How We Did the Story: Investigating For-Profit Colleges
This is a first-person column by Bloomberg News reporter Dan Golden, who won EWA's Fred M. Hechinger Grand Prize for Distinguished Education Reporting, along with colleagues John Hechinger and John Lauerman.
Read the stories here. To find out more about the grand prize and the National Awards for Education Reporting, please visit our website contest section.
Read the stories here. To find out more about the grand prize and the National Awards for Education Reporting, please visit our website contest section.
During my first week at Bloomberg News in August 2009, Editor-in-Chief Matt Winkler asked me to examine for-profit colleges, saying he wondered if their meteoric growth was too good to be true.
I began to pore over the US Securities & Exchange Commission filings of Apollo Inc.'s University of Phoenix, the largest for-profit university. I was surprised to find not only that its enrollment had quadrupled in eight years but that its business model had changed markedly since I had covered it for the Wall Street Journal some time before.
Back then, Phoenix had primarily served middle managers with some college experience whose private employers frequently paid for them to complete their four-year bachelor's degrees. About half of its revenue had come from federal student aid.
Now, I saw, it had more than 200,000 students in a two-year, associate's degree program, that started in 2004 and accounted for most of the university's enrollment growth. And almost 90% of the university's revenue derived from federal grants and loans to students, with tuition reimbursement from private employers no longer significant.
So I tracked down former Phoenix employees, current and former students and Wall Street analysts, and perused court cases involving the company. What I found was that Phoenix had altered its model and student mix to pursue a goal of 500,000 students set by its founder at his 80th birthday party in 2001. The two-year program in particular had expanded by targeting poorly prepared, low-income and vulnerable students -- including an intellectually disabled woman with an IQ between 65 and 70 -- who qualified for federal aid.
I also remembered a long-ago tip about online for-profit colleges aggressively signing up active-duty military. From interviews with faculty and administrators at state and non-profit colleges that traditionally taught service members, and with education advisers on military bases, I learned that online for-profit colleges were coming to dominate this market, tapping Department of Defense tuition assistance that enhanced their revenues and helped them exploit a loophole in federal regulations. When I visited Camp Lejeune, a Marine Corps base in North Carolina, its education adviser took me to the barracks for wounded warriors. The barracks were empty at that moment, but I prevailed on him to bring me back later that day.
On the second visit, I documented that an attractive female recruiter from for-profit Ashford University had visited the barracks without permission and signed up brain-damaged Marines. I interviewed one wounded Marine who had enrolled at Ashford--and couldn't remember what courses he was taking.
The articles about Phoenix and the wounded warriors were both published in 2009. Last year, John Hechinger, John Lauerman and I expanded our investigation into the colleges' abuse of taxpayer funds and vulnerable students.
After hearing that some colleges were recruiting at homeless shelters, I talked with advocates and shelter personnel around the country. Concentrating on Cleveland, I visited most of the city's homeless shelters over three days and found that two for-profit colleges -- Phoenix and Chancellor University -- had been competing for homeless students, many of whom suffered from alcoholism and other problems and were ill-equipped to attain degrees. The result was to plunge them deeper into debt and despair.
My earlier focus on active-duty military led me to look at recruiting of war veterans, whose enrollment also enables for-profit colleges to avoid regulation. At an Amvets convention in Louisville, Ky., I found representatives of Kaplan Inc. addressing three sessions and pitching veterans at a table in the exhibition hall. Further research connected me with former Kaplan employees and students as well as internal documents, and Kaplan became the narrative spine for an expose of the hard-sell push to sign up veterans.
Hechinger broadened our coverage by showing that for-profit colleges were becoming a favorite investment of blue-chip companies. He detailed how Goldman Sachs had accumulated a stake in Education Management Corp. -- the second-largest chain of for-profit colleges -- that was worth more than $1 billion. Through interviews with former employees and students and the examination of court records and SEC filings, Hechinger demonstrated that its students often were ending up with heavy debts and low-paying jobs. Because student loans -- unlike nearly all other kinds of debt -- can't be shed in bankruptcy, Hechinger delved into bankruptcy-court filings to find students facing garnishing of their wages and denials of housing and scholarships.
The plight of such students stood in stark contrast with the riches that for-profit college executives had made in the boom. Hechinger and Lauerman tallied those winnings by downloading information from thousands of SEC filings on spreadsheets. They found that top executives at the 15 publicly-traded for-profit colleges received $2 billion over seven years from selling company stock. Lauerman explored why many low-income students weren't attending community colleges that could provide the same courses at lower cost, and kept close track of Washington hearings and proposed regulations that in some cases sprang from our reporting.
The more we wrote, the more the colleges' recruiters, students and faculty contacted us with their experiences and insights. By the second half of 2010, we were inundated with more story ideas and victims than we could possibly do justice to. Stepping back, I profiled the industry's patriarch, Phoenix founder John Sperling, to trace how his idealistic vision had degenerated into exploitation.
Reporter Tips:
1) Get out of the newsroom. As Woody Allen said, 90 percent of life is showing up. There's no substitute for reporting on the ground. The color and examples gleaned from visits made possible the stories about active-duty military, the homeless, and veterans.
2) When you interview college administrators, ask more questions than you need for your immediate story. I spent a day or two at the Phoenix campus in August 2009, interviewing at least half a dozen officials on all aspects of the operation. Although Phoenix disliked my subsequent coverage and limited its cooperation, I still had plenty of material from the initial interviews that helped in conveying the university's situation and viewpoint.
3) The Freedom of Information Act can provide useful cover for government officials who want to help. For one story, officials had no objection to providing their e-mail correspondence with a for-profit college, but were reluctant to take the risk of their own accord. When I handed them a FOIA request, they immediately delivered the documents.
4) Remember that education can be a business. Enhance education reporting by using the tools of investigative and business journalism--including court records and Securities and Exchange Commission filings.
5) Sustain coverage. We concentrated on the industry for a a year and a half -- through major features and scores of daily stories -- adding to the impact of the series.
I began to pore over the US Securities & Exchange Commission filings of Apollo Inc.'s University of Phoenix, the largest for-profit university. I was surprised to find not only that its enrollment had quadrupled in eight years but that its business model had changed markedly since I had covered it for the Wall Street Journal some time before.
Back then, Phoenix had primarily served middle managers with some college experience whose private employers frequently paid for them to complete their four-year bachelor's degrees. About half of its revenue had come from federal student aid.
Now, I saw, it had more than 200,000 students in a two-year, associate's degree program, that started in 2004 and accounted for most of the university's enrollment growth. And almost 90% of the university's revenue derived from federal grants and loans to students, with tuition reimbursement from private employers no longer significant.
So I tracked down former Phoenix employees, current and former students and Wall Street analysts, and perused court cases involving the company. What I found was that Phoenix had altered its model and student mix to pursue a goal of 500,000 students set by its founder at his 80th birthday party in 2001. The two-year program in particular had expanded by targeting poorly prepared, low-income and vulnerable students -- including an intellectually disabled woman with an IQ between 65 and 70 -- who qualified for federal aid.
I also remembered a long-ago tip about online for-profit colleges aggressively signing up active-duty military. From interviews with faculty and administrators at state and non-profit colleges that traditionally taught service members, and with education advisers on military bases, I learned that online for-profit colleges were coming to dominate this market, tapping Department of Defense tuition assistance that enhanced their revenues and helped them exploit a loophole in federal regulations. When I visited Camp Lejeune, a Marine Corps base in North Carolina, its education adviser took me to the barracks for wounded warriors. The barracks were empty at that moment, but I prevailed on him to bring me back later that day.
On the second visit, I documented that an attractive female recruiter from for-profit Ashford University had visited the barracks without permission and signed up brain-damaged Marines. I interviewed one wounded Marine who had enrolled at Ashford--and couldn't remember what courses he was taking.
The articles about Phoenix and the wounded warriors were both published in 2009. Last year, John Hechinger, John Lauerman and I expanded our investigation into the colleges' abuse of taxpayer funds and vulnerable students.
After hearing that some colleges were recruiting at homeless shelters, I talked with advocates and shelter personnel around the country. Concentrating on Cleveland, I visited most of the city's homeless shelters over three days and found that two for-profit colleges -- Phoenix and Chancellor University -- had been competing for homeless students, many of whom suffered from alcoholism and other problems and were ill-equipped to attain degrees. The result was to plunge them deeper into debt and despair.
My earlier focus on active-duty military led me to look at recruiting of war veterans, whose enrollment also enables for-profit colleges to avoid regulation. At an Amvets convention in Louisville, Ky., I found representatives of Kaplan Inc. addressing three sessions and pitching veterans at a table in the exhibition hall. Further research connected me with former Kaplan employees and students as well as internal documents, and Kaplan became the narrative spine for an expose of the hard-sell push to sign up veterans.
Hechinger broadened our coverage by showing that for-profit colleges were becoming a favorite investment of blue-chip companies. He detailed how Goldman Sachs had accumulated a stake in Education Management Corp. -- the second-largest chain of for-profit colleges -- that was worth more than $1 billion. Through interviews with former employees and students and the examination of court records and SEC filings, Hechinger demonstrated that its students often were ending up with heavy debts and low-paying jobs. Because student loans -- unlike nearly all other kinds of debt -- can't be shed in bankruptcy, Hechinger delved into bankruptcy-court filings to find students facing garnishing of their wages and denials of housing and scholarships.
The plight of such students stood in stark contrast with the riches that for-profit college executives had made in the boom. Hechinger and Lauerman tallied those winnings by downloading information from thousands of SEC filings on spreadsheets. They found that top executives at the 15 publicly-traded for-profit colleges received $2 billion over seven years from selling company stock. Lauerman explored why many low-income students weren't attending community colleges that could provide the same courses at lower cost, and kept close track of Washington hearings and proposed regulations that in some cases sprang from our reporting.
The more we wrote, the more the colleges' recruiters, students and faculty contacted us with their experiences and insights. By the second half of 2010, we were inundated with more story ideas and victims than we could possibly do justice to. Stepping back, I profiled the industry's patriarch, Phoenix founder John Sperling, to trace how his idealistic vision had degenerated into exploitation.
Reporter Tips:
1) Get out of the newsroom. As Woody Allen said, 90 percent of life is showing up. There's no substitute for reporting on the ground. The color and examples gleaned from visits made possible the stories about active-duty military, the homeless, and veterans.
2) When you interview college administrators, ask more questions than you need for your immediate story. I spent a day or two at the Phoenix campus in August 2009, interviewing at least half a dozen officials on all aspects of the operation. Although Phoenix disliked my subsequent coverage and limited its cooperation, I still had plenty of material from the initial interviews that helped in conveying the university's situation and viewpoint.
3) The Freedom of Information Act can provide useful cover for government officials who want to help. For one story, officials had no objection to providing their e-mail correspondence with a for-profit college, but were reluctant to take the risk of their own accord. When I handed them a FOIA request, they immediately delivered the documents.
4) Remember that education can be a business. Enhance education reporting by using the tools of investigative and business journalism--including court records and Securities and Exchange Commission filings.
5) Sustain coverage. We concentrated on the industry for a a year and a half -- through major features and scores of daily stories -- adding to the impact of the series.
Labels: #ewa2011, college_completion, college_finance, contest 2010, for_profits, online_learning
posted by Lori Crouch at
9:42 AM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home