The Ghost of UC Future

by Catherine M. Cole

On June 11, UCOP made public a set of "expanded recommendations" to the UC Commission on the Future which is to meet on Monday, June 14. The cornerstone of these eleventh-hour additions seems to be items number 6 and 7 of the expanded recommendations which propose an "expedited Pilot Project" for lower division online education:

"Eventually, there will be online credit-bearing courses and B.A. degrees in the so-called quality sector. (emphasis added) That much seems certain. The questions are: Who will develop and deploy the first successful model, when will they do it, and can it be at a scale sufficient to make a meaningful difference in access to higher education. The Commission's proposed answers are: UC should be first, as soon as possible,and our ambitions should err on the side of boldness.

"We must plan assuming an indefinite period of serious financial pressures. Moreover, with or without revisions to the Master Plan, there will be growing political, economic and social demands for undergraduate spaces. Access to excellence is already too limited, and the future will be worse absent a combination of transformation and innovation - in both how we deliver on our mission and how we fund it."

You, like me, might be wondering what exactly is the "quality sector"? Sector of what? And what sectors besides "quality" are there? I am going to venture a guess that what is being discussed here is the educational industry which includes the rapidly growing market for online, for-profit higher education, aka "degree mills." I don't know what the sectors other than "quality" are called. For the time being, let's imagine two sectors: "quality" and "dreck."

Here are some disparate facts. Do we dare connect the dots?

--Federal aid to for-profit colleges jumped to from $4.6 billion in 2000 to $26.5 billion last year according to the Education Department.

--For-profit colleges can receive up to 90 percent of their revenue from federal grants and loans.

--According to the Chronicle of Higher Education, the proportion of students who borrowed at public two-year institutions and private, nonprofit four-year institutions stayed about the same between 2003-2008 (between 49.5%-53%), and at public four-year colleges grew slightly. However, "at for-profit institutions, 91.6 percent of students borrowed in 2007-8, up from 79.5 percent in 2003-4."

--Students attending for-profit schools are defaulting on their federal loans at a higher rate than those at traditional schools, according to the Dept. of Education. From the Chronicle of Higher Ed:

"Students at for-profit colleges receive 19 percent of federal student aid, which includes Stafford and Perkins Loans as well as Pell Grants for low-income students. During the 2007-8 academic year, students at more than 2,000 proprietary colleges received more than $16-billion in loans, grants, and campus-based federal aid.

"Four years into repayment, 23.3 percent of students at those colleges were defaulting on their federal loans-a higher rate than students at either public colleges, where 9.5 percent were defaulting, or private ones, where 6.5 percent were in default."

--The Department of Education is seeking to protect taxpayers from loan defaults and to stop students from taking on debt for degrees that don't pay off with higher incomes. New rules from the DOE were supposed to have gone into effect next week, but....

--As of June 11, 2010 (Friday), the Obama administration is delaying the release of a new loan rule. This rule would disqualify the major providers of for-profit education from being able to accept student loans. In response to news of this delay, stock values rallied.

--For-profit colleges say they are key to President Obama meeting his goal of having the world's highest number of college graduates by 2020.

----Blum Capital (of UC Regent Richard Blum) has significant fiscal holdings in the for-profit universities ITT Educational Services Inc. and Career Education Corp who benefit from Obama's delay.

--In 2009 the University of California Board of Regents, of which Blum is a member, voted to increase student registration fees (roughly the Univ. of California equivalent of tuition) by 32%. Shortly thereafter, Blum Capital Partners purchased additional stock in ITT Tech, a for-profit educational institution. Some contend that these events suggest a conflict of interest on Blum's part.

--The UC Commission on the Future meets on June 14 to discuss, among other ideas, several recommendations that were suddenly submitted on Friday outside of the committee review process. Online education is one of the biggest elements targeted for big, bold new initiatives. This would supposedly put those of us in the so called "quality sector" (UC) into a growing market that seems otherwise dominated by the "dreck sector" (University of Phoenix).

--Walmart's recent initiative for online, for-profit education is partnering with a company called "American Public Education." No, American Public Education isn't the federal model of funding for high quality public universities pitched to the Obama administration by the UC Berkeley administration last Fall. American Public Education is rather a fairly dowdy and unknown for-profit university that offers online training to the military. The company has now become the darling of Walmart. Yes, the "American Public University" moniker would seem to be treading on the "brand" identity of the not-for-profit and genuinely public higher education offered by institutions like UC. (Such confusion of identity is, by the way, typical of those 419 email scams from Nigeria that often come from the widow of some vaguely recognizable African leader who needs to deposit several million dollars in your bank account, if only you could send your personal financial details...)

--Of the Walmart/American Public University partnership, Jolene L. Knapp, executive director for the Society for College and University Planning, said this week: "Many in the traditional higher education world will decry this partnership".... "But many, many changes are coming to postsecondary education. This is just one."

--If I were an investor in for-profit, low quality, online universities, my interests would be served by:

a) Having the cost of attending a public university rise so that many who formerly could attend are priced out and need to seek alternate means of accreditation. (check--accomplished with 32% fee increase last year at the UC)

b) Having the lines dividing the "quality sector" from the "dreck sector" become very confused and blurred. (Check. If the new recommendations introduced by UCOP to the Commission of the Future on Monday are accepted, this second objective will be served--not just with online education, but also with expanded, fast-tracked new professional degrees; freezing the growth of the traditional, face-to-face high quality education we have been known for to date; shorter time-to-degree; greater utilization of extension classes, etc.)

c) Having online education be embraced and legitimized by traditional institutions in the "quality sector" of higher education so that the Obama administration keeps the federal loan dollars flowing. (Check. Get the Commission on the Future of the UC to embrace online education, and legitimation will be enhanced.)

For more on for-profit education and its use of online teaching, shady funding schemes, and substandard educational standards, see this Frontline special "College, Inc" which aired in early May 2010. As the website says, "Even in lean times, the $400 billion business of higher education is booming. Nowhere is this more true than in one of the fastest-growing -- and most controversial -- sectors of the industry: for-profit colleges and universities that cater to non-traditional students, often confer degrees over the Internet, and, along the way, successfully capture billions of federal financial aid dollars."

Remember the mantra coming from UCOP on this: "Our ambitions should err on the side of boldness." These are not words we have otherwise heard for a while now at the University of California.

So, friends, this is the Ghost of Christmas...I mean, er...UC Future. You may recall from Dickens, the Ghost of Christmas Yet to Come was the most fearsome ghost of all.

But other ways of viewing this future are possible. Some are arguing that if the UC embraces online education, this will be the "Phoenix"-like resuscitation (if you'll forgive the pun) of the dreams and values expressed in Kerr's Master Plan for Higher Education.

The proselytizers of UC online education certainly do foreground social justice issues. UCB Dean Christopher Edley says that online education and a cybercampus will serve the poor and underprivileged who will have access to UC's excellence without having to leave their homes. Such students would be physically located far from faculty and fellow students. Yet such "social justice" framings of educational access for the poor and underprivileged should give us pause. History has taught us that a separate education is rarely an equal one.

It may be that online education is the way of the future, and we must either get on board of be left behind with no money. But here are two worthy questions: If all members of the Board of Regents and top UC administrators were forced to divest themselves of any financial holdings in for-profit universities, a) would the UC still be exploring online classes?, and b) if so, would we be pursuing this new "delivery model" in the same way?