropes, reeling from multiple attacks from an increasingly activist Department of Education.

The latest incident is the Inspector General of the Department of Education's blistering attack on the North Central Association, the largest of the nation's comprehensive regional accrediting agencies. It seems the North Central's Higher Education Commission accredited a for profit institution without qualification, when it knew full well there were serious questions regarding the rewarding of credit. The IG thinks the North Central unit should be put out of the accreditation business.

I know nothing about the current dispute, and find it a bit odd that the Inspector General is reviewing accreditation decisions of individual institutions. But I have been noting for years that for all the expense, accreditation does very little --rarely putting an institution out of business for poor performance. I have lamented the fact that the accreditors are governed by the universities that are accredited, to me a grievous conflict of interest. I have complained that accreditation costs have been a significant barrier to entry for several entrepreneurial for-profit institutions that it appeared to me should be allowed to operate. Also, some accrediting agencies (notably the despicable American Bar Association) have used racist and other un-American criteria rather than academic standards as a prime determinant of accrediting criteria.

In a world where there were good data on student performance in college, on what faculties do, on the nature of research, etc., we simply would not need accreditation. General Motors did not get into trouble because it was going to lose its accreditation, but rather it got into trouble because people stopped buying its cars. Markets can and do perform a role, and more effectively, than accreditation does. To be sure, given the dubious presence of federal monies in higher education, probably there is some minimum threshold level below which federal monies should not be dispensed to institutions or their students. But that can be accomplished by a small federal agency that reviews data from the thousands of colleges and decides which ones are outside the parameters of acceptability. Since the colleges do not collect or report much worthwhile data on performance, it is impossible to use this approach. Margaret Spellings and Sara Tucker were right in their attempt to force colleges to provide some performance measures as a condition for accreditation, but the colleges ran to their favorite congressional puppet, Senator Lamar Alexander (sometime university president) and got Congress to block the attempt to require accountability.

Good luck to Arne Duncan's crew as it takes on the accreditors. Prediction: they will be as unsuccessful in the final analysis as the Spellings/Tucker crew, but they at least might scare the colleges into a modicum of responsible behavior.

Why So Much Secrecy With All Things Accreditation?

by Andrew Gillen

Today’s papers bring a story that could only happen with accreditation. For those of you unfamiliar with accreditation, the federal government didn’t trust itself to regulate institutions of higher education, so it allows accrediting bodies to act as the gatekeepers to federal money. If a college wants its students to have access to federal financial aid money, it has to satisfy the accreditors that it knows what it’s doing when it comes to providing an education. It’s a reasonable approach in theory, but the implementation is entirely screwed up.

One of the main problems is that everything is kept a secret. For instance, one very important question concerning higher ed is how much value they add (as opposed to just performing a signaling/screening function). Several weeks ago, I heard Judith Eaton, president of CHEA, the accreditors group say “Our research shows that there is value added.” This is great news. Where can you find the studies showing all this value added? You can’t, because the accreditors keep them secret.

Other methods of addressing the issue, such as NSSE and CLA, also keep their results secret, but this is because they are voluntary. If they didn’t agree to keep them secret, no schools would participate. Accreditation is different – there is no need to keep the results secret because the schools are required to participate. Keeping the results secret serves no beneficial purpose.

All this secrecy is why today’s stories are not that surprising.

Doug Lederman

the Education Department's inspector general issued a stinging rebuke Thursday of the country's largest regional accreditor and urged department officials to consider terminating the agency's authority…

Exactly what issues that the Higher Learning Commission found (and that the inspector general accuses it of underemphasizing) is impossible to tell from the heavily redacted eight-page memo that the inspector general published…

Eric Kelderman

News of the report also sent shock waves through the for-profit higher-education sector. Nearly all of the major for-profit companies whose institutions seek regional accreditation do so through the Higher Learning Commission, and all of them, like American InterContinental, operate extensive distance-learning programs…

It "suggests a whole new level of hostility on the part of OIG to what and how the for-profit schools operate, particularly online,"

Is the government simply ensuring that accreditors are doing their job, or are they trying to scare them away from accrediting evil for profits? It’s easy to adopt a conspiratorial mindset and [potentially] read too much into these types of things when everything is kept secret.

Secrecy is the enemy. The excessive reliance on secrecy with all things accreditation translates into the following:

1. The accreditors approach to regulating colleges: trust us, we’re experts
2. The government’s approach to regulating accreditors: trust us, we’re experts

This would be great, except for the fact that our friends over at CAP, New America, and Education Sector detail the reasons we shouldn’t trust private entities, especially for profit ones, and our friends over at Heritage, AEI, and Cato detail the reasons we shouldn’t trust the government.

Perhaps we'd be better off if we eliminated all this secrecy so that we could fulfill the latter part of that old slogan: trust, but verify.

Links for 12/18/09

Sue Shellenbarger

Students are increasingly skeptical about the value of a college degree; the proportion who are willing to borrow money for college if necessary has fallen to 53% from 67% in the past year…
[AG: be sure to note the awesome uniforms of the Tailwaiters staff]

Neal McCluskey

According to a story out yesterday, the federal government is starting a new campaign to promote financial literacy among high school students. That’s right, federal politicians, who have given us Fannie, Freddie, the Community Reinvestment Act, endless pork binges, and a national debt surpassing $12 trillion have the absolutely staggering hubris to think that they somehow have what it takes to teach your kids about sound financial practices!

David Glenn

while it is easy to criticize simplistic measures of citations and "impact factors," it is not so easy to find agreement about how to improve those metrics. Faculty members sometimes suggest that evaluators should de-emphasize numbers and instead look qualitatively at how research projects affect the public good. But a version of that proposal might be put into practice in Britain, and the idea is now causing anger and anxiety among scholars there.

Tim Ranzetta

Texas's Guaranteed Tuition Plan (closed to new participants) appeared not to be so guaranteed in April when the program administrators announced a change in their refund policy "...so that investors could withdraw only the money they put in. They would have received no earnings, no matter how long their money had been in the program…

Just in time for the holidays, the state is touting their new Tuition Promise Fund…

So, what is the promise of this plan? As far as I can tell, as long as college tuition increases remain muted and stock market returns click along at 7-8% a year, you should be fine. However, if declining state support of higher education leads to significant annual tuition increases and we have a few stock market corrections along the way...well this very well could be another promise not kept…

Government Intervention Distorts the Market, Permitting Economic Rent Seeking

by Daniel L. Bennett

I've managed to stir up a nice dialog with Ben Miller concerning the default rates of career college students. On Monday, Miller posted some excellent graphs depicting the newly released 3-year default rates by sector, which showed (as expected) that the for-profit sector has a disproportionately high share of defaulters.

I responded by highlighting the fact that the for-profit sector also enrolls a disproportionately high share of disadvantaged (low-income and minority) students -who are more likely to drop out or default regardless of institution attended- and suggesting that further research that investigates the outcomes of socioeconomically similar students at various types of institutions is needed to provide a correct diagnosis of the institutional effect of student loan defaults.

Miller replied this afternoon, denigrating my use of the term "market funded" (one that a remarkably well-intentioned, luminary education entrepreneur turned me on to) to describe the for-profit industry as semantics, stating that

Were Congress to pass a law tomorrow saying “no for-profit institution can access the federal student aid programs,” the sector would be largely bankrupt by the end of the workday. In that respect, for-profits are no more market-funded than your average community college.

I disagree slightly with Miller's assertion that for-profit institutions are not market funded in that they received their seed capital from private investors, whereas community colleges and public universities were funded directly from the public purse (in most cases). However, I agree with Miller that a significant portion of the for-profit sector would fold if Congress were to remove the sector from its dole; however, the same would hold true for all but the elite public research universities, (which would likely convert to private not-for-profit status and price most students out of the market) if Congress were to cut them off from federal student aid programs.

Therein lies the problem: our system of higher education is overly reliant on taxpayer money (notably student loans) and thus, has distorted the market by removing price consciousness from the decision making process. By making large loan sums available to all, it has exacerbated the rapid tuition inflation. This, in turn, has created an opportunity for private investors to enter the market and seek economic rent by pricing its product competitively, in compliance with existing regulation, and applying efficient business practices that reduce the cost of production. It is not uncommon of for-profit institutions to report 20 to 30 percent profit margins. Does this suggest that such schools are evil and need to be regulated out of business? No, it suggests that there are huge inefficiencies in the public sector that need to be reconciled in order to make college more affordable and accessible to all those who wish to seek a college education.

Increased government intervention via funding and regulation is not the antidote to higher ed's ailment of widespread inefficiency and rent-seeking. In fact, it may be a symptom. What's needed is the innovation that is the product of unadulterated entrepreneurship. This innovation is more often originating in the market driven sector, although I admit that there are some sour apples making the entire sector smell with their abusive recruiting tactics and seeming disregard for imposing exorbitant debt on students, due to the competitive nature of profit-seeking private enterprise. In time, the rotting apples will fall and the remaining tree will blossom into the envy of the orchard, if markets are permitted to work their magic. If not, then expect more of the same with the bad apples clinging on by adjusting to whatever new regulations emerge, financed by increasingly expensive tax burdens for all.

Links for 12/17/09

Edububble

I can’t decide who bothers me more: the cities piling on the back of the students or the colleges with their righteous claim to all of the freedom of private business (unfettered tuition increases!!) and all of the benefits of a charity (no taxes!!!).

Mikita Brottman

Perhaps learning objectives make sense for most courses outside the humanities, but for me—as, no doubt, for many others—they bear absolutely no connection to anything that happens in the classroom.
[AG: I came to interpret this sentence at least three different ways over the course of the piece.]

David Glenn

Almost certainly, you were told that your instruction should match your students' styles… Now four psychologists argue that you were told wrong. There is no strong scientific evidence to support the "matching" idea…

Consolidation of College Bureaucracy: Effecting Change and Innovation

by Daniel L. Bennett

Every now and then we hear some positive news that is near and dear to us, something that we in some way had an indirect effect in making happen. Today is one of those days for me at CCAP. I read today (HT: Tim Ranzetta) that the University of Akron and Lorain County Community College are launching a

pilot project that the two schools hope will lay the foundation to create a standalone administrative services center that could provide back-office functions to more schools and possibly other organizations as well.

Given that the majority of students attend a public institution of higher education, it makes economic sense for these schools to consolidate, or even outsource, many of their back office functions. A report that I authored earlier this year, as well as an article that I wrote for Forbes, have helped raise awareness of the serious problem of administrative bloat on our nation's college campuses that has contributed to continual tuition hikes.

Now it seems that the public's awareness of this issue is leading campus officials to seek new strategies, along with the help of the Lumina Foundation's Productivity Grant Program, which provided the seed capital to launch the UA-LCCC pilot project. According to UA President Luis M. Proenza:

The UA/LCCC model of shared services defines how administrative services will be delivered in the future. Our institutions of higher education must work closely together to attain academic and operational successes that align with the goals of excellence, effectiveness and efficiency identified in the University System of Ohio’s 10-year Strategic Plan. The shared services initiative is an innovative approach that will help to meet those goals

The goal of the project is to promote shared administrative services among Ohio's public colleges via a central office. Generally, I get spooked by the term "centralization", but it has helped many organizations improve their operational efficiency through a consolidation of processes. According to James L. Sage, U of Akron's CIO:

Providing these required services centrally will eliminate the need for each institution to operate many of their own administrative services units, and improve the breadth and quality of services while significantly reducing administrative costs. Money saved on administrative services can be redirected to our core mission, which is teaching. This centralized shared services approach is used extensively in private industry and is being adopted by the federal government

This is a good start for what will hopefully become a trend to reduce the size of the campus bureaucracy.

Bad Apples Stink Up the Orchard

by Daniel L. Bennett

Ben Miller over at Education Sector has posted some insightful graphs, including this one which illustrate the percentage of students, borrowers and 3-year defaulters by sector. His graphical analysis indicates that "for-profit schools enroll substantially more borrowers and defaulters than their share of enrollment would suggest."

However, Miller doesn't mention the most important cause of this -- that the market-funded sector (aka for-profit) enrolls a disproportionate share of disadvantaged (low-income and minority) students, as the below table that I developed for an article in Career College Central illustrates.

So what are the implications of this evidence? Many of these disadvantaged students come from less affluent families in which financial responsibility is likely not stressed from one generation to the next. They also are much less likely to have parents or peers who have direct knowledge of or experience with the college process, making it harder to navigate the complex world of applying to and funding higher ed. Such students are not likely to fully comprehend the consequences of failing to complete school or not paying their bills. These factors make disadvantaged students more susceptible to dropping out and defaulting on their loans.

Now, critics of the for-profit sector will likely suggest that these students should attend lower cost public schools where they are likely to have a lower chance of default, without considering the possibility that perhaps these disadvantaged students chose to attend a market-funded institution because it offered services better attuned to their needs, such as flexible scheduling, distance learning or personalized customer service. Or perhaps these students had poor academic credentials and were unable to gain admission to a public 4-year college. Whatever the case may be, the market-funded sector is serving a segment of the population that has been historically under served, but is increasingly demanding postsecondary education. Given the socioeconomic backgrounds of such students, they may not fare any better (and may in fact fare worse) in the public sector. Further research that investigates the outcomes of socioeconomically similar students at various types of institutions is needed to provide a correct diagnosis.

These factors, however, do not provide market-funded providers (or non-profit for that matter) with a free pass to gain access to taxpayer-funded student aid without accountability. I agree with Miller's suggestion that

it would be nice to see that sector (for-profit) become a leader in taking proactive measures to get their rates lower—an outcome that would have substantial benefits for students and the taxpayers that subsidize their loans.

The market-funded sector will continue to be scrutinized and deemed illegitimate unless it takes the lead in reshaping its practices and ridding itself of the few bad apples stinking up the entire orchard.

Links for 12/16/09

James Joyner

I taught some online graduate courses, aimed mostly at overseas military officers… Trying to treat it as if it were a legitimate graduate class was a constant source of frustration. Students simply didn’t have the time to do the reading and research — they were, after all, on active duty in a military with a high operations tempo. But they’d been led to believe that the courses would be easy — there wouldn’t be much work and they could do it at their leisure. The school got a lot of money, paid its faculty quite generously, and the students got the credentials they wanted…

But the military is as much at fault here as the degree mills. They quite literally treat college education as a check in a box. A master’s degree from Harvard or one from Walden both get officers over the “must have master’s degree” hurdle for promotion to lieutenant colonel. And, since few officers are given the time to attend classes at a real school, the incentive to get a dubious degree in the little spare time available is powerful. The same is true, to a somewhat lesser extent, in the federal civil service and for teachers in many school systems across the country: It’s the degree that matters, not the learning…

To the extent that the skills imparted by higher education are valuable to an employer, they should be apparent in actual job performance. So just reward people who do their jobs well and don’t worry about what degrees they have.

Jennie Woo via SLA

In a previous life, I worked at the second largest loan guarantee agency, and studied default behavior. In my estimation the amount borrowed is overrated as a cause for defaults… the relationship was negative! The larger the loan amount the less likely to default. Here's why: Most defaults happen at 2-year schools where borrowing levels are lower, programs are shorter. Many defaults happen to students who drop out, who therefore borrow less than those who finish or go on to graduate school…

Default rates had been so low that only the unusual and troubled cases made it into collections. Now vast numbers of middle-class, mature, responsible borrowers are struggling and the usual patterns are moot…

Erin Dillon

At 400 colleges, students have better odds of defaulting on their student loans than they do of graduating.

ERIC FERRERI HT: Kris Amundson

Ilgunas, 26, is shacking up in a 1994 Ford Econoline as a means of getting through his liberal studies graduate program without debt. Parked in a lot on the edge of campus, he cooks with camping equipment and subsists largely on peanut butter.

Google Informs Me That People Think I’m Wrong

by Andrew Gillen

The online world seems to get along fine without me most days, so imagine my surprise when google alerted me to not one, but two blogs attacking something I’ve written.

The first turns out to be a repost of an old Higher Ed Watch blog. With the assistance of Scott Fleming, I’ve already dealt with that one.

The second says I’ve made an “instructive error” by saying “Students and legislatures need to know employment outcomes so they can properly evaluate the effectiveness of the billions of dollars we funnel to colleges.”

It’s not entirely clear in the post why I was so wrong to say that, but I think he is under the impression that what I said translates into

Thus a degree program that is successful at obtaining entry-level placements is more effective than one that is successful at preparing graduates for leadership roles in industry, government, the law, and the academy, but only with a lag?

I’ll let you be the judge of the validity of that particular leap.

One thing that seems particularly relevant was that my post, and the proposed rules it refers to were for vocational programs. I’ll grant that that was not explicitly clear from my post, but that’s why I link to things, so that I don’t have to rehash everything.

Lastly, on a personal note, given my compulsive need to respond to every online utterance about me, no matter how wrong it may be, I’ve decided to take advantage of the google opt out program.

Links for 12/15/09

Tim Ranzetta and here

the three-year cohort default figures … sees an increase in the overall rate from 6.7% to 11.8%.

• 4-Year Private: 6.3%
• 4-Year Public: 7.1%
• 2-Year Public: 16.2%
- Proprietary: 21.2%

Andrew Trounson

UNIVERSITY students could be made to sit a generic skills test to assess what value has been added by their tutors as part of Education Minister Julia Gillard's plans to link university funding to performance targets from 2012.

Kevin Carey

The problem is that the study and the practice of education aren't the same thing... Inevitably, education schools evolved in response to institutional incentives and the research-university culture. Faculty members focused on developing specialized knowledge … with titles like "Complicating Swedish Feminist Pedagogy" and "The Hermeneutic Process Pertaining to Laozi."

At the same time, studies examining the relationship between having a master's degree in education and being effective in the classroom (most conducted in departments of economics, not education) nearly always find that no such relationship exists—despite the fact that states pay teachers an extra $8.6-billion in salary per year for acquiring those degrees.

Edububble

Shirley Ann Jackson. Being the highest paid president of any university wasn’t enough for her. Nor were seven bedrooms and 4800+ square feet. So the Trustees of this fair university decided to spend the extra cash from last year’s layoffs on a big, new manse for her. Oh wait. That’s not exactly correct. The letter from the Trustees somehow suggest that the money arrived with conditions that it could only be spent on a bigger, better, more impressive house for Ms. Jackson.

Links for 12/14/09

Anya Kamenetz

Since there are no generally accepted measurements of learning in traditional higher education, the proxy for the value of a diploma on the job market is prestige. Rankings like those of U.S. News & World Report depend on reputation; spending per student, including spending on research; and selectivity -- a measure of inputs, not outputs. On all these measures, for-profits come up short.

Bryan Caplan on why online education won’t lead to the demise of the university.

If he were right, then videotape would have put college professors out of business thirty years ago! It's been technologically feasible for all students to learn from superstar teachers for decades…

What do you think when you see that a seemingly capable candidate "went" to the University of Phoenix? Maybe you'll still give him a chance. If you need someone good, however, you'll almost certainly ask yourself, "If he's really so good, why didn't he just go to a regular university? What's his problem? Is he weird, lazy, or what?"…

As long as they do, traditional colleges will not just survive, but thrive, because college attendance will remain a powerful signal that you're not a weirdo or a loser…

Scott Jaschik

Fort Hays State University may have a unique way to use the funds to help with college costs: It is paying students $5 for each credit they earn with a grade of C or higher.

Goldie Blumenstyk

If college didn't help people get jobs, Mr. Carnevale says, society would view a higher education as "about as important as opera and Shakespeare."