Of pluties and politicians.

Although I have some small relief this morning after reading the governator’s minimum wage decree will not effect me, I read a predictably disturbing account of how one Wall Street smoothie, a UC regent, no less, is using public monies to cash in on diploma mills, which, in turn will suck up public monies, one way or another.
“A YEAR ago, Richard C. Blum, then the chairman of the Regents of the University of California, spoke at the Milken Institute’s Global Conference 2009, held at the Beverly Hilton in Los Angeles. The corporate confab was hosted by Michael Milken, the “junk bond king” who went to prison in the aftermath of the savings and loan fiasco in the 1980s.

Milken, who is barred from securities trading for life by federal regulators, has since re-created himself as a proponent of investing in for-profit educational corporations, an industry that regularly comes under government and media scrutiny in response to complaints of fraud made by dissatisfied students.

At the conference, Blum, who is the husband of U.S. Sen. Dianne Feinstein and a professional Wall Street speculator, sat on a panel called “The New University and Its Role in the Economy,” alongside the presidents of the Massachusetts Institute of Technology and Arizona State University. The panel focused on how universities can best serve the corporate jones for tech-savvy employees by recruiting smart freshmen with scientific talent. One panel member urged treating universities as “laboratories of business ideas and products.”

As someone who oversees investment policy decisions for the University of California’s $63 billion portfolio, and as the largest shareholder in two for-profit corporate-run universities (in which UC invests), Blum had a unique perspective to share at the conference. He advised public universities to attract business-oriented students with clever advertisements as vocational schools do.

“It’s like anything else,” he said. “It’s how you market it.”

Marketing strategy aside, Blum has taken on two seemingly disparate roles—one as an advocate for a nonprofit university, and the other as an owner of two for-profit educational corporations. However, as a regent, Blum has taken actions that, intentionally or not, have enhanced the value of his vocational schools. Are his loyalties conflicted? “

Well, of course there are no conflicts when it comes to the likes of Mr. Diane Feinstein, as power and wealth are inextricably tied, and every “solution” to our pressing problems ends up channeling more money to the wealthy and powerful.

Well, it was inevitable that the Free Market would rear its ugly head in public education. From latest job posting at a California university (CSU) that has been furloughing employees for a year, and now laying them off:

“Reporting to the Associate Dean, the Extended Education Specialist works to promote degree and extended education programs to prospective students, employers, and key decision makers. The Extended Education Specialist monitors unit budget and reports to the Associate Dean on the financial status of all program activities. This position will have work lead responsibilities and coordinate the development of business leads for clients regionally, nationally and world-wide.”

Extended Education is the term for cash-cow programs. This year there were increased summer school offerings by putting the summer school programs under “Special Sessions”–and those require higher fees than “Regular Sessions”.

There is a tremendously popular on-line program for a Master in Library Science, a good information-age kind of degree. And it serves internationally. If you want to get a jump start on the program and not wait to be admitted for a “Regular Session”, it also runs in the more lucrative “Special Sessions.”

But back to the pluties & politician’s. Richard Blum & co. were savvy enough to buy up diploma mills in trouble, when their price was low.

“Nationwide, vocational school students are paying billions of dollars in tuition to stockholder-owned education corporations, primarily using federal grants and loans guaranteed by taxpayers. In the United States, the dominant vocational education corporations are the University of Phoenix, Corinthian Colleges, Strayer University, Kaplan (owned by the Washington Post Company), Career Education Corporation and ITT Educational Services. Collectively, these companies operate hundreds of schools and teach hundreds of thousands of students, most of them eligible for public and private financial aid. The chains offer training for such technical professions as radiological technician, beautician, automotive mechanic, medical billing clerk, web designer and massage therapist. But they also offer degrees in engineering, computer science and business. Increasingly, they are promoting online education, which limits their operational costs, even though virtual courses are often not suitable for teaching nursing, cooking or car repair. As a result of delivering substandard education, some for-profit schools suffer from accreditation problems, according to recent news reports.

On a fairly regular basis, government regulators—including the U.S. Department of Justice—have accused chain schools of preying upon low-income individuals and active military service members. Typically, state and federal agencies report, chain school recruiters load students down with high-interest rate loan packages that, on average, amount to $30,000. As a result, fewer than 70 percent of enrollees graduate. Such a high dropout rate requires the corporations to continuously wage television, radio, Internet and print media marketing campaigns aimed at enticing students who want to better themselves—and who are, not incidentally, eligible for state-guaranteed loans.

Unfortunately, those who do graduate with two-year associates degrees often find out that the curriculum did not prepare them for the technical requirements of the jobs they seek. And often, government reports note, when they do find work, their wages do not match the inflated salaries promised by school recruiters. “

Matchbook colleges, really. I remember viewing some program in the last year, where someone in the southeast or perhaps Kentucky, was saying she was unable to find work, after taking out $14,000 in loans to complete this vaguely defined “medical assistant” program. Hell, I didn’t take out but half of that in loans for graduate school, 20 some years ago.

The bus I take to work is full of “Unemployed. We’ll loan you money for college” ads.

Welcome to Blood from Turnips University.

“UC is an investor in both educational corporations. Even as Blum was buying stock in Career Education and ITT Educational Services, UC financial records show that the university’s investment managers were actively buying and selling these same stocks—to the tune of $53 million. The university was not just holding onto these stocks to accrue value over time (as a prudent manager would do), it was day trading them in large amounts, as much as $2 million a trade, thereby affecting the daily price of these stocks. Did the fact that these two companies were largely owned by a regent—a Wall Street speculator who sat on the university’s investment committee—not pose at least the appearance of a conflict? “

Not to mention being literally in bed with one of California’s powerful senators. I think I’ll bring this up to said “representative.” I’m sure she’ll rationalize with the best of drug addicts.

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