From its symbiotic relationship with shady online for-profit colleges [Background on the for-profit scandal here.] to its plan to make itself an online school, the University of California at Berkeley is moving smartly along the path to self-prostitution.

Step One:

University Regent Richard Blum has an investment firm.

… Blum Capital Partners has been the dominant shareholder in two of the nation’s largest for-profit universities, Career Education Corporation and ITT Educational Services, Inc. The San Francisco-based firm’s combined holdings in the two chain schools is currently $923 million—nearly a billion dollars. As Blum’s ownership stake enlarged, UC investment managers shadowed him, ultimately investing $53 million of public funds into the two educational corporations.

… John M. Simpson of Consumer Watchdog, a nonprofit education and advocacy organization in Santa Monica, Calif., comments: “It is hugely inappropriate for the University of California to invest in for-profit colleges when it should be promoting public education. And something stinks when university investments end up in companies largely controlled by a regent. To the average fellow on the street, this would seem to be a conflict of interest. It is up to Mr. Blum and the UC treasurer to explain how it could not be a conflict of interest.”…

Blum’s not talking. He’s not talking to this guy, from Sacramento News and Review, and he’s sure as hell not talking to this guy, from the Los Angeles Times.

Should an important official of what is arguably the most prestigious system of public higher education in the world also be a leading financial backer of an industry that has been coming under intense regulatory scrutiny because of persistent allegations of fraud?

Or put another way: If the chairman of the World Wildlife Fund held significant investments in, say, BP, wouldn’t people wonder exactly what he thought about how to balance environmental protection and oil industry regulation?

Step Two:

Berkeley’s not only investing public money in the for-profits; it’s modeling itself after them. Put everything online; hire whoever to teach the stuff; advertise the Berkeley brand all over town.

Its professors are rightly worried. Some of them have written a worried opinion piece for the San Francisco Chronicle.

The UC Board of Regents will discuss this week a proposal by the University of California president’s office for an ambitious plan to market UC online. The proposal entertains the vision of an eventual online bachelor’s degree that could tap new students throughout the world, from “Sheboygan to Shanghai.”

In fact, the track record for online higher education is very uneven.

Uneven? UD, as readers know, is less diplomatic. She has long called online classes the poor white trash of education. If you want to know why, click on my poor white trash category.

The Berkeley professors can see what’s coming.

[T]he university runs the risk of destroying its reputation and excellence in the name of marketing a brand.

But hey. When a major big time regent has been kissing up to the for-profits for years — when, in a way, your university has become financially dependent on the kindness of the for-profits — you shouldn’t be surprised when administrators start suggesting that Berkeley should make them its model.


UD thanks her friend – once her student – James Elias for the initial link about Berkeley’s online venture.


Update: “[W]hat do these investments say about Blum’s vision for higher education?” asks Michael Hiltzik, author of a long article in the Los Angeles Times about University of California Regent and zealous investor in for-profit education Richard Blum.

Let’s think about that one.

Blum represents just about the most selective undergraduate institution in the world, Berkeley. Berkeley is simply the pinnacle of higher education — and it’s public. It’s one thing for small, insanely rich Princeton to offer a great education. I mean, Princeton does, it does offer this, and it deserves all the praise it gets. But Berkeley, to the enormous credit of California taxpayers, offers something similar. And it doesn’t have the legacy profile of the Ivies. It doesn’t make lots of special room for the children of the rich and well-connected. It doesn’t create the sort of culture Walter Kirn describes here.

Berkeley is, if you ask UD, inspirational. It’s probably the closest thing we have in this country to an admissions meritocracy.

What is the investment philosophy of Berkeley’s highest-profile regent? What does that philosophy tell us about what the LA Times reporter calls his vision for higher education?

Well, I’d say it’s a vision profoundly at odds with what Berkeley has long stood for. It’s elitist and cynical. Blum’s investment strategy says the following to UD:

I’m going to generate lots of money for a few of the most highly selected students in the country on the backs of millions of ordinary citizens being ripped off by substandard institutions. It’s a winner-take-all-the-education world. Let the losers pay the price.

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4 Responses to “Berkeley and the For-Profit Onlines: Cosmic Convergence All Over the Place”

  1. Eric Says:

    As a footnote, Blum is married to Senator Feinstein, so he may need to start talking at some point. Or not.

  2. Margaret Soltan Says:

    Eric: Yes, I sort of elaborately didn’t mention that — I don’t know what, if any, implications there are to that connection.

  3. University Diaries » First Richard… Says:

    […] … Blum, and now Lee Bollinger: Hypocrites of the Century. […]

  4. University Diaries » How Awkward for Berkeley. How Awkward for Senator Feinstein.. Says:

    […] Madoff and Ezra Merkin! … Well, that university investment strategy ended badly, and I think Berkeley’s is about to come to grief too… But … look. You don’t need to be Thomas Frank to be […]

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