Melinda Gates Leaves Post Board After Report Criticizes Kaplan

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Melinda French Gates, philanthropist and wife of Microsoft Corp. Chairman Bill Gates, has resigned from The Washington Post Co.’s board of directors.

Her resignation comes shortly after the release of a highly critical report, funded partly by her foundation, which likened for-profit colleges to subprime-mortgage lenders, targeting low-income and traditionally underrepresented students. The Washington Post Co. gets more than half of its revenues from its for-profit higher-education unit, Kaplan.

Neither Gates nor The Washington Post gave a reason for her departure.

Gates, who runs the multibillion-dollar Bill & Melinda Gates Foundation with her husband, joined The Washington Post Co.’s board in 2004.

The report, “Subprime Opportunity,”  authored by the Washington, D.C.–based Education Trust, said low-income students make up half of the enrollment at for-profit colleges and Blacks, Latinos and American Indians comprise 37 percent. The Education Trust is a nonprofit research and advocacy group, and the report was funded partly by the Bill & Melinda Gates Foundation and the Lumina Foundation for Education.

The report also found that in 2008, only 22 percent of the first-time, full-time bachelor-degree students at for-profit colleges graduate within six years, compared with 55 percent at public institutions and 65 percent at private nonprofit colleges.

The student-debt loads for recipients of bachelor’s degrees at for-profit colleges is also significantly higher than traditional universities: $31,190, compared with $7,960 at public institutions and $17,040 at private nonprofit colleges, the Education Trust report said.

The Post acquired Kaplan in 1984 when it was still primarily a test-prep company, preparing millions of students for standardized exams such as the SAT, LSAT, MCATs and other tests.

Over the last decade, Kaplan has moved aggressively into for-profit higher education, acquiring 75 small colleges and starting the huge online Kaplan University, according to published reports.


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Today, Kaplan higher-education revenues “eclipse not only the test-prep operations, but all the rest of the Washington Post Company’s operations,” according to The New York Times.

According to The Washington Post Co.’s annual report, filed on March 2, 2010: “Kaplan Higher Education generated $1.54 billion in revenue in 2009, 58 percent of The Washington Post Company’s total revenue. The $1.54-billion revenue for Kaplan Higher Education was an increase of $606 million (65 percent) from 2007.”

The Kaplan education unit has come under harsh scrutiny in recent news reports, and former Kaplan employees allege they are instructed to invoke the name of its parent company, The Washington Post, as well as the names of board members such as Gates, to persuade students to take classes at the company.

In a press release announcing her departure, Gates said that she was “impressed with The Washington Post Co.’s work with Kaplan, whose new approaches to education are allowing students opportunities that would otherwise not be possible.”

She also said that the mission of The Washington Post Co. “remains as vital today as at any time in its history.”

The Washington Post Co. board now has 11 members, including Warren Buffett, whose Berkshire Hathaway company owns about 24 percent of the firm. Buffett has pledged to donate much of his fortune to the Gates Foundation. According to the Bill & Melinda Gates Foundation website, the foundation has assets of $36.4 billion, more than 870 employees and links to more than 100 countries.

President Barack Obama has proposed regulations that would restrict the flow of taxpayer money to for-profit colleges, which get up to 90 percent of their revenue from federal grants and loans and received $26.5 billion last year in U.S. student aid.

According to a Bloomberg report, “for-profit colleges in the 2008–2009 academic year received $4.3 billion in federal Pell grants, which help low-income students pay for college, quadruple the amount they received 10 years earlier.”

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10 Comments

  • Anonymous

    I would imagine that part of the reason that it takes longer for the students at for-profit schools to graduate is that they are working at least part time while pursuing their degree. So this is not necessarily a bad thing to me. It is too bad that the study did not look at bang for the buck – if the education costs more but it may ultimately allow a poor kid to get a job he or she otherwise would not be able to land, then maybe it is worth it.

  • Anonymous

    According to Charles Scwab Inc. the total cost of a degree/certificate should not exceed what you can expect to make in one year once the degree/certificate is earned. Don’t end up upside down in your loans.

    Make sure the school is REGIONALLY accredited so that credits will transfer and/or your degree will be recognized by other schools. Ask which schools accept their courses upon transfer. Beware of getting a Masters without being granted a Bachelors.Also is there a separate local/state/national licensing exam that must be passed before you can begin working?

    Ask what percentage of their graduates are actually working in their field after graduation. 3-5 yr statistics are best. Most vocational programs (acupuncture/personal trainer etc.) offer no business start-up training.

    Student loans cannot be escaped through bankruptcy.
    As always Caveat Emptor!

  • I would agree with the first poster – there are probably a number of factors that affect graduation rates at for-profit colleges other than or in addition to lack of finances, such as the students’ job or family responsibilities. The study should look at the quality of the educational services provided by the schools. While I am not a supporter of these schools, I also have to wonder how instrumental the bias against non-traditional educational institutions is in these negative articles. I would like to see more information. However, I do have a problem with for-profit colleges getting taxpayer funded grant money to cover student tuition.

  • I have taught graduate level courses for for-profit universities. Even in the online courses, it was apparent that a large percentage of the students were lower income and people of color. It is eye opening to realize that the percentage is so high. While a majority of the students are very capable, the administration at my present university places more weight on the faculty member’s student evaluations than making certain that the weak students are coached out of the program before they spend too much time and money without successfully completing the thesis due to lack of preparation. The for-profits are clearly about the number of students in the program and less about education quality in my experience.

  • Anonymous

    For those who are concerned about the scientific rigor of the report…did you read it?

    How do you know that they didn’t control for the very factors you suggest are important?

    Just because the media focuses on the findings doesn’t mean that the report being discussed isn’t scientifically rigorous.

  • Anonymous

    I work for a “for profit” University and love it. After years working for State schools where student services doesn’t exisit..I find it refreshing to work for an institution that will ensure the students gets the education they need and pay for, in the time promised–even if it means offering a class for one student. Here in KY our tuition costs are lower than the non-profit colleges and Universities in the region. And yes, we are fully accredited–not only by SACS, but also by the professional accrediting bodies of the programs we teach.

  • @last guest:
    Accreditation doesn’t always mean very much. Take a look at North Central’s documents – standards are so subjective and vague nearly anyone would qualify. Complaint procedures are a joke, they’re just sent right back to the institution and that’s the end of it.

  • Valerie F. Leonard

    The article leads me to believe that the Gates Foundation is critical of for-profit universities because of the low graduation rates and high debt burdens for low-income and minority students. If in fact the Gates Foundation is of the opinion that for-profit universities exploit low income and minority students, this exploitation is not much different from the Gates Foundation’s own policies. They fund school districts around the country that are primarily low income and majority minority. They earmark their funding for charter schools rather than the whole district.

    The data have shown that the charter schools, which serve primarily low income minority students, do not outperform district schools. Moreover, the Gates Foundation has signed on a number of school districts to participate in the Gates District Charter Compact, which, among other things, promotes greater collaboration between district schools and charters; requires that school districts fund charters at the same level as district schools; requires districts to close the bottom 25% of district schools and prioritize donation of the buildings to charters. As a result of this compact, districts around the country are pushing mass school closings, citing under-utilization and budgetary constraints while opening charters at the same time. Indeed, Boston is closing 20 schools this year; Philadelphia is closing 44 schools this year and Chicago may close up to 140 schools this school year. These school closings are typically in low income African American neighborhoods.

    Studies have shown that students lose up to 6 months achievement when they change schools due to school closures. Moreover, it takes up to 5 years for new schools to “work out the kinks” and begin to make positive impacts, if, in fact, the impacts they make are positive. The massive school closings are disruptive in other ways, as they tend to increase school violence, dropout rates and increase school travel times for students; reduce job opportunities and salaries for teachers, many of whom live in impacted communities. In Chicago, the teachers who are most impacted are veteran African American teachers, who lose their jobs or are transferred within the system. In Chicago, we have seen a dramatic decrease in the number of veteran African American teachers.

    The charter schools in Chicago are not financially stable. Nearly 40% have experienced serious cashflow problems within the past 3 years. A significant number are not properly funding teacher pensions. Truly, Bill and Melinda Gates would not send their children into such chaos, yet the Gates Foundation’s education policies are driving chaos with very few victories.

    • Luke Visconti

      This appears to me to be a professionally written piece, and I’d guess it was paid for by a group associated with either a public school teachers association (union) or a lobby group supporting the status quo for poor people because they make money from misery in some way. Schools, especially where poor people live, have a horrible track record—they should be open all year long, open until parents come home from work, and there should be a pay-for-performance track. The current system rewards mediocrity and runs a schedule that benefits farming. (Why are kids sent home at 3? To milk the cows. Why are they sent home in the summer? To tend the crops. Until World War II, most Americans worked the land.) Why does it stay that way? It’s a great deal! Who else gets to work 180 days a year and is job-protected when their product outcome is unacceptable?

      Bill and Melinda Gates put their names and faces on what they believe in. Their opposition sends its message in sneaky, underhanded, scurrilous and anonymous ways. They shoot down solutions without presenting any of their own. They raise alarm only when it benefits them. They avoid discussion of current performance or accountability. Luke Visconti, CEO, DiversityInc

      • The statistics are real, no matter who wrote the article.

        As for longer school days and longer school years, I agree with you. The breaks are too long (Time had a good article on the losses during summer vacation) and kids should be in school until at least 4:30pm (common sense here – Kids get in trouble when they are unsupervised before parents get home). These changes cost more, but they would be worth it.

        I also agree that teachers should be paid more for good performance. The only question here is “How do you measure performance?” High stakes tests don’t work – I have seen the tests and they dont measure things a kid needs to know for the next grade, or the next level or college. I think it should be based more on evaluations by admin, students and parents. George W Bush once said that every one in a school knows who the best and worst teachers are – so why aren’t we identifying them?

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