Category Archives: Applying to US Universities

In Debt, Making New Promises

In Debt, Making New Promises

February 23, 2015

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https://www.insidehighered.com/news/2015/02/23/colleges-debt-troubles-are-making-new-promises-investors

In largely unnoticed side deals with investors, several colleges have promised they will raise prices on students, force students to live in dorms and even increase class sizes as they lay off faculty.

These are not for-profit colleges. Instead, they are nonprofits running into trouble with their debts. Unable to fulfill promises made when the colleges borrowed money years earlier, these colleges have struck deals to head off severe penalties, including foreclosures of campus property.

The debt was borrowed in the form of bonds, usually for campus construction. These bonds come with a host of financial conditions colleges must meet. Colleges agree to make timely payments, of course, and also to set aside a certain amount of money to cover their debts.

But, as colleges struggle to find enough students or run into unexpected market conditions, they may not be able to fulfill all these promises. To avoid penalties, at least a handful of colleges have promised their bondholders they would do things that could substantially affect student life.

These agreements -- which are usually publicly available but largely unknown to students -- could eventually raise questions about who is in charge of the institution: the college’s governing board members, administrators and faculty, or the people who hold its debts?

“To a banker, to an investor, it doesn’t matter if you’re a nonprofit or a for-profit. The bottom line is you owe them money,” said Kenneth Hartman, a senior fellow at Eduventures and a former president of Drexel University’s online operations.

Others take a more subtle view: debt holders want nothing less than to run a college, and what is good for the college is also good for investors.

Perhaps the most noted case of a college running into trouble right now is Thomas Jefferson School of Law, in San Diego. It signed an agreement with investors to restructure itself and promised to meet a series of financial conditions. While that agreement goes into financial details that are forcing significant changes in operations, other agreements lay out requirements for colleges that clearly touch on academics.

Take a deal Iowa Wesleyan College struck last fall with Wells Fargo -- which acts as a trustee on behalf of the college's bondholders. The college promised the bank that the college would enroll a certain number of students over the next several years. It is now contractually required to have 446 full-time students on campus in October 2017. Last fall, it had 361 full-time equivalent students. The college cut its workforce by a third, prompting questions last year about how it can continue to offer thorough instruction in some basic subjects. Now, it’s promised to take on more students.

Florida Keys Community College, a public institution, fell behind on promises it made when it borrowed money to build new dorms. After investors scrutinized its operations, it promised its bondholders it would raise student room fees “to the highest level the market will bear” starting last fall. That meant up to a 12 percent increase for students.

The college also promised that its officials would lobby state lawmakers to expand student housing on the campus.

A spokeswoman for Florida Keys said the price increases for rooms were “logical and prudent” and that the dorms were still less expensive than other housing in the area. The spokeswoman, Amber Ernst-Leonard, also said the college will need legislative approval to expand student housing, which college officials need “in order to reach healthy economies of scale.”

Iowa Wesleyan’s president, Steven Titus, said his college in southeastern Iowa is changing to adapt to a new economy.

“Restructuring operations and its financial position last year have quickly resulted in a renewed academic program, dramatically improved student retention and a dramatic increase in student applications,” he said.

The trouble Iowa Wesleyan ran into with its debt -- "trouble" is a term Titus objects to -- was not failing to make payments. Instead, it did not have an agreed-upon amount of cash set aside for payments.

Upper Iowa University, another private institution in the state, ran into the same trouble, though it got out of it after a year and is no longer under mandatory heightened scrutiny from bondholders. While they're not quite similar, both Upper Iowa and Iowa Wesleyan have laid off faculty and looked for ways to increase enrollment. Both have also begun to force students to live on campus. At Iowa Wesleyan, this was clearly a financial move. A consultant’s report noted that Wesleyan, as part of efforts to increase revenue, “changed its residence hall policy so that students must live on campus all four years,” instead of for just two, as it had in years past.

At Upper Iowa, the university began to enforce a three-year residency requirement, up from two years, a change mentioned in a report by its consultant. A university spokesman, Andrew Wenthe, said the change was for a variety of reasons, but one of them was the college had taken on debt to build new dorms and needed to fill them.

The university is also intentionally increasing class sizes so that the student faculty ratio will move from 14 students per professor to 19 students per professor by next year. The college also increased the number of students in each section of its online classes from 15 to 20.

The university also reduced its use of discounting, in the form of scholarships, meaning some students might be paying more, although that is a healthy sign for a tuition-dependent college.

These are all things a college might do anyway in the face of financial obstacles, but to see the decisions spelled out in black and white in papers prepared for investors is unusual, especially at a private college. It's also unusual to see financial interests peering into colleges' operations and making suggestions about how they should operate.

Upper Iowa is considered a success story. It needed to meet three financial conditions and had failed to meet one. With the help of an outside consultant, hired at the behest of bondholders, the college executed a turnaround plan of sorts.

“Really what the bondholders do is they provided the university with a new perspective, a way for us to look ourself through a different lens,” said Upper Iowa’s chief financial officer, Leslie Anderson.

She said the consultants and the bondholders are not trying to control the college but to get an understanding of what is happening.

“They are not interested in owning property at universities across the country,” she said. “They are more interested in trying to prevent institutions from getting to that point.”

Most students are likely to have little if any idea about what is happening behind the scenes.

At Upper Iowa University, officials have begun talking with students about the college’s finances, mainly to tell them what their money is going to. But the university did not tell students about the process it was going through with its investors, even though those decisions would affect how students lived their lives.

Titus said Wesleyan has made new deals with investors but that had “not led to heightened scrutiny by bond trustees.”

But the college now has to file more frequent financial reports and retain Longhouse Capital Advisors, the same consultant Upper Iowa uses. Colleges hire consultants all the time, but they are often required to hire a consultant as part of their bond agreements when their debt becomes distressed. Iowa Wesleyan also last year borrowed from several banks another $5.75 million through a loan program. To secure those loans, Iowa Wesleyan has put up 11 campus buildings that were not already collateral for previous debt, as well as part of the college’s endowment.

The decisions a college makes to get out of financial trouble may be made, formally, in an effort to make sure bondholders recoup their money, but the same decisions may also benefit the whole campus if it keeps the doors from closing.

“It may benefit the current students,” said David Bliss, the executive director of the New Hampshire Health and Education Facilities Authority, which helps finance nonprofit bonds in the state. “The fact is, they’re trying to keep this place alive, is what they’re trying to do.”

A number of colleges that have municipal bonds, which nonprofits can use, have to make public details about their bonds and their operations as part of financial disclosures required by the Securities and Exchange Commission.

Franklin Pierce University in New Hampshire has not made a key document related to its distressed debt public and will not talk about its troubles, which Moody's Investors Service has warned could result in a default. That makes it impossible for the public to tell what promises the university has made with its bondholders, what conditions those investors might have set and what changes the college might have made to its operations because of its debts.

Sandra Quay, the university’s chief financial officer, said the college was not making the information public. The bond’s trustee, BNY Mellon, did not provide the information, though the agreement is on file there. A spokesman for the university, Jim Wolken, did not comment.

One question without any clear answer yet is whether bankers and investors can come in and control so much of a college’s operations that accreditors might raise questions. For instance, the Higher Learning Commission, which accredits Iowa Wesleyan, has a standard that colleges must be "sufficiently autonomous to make decisions in the best interest of the institution and to assure its integrity."

The accreditor is supposed to look at whether a college’s financial situation confines its governing body's ability to make choices.

Barbara Brittingham, the president of the Commission on Institutions of Higher Education of the New England Association of Schools and Colleges, which accredits Franklin Pierce, said the accrediting agency also has a way to keep its eye on colleges’ financial conditions and also looks at institutions’ autonomy. There is no bright line, she said.

“A lot of the times if the banks are a local bank, they will go out of their way, in particular, to work with the institution, because it’s usually important for the economy,” Brittingham said.

Hartman, the senior fellow at Eduventures, compared colleges with debt troubles to Greece, which adopted widespread austerity measures to receive bailouts from other European countries led by Germany.

“What are you going to do with a bunch of dormitories in Mount Pleasant, Iowa?” Hartman said, naming the town Iowa Wesleyan is in. “So [bondholders] will work with an institution, but it will oftentimes require an institution to make significant changes to the way they operate the institution -- on a global scale, we see what is happening with Germany and Greece right now.”

The involvement of the bondholders may increase depending on the conditions of the college. And, at times, it seems, the wishes of the bondholders may not get memorialized, but the colleges get the idea. This means that even colleges that make public their agreements with bondholders may not be telling the whole story. The true scope of colleges with distressed debt is also largely hidden, in part because colleges with weaker finances may not even turn to the public bond market, which requires the colleges to disclose their operating conditions. These other colleges' troubles, then, may be between the institution and a bank, perhaps a local bank. Students, professors and local media may never know if things are going south until it's too late.​

Still, while bondholders may be able to force drastic changes at a college, including dumping senior management, it doesn’t necessarily mean they can or should.

“That just alienates the people who care about the institution the most,” said Lee White, the manger of the education and nonprofit finance group at George K. Baum & Company, an investment banking firm that specializes in public debt. “You want to keep the people who care about the institution the most in place.”

Completing the ‘Student Life Cycle’

Completing the 'Student Life Cycle'

February 23, 2015

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https://www.insidehighered.com/news/2015/02/23/student-success-company-hobsons-acquires-starfish-retention-solutions

Student success company Hobsons on Monday acquired Starfish Retention Solutions, bringing both companies closer to the goal of building college and career planning tools that track students as they move through elementary school, high school, college and beyond.

“We’re trying to address what we think is one of the biggest issues facing education today, which is that students are getting to higher education and they’re not necessarily sure why,” said Stephen M. Smith, president of advising and admissions solutions at Hobsons. “When you have a world where almost 40 percent of four-year college students don’t actually complete their degree after six years, we feel like we want to address that issue of retention.... We think we can do that by starting early.”

Hobsons is already a well-known player in the K-12 space. Overall, the company serves about 12 million students across 2,000 postsecondary institutions and 8,500 schools and school districts in 100 different countries, CEO Craig Heldman said.

The company is perhaps best known for Naviance, the software tool used by high school students to determine their chances of being accepted to colleges and universities based on how their grade point averages and standardized test scores compare to previously accepted students from their high schools.

Naviance is only one part of Hobsons’ broader interest in "student life cycle" management. Generally speaking, its software offerings help students find colleges and universities suitable to their interests and career plans. Adding Starfish’s software to the lineup “completes that student life cycle story,” Smith said.

Hobsons has a history of using acquisitions to gain a foothold in different sectors of higher education. For example, the company previously boosted its standing in the graduate and continuing education markets by acquiring Beat the GMATand Intelliworks.

Starfish, while smaller, has also established its presence in higher education, particularly among two-year institutions. Its student success software helps colleges and universities with academic planning, advising and identifying students who are at risk of not meeting their goals -- but also those making good progress toward them.

For the next 18 months, Hobsons will sell Starfish’s software. Meanwhile, Hobsons will work to integrate the two systems and the data collected from them.

“Longer term, what we want to do is ensure that -- as students start to think about their education and build a plan -- they can start doing that without an artificial divide between high school studies and postsecondary studies,” Smith said. In one example, he mentioned that students could grant advisers access to results from career exploration or personality assessments they completed as high school students. “That way it’s not a blank screen, but it’s something [the advisers] have as a starting point.”

David Yaskin, CEO and founder of Starfish, said the company’s roughly 250 clients have pushed for products that target prospective students -- in other words, “a bunch of things we want to do that we don’t have the resources for.” To address that demand, he said, the company either had to invest a significant amount of time and effort into building its own services or find a company already offering products in that market.

Yaskin first talked to Hobsons in April, and described the connection “like love at first sight.”

“There’s so much that we want to do in higher education, and Hobsons helps us get there,” Yaskin said. Addressing the broader issue of retention across all of K-12 and postsecondary education, he said, is “too much for a smaller company to do.”

Financial details of the acquisition were not disclosed, but Heldman described it as the largest in Hobsons history. Starfish’s team of roughly 70 employees will join Hobsons, bringing the size of the company up to about 900 worldwide. While Starfish only has a handful of clients located outside the U.S., Hobsons already has offices in Australia, India, Malaysia and the U.K.

Prioritizing Partnerships

Prioritizing Partnerships

February 19, 2015

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https://www.insidehighered.com/news/2015/02/19/international-education-conference-panelists-focus-impacts-overseas-partnerships

WASHINGTON -- In international education circles, it’s not uncommon to hear of an institution that has 100 or more partnerships with foreign universities -- several hundred, even. But how should universities assess the value of these partnerships and determine which ones to prioritize -- and which ones, perhaps, to prune?

Those questions were at the forefront of a session on strategic alliances on Wednesday at the Association of International Education Administrators’ annual conference. Daniel Obst, the deputy vice president for international partnerships at the Institute of International Education, began the session by outlining the benefits of strategic alliances to universities -- including shared costs and risks, access to target markets, expanded teaching and research capacity, and new opportunities for students and researchers. He shared preliminary data from an ongoing survey showing that 80 percent of universities globally report having established a partnership with a higher education institution abroad and 68 percent distinguish a regular partnership from a strategic one.

When the University of Queensland, in Australia, first launched a data tool to measure the impacts of its various partnerships, “We knew that we had 705 active agreements; we were working with close to 400 partners in 52 countries," said Jessica Gallagher, deputy director of global engagement for the university. “But what we didn’t know was where we had more substantive relationships -- the high-volume, comprehensive partners. We wanted to know where we could grow, and we also wanted to know which relationships were transformational and which ones were more transactional.”

Queensland officials also wanted to know which partnerships were inactive. “When you’ve got almost 400 partners, maybe it’s time for you to say, ‘Well, do we actually need that many?’” Gallagher said. “It is just not possible with the resources that we have to service all those partnerships at the same level, and so we really needed to look at prioritizing.”

Gallagher explained that Queensland’s Partner Engagement Framework, which launched in 2012 and is now updated annually, measures the strength of each individual university-to-university partnership on 16 different teaching-, research- and engagement- oriented indicators, including indicators for student mobility, joint Ph.D. programs, joint publications, funded joint projects and alumni connections. Users can log in to the online tool with a Queensland ID to see a snapshot of the university’s engagement with any given partner on each of the 16 dimensions (see a sample screenshot here) -- and can click for more detail on an individual indicator.

"With some of our partners we’re very strong in teaching and learning, so we have a number of Ph.D. programs, and we have a student mobility program, but what we may not have is research activity, so it gives us an opportunity to look at, well, is there opportunity to expand?” Gallagher said. The university has more recently launched a complementarycountry engagement framework, which looks at the strength of Queensland’s international partnerships at the level of country rather than university.

Queensland's quantitative approach has its limits, and not only in terms of the labor and resources needed to develop and update the frameworks: as an audience member pointed out, some partnerships could look small on paper but be big in practice. Further, as Gallagher readily acknowledged, the impact of these measures isn't everything.

"Some of our strategic partners aren't necessarily the ones that are bringing in the largest student numbers or the big dollars in terms of [research] projects," she said, but rather, the partnership fits with the university's mission. She cited Queensland's relationships in Indonesia, for example, "where the partnerships are still relatively new, and we're still really looking to to see what will result from the collaboration, but it is about supporting our federal government's initiatives in Southeast Asia. It's about different kinds of research, and it's about being able to provide expertise and support capacity building."

Also during Wednesday's session, Ursula Hans, the director of the international office at Humboldt-Universität zu Berlin, in Germany, described the university's approach to developing "profile partnerships." Hans described the university's international strategy as providing a "top-down framework" and organizational support for "bottom-up" initiatives.

"We would never suggest a strategic alliance with a university where we didn't already have two substantial projects in place," Hans said. "In other words, they build on substantial, long-term relationships and expand on a range of faculty interests."

Hans cited a number of reasons why a university might enter into a strategic partnership, including to enhance that university's reputation, to focus faculty interest in collaborations with international partner universities and to access third-party funding sources.

"Our motivation is really an exploratory one," she said. "It is to see whether there is an added value to linking yourself up very closely with another university, to see how far we can take that partnership concept both in students and in research and also in governance, because we think there's a lot out there to be learned for us in consulting with other people in other contexts. Some things cannot be adapted; others can."

Cheating or Collaboration?

Cheating or Collaboration?

February 19, 2015

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https://www.insidehighered.com/news/2015/02/19/u-illinois-urbana-champaign-backs-down-legal-threat-against-code-repository

The computer science department at the University of Illinois at Urbana-Champaign, seeking a balance between promoting student collaboration and fostering individual academic achievement, will continue to let students share their work online.

The department last week cracked down on students who were posting code -- and thereby sharing answers to homework assignments -- to the repository Web site GitHub. But after students criticized the department, which invoked copyright law to force the Web site to remove the code, faculty backtracked.

"Balance is indeed the key issue," Rob A. Rutenbar, department chair and Abel Bliss Professor of computer science, said in an e-mail. "We have great students, they come to us with some software skills, often learned in a collaborative environment, and expecting to use the Internet as a resource. But then it's important that we carefully assess each student’s individual understanding of material. Writing code for a class in this sort of a 'vacuum' is rather unnatural. This is an issue all CS programs are wrestling with."

The case was first reported by Wired.

The university used the Digital Millennium Copyright Act of 1998 to request the code be removed from GitHub. The law, now a common weapon to fight online piracy, protects Web sites from copyright violations their users might commit as long as the sites respond to “takedown notices” from copyright holders and remove the offending content.

Speaking to Inside Higher Ed, Rutenbar said the department issued takedown notices against repositories containing copyrighted code used in 3 large 200-level courses: data structures, computer architecture and system programming. The repositories included code written by students and "scaffold" code written by instructors to help students understand concepts taught in the courses. The takedown notices targeted the "scaffold" code, Rutenbar said in an e-mail.

As opposed to upper-level courses in the computer science program, which feature group projects, the three courses all include homework to be completed individually -- often in the form of fill-in-the-blank questions with code. That often led students to look for an easy way to complete the problems instead of doing their own work, said Cole Gleason, a senior computer science major. “I’m on the academic integrity grievance committee, and we get these kinds of cases all the time where students have copied off of GitHub,” he said. “It’s kind of a hassle for professors and course staff because they have to track how students are cheating.”

GitHub is a platform for coders to share their work and collaborate with others. By making their work publicly available through open-source repositories, coders can let other users create “forks” in the development process, meaning the same source code can spawn any number of different products -- like a family tree with sprawling branches all connecting to a common ancestor. GitHub has about 8.5 million users and hosts nearly 20 million repositories, according to official figures.

That makes GitHub a useful resource for projects with multiple people collaborating, a quality that Rutenbar said the program aims to instill in its students. "The goal is to build first the solid, individual software skills in the early years of the curriculum," he said. "Then we know that in their later courses -- and in their careers -- our students will be strong collaborators in team projects."

According to one of the takedown notices sent to GitHub, the department cited both the DMCA and the university’s own academic integrity code as reasons why the Web site should comply. Adapted for the computer science department, the code means “copying text directly from someone else” is cheating. “This is true regardless of whether the source is a classmate, a former student, a Web site, a program listing found in the trash or whatever.”

The Web site for the data structures course re-emphasizes that part of the honor code. “You may not reference any code outside of that provided in lecture and the textbook,” a section on academic integrity reads. “Your turned-in work must be your own product, representing your own knowledge. Any form of cheating is unacceptable.”

Emily Tran, president of the university's chapter of Women in Computer Science, questioned what having the code available online might mean for future students taking the same courses.

"My current sentiment is that students who do look up past semesters' students' work for problems that get reused are just obfuscating code to essentially copy it," Tran said in an e-mail. "There's no good reason students should need to upload their finished assignments for programming classes onto public repositories because that's not something that should be shared."

Gleason, chair of the university’s chapter of the Association for Computing Machinery, said he doesn’t like the idea of using DMCA takedown notices “in a censorship context,” but added that the computer science department’s use could be “legally viable.” In past cases, he said, the department has handled incidents of students posting copyrighted code internally by asking them to take it down.

“I totally understand going after those people,” Gleason added. “I don’t think the department has anything against using GitHub.”

Rutenbar said that some of the GitHub users who had posted the code had done so anonymously, so the department couldn't contact them directly. "When our instructors are able to ask students personally to remove these sort of posts, the students routinely comply," he added.

The department is experimenting with different forms of evaluation, including giving students randomized exams that give them access to compilers and debuggers but not collaborations or the Internet, Rutenbar said. The experiments have so far produced "very encouraging" results.

Suspended for Spouse’s Statements?

Suspended for Spouse's Statements?

February 13, 2015

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https://www.insidehighered.com/news/2015/02/13/u-tulsa-student-banned-campus-over-facebook-comments-posted-his-husband

The University of Tulsa has suspended a student over offensive Facebook posts that were written by his husband.

George “Trey” Barnett was banned from campus last semester until 2016 over the posts, which criticize two faculty members and insult a fellow student. If he returns to campus after his suspension, according to the university’s final decision in the case, he will not be permitted to complete his theater degree, nor will he be allowed to transfer theater credits from another university to Tulsa. He was 16 credit hours short when he was suspended.

None of the Facebook posts came from Barnett’s account, according to a faculty member’s formal complaint against him. Instead, they were posted by the account used by Christopher Mangum, then Barnett's fiancé, who tagged Barnett in the statements. The posts referred to the professors as unprofessional, immoral and unqualified, and to the student as “morbidly obese.” Mangum, who is not a student, later submitted two sworn affidavits to the university saying he was solely responsible for the posts.

The university disagreed, saying Barnett was using "the 'Chris did it' defense to avoid consequences." In its decision, the university said that after Barnett was told to remove the posts from his Facebook page, he was then responsible for them. The first of the statements -- posted in April -- stayed on his page for five months, but all three were deleted by October.

“Mr. Barnett became responsible for taking reasonable steps to prevent further attacks against the University of Tulsa faculty and students on his Facebook page,” the decision reads, adding that the three people targeted by the posts “expressed great distress, intimidation and dread at the mere thought of working alongside” him.

In a statement Thursday, Peter Bonilla, director of the Foundation for Individual Rights in Education, said the university’s decision was concerning. FIRE has long criticizedthe free speech policies at the University of Tulsa, which, as a private institution, is not covered by the First Amendment.

“Punishing someone for the speech of a friend or relative might be par for the course in a dictatorship, but it has no place on our nation’s college campuses,” Bonilla said.

In an appeal to the university’s decision, Barnett said the university did not follow its own policies in suspending him, as the Student Code of Student Conduct “does not prohibit” his actions. The code does not mention whether a student can be punished for statements made by someone else. Barnett was also not given a hearing.

In a statement Tuesday, Steadman Upham, Tulsa’s president, defended the university’s decision.

“The case in question was not a student conduct case, but investigation of a complaint involving harassment,” Upham said. “Under the harassment policy all proceedings are bound by confidentiality, and a hearing is not part of the process. University officials are bound by strict confidentiality in such matters. The university will continue to hold to this standard now and in the future.”

The university’s harassment policy states that if a harassment complaint is filed, “investigations and, if appropriate, hearings shall be conducted in accordance with the appropriate governing document.” The appropriate governing document for students accused of harassment, according to the same policy, is the Student Code of Conduct. And the code of conduct states that students have a right to a hearing. The university did not respond to a request to clarify the policy.

Last month, Tulsa denied Barnett’s appeal, saying that his arguments “are without merit” and that no further appeal would be possible. Bradley Shear, a lawyer who focuses on social media law and public policy, said the punishment sends a troubling message.

“To hold a student accountable for someone else’s actions is not really the best type of policy, and you have to wonder what else this would lead to,” Shear said. “How fast is fast enough when removing the comments? Can you be held responsible if you’re tagged in a Twitter post, as well? Where are you going to draw the line?”