July 15, 2015

APSCU Letter To For-Profit Colleges: Our New Direction


Former congressman Steve Gunderson (R-WI), president of the for-profit colleges’ main trade association, APSCU, this morning sent a dramatically-worded letter to APSCU members announcing organizational changes that “have the potential to create a new beginning for the sector and the association.”  In the circumstances, his words were reminiscent of Spinal Tap’s David St. Hubbins, who boldly told a sparse amusement park crowd, “Hope you enjoy our new direction.”

As Republic Report reported first yesterday, for-profit giants DeVry and Kaplan left APSCU last month, following the departures in the past year of ITT Tech, EDMC, and now-shuttered Corinthian. As we described in our piece, APSCU came to be dominated by such large publicly-traded and private equity backed companies in the past 15 years, and pursued an aggressive strategy to overturn regulations and defend the worst actors in the sector. Now that strategy has essentially failed — truths about industry abuses have spread, enrollments and share prices have dropped, and Obama Administration rules have been upheld. And now, these same big companies are fleeing APSCU.

Gunderson’s letter, co-signed by APSCU’s board chair, Roger Dalton, Vice President of American National University, opens ominously: “This letter may be as significant as any communication you have received from your Association in many years.”

The letter paints a dark landscape for the for-profit college sector, and a bleak-ish picture of APSCU’s health:

[T]he current political and economic environment has been incredibly difficult for our sector. At the national level we have witnessed decreases in Association membership, decreases in attendance at our major events, significant decreases in revenues leading to equally large decreases in our operations. Today, our annual operating budget is $9 million less than the annual operating budget in 2011-2012….

Our opponents have been on an ideological attack that attempts to define every institutions of our sector with the same negatives. The Administration’s incessant attacks over six years have only increased in recent months.

Over the last two years, this environment, combined with other factors, has resulted in the decisions of several publicly-traded institutions to no longer continue their APSCU membership. The immediate impact of this decision is an ever greater loss in membership dues and operating revenues at this critical time. To put it simply; the board has just approved a revised budget for FY16 that reflects $3 million less in revenue than the budget passed one year ago.

As a result, Gunderson writes, the APSCU board of directors this week “convened for a special meeting” and reached some decisions: that APSCU will define itself by the mission of providing career education “not the corporate structure of our institutions” and consider a new name that reflects that positioning (Note: the previous name “Career College Association” might be good!); that APSCU will improve media coverage with “a new, unique branding and positioning campaign … developed with some of the best research and strategic thinking we can tap”; that APSCU will consider “what student protections should become a part of our organization’s principles,” given the group’s commitment to “appropriate, effective student consumer protections rather than more government regulations”; and that the group will reach out to other postsecondary education sectors to improve career education.

APSCU did not respond to Republic Report‘s request for comment early yesterday morning on the loss of members, on possible layoffs and salary freezes, and on APSCU’s past and future strategies. But Gunderson did describe his new plans in interviews published today with Inside Higher Ed and Politico.

A national commitment to quality, affordable career education — providing people with serious training and usable credentials for jobs as diesel mechanics, dental assistants, hair stylists, etc. — is critical to our economy. But many companies in APSCU and its industry lost sight of that mission and instead created fancier higher education degree programs and, worse, relentlessly pursued profits to please investors, emphasized marketing over instruction expenses, raised prices through the roof, and deceived students and government overseers alike.

Ethical owners of effective career colleges are left wondering whether APSCU, having been taken over by a monster and itself become a monster, could truly come back to a more responsible place — especially with APSCU mainstays / big-school barons like Arthur Keiser, Avy Stein, and Jeffrey Leeds still involved in the organization, and with the same professional staff in place. Gunderson has promised improvements to the group’s code of conduct before, without meaningful results.

As the Center for American Progress’s Ben Miller told Politico, “It feels like APSCU tried this many times before. The question is, will this time be meaningful change – disavowing bad actors in the space, dropping litigation, and taking other steps to acknowledge mistakes – or just another superficial rebranding?”

This article also appears on Huffington Post