Diploma Mills: How For-Profit Colleges Stiffed Students, Taxpayers, and the American Dream

I read this book from the perspective of a scholar of fraud and corruption in higher education. I have also published on the topic of fake and fraudulent degrees and diploma mills. I found Angulo's book helpful and insightful. The historical perspectives offered in this book were particularly useful to understand the development of the for-profit education industry in the United States.

The inside story of diploma mills! A great read!

There is a strong tendency for reviewers to focus on the book they think the author should have written instead of how well w/he did at writing what s/he set out to do. There are a large number of aspects of what Winthrop University professor A. J. Angulo (who holds two graduate degrees from Harvard) terms “for-profit colleges and universities (FPCUs) in his succinct history Diploma Mill$.The book Angulo actually did write is a long-time-frame account of FPCUs in the United States based mostly on published sources of data. This he does very well, recalling (at least to me, since I have read literature on the emergence of professionalization of law and medicine) the absence of professional training before the Civil War and the gradual growth of professional standards and professional education in the “progressive era” (1890-1916). Just how untrained physicians through most of the 19th century were is scary.Universities were reluctant to add business schools (though one would hardly guess that from the focus on MBAs now!) and for-profit business programs taught good penmanship as well as accounting.Though FPCUs existed through the 19th century, the real boom fed on the federal money aimed to educate WWII veterans. The enabling legislation (Servicemen’s Readjustment Act of 1944) specifically forbade any attempt to impose national standards and most states showed no interest in establishing the efficacy (in terms of skills or employment related to “training” and “education” funded by the GI Bill). The number of FPCUs jumped from less than 2000 in 1944 to more than 7000 by 1949. A 1950 VA study of allegations of fraud found that 78% were made against for-profit institutions, many of which took the money and ran (aka “fly by night” businesses that disappeared, plus those going into bankruptcies).That boom (with concomitant education bust) paled before the gold rush by FPCUs following the Higher Education Act of 1965. Those setting up Educational Opportunity grants should have looked at how so much money was diverted from education to marketing and other kinds of administration maximizing profits in the case of the GI bill(s). Actually, no knowledge of this history is necessary to guess that if the federal government insured student loans, institutions would recruit “students” wanting degrees rather than any education and that the profits from guaranteed loans would guarantee recruitment of those who would drop out and default on loans, especially with little or no education actually available to them.Similarly, anyone with much familiarity with American politics would know that there would be resistance to any objective evaluations (of FPCUs, or of anything else), that there would be concerted efforts to fund Christianist institutions (“Bible colleges”) with tax dollars under the guise of “religious freedom,” and that massive lobbying campaigns would water down any attempts at regulation. The appointment of industry insiders with an aversion to regulating the institutions they had been employed by or would be employed by after leaving office is especially flagrant in the case of the federal education officials appointed by George W. Bush and California ones appointed by Governor Arnold Schwarzenegger, but the examples of US Senators caving in return for fairly negligible favors (not just campaign contributions) from FPCU lobbyists Angulo mentions are very liberal Democrats, Ted Kennedy and Tom Harkins. (After demanding evidence from Reagan’s Secretary of Education William Bennett against one of Kennedy’s contributors, Kennedy publicly accepted that allegations were true.)If not amazing, it is appalling that FCPUs managed to dilute the requirement that 15% of FCPU income for institutions certified for guaranteed stundent loans not come from the federal government’s guaranteed loans to 10%. I think that it should be 50+%.Having tried to stay within the bounds of the book Angulo wrote, I will extend beyond his inquiry to point out (as he occasionally alludes to) that some of the problems of rapidly rising administrative costs and executive salaries (as more and more of the teaching is done by adjuncts who are paid little more than Walmart greeters), grade inflation and general debasement of standards afflict public and private (nonprofit) colleges and universities, too, but the quantitative differences between them and NCPUs are very staggering. Take the $42 million 2009 compensation for Robert Silberman, CEO of for-profit Strayer Education (in contrast to $800,000 for the president of Harvard). And the ratio of spending on marketing to that on providing education is similarly off-the-chart for FPCUs in comparison to nonprofit educational institutions.

Diploma Mills: How For-Profit Colleges Stiffed Students, Taxpayers, and the American Dream should be required reading for political leaders who control funds to support higher education institutions. Additionally, guidance counselors in high schools all over America should be aware of the poor quality of many for profit colleges and universities. Lastly, students applying to for profit colleges and universities should know in depth and detail what they are likely to get for their tuition dollars.I am Professor Emeritus at Western New England University, a not for profit university, and my school is accredited by the Association to Advance Collegiate Schools of Business (AACSB International). "AACSB was founded in 1916 to accredit schools of business. The current mission is to advance quality management education worldwide through accreditation, thought leadership, and value-added services. It is regarded as the benchmark for business school quality among the academic community." I mention this accreditation because of its importance to students enrolling at the University. AACSB requires participating colleges and universities to maintain the highest standards, not only for the faculty teaching at the university, but also for every program and course taught at the university.Sadly, many for profit universities, according to A.J. Angulo, author of Diploma Mills, are more interested in marketing, advertising, and making huge sums of money for the executives who run the schools than they are for providing a decent education for the students who enroll in their schools and often pay exorbitant prices for courses taken at the school.Let’s use as an example The University of Phoenix, a for profit university. “Enrollment at The University of Phoenix, America's largest for-profit university, was about 460,000 students five years ago. Now it's 213,000. The University of Phoenix's parent company, Apollo Education Group (APOL), announced more losses Wednesday. Its revenues and enrollment both sank roughly 14% in its latest quarter compared to a year ago. Mar 25, 2015” The government is going after the University of Phoenix for allegedly deceptive practices. “The struggling school is now facing a probe from the Federal Trade Commission. The agency is looking into whether the school engaged in deceptive marketing tactics, its parent company, Apollo Education Group (APOL), said Wednesday.”Here is what one student has to say about the University of Phoenix. “I completed 57 credits and somehow managed to accumulate over $50,000 in student loans, not including my out of pocket expenses. I was consistently lied to about the loans and now I'm so far in debt that there is no end in sight.” This is just one of hundreds of similar comments readers are likely to find if they investigate the University of Phoenix.Let us take a look at the conclusions A.J. Angulo arrives at after his extensive research into for profit colleges and universities like the University of Phoenix.1. For profits claim to do more than they can and promise more than they should.2. For profits deliver less than they could.3. For profits have strong incentives to water down academic standards.4. For profits resist transparency and too often fail to operate within the law.From the beginning to the end of his expose, Angulo supports each of his statements with facts and figures that demonstrate what tens of thousands of students learn only after they have paid their money and received nothing of value in return. Sadly, many for profit colleges and universities care little about quality education and instead attempt to make their college or university a profitable enterprise for share-holders and executives running the business.Does this mean that all for profit colleges and universities are scams? Certainly not. But it does mean that students must investigate carefully any college or university that interests them. Is the school fully accredited? Are faculty qualified and do they work full time at the university? Does the college or university have an outstanding reputation in the local community, state, and region? That’s just a start. Students should be proud of their alma mater, not embarrassed by it.Hopefully, A.J. Angulo’s book will find its way into the libraries of high schools around the country and guidance counselors and teachers will recommend it before students begin the application process for the college or university of their choice, particularly if students are applying to a for profit college or university. Additionally, parents would be well advised to spend an hour or two familiarizing themselves with the major points Angulo makes in his book. Recommended

There is a great deal of merit in this book, a general expose of the sharp practices of for profit education by some practitioners.The examples which have been chosen however, do not provide the proof, which is badly needed, that the whole sector is bad.Please let me assure readers that I am not a blinkered defender of such institutions but rather seek to obtain a broader overview of the problems which have been shown in sharp relief by the work of the author who certainly sees his work as part of a mission to, if not eradicate the problems, at least legislate to minimize their abuse of the customers they obtain and of the public funds they fraudulently obtain.I would also point to the broader issue of the financing of higher education in the public and non-profit sectors. While not seeking to minimize the abuse of for-profit educational establishments, let us not overlook either, the general waste and mismanagement of public funds in the public and other institutions.Whilst I applaud the efforts of the author in this regard of exposure to scrutiny and to try to seek restitution and criminal action against the perpetrators of fraud and theft, I think that we need to look more fundamentally at the question, that being the constitution of the markets in education which enable those sorts of activities to take place.I noted that at one point there is a reference to the inability of authorities to police the sector due to understaffing but surely this misses the basic point. As Adam Smith and countless others have observed, the incentive structure which is established over a market will be a determining factor in how market actors behave. Thus, opportunity seekers will quickly determine ways in which to maximize their returns which have no necessary regard to the intentions of the framers. In plain English, if the lawmakers design the framework in which these people operate then clearly it is the framework which not only allows, but actively encourages criminal behaviours. The regulatory and accounting/reporting structures established leads to responses by the actors involved which were never intended. At the same time, the methods of supervision created are perhaps too bureaucratic and therefore too slow to find problems and deal with them adequately.What essentially happens is the market entrants can do so quickly and also exit quickly long before the bodies entrusted with policing the market can even become aware of it.This book certainly can help shed light on the dodgy nature of these businesses but it should also be used as a doorknocker on legislative doors to be more careful when enacting laws to take more time to ensure that the rules of the game are comprehensive to prevent such activities from the outset. This does suggest that reforms of the legislative process are urgently required.