On Tuesday, Sept 7, Senator Durbin of Illinois opens long-promised congressional hearings to investigate predatory, illegal practices by for-profit college chains, including Kaplan Higher Education, a wholly-owned subsidiary of the Washington Post. Kaplan Higher Education derives 85% of its revenues from federal funds, and we the people have been robbed; but that is only the tip of an iceberg. Kaplan has also penetrated into local public education, in for-profit markets the public doesn't even know exist. Because the Washington Post relies on Kaplan for 62% of its total revenues and almost all of its profits, it is agressive and brutal in its retaliation against any politicians who oppose its education-profit agenda. It will take courage for senators to turn over these rocks, and determination for citizens to find accurate reports.
long-promised congressional hearings
The Washington Post's Education Reform Agenda - Exposed
It was never exactly a secret that the Washington Post derives 62% of its revenues from its for-profit education subsidiary, Kaplan Education. Readers of the newspaper just somehow weren't aware of it. The Post proclaims itself an "Education and Information" company. It vehemently demands the expansion of for-profit providers in public education AT ALL LEVELS by legislative and executive mandates, under the banner of innovation, but it has presented itself as motivated only by disinterested public virtue in these campaigns.
Federal investigations this summer exposed fraudulant student loan scams, and revealed deep dishonesty and deception of both taxpayers and students by Kaplan Education. Several Kaplan facilities were shut down outright. The general public was thunderstruck when this expose of Kaplan suddenly blew away about 25% of the Washington Post's stock value, and sent investors into a paroxysm of stock-shorting. The Wall Street Journal and Business Week surveyed the wreckage last week, and links are posted below.
I'm returning to my Daily Koz diary blog to post these links and connect the dots, revealing the extent of the Post's for-profit penetration into national, state, and local school expenditures. Its shadowy subsidiaries have opened the budgetary veins of public school districts, with no oversight, public discussion, disclosure, or even awareness. From elementary schools, through middle and high schools, and on to public colleges: communities are unaware that their education budgets have been fast-tracked straight to the Washington Post's bottom line.
It is hard for defenders of public education to fight back against the Post's massive disinformation campaigns. Post editorial pages denounce any resistance as serving the status quo, and opposed to innovation. Until now, we have fought each struggle in the dark about their motives, but we are already making progress. California's community colleges have just extricated themselves from a "memorandum of understanding" which administrators signed with Kaplan last year, which allowed Kaplan to gouge students at ten times the public college tuition rates, for worthless online offerings. Who even knew?
Strip Mining American Education - For "Innovation" or Profit?
Most people only think of Kaplan as a chain of harmless test-prep centers. We now learn that these centers account for a minority of its revenue stream, while "Higher Education" is a cash cow, sucking $1.5 billion in revenues out of Pell Grants and federally subsidized student loans, with a repayment rate of less than 30%. The damage to the lives of Kaplan's victims is almost incalculable - federal investigations reveal that these courses are largely worthless on the job market, and lead to debt, despair and broken lives for most of Kaplan's low-income victims, rather than to the security and income promised by recruiters.
There is growing awareness among investors of the Washington Post's vulnerability in the Higher Education for-profit scam industry, and that whole sector is now the target of powerful short-selling interests. Ironically, because the Washington Post and other major news organizations are so tied to these "public-private partnership for education" profits, we can only turn (carefully) to the stock speculators themselves for more accurate information and, sometimes, insight.
With their core business damaged irrevocably by these disgusting revelations of systematic fraud, Kaplan must urgently seek safer places to harbor the capital it has amassed. The Washington Post has been preparing the market for its next for-profit education expansion for years. It has just reactivated the Venture Arm of Kaplan, to seek out and acquire even more businesses that "target students" in the K-12 "marketplace" of testing and accountability. Here is a description that initiative from learnboost.com (link below).
Kaplan Ventures develops and grows innovative companies at the intersection of education, technology and compliance. The company’s portfolio includes medium-sized, high-growth businesses that offer an expanding array of specialized education programs that complement Kaplan’s core businesses. Kaplan Ventures is a part of Kaplan, Inc., a leading international provider of educational and career services for individuals, schools and businesses. Kaplan is a subsidiary of The Washington Post Company (NYSE:WPO - News) and its largest and fastest-growing division.
No Transparency in Public School For-Profit Contracts
I recently had an amazing conversation with the Lieutenant Governor of my state, whom I have stronglyly supported. Although the administration pushed through and signed Race to the Top legislation to expand public payments to for-profit education service providers, he said had no idea such things even existed: "How can there be these state grants and contracts, and nobody knows about it?" he actually asked me. The administration's education talking points merely claim their legislation "gives educators the tools they need" to improve student achievement. I believe him. It is not necessarily a relief to know that politicians I trusted are merely clueless, rather than corrupt.
Our education budgets are hemorrhaging, teachers are denounced and fired to make way for "intervention programs" to raise test scores, and nobody even knows who is doing these things, or why, or how. Here is Kaplan's description of the plan (link below):
Kaplan K12 Learning Services partners with schools and districts to measurably propel student achievement. We work directly with educators to implement reading and math intervention programs for students who are significantly behind grade-level expectations, supplemental skill and test readiness materials for students who need help meeting grade-level expectations, and college preparation solutions for students who need support preparing for college entrance exams and admission.
Given the sleaziness of the Washington Posts activities in for-profit higher education, and their lack of disclosure in using the newspaper to promote their own business interests at public expense, there is no reason to believe these "services" are less of a scam than Kaplans other activities. Scandals and fraud in the education "free-market" go unreported. Controlled trials of their "products" are released by major universities, and ignored by the Post as they trumpet their innovative solutions. Who, but a cheat and liar, would carry this forward in such stealth and duplicity?
How can parents even know whether Kaplan's for-profit "learning services" are already dominating our school budget growth and our children's learning opportunities? Contracts for "public-private partnership" services are hidden in school budgets under other titles, with no reference to where the tax money actually winds up. In New York, for instance, all for-profit contracts are negotiated by the (corrupt) state BOCES clearing house, and appear in local school budgets only as payments to the state.
The Washington Post Doesn't Disclose its Financial Stake
Arne Duncan famously claimed that Hurricane Katrina was the best thing that could have happened to New Orleans schools. Many careful studies have revealed that students in his for-profit public education ventures are worse off than those in the public schools he is still trying to destroy, but these are unreported in the Post. In the editorial linked below, look for any disclaimer that the Post has any financial interest in its praise of Duncan's work. Then, see if you can find the Kaplan scams embedded in the Louisiana Parish school system.
As "E-Learning" modeled on the defective Kaplan Higher Education Products is forced on school systems everywhere by Duncan's leverage, we see the Post positioning itself to profit. "CEO" administrators, under its patronage, are shuttering real schools, shutting down after-school activities like drama and school papers in high schools, strangling supply budgets and firing good teachers.
Expand the Congressional Investigation - Don't Weaken It
The Post just carried a guest editorial, by Senator Tom Harkin of Iowa, which voices disappointingly weak and conciliatory admonishments, and serves to deflect real investigation and condemnation of the Post's truly contemptible actions. Harkin is, so far, protecting the Post by calling for slightly increased regulation of the supposedly praiseworthy online for-profit college industry, so low-income students can continue to "benefit" from it.
Instead, we have to work in the coming weeks to expand and sharpen the scrutiny. The Post and other papers will try to intimidate representatives, with the election coming up. We must call on our senators and representatives now, and assure them that our actual support will outweigh editorial endorsemeents and political contributions. We'll vote for them, and walk our precincts for them, and chip in again, if they will stand up for the truth.
What Really Happened to Public Education in DC, LA, Chicago, and NYC - and Why?
Wall Street Journal on Wpo investments
Secret Shopper investigation
California colleges cut Kaplan tie
Stock traders survey damage to WPo
Mercenary Traders offer moral guidance
Kaplan creates venture subsidiary
Rafael offers context for Kaplan venture arm
Kaplan K12 Learning Services
Kaplin online in public schools, at public expense
Washington Post fails to disclose interest
Find the hidden partner in the Louisiana "Association of School Administrators"