Don Graham: For-profit school plan hurts poor kids

By Chrystia Freeland
November 4, 2010

Don Graham, Chairman and CEO of the Washington Post Company, visited the Reuters studio this morning to chat with Chrystia about the future of the company’s Kaplan subsidiary as well as its flagship newspaper. In addition to its popular test preparation courses, Kaplan operates 75 colleges and graduate schools, both online and through brick-and-mortar campuses, that serve 112,000 students. Earlier this year the Department of Education lashed out at for-profit colleges like Kaplan for misleading prospective students about tuition costs and salaries after graduation. The Department proposed new regulations on these institutions that would tie federal aid to the number of students who are repaying their loans.

Graham said that while the Department’s efforts to crack down on bad actors are right-minded, the current proposals will end up having an unintentional yet harmful effect on low-income students:

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There is a 99% correlation between the number of Pell Grant students—the number of poor students a campus serves—and the repayment rate under the proposed Department rules… The Department has scored a direct hit on schools that serve poor students. They didn’t want to. They didn’t mean to. But that is what they did. And I hope they’ll reconsider that rule and propose something that in fact cracks down on bad actors but does not punish schools that serve poor students.

Graham offered an alternative proposal, the “Kaplan Commitment,” that would preserve the Department’s intentions to ensure students are not misled but that would not discriminate against poor students. The Kaplan Commitment will allow any student to enroll in any campus or online course that Kaplan operates for five weeks, free-of-charge. If the student decides the program is not for them, they can withdraw without paying a dime in tuition. Graham did note that enacting this change would have a material adverse impact on the company’s earnings, but he said it was worth it to show everyone that at Kaplan students come first.

When asked whether the entire model of for-profit education is a mistake, Graham said that at a time when state universities are seeing their budgets’ slashed, only for-profit colleges like Kaplan are poised to meet students’ needs:

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Somewhere between 7 and 10% of all students today are signed up at for-profit institutions… Let’s talk about traditional education and for-profit education. There are of course the most famous elite private universities in the United States—the Ivy League and so on—but nobody is founding such institutions in great numbers or expanding them widely today. President Obama has announced what seems like a pretty sensible goal: that the United States should again be #1 in the world in the percentage of adults who have graduated from college. And this is not a minor goal of his; this is put forward as one of the principal goals of his administration. The bulk of Americans who go to university go to a State U—go to a community college or go to one of the great state universities. The state universities are a fantastic achievement of the United States of America, but given the financial conditions of the states, and especially of the largest states, it is as plain as day that these state universities are struggling to maintain the number of students they have today. A year ago Cal State said they were reducing their total student count by 44,000 students. That’s a lot of students. And the state of California, the financial condition of the state of California is pretty famous. It’s very, very bad. Illinois, New Jersey, New York—these are states with big financial challenges. So are they going to be able to offer places to more students? It doesn’t seem realistic that they are.

Finally, Chrystia asked Graham how the Washington Post intends to compete with relative newcomers like Politico and Bloomberg News that have grown significantly in the nation’s capital in just a short time. Here’s what he had to say:

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I really admire what the Allbritton Company has done with Politico. It’s a very good job. As far as the economic future of the Post is concerned, every newspaper in the United States is under the same kinds of challenges. Down in Baltimore or up in Philadelphia they’re not thinking about Politico but they’ve got the same kinds of challenges to their political future, so it’s a challenge for our journalists to compete with the very good journalists they have as we compete with the journalists at the New York Times and the Wall Street Journal and Reuters. That is one of many journalistic challenges. It isn’t really fundamentally an economic challenge… Bloomberg—as I understand it—Bloomberg is going to hire a lot of reporters and offer a lot of specialized products to readers who have strong interests in tax or energy policy. That highly specialized information industry is an important part of the Washington news industry but it’s mostly covered by newsletter providers… I think Bloomberg News is a great organization—I’m sure they’ll do a good job, but what they’re meeting is the demand from their financial customers for highly specialized information about the actions of particular federal government agencies, which isn’t the primary focus of most newspaper readers.

Graham added he “welcome[d] the competition” and that he is “thrilled with the way the Post newsroom is doing its job today,” especially with coverage of the midterm elections. He also does not foresee a day in his lifetime when the Washington Post does not have a print edition, noting “there’s a strong preference among readers for a print publication.”

Posted by Peter Rudegeair.

6 comments

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So Graham uses his entire media empire to attack the funding base for public education, then pleads there’s no option left for our young people, but to feed our tax dollars into his worthless for-profit “education” cash cow?

This is a slimy, dishonorable business. Look at the sickening details of Kaplan’s fleecing of veterans, in this story the Reuters reporter didn’t mention. http://www.businessweek.com/magazine/con tent/10_46/b4203026910225.htm

What a mealy-mouthed poverty pimp Graham is! If he cares about the poor, why hasn’t he thrown his whole schedule behind congressional appearances and interviews demanding funding for the community colleges, then? He cares nothing for the “poor kids” he rips off.

Instead, his editors and columnists rail against the cost of admitting “unqualified” urban students into public community colleges, and demand restricted admissions. All this time, his Kaplan sales force is cold-caalling these same victims, lying to get their signatures on government-guaranteed loans for the vastly more expensive, useless crap he peddles to them.

Graham plays the same game when he goes ofter tax dollars meant for younger poor children, too. His newspapers, TV stations, cable network, and magazines demand that urban schools be shut down out from under their communities, so Kaplan can exploit the displaced children, who have no place else left to go. In his newspapers, he call this “choice”. The funding for Kaplan’s secret “virtual in-district charter schools” is coming out of our packets.

http://www.kaplanonlineschools.com/distr ict/solutions

People don’t even know about his aelf-serving rip-off
of DC schoolchildren, because his press won’t report it, and apparently Reuters also thinks he needs a bigger platform to spread his deceit.

Posted by chemtchr | Report as abusive

Public education is doomed bc:

1) Unions run the show. Unions are anti-competitive and protectionist by nature and do no allow the removal of poor performing members.

2) The Public Education system rewards teachers who have served longer rather than those who teach well. There is the exact opposite of performance based payment that would turn the teaching world upside down and improve results immediately.

Until these things change our education system will continue to falter.

Posted by BHOlied | Report as abusive

Despite being a supporter of separation of state and religion in general, I believe that American education system has languished behind many developing countries because of the severing of truly altruistic and self-sacrificing religious teaching staff from government funded or assisted educational institutions.

Most governments in the world are realistic about the contribution of religious nuns and volunteers towards the education of extremely impoverished children. Examples include the opening of education to the aboriginal people in Australia, to cooperation between British colonial government in their colonies( irony yes: at a time when catholics were still discriminated against as more or less outcasts or rebels in Great Britain for their historical opposition to Henry VIII, catholic nuns were nonetheless always welcomed, and not infrequently given high respect in their colonies, such as Mother Theresa in India for charitable work. Quite practical and successful. ) The United States developed one of the most expensive and less effective system at the early educational stages because over-separation of religion and state.

Posted by jo5319 | Report as abusive

Mr. Graham distorted the biggest threat to our educational system.
The educational system, where, in its ideal state, should provide future leaders, innovators, our brightests hopes a worry-free environment to develop their talents and potentials, is threatened by institutions like the ones Mr. Graham runs. Instead of choosing the schools that will mold students into the best citizens of our country, students have to settle with Mr. Graham’s institutions that satisfy the minimum requirement of being able to issue a diploma, without providing the higher level of nurturing, developing, and most importantly, opening up of students’ minds to greater and better things than just minimum standards.

Posted by Janeallen | Report as abusive

Public schools hurt poor kids!!

Posted by thisisnuts | Report as abusive

Interesting comments by CHEMTCHR – I wonder if this person (assuming chemistry teacher) has ever taught economically disadvantaged students?

We need to remember that education is not a constitutional right – it is a choice. Individuals from anywhere in the world have the right to choose attending a US University – if they can afford it.

An educated society is an economic advantage in our global world – and it is good to have advanced knowledge in all citizens.

I was in 1873-The Society to Encourage Studies at Home is founded in Boston by Anna Eliot Ticknor, daughter of Harvard professor George Ticknor. It’s purpose is to allow women the opportunity for study and enlightenment and becomes the first correspondence school in the United States.

In find this interesting:
1917 – The Smith-Hughes Act passes, providing federal funding for agricultural and vocational education. It is repealed in 1997 during Clinton’s Administration!

If the internet were in place – do you think these would have passed or would online/at home education be the norm? (Even though for K-12 it sets precedence)
1919 – All states have laws providing funds for transporting children to school.
1939 – Frank W. Cyr, a professor at Columbia University’s Teachers College, organizes a national conference on student transportation. It results in the adoption of standards for the nation’s school buses, including the shade of yellow.

Our Education system is an open system allowing anyone to better themselves – there is no guarantee of jobs from any school – not the state schools – nor the Ivy league schools.

And does anyone thing for one moment that schools like John’s Hopkins, Carnegie Mellon, MIT, Northwestern, Cal-Tech and others DON’t receive large Federal Funding in the form of Grants?

It is time to start separating our Universities between Research Orientation – and Teaching Schools. Just as Community Colleges were first founded as SKILLS colleges – they should return to this mission.

Don’t listen to the Politics – Talk to the Students – ask the Kaplan Students who are working full time and taking a program to better themselves, or ask the unemployed why they are unemployed (Due to not having a degree) – So why would a degree from McNeese State, Eastern Washington, Grambling, or Carolina College, be any different than an earned degree from Kaplan?

Why would Kaplan be required to guarantee a job – when state schools are not required to do the same?

Too many people who don’t have a clue about student initiative and learning are stereotyping online schools. This prejudice will only hurt opportunity for American citizens to better themselves.

And if the public doesn’t want future students to have access to Government backed funding – then take away federal government funding to all schools.

And one more consideration – If online education is to be argued – then why are a majority of US state universities starting online offerings?

Slap the schools for false advertising – but don’t take away the only opportunity for millions to improve themselves. Isn’t the “pursuit of happiness” written somewhere important (yes I know – but do critics of online education?)

Posted by Professor-Blake | Report as abusive