Financial Corruption and Value Dilution in Higher Education

I’d been brows­ing through the news recent­ly for a col­lec­tion of arti­cles to share on a rather broad top­ic: the influ­ence of mon­eyed inter­ests on the edu­ca­tion­al sys­tem. This is a long­stand­ing inter­est of mine, hav­ing grown up dur­ing a time when a year in uni­ver­si­ty cost about $1,200, and hav­ing watched tuition rates and liv­ing costs bal­loon expo­nen­tial­ly ever since. But what shocked me into get­ting the links to this post up that much soon­er is this emerg­ing sto­ry from the US:

The Secu­ri­ties and Exchange Com­mis­sion on Tues­day said it brought fraud charges against ITT Edu­ca­tion­al Ser­vices Inc. and two of its top exec­u­tives, alleg­ing they mis­led investors about the loom­ing finan­cial impact of two bad­ly-per­form­ing stu­dent-loan pro­grams on the for-prof­it edu­ca­tor. […] ITT formed the stu­dent-loan pro­grams to pro­vide off-bal­ance-sheet loans for ITT’s stu­dents in the wake of the finan­cial cri­sis, when the mar­ket for pri­vate stu­dent loans dried up and for-prof­it schools cre­at­ed new ways to help stu­dents pay their tuition bills.”

source: Wall Street Journal

Let us fur­ther expand on the dia­logue sur­round­ing mon­ey in edu­ca­tion for the ben­e­fit of those who haven’t been as immersed in the debate:

Corinthi­an Col­leges, once one of the largest chains of for-prof­it schools in the coun­try, is bank­rupt. The com­pa­ny filed for Chap­ter 11 pro­tec­tion on May 4, 2015, one week after it shut down its 28 remain­ing cam­pus­es. Less than a year ago, more than 70,000 stu­dents were enrolled at the school.”

– source:

… [A]s the July 1 dead­line approach­es, the trou­bled [for-prof­it] indus­try has been mount­ing a last-ditch effort to avert or roll back the new rules. And sud­den­ly it’s get­ting a lift from a set of unlike­ly allies: tra­di­tion­al col­leges and uni­ver­si­ties. For years, the high­er edu­ca­tion estab­lish­ment has viewed the for-prof­it edu­ca­tion busi­ness as both a rival and an unsa­vory relation—the cousin with the rap sheet who seeks a cut of the fam­i­ly inher­i­tance. Yet in a strik­ing but lit­tle-noticed shift, near­ly all of the col­lege establishment’s rep­re­sen­ta­tives in Wash­ing­ton are sid­ing with for-prof­it col­leges in oppos­ing the government’s crackdown.”

– source: Pacif­ic Stan­dard Magazine

Cov­er­age of a report from the US GAO: “Four of the col­leges — West­ech, Med­Vance, Anthem and West­wood — ‘encour­aged fraud­u­lent prac­tices” in meet­ings with under­cov­er inves­ti­ga­tors, the report says. All 15 “made decep­tive or oth­er­wise ques­tion­able statements.’ ”

– source: The Wash­ing­ton Post

Eleven of 12 for­mer Atlanta pub­lic school edu­ca­tors accused of par­tic­i­pat­ing in a con­spir­a­cy to cheat on stu­dent stan­dard­ized tests were found guilty Wednes­day of rack­e­teer­ing charges.”

– source: The Wall Street Journal

Under reg­u­lar infla­tion, prices can rise with­out lim­it. How­ev­er, because grades are capped at A or A+, grade infla­tion results in a greater con­cen­tra­tion of stu­dents at the top of the dis­tri­b­u­tion. This com­pres­sion of grades dimin­ish­es their val­ue as an indi­ca­tor of stu­dent abil­i­ties. With­out grade infla­tion, a tru­ly out­stand­ing stu­dent might be award­ed an A, while a very good stu­dent might receive a B+. With grade infla­tion, both stu­dents receive As, mak­ing it hard for employ­ers and grad­u­ate schools to dif­fer­en­ti­ate them. There is also evi­dence that lenient grad­ing reduces stu­dent effort.”

– source: US News & World Report

Lack­ing resources, fac­ing incen­tives to push out low-per­form­ing stu­dents, and respond­ing to a hand­ful of high­ly-pub­li­cized school shoot­ings, schools have embraced zero-tol­er­ance poli­cies that auto­mat­i­cal­ly impose severe pun­ish­ment regard­less of cir­cum­stances. Under these poli­cies, stu­dents have been expelled for bring­ing nail clip­pers or scis­sors to school. Rates of sus­pen­sion have increased dra­mat­i­cal­ly in recent years—from 1.7 mil­lion in 1974 to 3.1 mil­lion in 2000 (3)—and have been most dra­mat­ic for chil­dren of color.”

– source: Amer­i­can Civ­il Lib­er­ties Union

There are a few good points to take back from all of this, key among them being the edu­ca­tion lob­by group’s oppo­si­tion of reg­u­la­tions seek­ing account­abil­i­ty in gov­ern­ment fund­ing to insti­tu­tions. Tra­di­tion­al schools are watch­ing for-prof­it bad actors with a wary eye, ful­ly aware of the chance that once the most dis­hon­est behav­iour has been done away with, they might be the next ones on the chop­ping block.

This may be a valid point: there is a sig­nif­i­cant prob­lem in the stu­dent loan indus­try as a whole when it comes to trans­paren­cy and account­abil­i­ty, and with a siz­able seg­ment of the present gen­er­a­tion of young adults inden­tured to the loans indus­try, the edu­ca­tion lob­by has a lot to lose if forced to imple­ment more strin­gent and trans­par­ent procedures.

Equal­ly dis­turb­ing is that as mon­eyed inter­ests con­tin­ue to take a front seat, over­all qual­i­ty suf­fers. High­er edu­ca­tion has already lost some foot­ing in employ­ers’ minds as an increased num­ber of stu­dents grad­u­at­ed in recent years with dilut­ed qual­i­fi­ca­tions or were miss­ing crit­i­cal skill sets they should have learned while in col­lege or uni­ver­si­ty. High­er edu­ca­tion, at least in the­o­ry, is about build­ing on crit­i­cal think­ing skills, abstract con­cepts, and com­plex ideas. Pass­ing those who can’t or won’t pick up these skills, some­times due to a poor­ly designed pro­gram that fails its atten­dees, low­ers the val­ue of the estab­lish­ment in a gen­er­al sense.

When I hear the edu­ca­tion lob­by oppos­ing reg­u­la­tion that would see tighter reins on gov­ern­ment mon­ey, this isn’t a sim­ple issue of lais­sez-faire pol­i­cy, it’s an out­right con­ces­sion that may end in seri­ous ero­sion of qual­i­ty. This is the kind of behav­iour that comes at the expense of stu­dents, employ­ers, and soci­ety at a great many lev­els. It’s not fea­si­ble on a large scale to encour­age progress and altru­ism by reduc­ing com­mu­ni­ca­tion and account­abil­i­ty, as the two sides are very much oppo­sites and mutu­al exclu­sives. You can­not have improve­ment with­out account­abil­i­ty, and vir­tu­al­ly every time an indus­try has leaned the way of dereg­u­la­tion with the reduced need for report­ing and trans­paren­cy, it has set the stage for self-serv­ing behav­iour by that indus­try, some­times lead­ing to mis-allo­ca­tions, fraud­u­lent activ­i­ties, abus­es of pow­er, cov­er-ups, and low­ered qual­i­ty of ser­vices deliv­ered, if not an over­all reduced stan­dard of liv­ing for the more vul­ner­a­ble groups of peo­ple caught in the crossfire.

This has fol­lowed a sim­i­lar trend of mon­ey as a cor­rupt­ing force in Amer­i­can ele­men­tary and sec­ondary insti­tu­tions where it’s been forc­ing the focus to shift strong­ly toward test results and pass rates for bud­getary rea­sons instead of func­tion­al learn­ing out­comes. The byprod­uct has been grade fix­ing scams, low-scor­ing stu­dents pushed out of insti­tu­tions to boost results, and oth­er unsa­vory practices.

Apart from acad­e­mi­a’s more news­wor­thy prob­lems, it also would­n’t hurt to shed light on a fur­ther sub­ject that’s been wor­ry­ing stu­dents, edu­ca­tors, and the labour mar­ket for some time: intern­ships. Over the past few decades, the con­cept of edu­ca­tion­al vol­un­teerism has come into fash­ion, and today you can find many stu­dents (and even some entry-lev­el employ­ees in cer­tain places) accept­ing short-term unpaid posi­tions under the belief they stand to gain an edge over their peers through expand­ed oppor­tu­ni­ties for learn­ing, net­work­ing, and career advancement.

I’ve gone to some lengths to locate and include a vari­ety of per­spec­tives on this, from the strict­ly legal to those in favour to those against, and oth­ers that take mixed stances or bring oth­er ideas to the table:

In indus­tries across the board, employ­ers viewed an intern­ship as the sin­gle most impor­tant cre­den­tial for recent grads – more than where you went to school or what you majored in. Even your grades. ‘I learned a lot more from that intern­ship than I did in school,’ Abbared­dy says. ‘It’s a dif­fer­ent kind of learning.’ ”

– source: Mar­ket­place

Unpaid intern­ships have been con­tro­ver­sial due to, appar­ent­ly, more ben­e­fits for the employ­ers than the students/interns. Although remu­ner­a­tion is at the dis­cre­tion of the com­pa­nies offer­ing the intern­ships, employ­ers should rec­og­nize that a small salary or wage is like­ly to gen­er­ate more inter­est among interns. The FLSA states that no employ­ment con­tract exists between interns and the employer/trainer when the train­ing received by interns is in the pri­vate for-prof­it sector.”

– source:

The fight against unpaid intern­ships con­tin­ues this year with a grow­ing num­ber of interns look­ing to sue com­pa­nies for unpaid work expe­ri­ence. And, despite the fact that many unpaid intern­ships where the intern takes on real work are in fact unlaw­ful in coun­tries includ­ing the UK and the US, many employ­ers appar­ent­ly remain bliss­ful­ly igno­rant of the ille­gal­i­ty this free labor.”

– source:

Sci­ence, engi­neer­ing and tech­nol­o­gy research has been a big part of the Mitacs-Accel­er­ate pro­gram, but it is now begin­ning a ‘big push’ into social sci­ences, tra­di­tion­al­ly a hard­er area for gen­er­at­ing paid intern­ship oppor­tu­ni­ties. Past projects have includ­ed an eval­u­a­tion of First Nations her­itage as the basis for land use plan­ning (done for a First Nations forestry license part­ner­ship), a psy­chol­o­gy research project into eye move­ments in gam­ing, and alter­na­tive meth­ods of labour orga­ni­za­tion and recruit­ment to pre­vent the exploita­tion of migrant workers.”

– source:

The prob­lem is not that the unpaid interns them­selves nec­es­sar­i­ly get a bad deal, the prob­lem is that the sys­tem works against class mobil­i­ty. Only the com­par­a­tive­ly priv­i­leged can afford to make the ‘invest­ment’ of accept­ing an unpaid internship.”

– source: The Atlantic

Anec­do­tal­ly, based on thir­ty years of observ­ing pat­terns in intern­ship post­ings, unpaid intern­ships seem to increase dur­ing poor eco­nom­ic peri­ods, only to sub­side once the econ­o­my improves.  Employ­ers have dif­fer­ent rea­sons for tick­ing up unpaid posi­tions: (1) the desire to main­tain intern­ships pro­grams for prepar­ing future work­ers but can­not afford to pay them or face crit­i­cism from cur­rent employ­ees who may be incur­ring pay cuts or lay­offs; (2) tem­porar­i­ly cir­cum­vent hir­ing freezes; and (3) meet their social respon­si­bil­i­ty for train­ing the next gen­er­a­tion of pro­fes­sion­als in their field. Oth­er legit­i­mate and qua­si-legit­i­mate rea­sons can be put forth.”

– source: Michi­gan State University

Mea­sures announced in last month’s bud­get to pro­tect unpaid interns have turned out to be far less potent than adver­tised, New Democ­rats charge. Details of the mea­sures were spelled out in an omnibus bud­get imple­men­ta­tion bill tabled last Fri­day and NDP MP Andrew Cash said he was dis­ap­point­ed to find the Harp­er gov­ern­ment is doing noth­ing to pro­tect interns from sex­u­al harass­ment, being forced to work unlim­it­ed hours or being oth­er­wise exploit­ed as unpaid labour.”

– source: The Globe and Mail

[S]tudents say they’ll con­tin­ue to suf­fer even after Thursday’s crack­down against unpaid intern­ships by the Ontario Min­istry of Labour — action that led to the shut­ter­ing of two intern­ship pro­grams at the pop­u­lar Cana­di­an mag­a­zines Toron­to Life and The Wal­rus.”

– source: CBC

The main excep­tion would be for interns work­ing under a pro­gram approved by a col­lege of applied arts and tech­nol­o­gy or a uni­ver­si­ty, and sec­ondary school stu­dents work­ing under an autho­rized work expe­ri­ence pro­gram. Most of the interns at Toron­to Life and The Wal­rus do not fall into those cat­e­gories, so most have sub­se­quent­ly been told they no longer have posi­tions at the mag­a­zines. The mag­a­zines say they sim­ply can­not afford to pay their interns.”

– source: CBC

I have to won­der whether the grad­u­ate of today is any bet­ter off than their coun­ter­part of 20 years ago, par­tic­u­lar­ly when it comes to employ­ment fol­low­ing graduation.

The vol­ume of grad­u­ate sup­ply ver­sus labour demand plays a sig­nif­i­cant role in the way insti­tu­tions cre­ate poli­cies and man­age fac­ul­ties, and the way busi­ness­es man­age risk and hir­ing, as the bot­tom line in most sit­u­a­tions is essen­tial­ly a finan­cial bal­anc­ing act.

While cir­cum­stances still favour the idea that high­er edu­ca­tion­al attain­ment gen­er­al­ly results in bet­ter wages, a grow­ing sup­ply of well-edu­cat­ed indi­vid­u­als in the work force com­bined with prob­lems in edu­ca­tion (trends, per­cep­tions, pass­ing unqual­i­fied per­sons, grade infla­tion, mar­ket bal­ance, etc.) and exter­nal forces at many lev­els (eco­nom­ic insta­bil­i­ty, new tech­nol­o­gy, glob­al­iza­tion, off-shoring, wage stan­dards, labour laws, lim­it­ed dein­dus­tri­al­iza­tion, con­sumer atti­tudes, high house­hold debt, stock mar­ket shocks, etc.) has seen many orga­ni­za­tions shift into a far more risk-averse atti­tude, sit on their cash reserves, and see less worth in the sim­ple achieve­ment of a degree when hir­ing new employ­ees. Indeed, today the notion of val­ue is invest­ed far more deeply in the hows and whys behind the degree, the skill set of the indi­vid­ual, and the work expe­ri­ence matched to that per­son­’s edu­ca­tion. Employ­ers can afford to be picky. There are more than enough grad­u­ates to choose from, in a lot of cases.

The phe­nom­e­non of unpaid intern­ships is a fair­ly recent idea that diverges some­what from the time-hon­oured tra­di­tion of appren­tice­ship, and in its own fash­ion it’s evolved with the goal of help­ing to bridge the gap between school and employ­ment. In that sense, it bides time and fills unmet needs, includ­ing the needs of employ­ers to do work and save mon­ey, as well as the needs of stu­dents who desire a spring­board to new activ­i­ties and greater lev­els of experience.

For many, it can offer a much need­ed short­cut for tak­ing those first few steps after grad­u­a­tion. In con­trast with paid on-the-job train­ing, it’s far from ide­al for most, how­ev­er, and the unique cir­cum­stances it brings can give very mixed results depend­ing on where a per­son lives, where they work, and who they know.

At one end of the spec­trum, pro­po­nents argue there are sit­u­a­tions where such vol­un­teerism can and does evolve into sol­id net­work­ing, good con­tacts, and excep­tion­al oppor­tu­ni­ties so long as the process is ade­quate­ly planned, vet­ted, super­vised, and sup­ple­ment­ed with fruit­ful learn­ing oppor­tu­ni­ties. The above linked arti­cle from Uni­ver­si­ty Affairs show­cas­es some of the ben­e­fits that come from run­ning a well vet­ted, well man­aged intern­ship system.

On the oth­er side, crit­ics have brought to light many cas­es of bad intern­ships con­sti­tut­ing ille­gal exploita­tion which either failed to show regard for the safe­ty or the needs of the intern, as well as legal intern­ships that could be best summed up as inden­tured servi­tude or dead­wood posi­tions, offer­ing fair­ly high risk and scant ben­e­fit for the intern, with few or no mean­ing­ful oppor­tu­ni­ties for learn­ing, skill devel­op­ment, or port­fo­lio build­ing. The above linked sto­ry con­cern­ing the fias­co in Ontario, where the Cana­di­an gov­ern­ment inter­vened and shut down two major mag­a­zine intern­ship oper­a­tions, high­lights the spir­it if not also the let­ter of the prob­lem: com­pa­nies want labour and resources, but they may not want to accept the risk of pay­ing for it.

Con­cerns have also been raised about dis­pro­por­tion­ate effects to migrant and immi­grant pop­u­la­tions, as well as the fear that unpaid work in gen­er­al harms wages and degrades morale among all workers.

Fur­ther, there is the argu­ment that intern­ship inher­ent­ly favours class and priv­i­lege, as those liv­ing at or near the pover­ty line may rarely be able to afford the ben­e­fits of a qual­i­ty intern­ship while also strug­gling with the dai­ly cost of liv­ing — hous­ing, food, cloth­ing, trans­port, and oth­er ameni­ties all have a major effect on dis­pos­able income that direct­ly influ­ences one’s capac­i­ty to par­tic­i­pate in soci­ety and pur­sue non-pay­ing activities.

With­out some sort of finan­cial incen­tive to cement unpaid intern­ships as the main­stay (or even a sup­ple­ment) to house­hold income in which they deliv­er some sort of appre­cia­ble near-term mate­r­i­al ben­e­fit, the con­cept oth­er­wise remains a hard sell among those with lit­tle dis­pos­able income, and may give way to the search for pay­ing work.

In sum­ma­ry, these two bod­ies of cur­rent issues — both the range of trou­bles endem­ic to and sur­round­ing acad­e­mia, and the range of issues con­cern­ing intern­ships — rep­re­sent sig­nif­i­cant chal­lenges to society.

The dam­ag­ing con­duct of mon­eyed agen­das in edu­ca­tion have served to harm the mis­sion of the estab­lish­ment, erod­ing the val­ue of the train­ing and hon­ours into which so many of us have paid years of loans and work­ing wages. The dan­ger­ous poli­cies of marks-for-mon­ey and inflat­ed achieve­ment, both of which show seri­ous dis­re­gard for the well-being of the stu­dent, have sim­i­lar­ly served to dam­age con­fi­dence on all sides. There was a time when this was not the case, and qual­i­fi­ca­tions were more strong­ly val­ued. We need to take that time back.

Simul­ta­ne­ous­ly, in an increas­ing­ly flu­id glob­al econ­o­my the atti­tude toward human resources has changed. Thanks to a more net­worked and volatile cli­mate, it’s no longer the strong indi­vid­ual who wins out, but the one with the ben­e­fits of inter­con­nect­ed­ness and flex­i­bil­i­ty gained from cut­ting their teeth on the shores of their cho­sen indus­try. To that end, intern­ships and espe­cial­ly unpaid intern­ships have tak­en the lead, but they’re not work­ing out well as a solu­tion. Well-known abus­es, cou­pled with an absence of wages for legions of des­per­ate work­ers in seri­ous need of remu­ner­a­tion, sig­nal a jour­ney that’s only just begun.

And the way we’re present­ly embark­ing on that jour­ney, on both counts, sucks.

But even these prob­lems are things we can fix. Pub­lic cam­paigns, lob­by­ing, law­mak­er engage­ment, account­abil­i­ty, word of mouth, and social jus­tice, all com­bined with per­se­ver­ance and an unflinch­ing com­mit­ment to improv­ing the qual­i­ty of our insti­tu­tions, are the tools that will get us where we need to be.

At its core, this dia­logue is about our qual­i­ty of life at some of the most fun­da­men­tal lev­els. If we want our edu­ca­tion to remain use­ful and our work force to remain acces­si­ble, we need to fix the path we’re tread­ing by deal­ing with these issues head-on.

Send this arti­cle to a friend, a cowork­er, or a fam­i­ly mem­ber. Spread the word!

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