PBS’s Frontline documentary team has released a follow-up to its 2010 film about US for-profit conglomerates, College Inc.
‘Educating Sergeant Pantzke’ examines the manner in which for-profit colleges have attempted to monopolise the recruitment of armed forces veterans whose tuition is paid for by the US state under the terms of the GI Bill.
The focus on aggressive and misleading recruitment chimes with that uncovered by an investigative report from the Huffington Post. Recruiters are schooled to ‘Look for the Pain’ and convince those on the end of the hard sell that college is a route to resolving problems.
That article focused on changes at Education Management Corporation after their takeover by private equity firms: EMC also own The Art Institute who recruited Sergeant Pantzke.
In the UK, David Willetts met with representatives of the featured companies twelve times prior to the publication of the government’s white paper for higher education. His political party is backed by very similar financial operators seeking outlets for capital and access to the UK student loans.
Here, these companies are not going to be able to charge such high fees as they do in the US. The government would like them to do something else: to offer cheaper alternatives to undercut the established provision. These conglomerates have deep pockets and in the short term (and perhaps even the medium term) they could run at a loss to drive the established provision into difficulties, while their subprime degrees can be mis-sold to communities with little experience of higher education. This would superficially resemble widening participation.
Students at the for-profit BPP already have access to loans and grants on the same terms as those at public universities. As of 2012/13 they will be able to borrow up to £6 000 pa to meet fees. The creation of a single regulatory framework for higher education in England is a chance to rectify this anomaly.
As Martin Hall, vice-chancellor at Salford, has written:
The real issue, then, is not whether or not non-profit universities can become more efficient, or provide genuine choice for students. They are doing both. The point for debate is whether or not it is appropriate that for-profit universities convert large amounts of public cash into shareholder dividends via the mechanism of publicly subsidised student loans.
Spot on – why should UK taxpayers provide risk free income to for-profit companies by underwriting the risk that their graduates fail to repay what they have borrowed?
It needs to be said that a large part of coalition policy across the board is about preserving corporate profits for their party backers at a time of zero growth.
Cultures of Capitalism IV: The future of education
An event organised by the Institute for Modern & Contemporary Culture
With guest speakers including Mark Fisher, author of Capitalist Realism, Andrew McGettigan, author of the arts and humanities blog Critical Education and Andrea Phillips, Reader in Fine Art Practice and Director of Research Studies, Goldsmiths. Chaired by Marquard Smith and David Cunningham.
Venue: Whitechapel Gallery Time: 7pm
As 2011 comes to a close it is worth gathering together the various developing strands of the government’s strategy for higher education. Despite the brevity of the white paper, the plans are wide-ranging: dispersed, piecemeal and already underway. The coalition is implementing its plans using a variety of instruments in order to rush through change by the end of this parliament in 2015.
In the pressing haste and political compromises, some things like the loan system have been botched, but that doesn’t necessarily aid those campaigning against the reforms.
- Block grants for undergraduate teaching were reduced by 80% by a budgetary measure – November 2010’s Comprehensive Spending Review.
- The maximum tuition fee level that universities can charge from 2012/13 was raised in a snap vote last December. Using a piece of secondary legislation, the government was able to engineer the vote without publishing clear plans and with only a brief window of a few hours for debate.
- The Secretary of State can now set up to market rates of interest on student loans. Clauses tucked away at the end of the 2011 Education Act, which received Royal Assent last month, removed the current legislative protection and turned the decision on interest rates into an administrative matter that can be adjusted using statutory instruments.
- The new numbers controls that make use of an artificial supply-side mechanism to control recruitment were introduced by giving an instruction to a quango, Hefce. The Browne review recommended the creation of a new superquango, HE Council, to replace Hefce, Offa, QAA and OIA. One reason why the government chose not to adopt this idea is that it would have required new primary legislation – the passage of such measures through parliament can take months and this would have slowed up change as well as providing a focus for campaigning.
- Students studying at ‘designated’ courses offered by private providers (some of them for-profit) already have access to the publicly backed student loan scheme and maintenance grants on the same terms as those within the established sector. Although the numbers were small they are expanding with no control on recruitment besides the approval of courses on a case by case basis by nominally, Vince Cable. From 2012/13 those students will be able to borrow up to £6 000 per year to cover fees.
- George Osborne announced in the Autumn Spending review that the proposals to exempt universities from VAT on shared services will be included in a new Finance Bill to appear in 2012.
All these measures are already happening and so those waiting for a parliamentary vote on the white paper will be waiting in vain.
Here we have something of a democratic deficit given the lack of concerted scrutiny and oversight. Even articulating the nature of the plans is a task – it is still not clear quite what the government is proposing in some areas out for consultation.
There will be primary legislation in 2012 on universities and it will be likely that it appears as a Higher Education Bill rather than smuggling changes within other legislation. Parliamentary observers expect new legislation to appear in April or May and work its way through both houses over the rest of the year.
Key measures here will be:
- Changes to degree awarding powers and the restrictions on the use of the ‘university’ title including the possibility of allowing bodies that do no teaching, such as Pearson plc, to award degrees.
- Introducing a single regulatory framework to create a ‘level playing field’ for private and for-profit providers to compete against the established HE institutions.
- Allowing universities to change their corporate form more easily so as to be better able to access private finance. This will involve legislation governing the charitable status of public universities. This is most likely to allow ex-Polytechnics which are ‘higher education corporations’ to change to forms, such as ‘company limited by guarantee’, that would allow them to issue bonds.
These might simply appear to be purely technical matters about rationalising or tidying up. But they extend the new market in undergraduate recruitment by allowing more operations, while tight controls on the overall numbers of students are to be retained. More outfits fighting for the same students.
Any campaigning in 2012 has to be aware of these points of leverage. It will be a protracted passage through parliament but it is important to take these issues to a general public – and they lack the headline impact of fees.
The Guardian’s higher education network is hosting a live online chat on Friday from 12 to 2pm.
The title is, “What is the purpose of higher education?”
I’ve been invited to be a panellist.
The site is up here. You can post questions and comments in advance.
As English university financial years run from 1 August to 31 July, the 2010/11 financial statement for Middlesex University has now appeared after being approved by the Board of Governors at the end of November.
Last year’s difficulties at Middlesex have been documented by me in an article for Research Fortnight, ‘The Truth About Middlesex’. In particular, the damage to its overseas strategy caused by changes in government immigration policy for students and the collapse, at very short notice, of a planned campus in Delhi. Middlesex is currently running a compulsory redundancy programme as a result of this damage to its income and the uncertainties associated with the new controls on home/eu undergraduate recruitment.
The financial statement for 2010/11 confirms that, as predicted, Middlesex’s debt has now gone over £100million, to £107million. On its turnover of close to £180million that gives it a debt to income ratio of 60% in a sector that has consistently averaged 20% for the last decade. What is noteworthy is that Middlesex had planned to go further into debt to finance its redevelopment of Hendon but that the loan facility listed in 2009/10 as £55million has been reduced to £45million by the lender.
Middlesex had a further £17m of capital commitments at 31 July 2011 for which contracts had been agreed on £9m, while the confirmed sale of Trent Park is likely to raise at most £30million according to my sources. Middlesex is now left with outright ownership only of the Hendon site as Archway is jointly owned with UCL.
Over the next couple of years, Middlesex is likely to preserve its overseas campuses from the concussions in London as this overseas infrastructure (including partnerships) is its main differentiating feature in the English higher education sector. The Dubai campus is run through a subsidiary established in that city’s free trade zone; that subsidiary is then partner ( with 51% holding) to the joint venture that runs the Mauritius campus; the Indian private education conglomerate JJS has the other 49%. It is this operation, Middlesex International JSS (Mauritius) Limited, that was to run the Delhi scheme before JSS, who owned the buildings, pulled the plug.
What that priority means for staff and students in London is already becoming clear. The early disposal of Trent Park means a lot of people are going to be squeezed into Hendon in 2012/13.
UCU General Meeting / discussion of the HE White Paper
1-2.30 Thursday 15 December 2011
Gustave Tuck Lecture Theatre. University College London.
ALL WELCOME
1.00: General Meeting business concerning Information Systems Division
Chair: Saladin Meckled-Garcia, Department of Political Science
1.30: Open discussion led by Andrew McGettigan* on the HE White Paper
Birkbeck UCU speaker
Chair: Jane Rendell, The Bartlett School of Architecture
Apologies for the intermittent blogging recently. The interruptions were due to leaving Research Fortnight, doing some academic conferences and sorting out a book contract.
Regarding the latter, Pluto Press have offered to publish a political primer to the new market in English higher education next September. Title is still being negotiated so any suggestions are welcome – it needs ‘market’ and ‘university’ in there somewhere.
In the meantime, my three part series on accounting for and managing the student loan portfolio has been appearing with Research Fortnight. Part two, ‘Shifting the Risk’, can be found here though it is behind a paywall. (You may have joy with the ‘campus access’ option).
Part three, ‘Monetising the loan book’, will be out next week. Part one is a bit dry and technical on accounting conventions and estimates and is called ‘A dodgy PFI scheme’.
An interview with Vince Cable at the Association of Colleges event.
Following on from his speech at their conference in March, he again makes reference to validation arrangements (whereby an institution with degree awarding powers approves a higher education course run at a further education college).
The reference to ‘restrictive practices’ indicates that he is worried about universities withdrawing from these arrangements in an environment that sees direct competition between universities and FE colleges. (Especially, in the competitive bidding for the ‘margin’ of 20 000 places).
On the back of the BIS technical consultation document – which warns against ‘abuses of market position’ and the need for a memorandum of understanding between Hefce and the Office for Fair Trading – my worry is established universities are going to be treated like a monopoly which needs to be broken up or restricted in the short term.
Bids have now closed for the 2012/13 marginal places – 35 000 have been proposed with 20 000 coming from 167 FE colleges and 15 000 from 34 universities charging under £7,500 pa.
The Kafca conference (Knowledge Against Finance Capital) will take place at the beginning of December in Barcelona.
Venue: Museu d’Art Contemporani Barcelona
Times: 5pm, Thursday 1 December to Saturday 3 December
I’ll be speaking on the developments in English higher education. Franco ‘Bifo’ Berardi has organised the event.
Critical Education 