The Closing of a Newsroom’s Mind By Donald E. Graham
http://www.wsj.com/articles/the-closing-of-a-newsrooms-mind-1446237923
I’ve seen how for-profit colleges can help students—many of them older and seeking better jobs—but the government and the media want to shut them down.
For-profit colleges have become a standard target of the progressive left (and not them alone). Their charges include: The students are recruited aggressively; the prices are too high; most of the students drop out and many incur high levels of debt and then default; for those who stick it out and graduate, the degrees aren’t worth much.
These charges have been so widely publicized and so often repeated that they have entered the realm of accepted truth. In some quarters, to defend any for-profit education company is to defend the indefensible. Hear me: There are huge differences among for-profit colleges, as among other colleges. Some for-profit colleges have behaved disgracefully to their students; I do not defend them.
I do vigorously defend Kaplan’s higher-education programs. I know the people who run them, and I believe their ethics and values are on a par with those of my former colleagues at the Washington Post or the staff of the New York Times, which I’ll be getting to. I visit our closest campus whenever I need some inspiration. The school is run almost entirely by people who grew up in or near its local community and does excellent work helping its students get jobs in a town with perpetual high unemployment. I also occasionally teach online at the business school of Kaplan University, which has 41,000 students.
This gives me some exposure to our students, a group anyone would admire. Their average age is 34. For almost all, education is a third important part of their lives; they have a job and a family. I have seen much work submitted in the small hours of the morning, presumably after the kids have gone to sleep.
My exposure to the actual business of for-profit education has made it hard to understand and adequately respond to the assault on the industry that has raged since 2009. The attack has included the drafting of impossibly rigid regulations on top of countless already existing ones; Senate hearings aimed at ruining the reputations of the entire industry; and the placement of dozens of stories with friendly news organizations.
For-profit universities ultimately get the great majority of their revenues from U.S. government grants and loans to students. And as with every government expenditure, it is fair to ask: Is the government getting its money’s worth?
But surprise: There is another side to the story.
Until recently, we couldn’t answer a fundamental accusation. Knowing our students and following their careers, we believed that their education was opening doors to jobs and increasing their incomes. But to our frustration we couldn’t prove it. We didn’t have the third-party data. Once students graduated, we had no way of verifying their incomes.
A consortium of 35 states has now gathered income data from taxpayers for recent years (based on unemployment-tax filings). Researchers have access to that data, not for individuals but for groups like our former students. We cannot know the income of any individual student, but we can ask for the average of a group—say, nursing students.
Comparing Kaplan students’ pre-enrollment incomes (which we know from their student-aid filings) with their incomes in the years immediately after graduation:
• The weighted average gain in mean income among associate-degree graduates with jobs was 31%. This is the average earnings of graduates of all our programs—what most of you would call majors—weighted for the number of students in each program.
• The weighted average gain in mean income among bachelor’s-degree earners was 35%.
• The weighted average gain among masters-degree earners was 42%.
Of course, students paid tuition and spent years to earn those degrees. There is more research to do, and we’re just starting to evaluate the gains in income compared with the cost of education, but our initial figures look very good for students and for Kaplan.
We have educated students for degrees that have, on average, produced real gains in income. And we’ve done it with a student body 64% of whom were eligible for Pell grants (the Pell-eligible population is 38% at not-for-profit colleges). The numbers relate only to income gains in the first couple of years after college; graduates expect that they are starting a career and that their earnings will grow with time.
I’m not saying the debate is over, but the data make it clear that there is a debate. The information isn’t perfect, but it’s good. It doesn’t include the unemployed, for instance, but it does include those with minimal earnings.
I should say a word about those who do not graduate. We believe Kaplan University’s graduation rates are higher than average if our students are compared with those from similar demographic backgrounds. It would be better for us in every sense if every student graduated; they should have the opportunity to try. We do not excuse poor outcomes—in fact, we’re betting a lot that outcomes (graduation, and how much students learn) will come to mean a lot more than they do today.
You would think that the earnings data above would be universally hailed as good news: Students on average are achieving significant income gains after getting degrees. I can promise you it will not be so hailed. Politicians, analysts and advocates—and some reporters or whole newsrooms—have closed their minds to the possibility of anything good being achieved by students at a place like Kaplan University.
On Oct. 13, I woke up to see this headline on the lead story in the New York Times: “For-Profit Colleges Fail Standards, but Get Billions.” The online headline used the word “fraud.” The story started with a college that had been investigated or sued by 12 states and the Justice Department; it went on to another one investigated or sued by 19 states, the Securities and Exchange Commission, the Consumer Financial Protection Bureau and the Education Department. And then in the article, by God, there was Kaplan. We were lumped in with what the Times thought were the lousiest for-profit colleges—and I had no idea the story might run.
I checked everywhere at Kaplan. Had the reporter called? Nope. Had she visited a campus? The story certainly didn’t indicate that she had.
The whole article argues that for-profit colleges should be somehow eliminated from federal Title IV programs (a step that would shut down almost any college in America), although it cites no law that would permit such a thing.
I can say based on a lifetime in journalism that it is quite unusual to write about a company in a story whose headline uses the word “fraud” and not even call to get our side of the story. And I find it equally unusual to put forward a thesis that a college should be closed, but never visit it.
The Times doesn’t ask the same question of traditional colleges being investigated for similar or graver offenses, like the University of North Carolina, which has been accused of creating phantom courses and awarding high grades to 3,100 students over the years—many of them athletes who thereby remained eligible to play. Nor does the paper ask whether other organizations widely investigated for wrongdoing should be cut off from federal funds. What would the Times say if that happened to Planned Parenthood?
In its account, the Times reports on two companies that have dozens of investigations from state and federal agencies. And then, amazingly, it mentions Kaplan—citing two cases settled for a total of $2.7 million, with no admission of wrongdoing on our part. We don’t like settling a single case against us. But Kaplan is a high-integrity place and I would like to tell you one story that demonstrates that. We would have liked to tell this story to the Times reporter, but, as I may have mentioned, she never called.
In the course of the assaults on for-profits, Kaplan took one black eye—and came up with a principled response. Our critics discovered two Kaplan employees committing a truly hideous mistake: Two admissions representatives at one Kaplan campus behaved like the worst kind of unethical used-car salesmen when dealing with a Government Accountability Office investigator posing as a student.
In response (in addition to offering students at the campus a full tuition refund if they didn’t want to continue), we created the Kaplan Commitment. In its initial phase we promised students that they could withdraw at any time during or immediately after their first month (including after exams) and owe us no tuition payments and therefore incur no debt. Students in effect got a term to look the place over for free and withdraw if they felt that they had made a mistake by enrolling.
This seemed the ultimate answer to charges of aggressive recruiting—and it cost Kaplan and its parent corporation more than $175 million over the years (many times the cost of the settlements mentioned in the Times). This wasn’t my idea. It came up through the ranks at Kaplan University, from educators determined to show that theirs was an ethical institution.
I was angry enough to write a letter to the New York Times, which it declined to run. But I left out one of the strangest parts of this story: The reporter quotes a fellow named Ben Miller, senior director at the Center for American Progress, which she describes as “a liberal research and advocacy group.” A couple of paragraphs later she quotes some figures and says they were from “a detailed analysis by Mr. Miller for The New York Times.”
So the New York Times is now having its analyses performed by advocacy groups and—surprise!—the results support the conclusion of the advocacy group. The American Enterprise Institute would, I guarantee you, have reached a different conclusion. And this is how the Times conducts its research?
When the subject is for-profit education, journalistic standards fly out the window and are never seen again.
If you are managing a company for the long term, you can build a business that offers something great to those who depend on you—students in the case of Kaplan, readers in the case of the Washington Post when we owned it. And you can still do a good job for your shareholders.
Decent for-profit universities (there are several) will win the argument with any open-minded person. You can’t win an argument with a person or a newsroom with a closed mind. I am sorry to see the completely closed minds at the New York Times, but I still regard it as one of America’s best for-profit newspapers.
Mr. Graham, who was the publisher of the Washington Post for 20 years, is the CEO of Graham Holdings Co., which owns Kaplan Inc.
Comments are closed.
