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Thread: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

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    Re: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    Now that for-profit colleges are coming under the light of investigations, some of the people involved are playing the game by converting to "non-profit", which is still quite profitable for the insiders.
    Keiser: not for profit but still lucrative
    For many years, Arthur Keiser was the face of for-profit colleges — both in Florida and in Washington, D.C. Keiser chaired the for-profit industry’s D.C.-based lobbying group, the Association of Private Sector Colleges and Universities (APSCU), and presided over the Florida Association of Postsecondary Schools and Colleges, whose members are mostly for-profits.

    But in 2011, the school that he co-founded and still runs, Fort Lauderdale-based Keiser University, made a dramatic change: becoming a nonprofit.
    <snip>
    Keiser is one of several for-profit colleges that switched to nonprofit in the past few years. An Orlando-area for-profit school, Remington College, also did so.

    At a 2012 convention of APSCU, industry lawyers made a presentation that noted the “regulatory advantages” of going nonprofit — along with other potential perks, such as being exempt from property taxes and sales taxes. Arthur Keiser was chairman of APSCU at the time.
    <snip>
    . . . tax filings, which are public record, show that Keiser’s nonprofit conversion was achieved by Arthur Keiser selling the for-profit Keiser University to a smaller nonprofit controlled by the Keiser family, Everglades College Inc. Essentially, Keiser sold the left hand of his empire to the right hand.

    Robert Shireman has filed an IRS complaint over the details of Keiser University’s conversion to nonprofit.
    Committee on Education and the Workforce Democrats

    To pay for it all, Keiser made a $300 million loan to himself, and he’s now paying it back with college revenue — with interest.
    <snip>
    The records also show that 10 of the nonprofit’s campuses are paying rent to companies in which Arthur Keiser has an ownership interest.

    The combined rent for those properties: about $14.6 million.
    Lots more at the Miami Herald's page Higher-Ed Hustle

    As I noted above, we don't want to look at just one report in regards to for-profit colleges, so here's another one
    Dept. of Ed names 20 schools facing financial investigation after

    The Department of Education released the names of 20 colleges and career academies after audits of their finances turned up “severe findings.”

    Those 20 names round out the list of 544 institutions that have run afoul of Department of Education rules for managing their finances and face one of two levels of increased financial monitoring. More than half are for-profit colleges.
    From last year an article in Bloomberg News shows that it's not just the feds looking at for-profit colleges
    Jan. 29 (Bloomberg) -- For-profit colleges, bruised by years of investigations and rule-making, may face additional financial pressure from a new wave of state probes by attorneys general and the U.S. Consumer Financial Protection Bureau.

    Education Management Co., the education chain partly owned by Goldman Sachs Group Inc.; Corinthian Colleges Inc.; ITT Educational Services Inc.; and Career Education Corp. have said since Friday that they’ve received demands for information from a network of at least 12 attorneys general. The Federal Trade Commission has stiffened guidelines for marketing vocational training programs, which many for-profit colleges offer.

    The CFPB, created in 2011 to regulate financial products, has said it’s preparing to tackle student debt, which has climbed to $1.2 trillion and is pervasive among former students at for-profit colleges. Richard Cordray, head of the consumer bureau and a former Ohio attorney general, said in written testimony to a House panel yesterday that the bureau has received thousands of complaints and comments about private student loans and debt.
    Editorial in NYTimes
    The outrageous part is that these companies are allowed to leech off the federal government, getting as much as 90 percent of their revenue from federal coffers.

    The state attorneys general have come to the conclusion that the for-profit sector needs more regulatory scrutiny. But well-paid lobbyists are pushing a different story in Washington, arguing that everything is just peachy as it is. If the federal government falls for that, billions of dollars will continue to be wasted and many more people will come to harm.
    ďAnd I have no doubt that every new example will succeed, as every past one has done, in shewing that religion & Govt will both exist in greater purity, the less they are mixed together.Ē
    ~ James Madison, letter to Edward Livingston, July 10, 1822

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    Re: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    Quote Originally Posted by SouthernDemocrat View Post
    If you are running a business, you don't intentionally cut your own revenue so your example flaws flat on that alone. If a business commits to providing a product or service, then it attempts to find the revenue to provide that product or service. If there is insufficient revenue then it gets out of the business of providing that product or service.
    Businesses normally do not reduce revenue intentionally. Revenue losses are not intentional, just like those of LSU. Loss of some revenue does not necessarily result in failure of the business. I'm puzzled about your comment. It doesn't make sense to me.

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    Re: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    Quote Originally Posted by Risky Thicket View Post
    Wow! That's quite a solution. You must have a broad background in funding and governance and university administration.
    My broad background is in business management.

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    Re: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    Quote Originally Posted by fmw View Post
    Businesses normally do not reduce revenue intentionally. Revenue losses are not intentional, just like those of LSU. Loss of some revenue does not necessarily result in failure of the business. I'm puzzled about your comment. It doesn't make sense to me.
    If you go with the business analogy, LSU is a division of the State Government of Louisiana. No business would intentionally reduce its revenue to where it could no longer adequately fund one of its divisions, in this case, LSU.
    "You're the only person that decides how far you'll go and what you're capable of." - Ben Saunders (Explorer and Endurance Athlete)

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    Re: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    Quote Originally Posted by SenorXm/Sirius View Post
    Higher education and colleges is one of the few edges this country still has over the rest of the world. But the Republicans, because of politics are bound and determined to kill that edge.
    The sad fact is that education in the US is in a decline when compared with other countries and that you haven't heard of this, or would do any research to clarify, only lends to the fact.

    Throw more money at them and there'll be more $250,000 professors but,despite ever-increasing budgets and resulting in increasingly negative results, the liberal answer to the problem will always be to send more taxpayer money to them.U.S. Students Slide In Global Ranking On Math, Reading, Science : The Two-Way : NPR

    ďThe average American in 1940 had an 8th grade education. The post-war prosperity of this country was built by 8th graders. 8th grade America won the Second World War, and then bad that big post-war 1950s prosperity. Now we stay in school twice as long, have twice as much attention from school teachers, and for no purpose. The longer you keep people in education ó if you pretend that college is universal, it becomes middle school. If everybody goes to college itís middle school, thatís what it is, thatís what it will be. You take away so many peopleís most productive years. It leads to later economic contribution, later family formation, it has all kinds of consequences. And the education that matters is still K through 8. Because if you screw up K through 8, you can spend the next 20 years trying to play catch-up, and it doesnít really make any difference". - Mark Steyn

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    Re: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    Quote Originally Posted by SouthernDemocrat View Post
    If you go with the business analogy, LSU is a division of the State Government of Louisiana. No business would intentionally reduce its revenue to where it could no longer adequately fund one of its divisions, in this case, LSU.
    It is a financial decision. Money doesn't grow on trees. Budgets have to be balanced. It is time for management to get busy making the shortfalls as harmless as possible. Some things will have to change. Hopefully they will change in a way that won't affect the quality of education meaningfully. That is certainly a possibility.

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    Re: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    Quote Originally Posted by SouthernDemocrat View Post
    If you go with the business analogy, LSU is a division of the State Government of Louisiana. No business would intentionally reduce its revenue to where it could no longer adequately fund one of its divisions, in this case, LSU.
    As well, businesses are expected to turn out a satisfactory product in order to stay in business. The product they've been turning out over the past few decades has been well below most international standards. Apparently those graduating from higher education have been taught that the best way to increase educational standards is to sent the professors more money. Their students have learned this part well.

    Measuring America’s Decline, in Three Charts - The New Yorker

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    Re: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    Quote Originally Posted by fmw View Post
    It is a financial decision. Money doesn't grow on trees. Budgets have to be balanced. It is time for management to get busy making the shortfalls as harmless as possible. Some things will have to change. Hopefully they will change in a way that won't affect the quality of education meaningfully. That is certainly a possibility.
    Let's not forget the importance of architecture. America

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    Re: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    Quote Originally Posted by fmw View Post
    It is a financial decision. Money doesn't grow on trees. Budgets have to be balanced. It is time for management to get busy making the shortfalls as harmless as possible. Some things will have to change. Hopefully they will change in a way that won't affect the quality of education meaningfully. That is certainly a possibility.
    The state government cut its own revenue, thats the part you seem to be ignoring. Big tax cuts come back to bite states: Our view
    "You're the only person that decides how far you'll go and what you're capable of." - Ben Saunders (Explorer and Endurance Athlete)

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    Re: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    Quote Originally Posted by SouthernDemocrat View Post
    The state government cut its own revenue, thats the part you seem to be ignoring. Big tax cuts come back to bite states: Our view
    I understand perfectly and that is a positive thing. Always better to leave money in the hands of citizens whenever possible.

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