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K12 Inc Investors Conference Call: You Are There!

By dianeravitch
October 15, 2014 //
58

K12 Inc. is a for-profit virtual charter school chain that trades on the New York Stock Exchange. It was founded by Michael Milken and Lloyd Milken. It is funded with taxpayer dollars. It advertises and recruits heavily to keep enrollment up. It has a high attrition rate.

Its cash-cow operation is the Ohio Virtual Academy. Look for significant lobbying in New Jersey, Illinois, Connecticut, Kentucky and New York, according to the investor conference call.

I don’t know about you, but I had a hard time reading this transcript. They might just as well have been discussing a corporation that sells tires, toothpaste, bundled mortgages, or manure. These guys are profiting from taxpayer dollars that are supposed. To pay for public schools, for bands, for nurses, for guidance counselors, for reduced class sizes, for libraries. They are taking money away from real instruction, real children, real schools. Have they no sense of shame? Would any of the investors on this call put their own children in a K12 virtual charter school? Bet not. Bet their kids are in really nice suburban schools or elite private schools.Not sitting in front of a computer and calling it a “school.” It’s not. It’s a business, and the kids it recruits don’t get an education.

NOTE: I just learned that I am allowed to quote only 400 words from the transcript, so accordingly, I will count 400 words and delete what remains.

http://investors.k12.com/phoenix.zhtml?c=214389&p=irol-reportsannual

RISK FACTORS (Page 33-48)

Page 42

“We generate significant revenues from two virtual public schools, and the termination, revocation, expiration or modification of our contracts with these virtual public schools could adversely affect our business, financial condition and results of operation.

“In fiscal year 2013, we derived approximately 11% and 14% of our revenues, respectively, from the Ohio Virtual Academy and the Agora Cyber Charter School in Pennsylvania. In aggregate, these schools accounted for approximately 25% of our total revenues. If our contracts with either of these virtual public schools are terminated, the charters to operate either of these schools are not renewed or are revoked, enrollments decline substantially, funding is reduced, or more restrictive legislation is enacted, our business, financial condition and results of operations could be adversely affected.

“Note at a k12, inc investor conference call on 10/9 the company addressed the loss of the management agreement for Agora Cyber Charter School in PA. http://www.huffingtonpost.com/2014/10/01/charter-schools-k12_n_5914580.html

“The school will continue to use the k12, inc curriculum, but will self-manage.
http://www.marketwatch.com/story/k12-inc-awarded-contract-to-be-curriculum-provider-for-agora-cyber-charter-school-2014-10-09”

Here is the transcript of the investor conference call. Grab your vomit bag.

http://seekingalpha.com/article/2559155-k12-inc-2015-guidance-update-call-oct-09-2014?part=single

K12, Inc., 2015 Guidance/Update Call, Oct 09, 2014

Oct. 9, 2014 3:30 PM ET | About: K12 Inc. (LRN)

K12 Inc. (NYSE:LRN)

October 09, 2014 8:30 am ET

Executives

Mike Kraft – Vice President of Investor Relations

Nathaniel Alonzo Davis – Executive Chairman and Chief Executive Officer

James J. Rhyu – Chief Financial Officer and Executive Vice President

Timothy L. Murray – President and Chief Operating Officer

Analysts
Jeffrey P. Meuler – Robert W. Baird & Co. Incorporated, Research Division
Corey Greendale – First Analysis Securities Corporation, Research Division
Jason P. Anderson – Stifel, Nicolaus & Company, Incorporated, Research Division
Trace A. Urdan – Wells Fargo Securities, LLC, Research Division
Sou Chien – BMO Capital Markets Canada

Operator

Greetings, and welcome to the K12 Inc. Guidance Conference Call for Fiscal Year 2015. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mike Kraft, Vice President of Finance. Please go ahead, sir.

Mike Kraft – Vice President of Investor Relations

Thank you, and good morning. Welcome to K12’s Fiscal Year 2015 Guidance Conference Call. Before we begin, I would like to remind you that in addition to historical information, certain comments made during this conference call may be considered forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and should be considered in conjunction with cautionary statements contained in our guidance release in the company’s periodic filings with the SEC.

Forward-looking statements involve risks and uncertainties that may cause actual performance or results to differ materially from those expressed or implied by such statements.

In addition, this conference call contains time-sensitive information that reflects management’s best analysis only as of the day of this live call. K12 does not undertake any obligation to publicly update or revise any forward-looking statements.

For further information concerning risks and uncertainties that could materially affect financial and operating performance and results, please refer to our reports filed with the SEC, including, without limitation, cautionary statements made in K12’s 2014 Annual Report on Form 10-K. These filings can be found on the Investor Relations section of our website at http://www.k12.com.

This call is open to the public and is being webcast. The call will be available for replay on our website for 60 days.

With me on today’s call is Nate Davis, Chief Executive Officer and Chairman; Tim Murray, President and Chief Operating Officer; and James Rhyu, Chief Financial Officer. Following our prepared remarks, we will answer any questions you may have.
I would now like to turn the call over to Nate. Nate?

Nathaniel Alonzo Davis – Executive Chairman and Chief Executive Officer

Thank you, Mike. Good morning, everyone. Thanks for joining us on the call today. We wanted to provide you with an update on our fiscal year 2015 count date enrollment as well as a guidance for the first quarter and for the full year.

Today’s guidance is a reflection of the trends in the markets that I outlined during our fourth quarter earnings call. Specifically, we saw a couple of our charter schools deciding to self manage their online learning programs. We’re also seeing more traditional school districts offering their own full-time online programs, along with supplemental learning options and online summer courses.
Education is evolving for the better, and families today have more choices in choosing full-time or part time virtual programs for their child. We believe that overall demand for virtual options in education is increasing, and this is translated into stronger demand for our institutional group, Fuel Education or FuelEd, which provides content and curriculum to school districts as well as private and charter school operators. At the same time, these market dynamics have also created a challenge to enrolling students in our traditional managed programs. And to help you understand this transition, we’re providing new guidance on student enrollment and revenue to clearly outline how K12 is participating in the growth of online learning use in public school classrooms.

Student enrollment and revenue data will now be provided for Managed and Non-managed Programs. Managed Programs are where K12 provides substantially all of the administration and education program management for an online program. Non-managed Programs include schools where K12 is the primary provider of content and technology and we may even provide instruction, management or other educational services, but K12 is not providing primary administrative oversight for the virtual school program.
And as you can see from the data we provided in this morning’s release, the 4.7% reduction in student enrollment from managed schools reflects this new market dynamic. It also reflects the events in Tennessee, where the state imposed an arbitrary enrollment cap midway through the enrollment season; and in Colorado, where our school partner took longer than expected to finalize their charter and subsequently, the curriculum contract with K12. We believe that enrollment in these 2 states were impacted by over 4,000 students this season. Also, this year, K12, in collaboration with the school boards we serve, made a concerted effort to keep students enrolled only if they were truly engaged and ready to learn, which also affected Managed Program enrollments.

Our partners are serious about running high-quality charter schools, with students who realize this is hard work. And they want to succeed by putting in the work. And while this is slow to growth in the near term, it better matches students to our core curriculum strengths and improves our reputation as a firm who is serious about providing high-quality education.

Even with the market evolution that’s beginning to unfold, we continue to see strong demand in Managed Public Schools. This year, we saw solid growth in select markets, including Texas, Michigan, Florida and Georgia. And at some point, we believe states like New Jersey, Illinois, Connecticut, Kentucky and New York will become states that allow online charter schools, although these states could take quite some time before opening up.

We will also attempt to be one of the educational management organizations chosen in North Carolina as that market commences an online charter trial next year.

[NOTE: I deleted the remainder of the conference call to abide by the guidelines of the company that supplied the transcript. It was hard to know which words count towards the 400 permissible, like instructions, the operator’s comments, the names of participants, etc. I cut copiously.]

Categories Education Industry, For-Profit, K12 Inc., U.S. education, Virtual Charter Schools

This Blog Just Reached 15 Million Page Views! Thank You, Readers!

By dianeravitch
October 15, 2014 //
29

I just noticed that the blog has had 15,000,050 page views since its inception on April 26, 2012.

 

I am amazed and gratified.

 

Thank you to the readers who are here everyday, commenting, sending articles from your town, city  or state.

 

Thank for for engaging in thoughtful dialogue in the comment section.

 

Some of the best-read blogs have been written not by me, but by you.

 

The blog has become a hub of the resistance to high-stakes testing and privatization. I will continue to highlight the hard work you do to strengthen your public schools, to stand up for children, and to defend real education, as opposed to the massive machinery of data collection that is now promoted by the U.S. Department of Education and the Gates Foundation. I will continue to honor those parents, students, and educators who speak out for real education and for treating students and teachers with dignity. I will continue to support those who fight politically motivated budget cuts that hurt children.

 

Together we will do what now seems impossible. We will one day restore sanity to education policy, which is now completely off-track and determined to tag and label each of us as though we were cattle. The policies that govern federal policy are written for the benefit of the education industry, not for the education of our children. Our policies bear no meaningful relationship to love of learning. We will put a stop to it, because it is absurd. Not today, not tomorrow, but in due time, the cyborgs who now control education policy will return to the planet from which they came and allow us once again to educate our children for meaningful lives, not as pawns of the testing industry, not as consumers of tech products, not as data points, but as full human beings.

Categories Accountability, Corporate Reformers, Education Industry, Education Reform, Privatization, Testing

Peter Greene: Charter Bait and Switch

By dianeravitch
October 15, 2014 //
88

Do you remember when the charter school idea was first circulated in 1988? Do you remember how the idea was sold in the 1990s? We were told that charters would save the taxpayers millions or billions because they would be lean and efficient: no central bureaucracy.

Surprise! Now charters are suing in Néw York and DC for the same funding as real public schools, you know, the ones that are required to accept English language learners, kids with disabilities, and unmotivated kids.

And guess who is siding with them to drain more money out of the public schools: the U.S. Department of Education’s Office of Civil Rights.

Peter Greene says this is classic bait and switch.

The bait? Charters will save money and get dramatic results for the neediest kids.

Says Greene::

“So here comes the switch. We pitched charter schools as more economical, more efficient, lower-cost alternatives. Now that we’ve got them up and running, we want more money. This is simply a continuation of the policy goal, adored and nurtured from corporate boardrooms to federal offices– the policy goal of shoving public schools aside and replacing them with charter schools. I don’t imagine that public schools will ever be completely done away with, because the charters will need some place to send the students that they refuse to educate, but those public schools will be stripped of resources and filled with the students that nobody wants.

“It is really one of the oldest business tricks in the book, used by everyone from John D. Rockefeller to Jeff Bezos– undercut your competition, and once you’ve bled them dry, boost your price as much as the market will bear. Charters just refine the technique by having federal and state government serve as the vampiric mechanism by which the competition is sucked dry.”

Categories Charter Schools, Education Industry, Funding, Scandals Fraud and Hoaxes

Charter Advocates Condemn Imagine Charters for “Crony Capitalism”

By dianeravitch
October 13, 2014 //
24

I have always hoped that leaders of the charter industry would call out the frauds in their midst. Where to start? It looks like they have finally turned against the profiteering of Imagine charters. This is from politico.com:

“CRONY CAPITALISM IN THE CHARTER SECTOR? Imagine Columbus Primary Academy in Ohio plans to spend $700,000 on rent this school year. That’s more than the charter school will spend on salaries and benefits, The Columbus Dispatch reports [http://bit.ly/1yrG77D ]. The cost of rent will eat up more than half of the school’s annual state revenue. Meanwhile, Imagine Schools Inc. – one of the nation’s largest charter school operators – rakes in hundreds of thousands in public tax dollars. It’s all thanks to a complicated real estate maneuver, the Dispatch said Sunday. A subsidiary of Imagine Schools Inc., named SchoolHouse Finance, buys buildings and resells them for two or three times the purchase price. SchoolHouse Finance then leases the building from the new owner and rents the space back to Imagine. “It’s legal, but that doesn’t mean it should be,” said Greg Harris, Ohio director of StudentsFirst, an advocacy group that supports charter growth. “We don’t want charter-school operators profiting as landlords.”

– “Let’s call this what this is: Crony capitalism,” Fordham Institute President Michael Petrilli tweeted [http://bit.ly/1s7ZXzT]. At least three states and Washington, D.C. are investigating Imagine for similar practices, the Dispatch noted. One state even shuttered schools operated by Imagine. After an investigation conducted by the St. Louis Post-Dispatch in Missouri, the state board of education shut down six schools run by Imagine in 2012. The paper uncovered real estate deals similar to the ones happening in Ohio and poor academic performance.”

Categories Charter Schools, Education Industry, For-Profit, Ohio, Scandals Fraud and Hoaxes

Jeff Bryant: Corporate Reformers Have Lost the PR War–Now What?

By dianeravitch
October 12, 2014 //
18

Jeff Bryant, a sharp observer of education trends, points out that the well-funded corporate reform movement has hit a brick wall: they have lost the PR war against public schools and teachers, and they know it. It turns out that the public really does support their public schools, really does respect teachers, and thinks that their local public schools need more resources.

 

The evidence is everywhere, especially in their own publications. They write that they want a new conversation; they want a restart on accountability; they know that the public is rising up against their obsession with standardized testing. They surely know (although they don’t admit it) that charter schools do not outperform public schools unless they engage in skimming, and that many for-profit charter chains are frauds and scams that promise the moon but take public money away from public schools while providing a third-rate education to hapless children lured in by their advertising.

 

Do the reformers have any new ideas? No, it is the same old, same old. They will not give up their obsession with standardized testing; they will not give up their faith in test-based evaluation of teachers; they will not abandon their love of charters and other forms of privatization.

 

When you hear the reformers denouncing budget cuts or racial segregation or for-profit schools, when you hear them call for reduced class sizes and higher standards for new teachers, then you can believe in their sincere reformation. Until then, it is old wine in new bottles. Or old wine in old bottles, rebranded.

Categories Charter Schools, Common Core, Corporate Reformers, Education Industry, Privatization, Testing

Mercedes Schneider: Could the Rights to CCSS Be Sold?

By dianeravitch
October 10, 2014 //
18

The Common Core standards are copyrighted. The copyright belongs to the National Governors Association and the Council of Chief State School Officers. Theoretically, states are not allowed to alter them. States can add standards, but they cannot alter what has already been written,  which is treated as a holy scripture or the two tablets brought down from Mount Sinai. This, in fact, is a major defect of the standards, because there is a protocol for standard-writing, which the CCSS violates. That protocol, described very clearly by the American National Standards Institute, says that any standard-writing process must include a means of revising them; CCSS does not. It also says that all stakeholders must be involved in the discussion; this was not true for CCSS. And it says that no single interest should dominate standard-writing (as the Gates Foundation did by paying for everything).

 

Mercedes Schneider brings up another worrisome, if speculative point: since the CCSS are copyrighted, could the holders of the copyright sell it? The likeliest buyer, of course, would be Pearson. Suppose Pearson offered the two D.C.-based organizations $100 million? Would they refuse it? In that case, a private, for-profit organization based in the United Kingdom would be sole owner of the United States’ standards. Why not? It makes about as much sense as having the “national standards” developed and written by a committee that included no classroom teachers, a committee led by a Yale- and Oxford-educated entrepreneur who had never taught, a committee that included no experts on cognition or early childhood education, a committee that had an ample representation from the testing industry.

 

Some supporters of CCSS think that the standards could be used all by themselves, disconnected from the testing. But that is not the plan. The plan is a system. The system begins with standards, then testing, then teacher evaluation based on the testing, the testing must all be done online, which makes possible data mining and the creation of a longitudinal data base that follows children from pre-Kindergarten through at least the end of high school. At every step along the way, some corporation has a stake in the process: the testing industry, the technology industry, the consultants who sell teacher evaluation rubrics, the data mining entrepreneurs whose numbers are multiplying, the Big Data industry. I am sorry if this sounds conspiratorial. I don’t believe in conspiracies. It is all out there in the open.

Categories Common Core, Corporate Reformers, Education Industry, Testing

Jitu Brown: “Reforms” Discriminate Against Our Children in Newark, New Orleans, and Chicago

By dianeravitch
October 10, 2014 //
9

Journey for Justice, led by Jitu Brown of Chicago, has filed complaints with the Office of Civil Rights in the U.S. Department of Education, on behalf of children and parents in Newark, Chicago, and New Orleans, claiming that they are victims of discrimination.

 

Their children, parents say, are the victims of reformers. Maybe they mean well, but the results for the children have been disastrous.

 

Far from being “leaders of the civil rights issue of our time,” as the reformers assert, the reformers are violating the rights of black and brown children.

 

Jitu Brown, founder of the Journey for Justice, is a spokesperson for the angry parents of these cities. He says “reform” is actually “a hustle.”

 

Brown, a lifelong Chicago resident who has been working with inner-city schools and neighborhood organizations since 1991, says that school choice has really just been an excuse for politicians to sack neighborhood schools and funnel government money to charter operators, which operate schools that on average take just 64 percent of the money that their district counterparts take.
Brown points to a number of examples in which, he says, Chicago Public Schools intentionally sabotaged successful schools in an effort to prop up charters, using tactics like offering laptops and iPads to lure high-performing students out of traditional public schools and into charters.
“These people are almost like drug dealers and the children are the narcotics, and they flip ’em until they’re able to finally make enough profit,” he says. “That’s how drug dealers work. It’s no different. It’s really no different.”
A report from the Chicago Teachers Union (pdf) released last year detailed how Simon Guggenheim Elementary School in West Englewood was set up for failure, while Jacob Beidler Elementary School, in East Garfield Park, was set up for success. The two schools have similar percentages of low-income students, and both are in communities facing high rates of violence, but Guggenheim, the report says, was denied resources in order to destabilize the environment.
Brown alleges that Chicago Public Schools has done this on several other occasions, citing examples like Beethoven Elementary on the city’s South Side. Once a high-performing school in a poor community, it was inundated over a number of years with students from closed schools in different neighborhoods around the city that ultimately dragged the school’s test scores down to a level where it is now failing.
“[The school district has] been closing schools in this neighborhood since 1998 as they’ve been trying to gentrify the area,” he says. “Those closings accelerated around 2004. We realized that it wasn’t really about school improvement; it was about freeing up that public area for the incoming gentry….”

 

“In Newark, students and their parents in the city’s South Ward boycotted the first day of school to protest One Newark, the school-choice enrollment plan that moved some children far from their neighborhood schools. Weeks later, hundreds of high school students walked out of class in protest.
“More than a month after school started, some parents say that hundreds of children still have not been assigned a school, and frustrations over transportation issues, uncertainty about where to send their children and dissatisfaction over closed neighborhood schools have led to many more not showing up for class.
“For me, as a parent, I know that my children deserve better,” says Sharon Smith, a mother with three children in Newark schools. “And not because they’re just mine, but because every child deserves the best opportunity that they can receive with education. But that’s not happening here. The parents here are stuck with whatever decision the district makes.”
Smith and other critics have chided One Newark on behalf of families without cars, who, she says, sometimes have to put children on two buses to get them to school. The plan doesn’t provide wholesale transportation, and many charter schools don’t offer it.
Zuckerberg’s $100 million matched donation has vanished, mostly into pockets of contractors and consultants and given to teachers unions as back pay. As Vivian Cox Fraser, president of the Urban League of Essex County, famously remarked in a New Yorker story about the debacle, “Everybody’s getting paid, but Raheem still can’t read.”

 

 

Categories Charter Schools, Chicago, Corporate Reformers, Education Industry, New Orleans, Newark, Privatization

JeffCo Students are Rallying on Saturday to Demand Change

By dianeravitch
October 10, 2014 //
11

Students and parents are the most powerful voices in the battle to save public education from ideologues, one-issue zealots, misguided philanthropists, and greedy entrepreneurs. Why are they so powerful? They can’t be fired or intimidated!

 

Students in Jefferson County, Colorado, are holding a rally on Saturday. If you are anywhere nearby, please join them and show your support for them as they fight for a real education. Their school board is dominated by rightwing corporate reformers. The students have had enough of their school board’s love of privatization, testing, and censorship.

Categories Curriculum, Education Industry

Tech Companies Sign Pledge to Respect Student Privacy; Critics Skeptical

By dianeravitch
October 10, 2014 //
25

Several major technology companies signed a pledge not to sell or misuse private student data. Critics were not reassured.

 

According to a story in Education Week,

 

K-12 student-privacy pledge released Tuesday and signed by prominent ed-tech providers prompted immediate statements of concern from some advocacy groups about whether self-regulation will do the job of protecting student data.

 

The voluntary Pledge to Safeguard Student Privacy, co-authored by the Software and Information Industry Association or SIIA, and the Future of Privacy Forum, and signed initially by 13 companies and one non-profit, includes six “do’s” and six “don’ts” of handling student data. The signers—including Amplify, DreamBox Learning, Edmodo, Follett, Knewton, Knovation, Houghton Mifflin Harcourt, Microsoft, and Think Through Math—agree to abide by the provisions of the pledge effective January 1, 2015.

 

Among key elements of the pledge are promises to:

 

Not sell student information
Not behaviorally target advertising (which means targeting advertising based on a student’s web-browsing behavior)
Use data for authorized education purposes only
Not change privacy policies without notice and choice
Enforce strict limits on data retention
Support parental access to, and correction of errors in, their children’s information
Provide comprehensive security standards
Be transparent about collection and use of data
The pledge was created as parents’ worries about the privacy and security of their students’ data have resonated in state legislatures, and as the state of California enacted a strict privacy law last month. It also follows the collapse of inBloom, a controversial data management company that was striving to be a single repository for up to 400 pieces of information about each student whose data were uploaded to the cloud—but that fell under the weight of protests from parents, some educators, and others.

 

Software companies selling products to K-12 schools have been concerned, too, that their mission to collect and use student data to help educators better teach their students will not be permitted by law. “Without data, we are flying blind,” said Aimee Rogstad Guidera, founder and executive director of Data Quality Campaign, a national nonprofit that advocates for the effective use of education data to improve student achievement, in a statement in support of the pledge.

 

Range of Reactions to Pledge

 

The National School Boards Association and the National PTA joined the organizations that released the pledge with their endorsements in the launch announcement. Keith Krueger, CEO of the Consortium for School Networking, said he thinks the pledge is helpful. “It states, pretty clearly and crisply—in language a non-lawyer can understand—what’s not going to happen with your data,” he said. Schools and districts are looking for that kind of assurance in an industry standard about the collection, management, and use of personal information, he said.

 

But Leonie Haimson, executive director of Class Size Matters based in New York City and co-chair of the Parent Coalition for Student Privacy, said in a statement that “we need legally enforceable provisions requiring parental notification and consent for the disclosure and redisclosure of personal student data, as well as rigorous security standards.” She predicted that the pledge would not reassure parents about data sharing, data-mining and data breaches.

 

Mark Schneiderman, the senior director of education policy at SIIA, said that, when companies make public pledges like this one, it is enforceable by the Federal Trade Commission, or FTC.

 

It is worth remembering that the CEO of Knewton, working with Pearson, boasted that education is the most data-minable sector of the economy. Data mining is big business.  Can we trust them?

Categories Corporate Reformers, Education Industry, Education Reform

Glen Ford: For-Profit Colleges Destroy the Lives of African Americans

By dianeravitch
October 10, 2014 //
13

This is a dynamite article about the predatory for-profit higher education sector by Glen Ford of Black Agenda Report. He pulls no punches.

He writes:

“The dominos are falling in the for-profit college racket, a cauldron of corruption that has crushed the dreams of millions of African Americans in desperate search for tools to navigate their way through a racist, cut-throat capitalist society. Corinthian College’s stock fell from a peak of $33 a share, ten years ago, to 33 cents last month, when it became clear that the federal government intended to pull the plug on the $1.6 billion a year rip-off. Corinthian – known to victims by the brand names Heald College, Everest, and WyoTech – will soon file for bankruptcy protection, shielding its bankster and hedge fund profiteers from liability for wanton theft and massive life-wrecking. More than 70,000 students at 107 campuses, half of whom were statistically certain to drop out before completely their courses, will struggle to find another route to mobility and dignity.

“Corinthian is only the third or fourth-worst offender in the pantheon of for-profit colleges created for the sole purpose of diverting public money to the coffers of hedge funds and mega-banks. Although the titans of this fraudulent industry have committed crimes far larger than Bernard Madoff, none of them will join him in prison, since their victims are largely Black people whose usefulness to Wall Street is limited to availability for super-exploitation, demonization and incarceration.

“Corinthian’s collapse – and the panic that reigns in the rest of the for-profit education pack – was triggered by the Obama administration’s decision to shut off the criminal enterprise’s federal funding faucet, which accounted for at least 83 percent of the company’s revenue stream. Since Corinthian, like its sister shysters, was created as a pass-through of federal dollars, it could not withstand the slightest pause in payments from various federal agencies. So, it folded. Other corporate educational fraudsters will soon follow Corinthian into bankruptcy, causing a shakeup in the industry that will probably result in a leaner and more vertically integrated structure of dream-sploitation. Billions of educational dollars will continue flowing straight from federal programs to Wall Street, but with little improvement to the life-chances of the supposed beneficiaries: the educationally deprived.

“The Obama administration may abhor the chaos in which players like the University of Phoenix and Ashford University have become the top producers of baccalaureate degrees among Blacks. But the administration – and the Democratic Party, as an institution – also worships at the alter of privatization. Rather than eliminate the felonious educational enterprises root and branch – and spend the money on a nationalized system of free education – Obama will continue to provide tens of billions to nourish the poisoned tree.”

Every year we spend $32 billion on these for-profit institutions. Why not use that money for tuition-free colleges for students who need higher education–and bypass Wall Street?

Ford adds:

“In previous decades, African American political leaders would have been out front in demanding a public agency to respond to the phenomenal Black craving for educational services. However, much of the Congressional Black Caucus has succumbed to the bribery of for-profit sugar daddies who, according to Sen. Durbin, “own every lobbyist in town.” Among the legions of for-profit lobbyists is Black former Maryland Rep. Al Wynn (who, while in office, acted as the Black Caucus bag-man for the corporate Democratic Leadership Council). Florida Congressman Alcee Hastings collected at least $54,500 from the education rip-off industry, according to David Halperin’s April 3 article in The Nation, “The Perfect Lobby: How One Industry Captured Washington, DC.”

“Hastings featured prominently in the groundbreaking May 27 Huffington Post piece “How the Congressional Black Caucus Went to War with Itself Over Wall Street,” which described his “epic argument” with Rep. Maxine Waters (D-CA) in 2011. Waters blasted Hastings “for sponsoring a measure that was seen as a gift to shady for-profit colleges. What was more embarrassing than selling out, Waters told her assembled colleagues, was selling out cheap to nickel-and-dime scammers like the for-profit college industry. If you’re going to sell your soul, she admonished, have some self-respect and sell high. (Hastings didn’t dispute the conflict, but he did dispute Waters’ point. ‘It would be a mistaken premise,’ he says, smiling. ‘There are a hell of a lot of for-profit schools.’)”
Key members of the unelected Black Misleadership Class are also beholden to Wall Street’s for-profit federal educational money conduits. The National Urban League got a $1 million check from now-doomed Corinthian Colleges after president Marc Morial wrote a favorable op-ed in the Washington Post. Morial then joined Corinthian’s board of directors, a sinecure that is worth between $60,000 and $90,000 a year in cash and deferred stock.

“Al Sharpton, the MSNBC host and presidential pit bull, reciprocated the University of Phoenix’s sponsorship of his TV special Advancing the Dream with a puff piece on the for-profit giant’s online offerings, featuring the NFL’s Larry Fitzgerald, a Phoenix student and booster. Phoenix University excels all others in funneling Black people’s educational dollars directly to Wall Street via the Apollo Group, a $5.36 billion corporation with ties to the super-predatory Carlyle Group.”

“For-profit education has diverted many billions of dollars that Black students never actually possessed for even one moment– but will owe for much of the rest of their lives – into the accounts of the fabulously wealthy.”

And Ford writes:

“One exception is historically Black colleges and universities (HBCUs), now reeling from a funding crisis set in motion by Obama administration “reforms” in student aid, which led to dramatic decreases in student enrollment. HBCU’s and community colleges attempt to serve much the same demographic that is so grievously exploited and damaged by for-profit vultures. Therefore, these two step-children of American education are the logical starting points for building a publicly funded, virtually free higher educational system, sustained by a lion’s share of the $32 billion in federal moneys that annually pass through for-profits on the way to Wall Street. (Total federal spending on HBCUs is currently less than $1.5 billion a year, and California’s community college system, the nation’s largest, is in constant crisis.)

“Nobody can claim that the feds don’t have the money; Washington spends it lavishly on edu-criminal enterprises. Most importantly, history shows conclusively that most of established U.S. public and private higher education is institutionally incapable of serving anything approaching sufficient numbers of darker and poorer Americans – who are then corralled by scurrilous aid-snatchers and dream-breakers.

“The for-profits should be put out of business with all deliberate speed, but it would be a further crime to shift that portion of federal aid to schools that have never demonstrated a willingness or competence to serve the demographic so cruelly exploited by the likes of Corinthian. The federal dollars that made Phoenix and Ashford Universities the top sources of Black baccalaureate degrees (for whatever that’s worth) should not be diverted to institutions that are manifestly hostile to Black people, based on enrollment figures.”

Ford takes no prisoners. Read the article in full.

Categories Education Industry, For-Profit, Higher Education
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