Michael Clifford Refutes Eisman

Education entrepreneur Michael Clifford offered a rebuttal to the recent criticisms of short seller Steve Eisman, in an article for Earth Times.

Eisman is one of the legendary Wall Streeters, who has a strong proclivity for making ‘easy money.’ He doesn’t create jobs or help people live better lives. Instead, he makes money for himself and investors in his $1.1 billion long/short equity fund by creating doom and gloom scenarios, then shorting stocks.

the industry, as a whole, can be improved. He humbly suggests the following to Secretary Arne Duncan:

“Get rid of 90/10 rule, or the requirement that schools receive no more than 90 percent of their tuition revenues from the government. Watch prices fall at institutions. The primary way today for schools to solve the 90/10 dilemma is to increase tuition.

“Jobs: If under your watch, Secretary Duncan, the Department of Education decides to cut the for-profit sector’s participation in helping these students, the sector will be forced to lay off hundreds of thousands of faculty and support staff resulting in increased unemployment numbers. And hundreds of thousands of current students will be denied access to school and much needed retraining.

“Make sure the Department of Education differentiates between publicly traded for-profits and privately held for-profits. The pressure Wall Street demands for increased profits with growth to avoid players like Eisman every single quarter contributes to the abuses. Private for-profits don’t have this pressure.

“Increase transparency with ALL regionally accredited institutions for-profit and non-profit. The best contribution the Department of Education could provide would be to give the accrediting commissions the same technology in order to create real time reporting for the entire world to review. Level the playing field for all institutions receiving Title IV funding.

“Invest in technology and encourage innovation. The Internet is continuously and radically disrupting every business model it touches, so get some super smart Internet leadership riding shotgun with you, Secretary Duncan, as nobody can stop the power of the Cloud.

“Allow the opening of more post-secondary institutions with affordable price points. Encourage the regulators to support Public-Private Partnerships – get rid of the divisive ‘them or us’ mentality.”

Clifford summed up his position as follows: “If you make it prohibitive for all market-funded institutions to come into the higher education sector, then you will be smothering the dreams of millions of Americans, who want a better life. Are there bad actors in our industry? Sure. Just like there are in other industries. But the vast majority of schools and school owners are working to change lives through the power of education while fulfilling their corporate mission at the same time.

In The News Today: 06/08/10

Inside Higher Ed has a great story on the increasing use of e-textbooks at for-profit institutions.

The Chronicle of Higher Education's Kelly Field and Sara Hebel discuss the latest gossip on the much anticipated rules on gainful employment in a short audio clip.

Steve Eisman dishes out some hate for the for-profit sector in an article for the NY Post.

NY Times Discusses Gainful Employment

The NY Times has an article this morning discussing gainful employment. There is nothing new or groundbreaking in the article if you have been following the issue.

Shireman's Replacement Named

If the for-profit sector thought that it caught a break with the announced departure of Bob Shireman, they might be second guessing right about now. Shireman's replacement -James Kvaal -was announced today. Kvall joins the Department of Education as a former colleague of Shireman at the Institute for College Access and Success, as well as employment at the liberal Center for American Progress, and advisor to former President Bill Clinton and candidate John Edwards.

A Better Approach to Gainful Employment

I have a short piece on the Minding the Campus forum following up on my recent article discussing the negative implications of gainful employment for Career College Central.

Death by Gainful Employment

Check out my latest article for Career College Central magazine, "Death By Gainful Unemployment: The Department of Education raises the blade on the guillotine of ambiguity.” In the article, I discuss the negative implications of the Department of Education’s proposal to define its gainful employment rule in terms of an 8 percent debt-to-income ratio. In addition, I calculate the maximum lifetime student debt that a student could have borrowed in both 2003 and 2008 to pursue training for a career in 10 occupations expected to create a great number of jobs in the next decade, using the Department’s proposed metric. What I find is that for 7 of the 10 occupations, students would have been able to borrow less in 2008 than they would have in 2003, after adjusting for inflation.

You can access the online version of the magazine and flip to pages 24-27, or download a PDF to read the article.

Role of the For-Profits in Meeting Obama's College Completion Goal

The Chronicle of Higher Education has the story.

Jeffrey J. Conlon, chief executive of Kaplan Higher Education, says the United States will need to produce 63 million degrees to match leading nations in the percentage of adults with college degrees by 2025. At the current pace, the United States will fall short of that threshold by 16 million, according to data from the National Center for Education Statistics.