… you can hear Tom Harkin being very indignant indeed about the scummy for-profit schools of America.

“A very sick industry.”

Harkin seems particularly scandalized by the involvement of hedge fund people in these schools. Someone should show him who’s running Brown University. And Yeshiva University.

…Hm. He seems to be under the impression that online is the poor white trash of education… He’s scathing on the subject.

I seem to be live-blogging this.

Can’t remember the exact number, but Harkin also seemed struck by the fact that the prez of some for-profit university or other made, what, fourteen billion times what the prez of Harvard makes. Something like that. Thirteen billion…

Ooh. Richard Durbin’s pissed too. For-profits rip off veterans, too. Veterans default and the schools don’t teach them shit. “How can it be fair for this kind of exploitation to continue?…. This is an absolutely unexplainable, indefensible situation!”

Harkin: “Used to be fifty percent of your students had to be campus-based. That ended in 2005. Now you’ve got the entire student body online! And look at the online dropout rates!”

Harkin: “These days a semester’s anything you want it to be. Some of these schools have semesters that are five weeks long! Keep ’em just long enough to be able to keep the money!”

Harkin: “Their mission is to grow and get profits at the expense of students… It’s the obligation of us here to provide effective government oversight and regulation… Are taxpayers dollars being used effectively?… I have grave doubts that these schools are a good taxpayer investment.”

Regular readers know that UD uses the phrase the mephitic factor to designate the intensity of bad smells in the air on this or that American campus at any given time.

Brown University, a fancy Ivy League institution, is an example of a High Mephitic Factor school — its gathering emanations of corruption and wrongdoing of late have an elite feel to them, coming from famous scientists on the faculty, and from sophisticated, wealthy trustees.

Auburn University, a school without academic or social distinction, represents the much more typical Low Mephitic Factor, where the shitty smell in the quads has to do with athletes and their associates who cheat — on the field, and in the classroom.

High or low, the mephitic factor is almost always about the same thing: greed. Pastor Newton pimped his son Cam to Mississippi State; now that same son is at Auburn, and it’s only a matter of time before the NCAA proves that the father pimped the son to Auburn too. Until then, Newton gets to play, and the campus gets to keep that smell.

[People at the NCAA] know (and believe they can prove) that Cecil Newton demanded money for Cam’s commitment, thanks to the Mississippi State evidence. They cannot prove that he made the same demand of Auburn, or that Cam was aware of his father’s pay-for-play schemes. This sounds as believable as a hooker not knowing she’s being pimped out, but it’s not about what probably happened. It’s about what can be proven, and as of this moment, it cannot be proven that Cam Newton or Auburn did anything against the rules.

Brown could clear some of the bad air; but that would mean acknowledging what’s going on there, not merely with one of its trustees, but, soon enough, in all likelihood, with another. The scientist, the trustees… After awhile, the campus smells, and schools that care about that, schools that have something to lose by way of integrity, need to act.

“[I]nstead of providing a solid pathway to the middle class, (for-profits) are paving a path into the subbasement of the American economy.”

From a just-issued report on for-profit colleges.

… there’s beer, get used to it.

The chair of the Northeastern Illinois University board of trustees celebrates a university president who gave tenure to a fraud who graduated from a diploma mill.

Tenuring a diploma mill fraud. That’s the sort of thing you do when you are either corrupt beyond belief, or exceedingly mentally feeble.

Only one thing to do with joke presidents.

Might want to take a look at the board of trustees, too.

… no one else comes close to the University of New Mexico.

Its president is a nepotistic nullity.

Its football coach likes to lose games and beat up people.

Everyone’s tried to get rid of the president every which way, but the governor and legislature can’t get enough of the guy.

UNM will also keep the coach on, rumor has it, because “UNM’s Board of Regents, the state of New Mexico and the athletic department’s private fundraising Lobo Club is unwilling to provide the $1.46 million to buy Locksley out of a contract that runs through 2014.”

They’re already paying through the teeth on contract buyouts for three other coaches.

Plus:

This year’s average attendance will likely be the lowest since 1992. The school’s ticket revenue projection is down over a million dollars over the last two years yet it will cost the University about $1.4 million to buyout the remainder of his contract.

All UD can say is Choose your state well. You’re free, in the United States, to move unaccosted from state to state, putting down roots, attending school, and working, where you prefer. Occasionally, you’re trapped; I understand that. But in most cases you do not have to go to a public university in Nevada, New Mexico, Alaska, or Hawaii — all states where there is simply no good option if you’re serious, or even semi-serious, about an education.

Don’t wait for UNM to change. Go away.

… for years.

Now, with the FBI investigating the university’s research institute (it’s “the contracting arm of the university, farming out millions of dollars in research work to professors and others on behalf of all manner of clients, including NASA, Boeing and the U.S. Army”), presumably for theft, things at A&M have gotten so chaotic that the situation is simply impossible to follow. It obviously involves conflict of interest, incompetence, and cover-up, but who really knows? The university doesn’t seem to have an actual president at the moment… or, rather, the pro tem guy in the job seems all messed up in the conflict of interest and as a result lacks authority… Whatever. If anyone cared about, say, the students at that school, they’d shut it down and send them all somewhere else.

… has a category, Poseur Alert.

In case he misses this one…

… shrivels.

Emory University cardiology professor Bobby Khan already has lots of money, but he couldn’t pass up this opportunity to make tons more:

… Khan acquired material nonpublic information regarding the acquisition of Sciele Pharma, Inc. (“Sciele”) by Japanese pharmaceutical company Shionogi & Co., Ltd. (“Shionogi”) from a long time business associate and friend, who was then an officer of Sciele. Following his receipt of this information, Khan opened an online brokerage account, his first since 2003. Khan then transferred approximately one-third of his then-liquid net worth into that account and purchased a combined total of 4,000 shares of Sciele stock, days before Shionogi’s public announcement of its tender offer for Sciele shares on Labor Day, September 1, 2008. Following the tender offer announcement, Khan sold all of his Sciele shares in October 2008, realizing substantial profits and returns in less than two months.

The SEC has charged him with insider trading.

… but for-profit universities?

… Education Management Corporation operates Argosy University, Brown Mackie College, South University, and various Art Institutes…. [T]he company [has] hired DCI Group, a Washington-based lobbying and public relations firm … to coordinate a campaign against the Education Department’s proposed “gainful employment” rule.

… DCI Group [was] paid nearly $350,000 to represent Burma’s military junta. “It also led a PR campaign to burnish the junta’s image,” Newsweek’s Michael Isikoff reported, “drafting releases praising Burma’s efforts to curb the drug trade…”

Robert Smith, provost at Texas Tech, says, in the Houston Chronicle, that professors at public universities are moonlighting at the for-profits.

… During a panel discussion on “For-Profit Education” at the July 2010 meeting of the Council on Academic Affairs of the Association of Public and Land-grant Universities (APLU) in Portland, Ore., the president of The Art Institute of Portland and the chief academic officer at the University of Phoenix (UP) were questioned about how many members of their faculties held full-time jobs at public institutions.

… [T]he UP official responded: “Oh, we hire a lot of your faculty,” meaning faculty members in the 188 public institutions represented by APLU.

A follow-up question revolved around measures UP does or does not take to determine if those same public institution employees have permission from their public employers to teach at UP, which has more than 450,000 students, with all but 100,000 taking courses online. The response: “We leave that up to the individual.” Finally, the UP official was asked whether UP would be willing to publish names and addresses of its faculty employees. His reply: “We’ll have to think about that.” [What sort of university doesn’t list its faculty members? In its catalogue?]

… Are the profits of UP and other for-profit institutions coming at the expense of taxpayers — federal and state – as well as parents and students paying tuition at public institutions?

This is a new one on UD, some extra-credit corruption in an already impressively corrupt industry.

No wonder that Cal State Bakersfield professor handling 700 online students in an intro math class had trouble getting many of them to pass the course. The same guy was probably handling 14,000 Phoenix students.

There’s almost nothing good to say about the for-profit education industry, as this pithy account makes clear. Senate hearings on the government shakedown scheme are ongoing.

Hedgies, noting the same grotesque corruption in the for-profit education sector that the United States government has noted, are betting that the industry will soon fall as low as the homeless people it recruits for its entering classes.

Short sellers are betting that a combination of new laws withholding federal tax dollars from schools that don’t graduate anyone (the schools rely almost entirely on tax dollars), and HUMONGOUS rates of loan default on the part of their hapless homeless (one expert anticipates defaults of “$275 billion in government loans over the next 10 years”), will put these corporations on the same skid row their recruiters haunt in search of bodies to which to attach federal loans.

“People have worked out that these companies are overvalued. They’ve put on bigger and bigger short positions as the price keeps going down. And they have been right because the price keeps dropping, [says one observer].”

A for-profit executive complains that the short sellers “are hiring people who are semi-disguising who they are and not being candid with people about their role in trying to drive down the stock price of certain companies.”

To which UD responds:

1.) I thought you liked the free market. You’re always touting it in what you write about your industry. You put down traditional universities because they don’t operate by the clear cool astringent free market principles you do, which is why, you boast, you’re doing so well compared to those elitists…

The free market is why for-profit university presidents make six million dollars a year, while Drew Faust makes $800,000 or so to run Harvard. Now you’re getting all snivelly because hedgies operate in the same free market you do?

2.) You’re upset about people who aren’t candid? You, who troll the mean streets of America looking for desperate losers and signing them up for humongous loans?

*******************

Update: Inside Higher Ed has an excellent account of the current controversy.

Bill George, Harvard professor, specialist in corporate leadership, author of the sentence that heads this post, is a Goldman Sachs director.

Under conditions of profound challenges at Goldman, he has so far set no tone at all because he has said and done absolutely nothing.

In an article in Bloomberg titled Goldman’s Silent Board, Richard Teitelbaum reviews the “storm of criticism, government investigations and an SEC suit” that continues to rage around Goldman, and notes that the bank’s “outside directors have failed to speak out.” As “regulatory and legal entanglements escalate — the firm’s nine outside directors, who aren’t Goldman employees, are keeping mum.” He quotes several informed observers, all of whom are amazed at “the board’s somnolence in the face of so much controversy.”

… The board members said nothing publicly, for instance, when on April 16 the U.S. Securities and Exchange Commission filed a civil suit alleging Goldman had committed fraud in underwriting and marketing a mortgage-related security called Abacus 2007-AC1 without disclosing to clients that a bearish hedge fund customer, Paulson & Co., was involved in creating it.

… Nell Minow, co-founder of the Portland, Maine-based Corporate Library, a governance research firm, says that when the SEC suit was filed, the outside directors should have immediately set up a committee to investigate, hired independent counsel and announced that they would make the results of their probe public.

The board should also have been riding herd on its members’ stock trades, says Cornell University Law School Professor Robert Hockett, who specializes in financial regulation from his office in Ithaca, New York. Goldman spokesman Lucas van Praag says directors are periodically informed of such trades. The bank received a Wells notice dated July 28, 2009, notifying the firm that it was the target of an SEC fraud investigation.

… “The outside directors haven’t been visible on any of this,” says Patrick McGurn, special counsel at RiskMetrics Group, a New York adviser to shareholders. “You have to ask if it’s setting the correct ethical tone.”…

Keep in mind that Leader Bill’s silence doesn’t come cheap. Like the other board members, he gets handed hundreds of thousands of dollars every year to keep his trap shut.