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Private Colleges Seen As Growing Alternative To State System

Local ‘Non-Traditional’ Campuses Promote Fast Track To Higher Education

By Sean Belk - Staff Writer

January 31, 2012 - With the unemployment rate at 12.7 percent in Long Beach, access to higher education is more vital than ever, according to local economists and education experts who emphasize that the chance of attaining a well-paid career significantly increases with educational background. But, as impacted public universities turn away students and community colleges scale back courses due to the state’s budget crisis, one might be wondering: what are the alternatives?

For some job seekers, postsecondary private sector institutions, also known as for-profit “career colleges” and trade schools, along with non-profit universities have become viable options. Private college proponents point to a fast track to higher education in a “non-traditional,” career-oriented environment, offering online courses, night classes and other conveniences. Educational programs cover a wide range of occupational fields, from healthcare to business administration to information technology.

Ivonna Edkins, president of the DeVry University Long Beach metro campus, and Scott Sand,
president of DeVry University LA Metro, is seen in the computer lab class at the Long Beach
campus, located at 3880 Kilroy Airport Way. DeVry continues to expand with new locations and
online courses. The private university currently has 16 on-site locations in California and
nine in Los Angeles County. (Photograph by the Business Journal’s Thomas McConville)

But, there are some hitches. The National Bureau of Economic Research, an independent non-profit research organization, released a study in December, indicating that annual average tuition at for-profit colleges was more than double the cost of annual tuition at four-year state-subsidized universities in 2010-11. Also, taking on costly student loans in a still troubled economy can be a daunting endeavor and has recently become the subject of state and federal scrutiny.

Still, some students are willing to pay the higher costs to more quickly achieve their goal of attaining a higher education degree, which, by today’s standards, is considered invaluable to landing a high-paying career or climbing up the employment ladder.

Scott Sand, president of DeVry University’s greater Los Angeles metro campuses, including one in Long Beach, said the for-profit university enables students to earn degrees quicker than at state-funded counterparts, while offering similar opportunities for federal and state grants.

“Students can proceed very, very rapidly within their degree, sometimes as soon as two years and eight months,” he said “Many of the state programs are impacted and can take five to sometimes six years for a student to graduate ... What they’re doing is delaying the start of their life. They’re delaying the actual attainment of a salary position.”

Although student enrollment varies between different for-profit and non-profit universities, for the most part, private higher education remains a growing industry.

Kimberly Ritter-Martinez, associate economist for the Los Angeles Economic Development Corporation, said employment in private sector education in Los Angeles County jumped by more than 25,000 new jobs, or 25 percent, from the onset of the recession in 2008 to November 2011. The increase is in stark contrast to overall local public education jobs that fell by 2.3 percent during the same time period, she said.

The spike in private education hiring can be attributed to demand for technical and training services, Ritter said, adding that many people retrained, learned new skills and even switched careers during the recession. Currently, she said more students are opting to stay in college longer to advance their degrees instead of entering the labor market, and both private and public education sectors should see more demand for services, as student loans remain the “fastest growing sector of consumer barrowing.”

Ritter added that, in today’s job market, competition and earned salary directly correlates to a person’s level of education. On a national scale, she said the unemployment rate for people with a bachelor’s degree or higher is only 4.1 percent, while the jobless rate for those with just a high school diploma is 8.7 percent and 13.8 percent for those with less education. “So, your likelihood of finding a job, keeping it and earning a good living salary all increases with education,” Ritter said.

Public Higher Education

According to California State University (CSU) officials, Gov. Jerry Brown’s recently released 2012-2013 state budget proposal calls for “no change from this year’s level of state support” to the CSU system, which has 23 universities statewide. However, the projected $2 billion in state funding, which is still the lowest in 15 years, hinges on voters passing the governor’s proposed tax measure slated for the November ballot.

The measure would raise taxes on high-income earners and increase the state sales tax, generating approximately $7 billion a year in additional revenue. But, if not passed, the governor’s proposed budget calls for a series of “trigger cuts,” including an additional $200 million cut to the CSU system, bringing state support for CSUs to $1.8 billion. The proposal comes on the heels of a $750 million, or 27 percent, reduction in state funding made this year. CSU Chancellor Charles Reed said in a statement that, if the state chooses not to reinvest in public education, universities might have to “take more drastic measures, including cutting enrollment and programs, raising tuition and reducing personnel.” According to CSU statistics, average annual tuition fees for undergraduates has already risen close to 350 percent in the last decade, costing approximately $5,472 per year as of 2011-12.

At California State University, Long Beach (CSULB), the reduction in state funding this year meant $7.7 million less in income, according to David Dowell, CSULB’s vice provost and director of strategic planning. So far, the university has been able to paper over about $20 million in “restoration money” handed down by the former governor, Arnold Schwarzenegger, from the previous budget. But those funds are expected to soon expire, he said. “We’ve been cut over several years and we’ve been living to some extent on one time money,” Dowell said.

Still, CSULB continues to be an impacted university, meaning there are more applications than available services, causing the university to prioritize admittance. Last year, CSULB had “the fifth highest number of applications of any university in the United States,” Dowell said. For the 2012 fall semester, he said, there were approximately 76,600 applications for undergraduate admissions. But, the university was only able to enroll about 10,000 students.

Currently, CSULB has 23 impacted programs: the most impacted is nursing; along with psychology; communications; communicative disorders; and social work, Dowell said. “We have tremendous interest in our campus and managing all that is a substantial problem,” he said.

However, there are exceptions. California State University, Dominguez Hills, for instance, is a non-impacted university, according to Samuel Kim, the university’s executive director of enrollment services. He said the campus accepts students based on minimum requirements outlined by the CSU system.

As the university has experienced steady growth in student enrollment over the last five years due to increased community outreach and a rising student population, services generally haven’t been impacted, Kim said. “Overall, people are understanding and realizing that college is not a requirement, but a stronger part of people’s reality,” he said. “We find that students get the classes they need ... We look at our enrollment and if we need to increase classes appropriately, we do. But we try not to let it affect the students.”

Community colleges, on the other hand, haven’t had to reject students like state-funded universities, but many still have been forced to cut “thousands of courses across the state,” according to Michele Siqueiros, executive director for the Campaign for College Opportunity, a non-profit public education policy advocacy group based in Los Angeles.

“Students who want to go to community college, in particular students fresh out of high school, have a very hard time finding the classes they need,” she said. “And students already in the system have a harder time finding the classes they need to transfer and complete their degree or certificate pathways.”

What’s more, the governor’s proposed budget is planning more than $300 million in cuts to Cal Grant awards this year, which stands to increase minimum academic requirements for state financial aid eligibility at almost all campuses, including some private sector universities, according to a statement from the Oakland-based Institute for College Access & Success.

The grants are primarily crucial to low-income and “underprivileged” students at community colleges. “This is a dramatic cut to student eligibility and one that would happen so suddenly that students who have long counted on a Cal Grant would instead find themselves empty handed,” according to the institute.

So far, initiatives to increase college accessibility in California include creating a smoother transfer pathway between community colleges and four-year public universities and upcoming legislative reforms to the community college system that would give students on a degree-certificate or transfer-pathway priority over other college students, Siqueiros said.

However, she said the state should do more to increase college accessibility to meet the needs of a rising population of students who lack the skills for employment. “We do have a growing young adult population in California and I think our state has done a very poor job of preparing for that fact,” Siqueiros said. “Really, there’s not been a whole lot of planning to ensure that we would have the capacity, not only in terms of funding, but for the accessibility to college [as well].”

For-Profit ‘Career Colleges’

Although the vast majority of higher education students are enrolled in government-subsidized colleges and universities, enrollment in accredited for-profit institutions, also known as “career colleges,” has dramatically increased over the last few decades, according to the Association of Private Sector Colleges and Universities (APSCU).

Today, private sector institutions, which typically pay taxes yet receive no direct financial support from state governments, provide services for more than 3 million students, representing about 12 percent of all higher education across the United States, according to the APSCU.

Some for-profit universities have expanded their onsite locations, building on efforts to become more “community focused” and convenient, while offering online coursework. DeVry University, which offers associate, bachelor’s and master’s degree programs within five separate colleges, has expanded in California from one original campus in Pomona to 16 locations across the state, said Sand, who overseas nine campuses in the greater Los Angeles metro area.

The DeVry University Long Beach campus, located at 3880 Kilroy Airport Way off of the 405 Freeway, has been “resized” in the last year, with the campus’s square footage reduced by half to about 50,000 square feet. The smaller footprint, he said, is due to DeVry taking a new approach to augment service with newly built centers across Southern California, including Anaheim and Sherman Oaks. “We’ve tried to place some things within a commutable distance within the major population areas in L.A. and that’s been really, really successful for us,” Sand said.

Popular fields of study offered at the Long Beach campus include, among others, accounting, business administration, network systems administration, computer information systems and project management. Sands added that the major goal of the university is to provide a path to high-paying careers in high-demand fields, through offering the latest curriculum and partnering with companies through industry-based advisory committees.

Recently, however, recruiting students in the prolonged economic downturn has been a challenge for some for-profit career colleges that have experienced a drop off in student enrollment in the past year, according to officials. Total, national student enrollment at DeVry University, for instance, dropped by 12.8 percent last year over 2010, serving a little more than 64,000 students, according to a financial statement for parent company DeVry, Inc., released in December.

“Weak economic conditions and persistent unemployment continued to impact consumer confidence and enrollment results, coupled with adjustment associated with new regulations,” the statement said. “DeVry University continues to mitigate the effects of this challenging environment by prudently controlling costs, and by increasing employee training to improve the student admissions experience.”

The University of Phoenix, one of the largest for-profit education providers in the nation, with nearby campuses in Costa Mesa, Gardena and La Palma, has also seen enrollment declines, which led to a drop in earnings, causing its owner, the Apollo Group, to make 700 layoffs nationwide last year. As of the first quarter for fiscal year 2012 that ended November 30, Apollo Group’s revenue was down 11.1 percent from the same time period a year ago, according to the latest earnings report.

Still, Dan Dement, spokesperson for DeVry University, said the outlook for student enrollment in states such as California remains positive, with more demand due to impacted government-funded universities and applicants attracted to DeVry’s expanded new locations. He added that for the year ending in 2010, 88 percent of DeVry graduates were hired in chosen fields within six months of graduation.

Santa Ana-based Corinthian Colleges, Inc., which owns Everest University, Heald College and WyoTech, currently offers short-term diploma and associate degree programs at more than 120 campuses in the United States and Canada, with a combined total enrollment of about 94,000 students.

Kent Jenkins, spokesperson for Corinthian Colleges, said certificate and degree programs offered through the for-profit institution are geared primarily toward young adults who might be working and have started a family, but want to better their employment prospects. “Most have completed high school and went directly out into the workplace and have found that they simply don’t have the career prospects that they’d like to have and they want an education,” he said.

Corinthian’s accredited WyoTech campus, located at 2161 Technology Place in Long Beach, offers career-oriented education in the automotive, electrical, plumbing, HVAC and healthcare career fields, with most graduates entering fields in the motor and construction trades, Jenkins said. He added that the institution offers Cal Grants and Stafford Loans.

After coming off historic highs during the recession, Corinthian Colleges has seen decreases in enrollment in recent years, Jenkins said. But, he said some programs, such as nursing, continue to see demand in the greater Los Angeles and Ontario areas, as state-funded programs continue to be impacted. “Public institutions, like community colleges, are just over subscribed,” he said. “There just aren’t spaces available.”

Non-Profit Vocational Schools

In contrast, some local private career colleges are known as non-profit vocational schools. As 501(c)3 corporations, the institutions are tax exempt and are able to apply for research grants.

Pacific Coast University, School of Law, located at 1650 Ximeno Ave. in Long Beach, is considered the “oldest night law school in Southern California,” celebrating 85 years after being founded in 1927. William Lewis, dean of Pacific Coast University, said the non-profit university’s main goal is to keep tuition the lowest in the area, currently costing only $5,500 per year, excluding textbooks.

The four-year night school offers a path for a Juris Doctorate degree and qualification to take the California Bar Exam, he said. “We’re a very viable economic alternative,” he said. “The school has catered to working adults who are either in a profession already or getting started in a mid-career change and they have families, kids and careers, but have always had a burning desire to become a lawyer.”

After becoming accredited in 2010 by the Committee of Bar Examiners of the State Bar of California, the non-profit university has seen a 20 to 25 percent increase in student enrollment, Lewis said. “We’re kind of a well kept secret,” he said.

Embry-Riddle Aeronautical University, also a non-profit vocational school and considered one of the leading aviation and aerospace universities with 150 campuses worldwide, has a campus at 5001 Airport Plaza Dr., near the Long Beach Airport that serves the Los Angeles region.

Christopher Hetherington, director of academics for the Long Beach campus, said programs offered locally include two-year associate degrees and four-year bachelor’s degrees in technical management, aviation management and professional aeronautics. The school also offers master’s degrees in business administration in aviation, project management and aeronautical science.

Although a majority of aerospace manufacturing has shifted from Southern California to other states, there still continues to be local demand for aerospace and aviation education. In the last year, Hetherington said the school has seen an overall 5 to 6 percent increase in enrollment, to about 300 students.

According to Hetherington, graduates have recently been able to find high-paying work at such companies as Boeing, Gulfstream and Northrop Grumman, along with regional airports. The school has also received research grants, while students benefit from having an industry-based faculty. “Once you have a college degree, your chances of employment are greatly increased,” he said.