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The ChroniCle of Higher Education ® February 11, 2011 • $3.75 chronicle.com Volume LVII, Number 23 College Giving HUNTSVILLE: One Year Later Has Yet to Recover From Recession Wealthy donors pledge lowest total in a decade

By Kathryn Masterson

lthough the recession of- ficially ended more than A a year ago, private giving to colleges and other charities re- mained depressed in 2010, two sur- veys have found. after a steep drop-off in 2009, donations to higher education dur- ing the 2010 Top Money fiscal year rose Raisers, just 0.5 percent, 2009-10 the annual vol- untary support of education 1 Stanford U. $598,890,327 survey found. The report was

released last ChrisTine priChard For The ChroniCle 2 Harvard U. week by the Joseph Leahy of the U. of Alabama at Huntsville is struggling to recover his teaching and research skills, with the help of his wife, Virginia. $596,963,000 Council for aid to educa- The Johns tion. adjusted 3 Hopkins U. for inflation, $427,593,283 total giving ac- A Professor’s Long Road Back Source: Council for tually declined Aid to Education slightly, a clear Shot in the head at a department meeting, Joseph Leahy is relearning his job signal that the economic recovery that colleges have been hoping for has not yet By Robin Wilson ciate professor of microbiology. member the events at all.” arrived. “it’s funny because it’s just a dark More difficult for Mr. leahy one reason might be that wealthy ach time he goes to room,” he says of the place where has been resuming his career. donors pulled back their charitable the biological-sciences amy bishop, then an assistant The bullet severed the optic giving. The 54 most generous do- E depart ment at the Univer- professor, is accused of opening nerve in his right eye before shat- sity of alabama at huntsville, fire during a faculty meeting last tering his jaw and then lodging nors gave a total of $3.3-billion to O Rebuilding the faculty: all nonprofit organizations last year, Joseph g. leahy walks by the February —killing three of Mr. in his neck near his jugular vein. A message on campus conference room where one of leahy’s colleagues, shooting him he credits his colleagues with the lowest total in a dec ade, accord- captures the shattered his colleagues tried to kill him. in the head, and wounding two helping to save his life by stanch- ing to a survey released this week biology department’s but the proximity holds no others. “it’s kind of a big nothing ing the blood from his head with by The Chronicle of Philanthropy. comeback: Page A7 one bright spot for colleges: nearly horrors for Mr. leahy, an asso- to me since right now, i don’t re- Continued on Page A10 half of the 65 gifts of $5-million or more from that group went to high- er education. over all, american colleges and universities raised $28-bil- Fast-Growing U. of Phoenix Calculates a More Careful Course lion in 2010, the same amount they brought in during 2006, the vse re- By Goldie Blumenstyk largest private university not only put in mo- of this 438,000-student institution. port said. While that finding is most tion an overhaul of what had come to be seen The moves, orchestrated from its headquar- likely a sobering one for institutions Phoenix as its grow-at-any-cost admissions practices. ters here, and from corporate outposts like san whose expenses and ambitions have n the fall of 2009, after closing the it also ended a compensation schedule tied Francisco, where the university has assembled grown since then, college leaders books on yet another banner year of en- a team of silicon valley veterans and comput- may take solace in the fact that fund rollment growth, and with its parent com- New Student Enrollment Drops er scientists to create a cutting-edge electronic I Total new students over the past eight quarters raising did not decline further. last pany’s stock climbing toward a five-year high course platform, are part of a top-down cam- year’s flat results followed a year of $90 per share, the University of phoenix be- 120,000 80,000 56,500 paign led by a team of a half-dozen executives, that showed an 11.9-percent drop, gan to question fundamental pieces of the very 90,000 all of whom have joined its $5-billion parent the sharpest in the survey’s 50-year formula that had fueled its years of success. 60,000 company within the past four years. history. even as its executives celebrated, recalls 30,000 “We are investing in academics like no other The survey, which counts cash one, they were uneasy. a feeling was building 0 higher-education company can do,” says Joseph gifts and includes about 1,000 col- “in the pit of everyone’s stomach: That felt too Feb. May Aug. Nov.Feb. May Aug. Nov. l. d’amico, who as president of apollo group leges, found that the percentage of 2009 2010 good.” Source: Apollo Group Inc. inc. oversees the campaign it calls “reinvent- alumni who gave continued to de- From that “moment of truth,” as that execu- ing education, again.” The goal, he says, “is to cline, dropping to a record low of tive, robert W. Wrubel now describes it, phoe- to enrollment, began a required orientation take our business to a new level.” 9.8 percent. The average alumni gift nix quietly began what it calls a major change program for inexperienced students, and in- last month apollo provided The Chronicle a was also down. of direction. stituted a host of other reforms in market- behind-the-scenes (but by no means unfettered) Continued on Page A17 out of the public eye, north america’s ing and nearly every other important facet Continued on Page A13

This week’s news briefing: Page A3 l The Chronicle Review: Section B l 294 job opportunities: Page A38 The Chronicle of Higher Education • February 11, 2011 A13

money & management

Fast-Growing U. of Phoenix Calculates a More Careful Course Continued From Page A1 catered to younger, less academically pre- The moves are taking a toll. In January, cated, 24-hour-a-day operation. Phoenix still look at some of the new recruiting techniques, pared students. The company set tuition for Apollo announced that the number of new relies on a force of more than 8,700 enroll- educational moves, and marketing tactics be- the two-year-degree program low enough students enrolling in the previous quarter had ment, finance, and academic counselors— ing used to reshape the University of Phoe- that students could use federal loans—and dropped by 42 percent from a year earlier. It about two-thirds of them in admissions—to nix. if they were financially needy enough, Pell predicted that the slowdown would very like- attract and keep students and advise them on The timing of the changes, and no doubt Grants—to cover most of their costs. Phoe- ly continue for at least a year. The news sent financial aid. (Although one-sixth Phoenix’s the company’s willingness to share the de- nix now gets nearly 90 percent of its revenue its already depressed stock price to $36, one size, the for-profit American Public Universi- tails, is hardly coincidental. This most sig- from those federal sources, the maximum al- of its lowest levels in five years. It remains to ty says it has just 30 enrollment counselors.) nificant re-engineering of Phoenix in its lowed by law. That includes more than $1-bil- be seen whether investors stick with the com- What’s changed is how Phoenix is selling. 35-year-history comes as it and the sprawl- lion in Pell Grants last year, the most of any pany, and whether the “new” University of In September the university put in place a ing $20-billion for-profit higher-education university. Its rate of student-loan defaults Phoenix, even with all of its marketing mus- new compensation system for its enrollment industry it helped to create face the greatest has also risen markedly, largely among Axia cle, can hold its own against the many non- and financial-aid counselors, eliminating any political, financial, and public-relations pres- use of enrollment and retention goals in de- sures of their existence. New laws that make termining salaries. Requirements that enroll- the colleges more accountable for some stu- ment advisers make 65 to 85 calls a day and dents’ inability to repay their federal loans, The university has put in place a new compensation system put in four hours of “talk time” per shift have intensifying scrutiny from news media and for its counselors. Instead of filling enrollment and retention been replaced with customer-service training government on aggressive recruiting, grow- based on “emotional intelligence.” Apollo ex- ing legal activism on the part of dissatisfied goals, they now value “emotional intelligence.” ecutives decline to share full details on the former students, and collapsing stock prices new techniques but say the change is meant are prompting the companies to shift gears to encourage behaviors that will allow the on the problem-laden growth strategies that students, which under the tougher laws enact- profit and for-profit colleges now competing advisers to make personal connections with have fueled the industry for half a decade. ed in 2008, put it closer to the point where it for similar kinds of students. prospects, relying on techniques like asking At Phoenix the biggest problem-laden strat- could lose access to federal student aid. Phoenix’s strategy is a risk, says Kevin open-ended questions and maintaining a dia- egy goes by the name of Axia College. This Apollo’s new three-week orientation pro- Kinser, an associate professor of education at logue. entry-level division, created in 2004, failed gram, along with efforts to better connect the State University of New York at Albany, Or, as Brett Mitnick recited when two of to graduate many of the thousands of under- students with the university’s 600,000 alumni who closely follows the sector. “What makes his managers quizzed him during a training prepared students it had relentlessly enrolled and a push to revive its corporate-education you profitable is getting new students in.” session, “Let the students relate their needs to in mostly online programs, leaving them with business (a move that could help it reduce its you. Let them tell you how they’re going to student-loan debts they couldn’t pay. dependence on federal student-aid money), The Sell use the degree.” An enrollment adviser here “That grew very large very fast,” says are all part of the change in course. The new Step onto one of the football-field-size since September 2009, Mr. Mitnick and the Gregory W. Cappelli, formerly a stock ana- direction, which it is pursuing even as it con- floors of the University of Phoenix call center two supervisors allowed a reporter to sit in on lyst at the Credit Suisse investment bank, who tinues to furiously lobby and make campaign here—an airy room buzzing with a cacoph- a critique as they played back a recording of joined Apollo in 2008 and became co-CEO donations to lawmakers to beat back tougher ony of conversations—and there’s no doubt a phone conversation with a woman who was in 2009. “I think we lost our way a bit.” federal rules, is designed to attract a different that the university continues to put a lot of considering returning to college as an online While Phoenix had long made its name kind of student. “We don’t want to take their energy into selling its programs. student at Phoenix to complete a degree. using its innovative scheduling and online money if they’re not going to succeed,” says Enrollment and retention still involve a The call was one of 46,000 that come in technology to serve working adults, Axia Mr. Cappelli. vast, competitive, technologically sophisti- Continued on Following Page

LAURA SEGALL fOR ThE ChRONICLE Pay raises for enrollment advisers like Brett Mitnick are now based on their mastery of behaviors like showing compassion and getting prospective students excited about an education.

The re-engineering of the U. of Phoenix comes as it and the $20-billion for-profit higher-education industry it helped to create face substantial political, financial, and public-relations pressures. LAURA SEGALL fOR ThE ChRONICLE The Chronicle of Higher Education | March 11, 2011 A13

NEWS | publishing

As Borders Goes Bankrupt, Academic Presses Worry About Ways to Reach Readers he debt-ridden Borders these regional lists go away, that is bookstore chain filed for going to affect our academic books,” T bankruptcy last month, say- Mr. Hussey told me. “That’s what ing it would close 30 percent of its scares us the most.” retail stores and reinvent itself as When the big Borders store in a purveyor of e-book and nonbook downtown Louisville, Ky., shuts its options. doors, he wondered, how will the JeNNifer Even though press put its Kentuckiana books in Howard Borders isn’t a big front of the tourists and other brows- source of sales for ers who shopped there? University Hot Type most university presses have to step up and do a lot of presses—and, like direct marketing to consumers, an ef- most publishers, they saw the bank- fort that they used to count on book- ruptcy coming—the news has unset- sellers to make, Mr. Hussey said. tled them. It’s a reminder of just how The decision by Barnes & Noble to much the book-distribution chain cut many of its buyers with strong has changed, putting more pressure regional publishing connections has on presses to find new ways to get added to the sense of urgency. their books to readers. For the Kentucky press, that means University presses don’t stand to finding sales partners in unlikely lose anything like the $41.1-million places. “Our bread and butter has the chain reportedly owes Penguin been things like state parks and gift Group USA. But the failure of a shops,” Mr. Hussey said, because they large brick-and-mortar outlet does attract visitors interested in the state. GARY FABIANO, SIPA PRESS, NEWSCOM affect university presses with re- But he’s been cultivating relationships Borders isn’t a big source of sales for most university presses, but its bankruptcy puts more pressure gional lists or books with crossover with less obvious sales outlets, includ- on them to find new ways to get their books into readers’ hands. appeal—the kinds of books a chain ing clothing stores and distilleries. is likely to stock. Those titles help The press has a number of titles support the more academic portions devoted to the state’s famous liquor, portant a supply channel as Amazon with Apple to have its books in cluded Still, he said, “it’s not nothing.” He of the publishers’ lists. including The Social History of .com, which she described as “a in the iBookstore. It also wants to compared Borders to a terminally ill The news also gives Amazon.com Bourbon and The Kentucky Bourbon very efficient partner” and an in- reach more customers directly. patient. “You know they’re going to more power to call the shots at a time Cookbook. “There’s more money in creasingly important source of sales As for direct losses because of Bor- go, but it’s shocking when it happens.” when the online retailer has already bourbon than there is in books right for the press as some traditional out- ders’s bankruptcy, all of the university- No publisher likes to see a book- established itself as a major conduit for now,” he said. “I sold our Kentucky lets fade away. The Amazon boost press officials I talked with said seller fail. “It’s still a bitter pill, and university-press books. And Barnes Bourbon cookbook to a grill store in comes at a price: The online retailer they had seen this coming and had whether you’re doing 1 percent of & Noble announced in January that it North Carolina.” has more power to ask publishers to been cautious lately in their dealings your business with Borders or 5 per- would cut back on a sales force that The press has also become a regular do business its way when it comes to with the company. (Ms. Mudditt esti- cent, it’s still painful,” said Richard bought many academic-press titles. at the state-sponsored Kentucky Craft- negotiating contracts and prices and mated that California’s losses would Brown, director of Georgetown Uni- “We’re going through the same ed show, which features the state’s how orders are fulfilled. run somewhere in the $20,000 to versity Press and president of the transition the music industry went arts and crafts and has turned out to But what choice do publishers $25,000 range.) Some presses de- Association of American Universi- through 10 years ago,” John P. Hussey, be a lucrative source of new accounts. have? They need to do business with cided not to deal with Borders di- ty Presses. He also noted the hu- director of sales and marketing at the “You can’t find that stuff on Twitter,” e-tailers just to keep up the sales num- rectly but to work through inter- man cost: “There will be thousands University Press of Kentucky, told Mr. Hussey said. “You need to be in bers that used to come from other mediaries, like the wholesaler In- of people who no longer have jobs.” me. “We used to be this ivory tower a location where they find you.” That stores. “We’ve all seen tremendous gram Book Company, that could I wondered whether Princeton that never interacted with anybody, in used to be a bookstore. Now it can be sales growth through Amazon, but it’s decide when to stop accepting orders University Press, whose list has some ways, and now we’re becoming almost anywhere. mainly been displacement from other and thus assume the risk. strong crossover appeal, stood to much more grass-roots.” outlets,” Ms. Mudditt said. Garrett P. Kiely is director of lose much money. Peter J. Dough- Mr. Hussey said Borders had pro- What Choice? She expects that California’s rev- the University of Chicago Press, erty, the director, said he couldn’t vided a modest part of the press’s Other publishers I talked with re- enue stream from electronic books whose Chicago Distribution Cen- say right now, but expected to have a sales. But Kentucky publishes a lot inforced Mr. Hussey’s points about soon will be greater than that from ter handles the output of 90 presses. better sense in the coming weeks. of books on the state’s history and how different the supply-and-demand print books. “The challenge for us Sixty of them could lose money be- For now, uncertainty rules. Borders culture, and the chain had been a landscape is looking these days. Ali- is both how we can work effec tively cause of Borders, possibly close to says it plans to reorganize, but no one strong supporter of that part of the son Mudditt, who took over late last with online retailers and how we a million dollars, but the final ac- knows what that will mean. “What will list. Its support helped maintain year as director of the University of can get word out about books our- counting isn’t in. He pointed out a reorganized Borders look like?” Mr. Kentucky’s scholarly publishing pro- California Press, pointed out that the selves electronically,” she said. For the losses “are nowhere near some Dougherty asked. “There’s a lot of un- gram of books that a general-interest supply chain “is undergoing as much instance, like a number of other uni- of the big creditors. The orders certainty and a lot of question marks. bookseller tends not to carry. transition as we are as publishers.” versity presses, California has yet haven’t been that large, so the expo- We just don’t know how it’s all going to “We are concerned that if some of Borders hasn’t been nearly as im- to come to a satisfactory agreement sure hasn’t been that large, either.” shake out.” n

NEWS | government Got the Inside Scoop on For-Profits? Investors Will Pay—and Handsomely By Goldie Blumenstyk ernment-affairs official at the Amer- Expert networks have become in- “You’ve got an industry that is Wall Street over the past few years, ican Council on Education; Mark creasingly significant players on the so dependent on what the regula- and “you’ve probably got a lot of peo- ot all talk is cheap. Espe- Kantrowitz, an expert on student Wall Street scene in the past decade, tors do,” says Dennis M. Cariello, ple who jumped on the moving train,” cially not if it comes from the loans; and Kevin Kinser, an academ- and recently, with allegations that a former deputy general counsel he says. Now, following a year of Nmouths of professors, former ic who studies higher education— some of them have been involved in for the Education Department in growing public and government scru- corporate executives, or Washington are banks of on-call experts who get insider trading, they have become the Bush and Obama administra- tiny, says Mr. Hartle, some investors insiders who understand the workings paid to speak privately about trends controversial, too. In the for-profit tions, who worked for a while with are wondering if the train is “moving of the $20-billion for-profit higher-ed- to the networks’ clients. The clients higher-education industry, where an expert-network company after off onto a siding.” (He says he doesn’t ucation industry and how impending are hedge funds and other investors, the involvement of expert networks leaving the government but no lon- invest in any of the companies.) tougher regulations might affect it. which pay handsomely—$40,000 a is only about two years old—and ger does. Mr. Hartle says he speaks at least Then the talk can be worth hundreds year, in some cases—for that ready where there have been no known Mr. Hartle, senior vice president once a week with investors, sometimes of dollars an hour, thanks to the grow- access. charges of insider trading—their for government and public affairs at receiving a fee of $250 from an ex- ing role of “expert networks” now fo- The experts get paid, too, with growing use coincides with the com- the American Council on Education, pert-network company called the Ger- cused on the for-profit college sector. several reporting fees that run from ing of new federal regulations and says the shifting climate appears to son Lehrman Group as a “GLG Coun- The networks—which in the past $250 to $850 a pop for a 30-minute rising attention on the sector from be spurring investors’ desire for in- cil Member” and sometimes without several months have featured the or hourlong conversation—similar Congress and the Department of formation from him and others. The charge to people who call him. likes of Terry W. Hartle, the top gov- to a lawyer’s billable hour. Education. for-profit sector has done very well on Continued on Following Page A14 March 11, 2011 | The Chronicle of Higher Education

NEWS | government

Continued From Preceding Page officials on its roster of experts on expert networks in 2008, about the He says he sees no conflict be- the for-profit industry, including two time the federal government start- tween that work and his duties at people it identified as former com- ed proposing major changes in the ACE, where he is often the public pany presidents (at the Career Edu- bank-based student-loan system, face of the 1,600 campuses the or- cation Corporation and Corinthian moves that proved tumultuous to gi- ganization represents. “I’m frankly Colleges Inc.) and four former of- ant lenders like Sallie Mae and Ci- not doing anything on the phone ficials at the Education Department tibank. “Profit and education were with them that I would not say to and the White House. still at that intersection,” he notes, AMERICAN COUNCIL ON EDUCATION a reporter,” says Mr. Hartle, noting A Gerson salesman told The but the anxiety and interest he hears Terry W. Hartle that ACE has permitted him to do Chronicle that the company typical- on calls these days from investors the work as a private consultant. ly required clients to pay a license in the for-profit college industry are suspects many are low-level analysts Last summer Gerson also paid fee ($20,000 a year for companies “a lot more intense” than they were hired by investment funds, or private- to fly him from Washington to San with revenues below $25-million; among loan-industry investors. equity firms, to scope out the land- Francisco to meet with a group of $40,000 for those with higher rev- “They panic when the news comes scape. And there’s no doubt about their more than a half-dozen investors. enues). In return, the clients receive out” about a college company’s student- interest: “It’s always about for-profits. COURTESY MARK KANTROWITz Mr. Hartle says he avoids gigs where “white glove” service in setting up loan default rate or a new regulation, It’s not about tenure or academic free- Mark Kantrowitz clients are seeking information telephone calls, Webcasts, or live he says. Right after the Education De- dom.’” Like Mr. Hartle, Mr. Tierney about particular companies and typ- meetings in restaurants or similar partment released its proposed “gain- and Mr. Kantrowitz say they don’t in- some of the college companies, and ically talks about topics such as the locations with the expert of their ful employment” regulation, designed vest in the industry they study. for having no personal financial in- likelihood that Congress will block choice, paying an additional fee per to bar federal student aid to programs Mr. Kinser, an associate profes- terests in the sector (he too does not tougher federal regulations, or why event. For some Webcasts, noncli- whose graduates end up with overly sor of education at the State Univer- invest, because he studies it). He says the Education Department is taking ents can also buy transcripts. burdensome levels of student-loan debt, sity of New York at Albany who has the callers seem to come from two so long to issue a final regulation. The services run as a two-way Mr. Kantrowitz says he participated worked for an expert-network com- camps: those who think “all the reg- Expert-network companies rely street, with expert-network companies in about a half-dozen expert-network pany for about 18 months, says most ulations the government is proposing heavily on academics, particularly sometimes offering up their experts in calls in a single week. In a more-typi- of what he has provided to callers are bull” and want evidence to prove for clients that invest in information conference calls, and sometimes with cal month, he says, he does one or two. in three conference calls and a half- that, or people “who think the whole technology, biotechnology, and the clients posting requests to the net- He says his fees (he declines to make dozen conversations with individuals system is ripe for collapse” and want pharmaceutical industries. Only a works for an expert to answer their public how much he gets) are turned is a perspective on the industry as a to know the biggest vulnerabilities. handful of the three-dozen expert- questions. Last month, for example, over to a scholarship fund created by whole, how it fits into all of higher As a higher-education researcher network companies known to ser- the Coleman network featured at least the sponsor of his FinAid Web site. education, and his expectations about in a field where colleagues “always vice Wall Street specialize in for- three requests from clients “looking William G. Tierney, a professor of the impact of new regulations. “They gnash their teeth” over the scant at- profit higher education, with firms to gain insights into industry trends, higher education at the University of wanted me to tell them who was a tention being paid to their work, Mr. like Gerson, the Coleman Research market dynamics, and the competi- Southern California who writes fre- winner and who is a loser,” says Mr. Kinser says the interest of investors, Group, and the Marwood Group tive landscape of the industry.” quently about for-profit colleges and Kinser. “That’s not what I do.” as well as the notice his scholarship among the most prominent. academic governance, says the inves- Mr. Kinser is known for his deep is getting from news reporters and Gerson, the firm that hires Mr. Intense Interest and Panic tors he gets connected to, some of them understanding of Education Depart- government officials, is a kick. Hartle, features more than a dozen Mr. Kantrowitz, the student-aid from Europe, don’t know very much ment data, which he has used to high- “This,” he says, “is what having a former executives and government expert, says he began working with about American higher education. He light the poor rates of graduation at relevant research topic looks like.” n

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Walden University is accredited by The Higher Learning Commission and a member of the North Central Association, www.ncahlc.org; 1-312-263-0456. Walden offers both state-approved educator licensure programs as well as programs and courses that do not lead to licensure or endorsements. Prospective students must review their state licensure requirements prior to enrolling. For more information, please refer to www.WaldenU.edu/educlicensure. Prospective Alabama students: Contact the Teacher Education and Certifi cation Division of the Alabama State Department of Education at 1-334-242-9935 or www.alsde.edu to verify that these programs qualify for teacher certifi cation, endorsement, and/or salary benefi ts. Prospective Washington state students are advised to contact the Offi ce of the Superintendent of Public Instruction at 1-360-725-6320 or [email protected] to determine whether Walden’s programs in the fi eld of education are approved for teacher certifi cation or endorsements in Washington state. Additionally, teachers are advised to contact their individual school district as to whether this program may qualify for salary advancement. The ChroniCle of Higher Education ® March 18, 2011 • $6.99 chronicle.com Volume LVII, Number 28 For-Profit Colleges Manage Defaults to Mask Problems, Analysis Indicates 3-year default rates on student loans are 5 times as high as 2-year rates at some colleges

By Goldie Blumenstyk and Alex Richards

t is no surprise that student-loan default rates go up the longer they’re tracked: I Give borrowers more time, and more of them will default. But a Chronicle analysis has found that at hundreds of colleges, most of them for-prof- it, the three-year default rate is inordinately greater than the two-year rate, giving cre- dence to concerns that certain colleges are ag- gressively using “default management” tools to mask problematic rates of default. Education Depart- of col- ment data released last 83% leges month show that rates JEFF MILLER, U. OF WISCONSIN AT MADISON with the biggest at nearly all institutions Carolyn A. (Biddy) Martin, chancellor of the U. of Wisconsin at Madison, wants her flagship campus freed of many jumps in 2-year rose when measured for regulatory constraints and separated from the regional campuses that make up most of the state’s university system. to 3-year student- three rather than two loan default rates years, as federal law are for-profits. will soon require. Yet at 243 colleges, or about 8 Flagships Just Want to Be Alone percent of the 3,168 degree-granting institu- tions The Chronicle examined, the three-year Hard times strain relations between big public research universities and their states rate was at least 15 percentage points higher than the two-year rate, a substantial increase. By Jack Stripling ers say they’ve never seen the relationship Of those, 83 percent were for-profit colleg- O Two chancellors in the U. of between the two as strained as it is now. es, including 27 institutions owned by Corin- hey thought they were made for Wisconsin system debate changing And, in what is often the death knell thian Colleges, 25 owned by ITT Educational each other. the flagship’s status: A34 for couples, several flagship presidents are Services, and 17 owned by Career Education T Hearing today’s higher-education now saying they think their campuses need Corporation, At five of Career Education’s leaders opine about the heady days of the tired soul recall a once vibrant romance some space. Cordon Bleu culinary colleges, the two-year 1800s, when the Morrill Land-Grant Acts that has slowly soured. While major public At the heart of this story is Carolyn A. rates hovered at 5 percent or below and the created many of the nation’s flagship public research universities and state governments (Biddy) Martin, chancellor of the Univer- three-year rates exceeded 24 percent. universities, is a bit like listening to some have always had their differences, observ- Continued on Page A3 Those three companies are among the most Continued on Page A6 Much Ado About Building Costly Arts Centers Even in an era of cutbacks, some colleges see big performance halls as the new necessities

By Lawrence Biemiller to make up shortfalls and prom- month Joan Rivers, Kiri Te Kana- ised anxious students that none of wa, Ed Asner, and Roseanne Cash Northridge, Calif. the money would come from their are performing in the 1,700-seat t’s an irony Shakespeare pockets. It wouldn’t be a surprise main hall, and a student production could write a play around: to hear that the project’s biggest of A Midsummer Night’s Dream is IOfficials of California State backer, President Jolene M. Koes- running in the black-box theater— University at Northridge spent ter, had checked between the sofa while across the campus, students 10 years planning a $125-million cushions in her office for loose stage protests against fee increases performing-arts center and figur- change. and program cuts that the universi- ing out how to pay for it—secur- Finally Northridge scheduled the ty says will be necessary because of ing more than $60-million in cap- opening gala for late January, only the state’s revenue shortfall. ital-projects money from the state to have it take place just two weeks The Valley Performing Arts

CSUN and raising millions more from after Gov. Jerry Brown proposed Center here isn’t the only one to The Valley Performing Arts Center is a hard-won jewel on the campus gifts and grants. They pleaded slashing $1.4-billion from state make its debut amid recessionary of California State U. at Northridge. with donors and local politicians support for higher education. This Continued on Page A8

a The Dissertation, Undone a Zip It a Get That Degree INSIDE Sometimes the only copy of a research paper that In a few courses, Western Governors U. took years of effort is the one that the laptop thief secrecy prevails outside Indiana wants college got. A16 the classroom. A14 dropouts back. A12 A6 March 18, 2011 | The Chronicle of Higher Education

NEWS | For-Profit Education

Many For-Profits Are ‘Managing’ Defaults The Default Gap: How One Company Measures Up to Mask Problems, Data Suggest After September 30, 2014, colleges’ student-loan default rates, now measured over two years, will be measured over three years. Continued From Page A1 rates as a proxy for measuring an in- Success, a group that advocates for A college will lose federal aid if its three-year default rate is active in the political fight against stitution’s quality. For-profit college tougher regulation of the sector. “It’s equal to or greater than 30% for three years, or if it is greater tougher new federal rules that would leaders contend that this approach puzzling unless you assume the col- than 40% for a single year. Here’s how Corinthian Colleges limit or bar colleges with low rates ignores findings that students at their leges were working hard to assure would fare, based on recent data: of loan repayment by their students institutions tend to default at a high- that their two-year rates reflected 2-yr. 3-yr. from participating in federal stu- er rate because they are, as a group, them in their best possible light.” default rate default rate dent-aid programs. Such aid is the disproportionately poorer than the 30% threshold 40% lifeblood of most for-profit and other general population of college stu- Big Jumps Are Red Flags threshold tuition-dependent institutions. dents, and more of them are juggling The Chronicle’s analysis was The analysis showed that at 69 work and family obligations. based on the unaudited information- National averages 10% 20% 50% institutions, the difference between Critics of the sector, however, al-only “trial” data that the Educa- Public the two-year rate and the three-year say that explanation, recently reiter- tion Department released in Febru- rate was 20 percentage points or ary on borrowers who were re- Private greater. At a dozen of those, the quired to begin repaying their difference was greater than 25 Higher Default Rates loans at some point between For-profit percentage points, an increase October 1, 2007, and September that would have put two-thirds Three-year default rates were 30, 2008. The department not- Corinthian inordinately greater than two-year of them above the 40-percent ed that the data could contain Everest University* threshold at which colleges will rates at some colleges. errors. The government tracks Tampa, Fla. become ineligible to participate information on institutions ac- Wyotech* in federal student-aid programs 243 institutions with a cording to their Education De- Long Beach, Calif. default-rate change of 15 when the new law goes into ef- percentage points or higher partment identification numbers, Everest Institute* fect, in 2014. and in some cases, an institution Cross Lanes, W. Va. The college showing the big- 202 for-profits with a single ID number could 24 nonprofits Everest Institute* Rochester, N.Y. gest gap was Professional Busi- 17 public colleges include several campus at addi- ness College, a private nonprof- tional locations. Everest College* it institution in New York City, In its analysis, The Chronicle Thornton, Colo. where the difference between the considered only degree-grant- Everest Institute* two-year rate and the three-year ing institutions and included only Miami, Fla. rate was more than 30 percent- 3,168 total degree-granting those that had 30 or more borrow- institutions with 30 or more Everest College* age points. (For a sortable table borrowers in repayment status ers in “repayment status.” (Federal Newport News, Va. of the degree-granting colleges regulations on default rates are dif- Everest Institute The Chronicle analyzed, please ferent for colleges that have fewer Miami, Fla. go to chronicle.com.) Note: Institutions may include more than one campus. than 30 borrowers in a repayment Everest University* The findings raise questions cohort.) The analysis then com- Orlando, Fla. source: U.S. Department of Education; Chronicle Analysis about whether some colleges are pared the two-year rate—the pro- Everest College offering comprehensive, objec- portion of those borrowers who Phoenix* Ariz. tive loan counseling to their students, ated in a report from the industry’s subsequently defaulted on or before Heald College or “conveniently placing people into trade group, the Association of Pri- September 30, 2009—with the three- Stockton, Calif. options that are best for the schools, vate Sector Colleges and Universi- year rate—the proportion who default- Everest College* not for the borrowers,” says Deanne ties, does not explain the big jump ed on or before September 30, 2010. Portland, Ore. Loonin, director of the Student Loan between the two-year and three-year For the public institutions analyzed, Everest College* Borrower Assistance Project at the rates at some institutions. If it was the two-year rate was 6 percent and West Valley City, Utah National Consumer Law Center. just demographics, “you would ex- the three-year rate was 10.8 percent; Everest Institute “I just don’t see how you would see pect the two-year rates and the three- for private institutions, the two-year Pittsburgh, Pa. these kind of disparities in the second year rates and the 10-year rates to all rate was 3.7 percent and the three- Everest College year to the third year if it was being done show the same kinds of trends,” says year rate was 7.1 percent; and for the Henderson, Nev. in a comprehensive way,” she said. Deborah Frankle Cochran, who di- for-profit colleges, the two-year rate Heald College Many federal higher-education rects a program on financial aid at was 11.3 percent and the three-year Milpitas, Calif. policies and regulations use default the Institute for College Access & rate was 24 percent. (The Chronicle Everest University* figures differ slightly from the sector Largo, Fla. averages reported in February by the Heald College Education Department, which count- Fresno, Calif. 2-Year vs. 3-Year Default Rates ed all institutions regardless of their Heald College Average default rates for major higher-education companies degree-granting status or number of Hayward, Calif. borrowers in repayment status.) Everest College* Percentage- The difference between the two-year Colorado Springs, Colo. 2-year 3-year point default rate and the three-year rate is difference Everest University 19.1% not itself the focus of any current regu- Corinthian Colleges 20.0 Pompano Beach, Fla. 39.1% lation or any new ones. But according Heald College 12.3% to the Education Department and sev- Salinas, Calif. ITT Educational Services 17.3 29.6% eral experts, a big jump can be a red Heald College 10.4% flag. It can be a signal that a college has Concord, Calif. Alta Colleges 16.3 26.8% been aggressively managing its defaults Wyotech 10.1% for the two-year period by encouraging Fremont, Calif. Career Education Corporation 14.2 24.3% borrowers to obtain deferments or for- Heald College 16.9% bearances on their loans. Kaplan 12.3 Rancho Cordova, Calif. 29.2% Because the stakes can be so high, Everest College 7.0% “default management” has become Education Management Corporation 11.3 San Bernardino, Calif. 18.3% a business in its own right, particu- larly in the for-profit-college sector Everest College* 9.2% DeVry 10.9 Springfield, Mo. 20.1% (The Chronicle, July 16, 2010). A forbearance gives borrowers Heald College* 12.9% U. of Phoenix 9.9 San Francisco, Calif. 22.8% more time before they are required to begin repayment, but the cost of the Heald College 11.3% All for-profit colleges 12.8 Roseville, Calif. 24.0% interest on the loan during the exten- sion can be added to the principal they 10% 20% 30% 40% 50% Note: Institutions may include more than one campus. owe. Forbearances, which are notori- * Institution has one or more branches in other locations, listed under the source: chronicle reporting, same Office of Postsecondary Education identification number. U.S. department of education source: U.S. Department of Education; Chronicle Analysis Continued on Page A8 A8 March 18, 2011 | The Chronicle of Higher Education

NEWS | For-Profit Education

Continued From Page A6 could cripple them financially. dow was.” But he says that’s hardly rate of 19.1 percent and a three-year rate for all of its institutions, which ously easy to get, can help colleges Erin Dillon, a senior policy ana- improper. The idea that helping their rate of 39.1 percent, or about 15,000 is 10.4 percent, and the three-year avoid higher default rates by postpon- lyst at Education Sector, an indepen- students get forbearances or defer- of its 38,000-plus borrowers in re- rate, which jumped more than 16 ing the date by which the borrower dent group that focuses on education ments “is somehow an evil thing to payment status. Its three-year rate percentage points to 26.8 percent, or needs to begin repaying. If the for- policy, says the worsening economy do is absurd,” says Mr. Miller, noting and the 20-percentage-point gap be- nearly 2,400 former students. bearance pushes that new repayment might explain some of the differences that these tools are provided in the tween the two- and three-year rate ITT declines to comment. Col- date outside the two-year window, the highlighted by the analysis but not the law for a reason, to help students. were the highest of any major high- lectively its rate for two years was college doesn’t face any consequences disproportionately higher disparities. He and several of the college com- er-education company. 12.3 percent; its three-year rate was if the borrower subsequently defaults She says colleges’ focusing their panies’ representatives also suggest Kent Jenkins, a Corinthian spokes- 29.6 percent, or about 9,000 former on the loan. The borrower, however, is default-management efforts heavily that some of the increase is based on man, says the company has also sub- students. still ultimately liable. on students during the two-year mea- confusion in the student-loan market, stantially beefed up its default-manage- In terms of percentages, the giant Mindful that some institutions surement window was the likeliest ex- which occurred after the Department ment activities, spending $10-million University of Phoenix showed less of were using these techniques to, in planation. “If they’re only doing that of Education assumed the loan port- a year, to encourage students to make an increase than the for-profit sector as effect, run out the clock on default as long as the government is watch- folios of two major lenders in 2009. regular payments once their loans come a whole: Phoenix’s two-year rate was rates, Congress in 2008 extended the ing, that’s a problem,” says Ms. Dil- Mr. Miller and his colleagues contend due, and “not merely to kick the can 12.9 percent, and its three-year rate measurement period to three years to lon, even if the colleges were doing that poor management of those loans, down the road through programs that was 22.8 percent. A spokesman at- get a truer sense of institutions’ de- more than encouraging students to get which were “put back” to the depart- defer or delay repayment problems.” tributes that to the difficult economic fault rates. Now colleges are barred forbearances, such as counseling them ment, has created confusion that may Career Education says it is still conditions over the last several years. from federal student-aid programs if on how to enter income-contingent re- be adding to the levels of default. examining the factors affecting the Professional Business College, the their two-year default rate is 25 per- payment plans. The Education Department has big jump in rates at its Cordon Bleu nonprofit institution that showed the cent or higher for three successive said the “put” loans were not a fac- institutions. highest gap, says that it is “surprised years, or above 40 percent in a single Hardly Improper tor in the jump between the two-year A statement from Alta Colleges, and disappointed” by the statistics, and year. Under the new law, which will Harris N. Miller, president of Ap- and three-year rates. another company where the rates that it has already begun new counsel- take full effect after September 30, scu, acknowledges that for many in- Corinthian says some of its de- showed a sizable increase, says the ing programs to redress the problem, 2014, colleges with three-year rates stitutions in his sector, the focus for faulted loans were part of those company provides a team of loan even as it notes that the numbers in- of 30 percent or higher for three suc- corporate personnel and spending has “put” portfolios. specialists to help students, but it volved are fairly small. The college had cessive years, or above 40 percent in been on averting defaults for only two Taken as a group, Corinthian in- does not provide any explanation for 79 students entering repayment status, any single year, will be barred, which years “because that’s where the win- stitutions showed a two-year default the difference between the two-year and 33 of them defaulted.

NEWS | Facilities In an Era of Campus Cutbacks, Performing-Arts Centers Keep Going Up Continued From Page A1 fallout. Multimillion-dollar ven- ues, many of them financed large- ly by state money, are opening or planned at colleges across the coun- try. Even though ticket sales and do- nations cover much of the operating cost, the centers prompt critics to talk about “edifice complexes” and “conspicuous consumption.” The number of new facilities, at least, is conspicuous. In February, James Madison University opened its five-venue, $82-million Forbes Cen- ter for the Performing Arts. Smaller facilities have opened within the past

The new centers prompt critics to talk about “edifice complexes” and “conspicuous consumption.” year or so at George Mason Universi- ty’s branch campus in Manassas, Va. ($46-million), Sam Houston State University ($38.5-million), and on Montgomery College’s campus in Silver Spring, Md. ($31-million). All of those were planned before the recession started. But even with the economy sputtering and gloom pervading legislative budget com- ROBERT BENSON mittees, new arts venues are in the The Hylton Performing Arts Center, on the Manassas, Va., branch campus of George Mason U., opened last fall at a cost of $46-million. works at institutions as diverse as Modeled on 19th-century European opera houses, its 1,121-seat theater includes a copper ceiling and three levels of box seats. Hagerstown Community College, in Maryland; the University of Texas’s Permian Basin campus; and the State “In the order of sins, perform- Ohio University who is director of But when you start adding up per- directly, there are no free lunches.” University of New York at Potsdam. ing-arts centers are probably a tad the Center for College Affordabil- sonnel costs, heating and air condi- With colleges everywhere raising better than rec centers, student- ity and Productivity. “They present tioning, and depreciation, he says, A Glut of Theaters? tuition and cutting programs, such union buildings, and indoor-prac- events that have some tie to artistic “the real problem is, we simply can’t Some of the arts projects have projects have some people question- tice facilities,” says Richard Ved- expression, and that’s part of what afford this stuff.” Even though arts been particularly controversial on ing administrative priorities. der, a professor of economics at universities do.” venues may not “be socking it to kids Continued on Page A10 The ChroniCle of Higher Education ® April 8, 2011 • $6.99 chronicle.com Volume LVII, Number 31 Presidents Defend Their Pay as Public Colleges Slash Budgets By Jack Stripling will often have targets on their backs, par- salaries have for years argued that, irrespec- Total Cost of a Public-College President and Andrea Fuller ticularly if they are asking for more state or tive of economic conditions, those presiden- federal support. tial pay levels are fair, necessary, and per- Highest: $1,818,911 f there’s a sure lesson from the econom- The highest-paid public-college execu- formance-driven. While that case appears to E. Gordon Gee, president of Ohio State U. ic recession, it’s that perception matters. tives, who receive compensation packages in have been effectively made in many states, I When Wall Street bankers took tax- the high six figures and more, walk a diffi- some higher-education officials and compen- Median: $440,487 payer bailouts and then made off with big bo- cult political tightrope. They must at once ar- sation experts say a prolonged budget crisis nuses, they were vilified. Moral outrage en- gue that their state budgets have been cut to could hamstring the wealthiest presidents as Lowest: $212,800 sued when chief executives of the Big Three the bone and need to be restored, while at the they argue that their institutions are deserving Timothy J. Donovan, chancellor automakers flew into Washington on private same time acknowledging their rarefied per- of increasingly scarce public resources. of the Vermont State Colleges system jets to ask for a government rescue. sonal financial circumstances in states where Bob Graham, a former U.S. senator who Indeed, America’s anemic economy en- layoffs, program closures, and pay reductions helped shape Florida’s higher-education sys- INSIDE: Top 10 highest-paid executives: A10 sures that people at the top of the heap, in- have been all too common. In making that tem when he was governor, said he viewed Complete table of 185 CEO’s: A12 cluding some public-university presidents, case, presidents and the trustees who set their Continued on Page A10 Colleges Scramble to Avoid Violating Federal-Aid Limit For-profits’ tactics to comply with 90/10 rule raise questions

By Goldie Blumenstyk

orinthian Colleges Inc.’s decision this winter to raise tuition at doz- Cens of its Everest, Heald, and Wyo- Tech campuses by an average of 12 percent, knowing that most of its students would have to go even further into debt, had nothing to do with rising costs or any improvements it was making in the curricula. With many of its students already receiving the maximum in federal grants and loans, the company said it was raising its prices to cre- ate a financial gap that students would have to cover with private loans or other funds be- sides those from the federal student-aid pro- grams. Corinthian’s move is just one of the lat- est—and some say one of the most cynical— strategies that some for-profit colleges are us- ing to avoid violating the so-called 90/10 rule,

KRISTEN SCHMID SCHURTER FoR THE CHRoNIClE so they can remain eligible for the billions of For Blue Waters, a supercomputer to be housed here at the U. of Illinois at Urbana-Champaign, quickness is not of the essence. dollars in federal student aid that have fueled their growth. The rule requires them to re- ceive at least 10 percent of their revenue from other sources. “They are making loans, just like the sub- Supercomputers Let Up on Speed prime lenders did, that they know their stu- dents will not be able to repay,” said Pauline With big money and competitiveness at stake, smarter—not faster—designs may be winners Abernathy, vice president of the Institute for College Access & Success. By Jeffrey R. Young won’t be the fastest computer in the world. simu lations of a tornado that can predict Corinthian’s decision to comply with the And its designers don’t care. where a storm might strike. 90/10 rule in this manner, said Ms. Aberna- Champaign, Ill. “We’re not looking to be on the Top Flat-out speed, for a long time the thy, even as it acknowledges that the compa- he warehouse-sized supercomput- 500 list,” says Thom Dunning, who leads measure of a supercomputer’s worth, may ny-sponsored loan program most of its stu- er under construction here at the Uni- the computer’s development as head of the be going out of style. A recent report from dents will use has a default rate of more than versity of Illinois at Urbana-Cham- university’s National Center for Supercom- an influential federal panel recommended 50 percent, is “the height of cynicism.” T The 90/10 rule is also driving activities at paign comes with a price tag of nearly half puting Applications. Rather than hit a peak more emphasis on software and alterna- a billion dollars, making it one of the most sprint speed measured by the Top 500, the tive designs rather than computational other college companies. In recent months, expensive supercomputers ever devoted to most widely used supercomputer ranking, Ferraris. Still, fast computers attract top Education Management Corporation, par- academic research. And yet, when engineers he wants to build a distance runner, capable, faculty—and federal money. “Every con- ent company of the Art Institutes, South turn on the machine this year, it very likely for example, of powering through intricate Continued on Page A3 University, and Brown Mackie College, an- nounced it would increase its recruiting of Continued on Page A6

a New Competition for Foreign Students a E-Mails at Issue a Funny Business INSIDE Eyeing efficiencies of scale, public and private Politics and academic M.B.A. students im- colleges in “flyover” states are teaming up to join freedom collide in provise in a leadership the growing rush to recruit from abroad. A23 Wisconsin. A25 course at MIT. A30 A6 April 8, 2011 | The Chronicle of Higher Education

NEWS | For-ProFit EducatioN

For-Profits Scramble as Limits on Federal Student Aid Draw Near Continued From Page A1 as employer-sponsored tuition plans. If the above or close to the limit, many more have the federal dollars flowing.” Colleges “make foreign students. Kaplan University and the colleges exceed the 90-percent level for two remained below the 90-percent mark thanks unaffordable loans as a way of filling up the University of Phoenix created new colleg- consecutive years, they lose access to federal only to a temporary provision enacted by 10-percent category with vapor revenues de- es of “professional studies” so they could student aid. Congress in 2008. When federal loan limits rived from loans that will never be repaid,” count more of their nontraditional-educa- Creators of the law saw it as a way to show were increased by $2,000 in 2008, Congress the center’s Deanne Loonin, a staff attorney, tional revenues as part of the 10-percent outside validation for a college’s offerings. agreed to temporarily allow colleges to count wrote in a report in January. Under the tem- side of the calculation, and Career Educa- But with the rising availability of federal stu- that additional amount of Title IV as part of porary provision, only a portion of the rev- tion Corporation has beefed up marketing dent aid—and colleges’ increasing creativ- the 10 percent rather than the 90. That mea- enues generated via the college-sponsored for a chain of restaurants called Technique, ity in exploiting the many exemptions now sure will expire at the end of June. loans can count in the 10 percent. Still, the tied to its Cordon Bleu culinary schools, found in the law—some of its supporters, as Along with Corinthian, many other for- center said that rather than extend that mea- all in the service of bolstering non-Title IV well as its critics, are now questioning wheth- profit colleges are lobbying furiously to get sure beyond 2012, Congress should end it the temporary measure extended (along with now. another provision, which authorizes favorable treatment for college-issued loans and will Gaming 90/10 expire in June 2012), or to get the 90/10 law The coming political debate could also How the 90/10 Rule Plays Out gutted altogether. Corinthian’s tuition hikes bring attention to the many other tactics The rule requires for-profit colleges to receive at least 10 percent of their revenue from are an explicit part of that lobbying fight. The colleges have begun to employ to satisfy sources other than federal student-aid programs to be eligible for such aid. company said it would reverse the increase the 90/10 rule. In addition to its push for if Congress changes the law. It maintains, as more military and international students, its CEO, Jack D. Massimino, recently told for example, Education Management has investors, that the price increase was “not also just reported in financial documents something we want to do, it’s something we that it would undertake some “internal re- have to do.” He said that’s because so many structuring” to deal with the issue, which of Corinthian’s students are financially needy could mean moving some academic pro- 90% 10% and qualify for the maximum in federal stu- grams where federal student aid is close dent aid. to the 90 percent mark over to institutions What counts: What can count: The gambit has drawn attention and criti- where the rates are lower. The company

■ Pell Grants ■ Cash payments by students cism, not only from the consumer-advocacy said it would not comment beyond what it sector but also from at least one Wall Street had reported. ■ Federal student ■ GI Bill benefits analyst, Ariel Sokol of UBS, who in a mes- loans ■ Federal tuition assistance for active- sage to investors called it “perhaps the most duty military counterproductive public negotiating tactic that we’ve ever witnessed.” “ The 90/10 rule has created ■ Department of Labor Workforce Investment Act tuition vouchers In an interview, Mr. Sokol was even more untold numbers of millionaires scornful. Corinthian officials announced the ■ Tuition reimbursements from tuition increase “as if they are somehow the … on the backs of those who employers victims,” he said. But the company know- can least afford it.” ■ Income from culinary-school ingly pursued this kind of a growth strategy. restaurants, education-school The levels of student aid have risen, he noted, childcare programs, and other but the 90/10 rule has been around for many services related to students’ years. “It’s not as if it happened by surprise,” Phoenix and many other colleges have also education and now, “students are being burdened with been revving up their lobbying in Califor- debt they can’t repay,” he said. For the com- nia’s and other state legislatures, to help pre- ■ Fees for real-estate courses, pany, “that’s not a viable long-term strate- serve the availability of state grants for stu- continuing teacher education, and gy.” dents who attend for-profit colleges. Student other training that leads to licensure The cause championed by Corinthian and aid that states provide also counts in the 10. or industry-recognized certificate others faces an uncertain political fate. The Thirty-one states provide such aid, according ■ Proceeds from private loans made for-profit college industry maintains strong to the most recent data, but, as in Califor- from third-party lenders support in the Republican-controlled U.S. nia, some programs are under fire because of

■ Up to $2,000 in federal student loans House of Representatives as well as among tight budgets, lawmakers’ concerns over the issued from July 2008 through June some Democrats, like Rep. Robert E. An- colleges’ quality, or both. 2011 drews of New Jersey, who has been work- In some instances, the colleges are tak- ing with the Association of Private Sector ing advantage of looser provisions of the law ■ The value of proceeds from college- Colleges and Universities, the industry trade that they successfully lobbied for in 2008. provided private loans issued group, on an alternative to the 90/10 rule. Kaplan, for example, created its new profes- since July 2008, excluding Some Senate Democrats, along with student sional college by merging its Kaplan Profes- the amount they expect advocates, meanwhile, want to strengthen sional division, which provides courses for will never be repaid 90/10. people studying for real estate, accounting, (expires July 1, Senators Thomas R. Carper of Delaware, and financial-planning exams, into Kaplan 2012) Richard Durbin of Illinois, and Tom Har- University. The move allows Kaplan Uni- kin of Iowa have all recently said they might versity to treat revenues from about 125,000 push to count revenues from the GI Bill and students who annually enroll in those profes- military-assistance programs as part of the sional courses as part of Kaplan University’s 90 percent. Military recruiting has been 10 percent. Kaplan would not provide finan- a growing focus for many of the colleges. cial details about how the merger affects its revenues (so named for the section of the er 90/10 serves the purpose for which it was Twenty for-profit companies received a com- 90/10 ratio. It was among those that pushed law that authorized them). intended. bined $521.1-million in veterans and U.S. for the change in the law in 2008 that al- Overshadowed in recent months by the Defense Department benefits in 2010, ac- lowed such professional courses, which run legal and political disputes over proposed ‘Counterproductive’ Strategy cording to a report by the Senate education from a few days to a year in length, to be regulations on how recruiters are paid and Revenues that flow from other federal pro- committee. The for-profit sector as a whole counted in the 10 percent. Previously, only the costs of programs and student debt, the grams, like the GI Bill and tuition assistance has received more than a third of the ben- revenues from programs that qualified as longstanding 90/10 rule could soon reclaim for active-duty members of the military, don’t efits paid out under the new GI Bill, even Title IV-eligible would have counted in the the spotlight, bringing new attention to a count toward the 90 percent. Even so, several though it enrolls only about 10 percent of 10. law that many for-profit colleges consider of Corinthian’s Everest campuses and hun- all students. Income that colleges generate from educa- an ill-conceived and inappropriate measure dreds of other for-profit colleges, including The National Consumer Law Center, tion-related activities, like salons staffed by of quality, and some student advocates call a Kaplan, Phoenix, and Bridgepoint Educa- which has been critical of the ways colleg- cosmetology and massage-therapy students, consumer safeguard in need of toughening. tion’s Ashford University, have been moving es have “gamed” 90/10, is pushing for other can also count toward the non-Title IV side The 90/10 rule was enacted decades ago closer to that limit, according to Education changes. It wants Congress to toughen rules of the equation. “We know some schools that to ensure that institutions were not relying Department data released in February (The for treatment of revenues generated through have opened nursery-school programs” in solely on federal student aid, but also gen- Chronicle, February 15). loans like Corinthian’s, which it said col- conjunction with their early-childhood-edu- erating revenues from other sources, such In addition to the 260-plus institutions leges were using as “loss leaders that keep Continued on Page A8 A8 April 8, 2011 | The Chronicle of Higher Education

NEWS | For-ProFit EducatioN

Continued From Page A6 to satisfy 90/10 by pricing his tuition above alliance programs, which include relation- that the University of Phoenix has recent- cation programs and now offer English as a the Title IV maximum, Mr. Clark said he can ships with companies like Verizon, Lowe’s, ly reported that with a new focus on loan Second Language courses, said Stephen B. offer his courses less expensively than many General Dynamics, and Bank of America, counseling, fewer of its students are now Freidheim, a Dallas-based consultant who of his competitors. to generate non-Title IV income. About 2 taking out the maximum levels of student advises colleges on how to satisfy the law “It would be nice to pocket another $6,000 percent of Strayer’s revenue comes from loans. and other matters. a student per year, but the student has to pay active-duty members of the military. Al- Corinthian’s Mr. Massimino said the de- Mr. Freidheim said colleges resort to that debt back,” said Mr. Clark. With this ap- though several higher-education compa- mographics of its student body make that a these tactics because complying with the proach, he said, “I can sleep at night.” less feasible strategy for his company. law has become harder, thanks to the in- Still, he contends that he and most every- Yet critics say companies like Corinthi- creases in Pell Grants and the availability one else would be better off without the law: an have brought their 90/10 problems on of larger federal student loans over the past “The 90/10 rule has created untold numbers Strayer, along with the themselves by using the availability of fed- four years. of millionaires and billionaires on the backs thousand-plus colleges that eral loans as a recruiting tool to attract stu- One owner of several small colleges in of those who can least afford it.” dents. Louisiana said the massage-therapy fees he remain safely in compliance, “Their programs are designed to soak up receives do help with 90/10. But the owner, Diversifying Revenue as much federal aid as possible,” and the Billy L. Clark, said that’s only part of his so- Not all for-profit colleges oppose 90/10. shows that the law can work. 90/10 rule is one of the few brakes on that lution. He also offers students at his Delta Strayer University, for one, said it had no practice, said Rich Williams, a higher-edu- colleges an alternative to the federal student concerns about the rule and wasn’t lobbying cation advocate at the U.S. Public Interest loans, at an attractive rate: zero-interest loans to change it or extend the exemption. In 2009 nies say their efforts to land corporate alli- Research Group. while the students are in school and 3 percent federal student aid accounted for 78 percent ances have been hurt by the recession, Ms. He doesn’t buy the arguments of Corin- after they leave. of its revenues (the 90/10 ratio for 2010 hasn’t Udler said Strayer hadn’t found that to be thian and others that demographics are at Running and managing the loan program been calculated yet), and even if the exemp- a problem. the root of the problem. Many communi- cuts into his profits, he said. And it carries -fi tion for the $2,000 is eliminated in July, Consumer advocates say that the Stray- ty-college students “are just as eligible” as nancial risks for his colleges. (Consumer ad- Strayer does not expect problems complying, er case, along with the experience of the most for-profit-college students to borrow vocates say such loans might also be less ad- said Sonya G. Udler, a spokeswoman for its thousand-plus colleges that remain safe- the maximum in loans, he noted. And while vantageous for students than federal student parent company. ly in compliance, shows that the law can it’s true that their tuition costs less, he said, loans, depending on terms.) But in not trying Strayer has long relied on its corporate- work. Ms. Abernathy noted, for example, they don’t borrow nearly as much. A Year After Bank-Based Lending’s Demise, Shrunken Industry Redefines Itself By Derek Quizon pating in the program faced virtual- At least two major national local level. Many of them were state- grant program, just one of the many ly no risk, because guarantee agen- banks, Key Bank and Citibank, have based nonprofit organizations that services it offered before. year after President Obama cies insured most of the loans, and stopped lending money for education performed a variety of functions, in- Administrators of similar nonprof- signed a law eliminating bank- the government reinsured the guar- altogether, with Key Bank’s educa- cluding servicing loans, administer- its in South Carolina, Louisiana, and A based student lending, the antors. tion division remaining in place only ing state scholarship programs, and New Mexico reported cuts in their lenders and guarantors that formed That system ended when Con- to service existing loans. Citibank offering loan counseling. Some also outreach programs. South Carolina the backbone of the old system have gress eliminated the program as part sold its portfolio to Discover Bank offered loans to students. Student Loan, for example, will cut laid off thousands of workers, elimi- of legislation that also overhauled last year. Last year’s changes have all but in half the number of presentations nated programs, and sought out new the nation’s health-care system. Un- Mark Kantrowitz, a student-aid eliminated the need for guarantors, to schools, churches, and community roles in the student-loan industry. der changes that went into effect last expert and publisher of Finaid.org, although the Education Department groups it makes this year. Presenta- The Education Department is July, students seeking federal loans says some lenders have come to him will allow some of the state-based tions will be made only at locations working to soften the impact with now must borrow directly from the in the past year asking for his input nonprofits to service a portion of its within an hour of the organization’s money to help retrain student-aid government. on proposals to create new credit direct-loan portfolio and continue offices, in Columbia. workers, servicing contracts for non- The Congressional Budget Of- products for students. He declined some administrative services locally. The Education Department is giv- profit lenders, and offers to pay loan fice had estimated that the govern- to name the lenders, saying they had Those organizations, like Ver- ing out about $19-million in grants to guarantors to develop default-pre- ment would save about $87-billion, not decided whether to go through mont Student Assistance Corpora- the lending industry this year toward vention programs. But those steps which would otherwise have gone with the proposals. tion, face the prospect of layoffs and retraining its workers, including many may not be enough to prevent fur- to the banks in the form of subsidies Most of the proposals, he said, major cuts in their counseling and fi- employees in local guarantor agen- ther cuts and layoffs. and administrative fees, over a period have characteristics of both student nancial-literacy programs. cies. Students took out some $65-bil- of about nine years. The Obama ad- loans and tuition-repayment pro- Scott Giles, the nonprofit corpo- The department also plans to re- lion in federally subsidized loans ministration said those savings would grams. Under one proposal, lenders ration’s vice president for policy, re- lease pricing information on loan-ser- through the bank-based system dur- help pay for increases in Pell Grants, would work with colleges to allow search, and planning, says outreach vicing contracts with nonprofit lenders ing the last year it was in place, which were expanded last year. students to hold off on paying tuition programs for first-generation college and to solicit applications within the and the lenders are still collecting The major student-loan compa- until after college, when they would students will serve about 250 fewer next two weeks from guarantors that interest and servicing fees on the nies started focusing more on pro- pay it back in installments over four students this year. Over the next two want funds to help develop default- loans they made before the law was viding what’s known as “gap fund- to five years. The programs would years, he estimated that the organi- prevention programs, officials say. passed. ing”—private loans to help pay costs have low interest, which wouldn’t zation will have to cut its budget by American Student Assistance, But without the ability to make left uncovered by a student’s federal begin accruing until after gradua- 18 percent. This week 58 members which guaranteed loans in Massa- new federal loans, they are look- loans and other financial aid, says tion, and an annual fee. of its 300-plus-member staff took chusetts and the District of Colum- ing for ways to stay in the market— John Dean, a lobbyist for the Con- Lenders are also considering a re- early-separation packages. bia, has laid off about 75 staff mem- for example, by offering new credit sumer Bankers Association. payment plan that would take a per- The cuts mean that counselors bers as a result of the changes, says its “products,” some of which combine The shift meant that the compa- centage of a student’s income rather who help students fill out their fed- chief operating officer, Michael Finn. elements of tuition-installment plans nies were significantly scaling back than a fixed monthly payment, simi- eral student-loan applications and But despite the reduction in funds, he and student loans. their student-lending programs, of- lar to the income-based repayment provide information on financial-aid says, the company will shift its focus The guarantors, which insured fering smaller loans to far fewer stu- program put into effect by the Edu- options will be able to help fewer toward loan counseling. bank-based loans against default, dents. Sallie Mae, the largest lend- cation Department last year. students. “There’s clearly a need out there are redefining themselves as loan er under the FFEL program, is lay- That could lead to a variety of Those services aren’t offered any- for student-loan borrowers to get servicers or providers of financial- ing off 2,500 employees this year, a new options for students and fami- where else in Vermont, Mr. Giles counseling and advice on how best aid advice. reduction of 30 percent of its work lies, Mr. Kantrowitz says, but wheth- says. “That’s the part that’s really to manage their student-loan debt,” Those efforts could bring about force. er those options would be good for heartbreaking for us. If we don’t do Mr. Finn says. “And this frees us to innovative ideas for helping people Joe DePaulo, the company’s execu- students remains to be seen. the work, nobody will.” go out and make a business of it.” pay for college. But many of the tive vice president, says Sallie Mae is The Vermont nonprofit is hoping But Mr. Kantrowitz says there ideas may not work out, which could still heavily involved in servicing loans Hardest Hit to secure a contract with the Educa- isn’t enough of a market for loan lead to a further shrinking of the in- and is looking to buy loan portfolios The government’s changes hit tion Department to help service fed- counseling and debt-management dustry. from lenders that were crippled by the guarantors especially hard. Many eral loans, but Mr. Giles isn’t sure the services to sustain the number of credit crisis and the new law’s changes. are laying off workers, cutting pro- department will offer enough money firms providing them. In the next Subsidies Gone According to its annual report to the grams, and transforming their busi- to cover administrative costs. It re- few years, he predicts, many of those Until last year’s change, the fed- Securities and Exchange Commission, ness models. ceived some state funds last year, for groups will fail. eral government had paid subsidies Sallie Mae has four years left on a con- Under the old bank-based loan the first time since 1997, and is look- “We have … at least 50 entities try- to private lenders to provide feder- tract with the Education Department to program, about 34 organizations act- ing for philanthropic support. ing to do something like that,” he says. ally supported student loans through service millions of federal loans and ed as guarantors, providing the first Mr. Giles says the organization “We don’t need that many.” the Federal Family Education Loan faces “very little competition” in that line of insurance against defaults is now focusing mainly on admin- program, or FFEL. Lenders partici- portion of the industry. and administering the loans at the istering the state’s higher-education Kelly Field contributed to this article. The ChroniCle of Higher Education ® July 29, 2011 • $6.99 chronicle.com Volume LVII, Number 42 Discipline by Discipline, Accreditors Multiply Despite debate over its cost, specialization thrives

By David Glenn

wo decades ago, some of higher edu- cation’s most-prominent leaders waged T war against specialized accreditation. Robert H. Atwell, who was president of the American Council on Education, believed that accreditors that assessed the quality of programs in particular disciplines were more trouble than they were worth: They sapped administrators’ energy with fees, site visits, and O What some long lists of requirements specialized that did little to improve accreditors the quality of education. tell the public (He made exceptions for fields that trained stu- that others Joon PoWELL FoR THE CHRonICLE don’t. A8 P. Jeffrey Conn co-directs Vanderbilt U.’s Center for Neuroscience Drug Discovery, dents to save lives.) When which has attracted top researchers from pharmaceutical companies. he served on the board of the Council on Postsecondary Accreditation, he voted against virtually every specialized accreditor that applied for membership. John V. Lombardi, who was president of the Uni- Big Pharma Finds a Home on Campus versity of Florida, told The New York Times in 1998 that specialized accreditors “blackmail” As drug companies scale back spending on R&D, academic research takes on financial risk college presidents by demanding unwarranted resources. By Goldie Blumenstyk and reformulating that brought Mr. Conn’s For better or worse, the mood has changed. O through work and luck, a research team to this point didn’t happen in a lab Specialized accreditors are proliferating. The Nashville program at Wichita State U. takes at a multinational pharmaceutical compa- Association of Specialized and Professional Jeffrey Conn left a full profes- off, literally. A6 ny—he left his job at Merck & Company Accreditors has 61 members, up from 46 a de- sorship for a job in Big Pharma 11 after just three years—nor at a venture- cade ago. Some provosts say they would like P.years ago because he saw no path in on a molecule that could bring relief to capital-backed biotech firm. It’s advancing their programs to apply for as many special- in academe to turn his novel idea for treat- the millions suffering with the condition’s in the laboratories of Vanderbilt Univer- ized accreditations as they can, even though ing Parkinson’s disease into an actual drug. debilitating tremors and paralysis. sity, one of a growing number of universi- the fees for an initial accreditation can run now he and a corps of scientists are closing But the screening, testing, formulating, Continued on Page A3 past $25,000. Several forces have driven that shift. Some Continued on Page A7 A Recruiter Offers the Humanities, and Second Chances By Eric Hoover homeless people find jobs. This Few, if any, members of her morning Kathryn Pope has come audience, Ms. Pope knows, have Santa Monica, Calif. to visit. Each summer she recruits heard of the institution, about n unlikely audience in places most admissions counsel- eight miles away, in Culver City. has filled a dozen chairs. ors never see. Shelters. Community And she knows that they may have A There’s a 40-year-old man centers. Rehab clinics. Adult day doubts. If you happen to lack a de- who spent most of his adult life in schools. Wherever men and wom- gree, a paycheck, and a computer, prison, a 29-year-old woman who en are trying to loose the knots of you might question what Socrates recently gave up booze, a middle- the past. or Shakespeare, Anne Sexton or aged guy who lost his job and ev- Ms. Pope, 34, introduces her- the Cubists, could ever do for you. erything else years ago when, he self as the director of Antioch Uni- So, at each stop, Ms. Pope, a says, his mind just went “kablooey.” versity’s Bridge Program, which writing instructor at Antioch, must For the next few minutes, they’re all provides free humanities courses tell a story about the benefits of prospective college students. to low-income adults. Unlike pro- a liberal-arts education. To those DAVID ZEnTZ FoR THE CHRonICLE Each of them is a regular here grams that offer training for low- with little or no college experience, Kathryn Pope, director of Antioch U.’s humanities program for low-income at the local office of Chrysalis, a level jobs, Bridge was designed to she describes what nine months of adults, speaks with a potential student at a service center for the poor. nonprofit group that helps poor and impart academic skills. Continued on Page A10

Section B

The C hroniCle o f hi g h e r ed u CaTion

T h e A c July 29, 2011 a d e m i c Wo r k p l a c e SPECIAL Great ColleGes to Work For: seCtIoN B REPORT 111 Colleges and What Makes Them Great | Leadership That Works | The Faculty Life Cycle

THE CHRONICLE

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0 G2 REAT COL L E G E S TO W O R K FOR® AnnuAl S u r v e y reSu l t S The Chronicle of Higher Education | July 29, 2011 A3

The Week in Brief

Gifts to colleges, universities, and NEWS | RESEaRch private schools rose an estimated 4.7 percent for the fiscal year end- ing June 30, according to a survey by the Council for Advancement and Support of Education. At the group’s annual meeting, some officials said Academe Takes On Risks of Drug Research they were confident about their bil- Continued From Page A1 several years of mergers and consolidation, The new activity raises many new ethical lion-dollar campaigns. ties now taking on the high-stakes work of is scrambling for new medicines to fill its and practical questions, and not only the ob- drug discovery. sales funnel. vious ones concerning the increasing poten- A federal judge struck down a por- This academic pursuit of new medicines, The biotech industry, once a major source tial for conflicts of interest. Are universities tion of the Education Department’s fueled at Vanderbilt and several other insti- of new drugs for Big Pharma, is being any more likely than the drug companies to controversial “state authorization” tutions by big-dollar research collaborations squeezed by its own financial pressures. succeed in finding useful new drugs? If the rule but upheld a pair of rules barring with pharmaceutical companies like Johnson Universities, meanwhile, realize that they financial risks of drug discovery have be- deception in college recruiting and & Johnson, Pfizer, AstraZeneca, and Gilead need alternatives to the federal government come too great for giant multinational com- commissions for college recruiters. Sciences, has put research universities at the for research support. And they face growing panies, is it really practical and timely for Days later, the main trade associa- heart of what one AstraZeneca executive pressure from politicians and patient groups universities to take them on? Are universities tion of for-profit colleges said it would calls “a new economy of drug discovery,” one to demonstrate that the billions in philan- delving into drug discovery with unrealis- appeal the ruling. that shifts some of the responsibility, along thropic and taxpayer dollars flowing into tic expectations of a big payday? And more with some financial peril, away from industry their labs can produce cures. broadly, will having universities, with their Marc D. Hauser, the renowned Har- and onto academe. “All of this is either a perfect storm or a public mission, more integrally involved in vard psychologist found responsible Converging financial realities drive new opportunity,” says John Reid, director of drug discovery make it any more likely that for eight counts of scientific miscon- the shift. Drugs like Lipitor, Plavix, and global alliance management at AstraZeneca, new drugs are affordable to people in the de- duct, resigned, ending speculation Gleevec, collectively worth hundreds of who oversees its 18-month-old, seven-figure veloping world, or for that matter, even here about whether he would return to billions in annual sales, will lose their pat- collaboration with the University of Pennsyl- in the United States? the campus this fall. ent protection between now and 2015. The vania, where neuroscience researchers are Proponents of this new role for universi- Community-college students enrolled pharmaceutical industry, which has laid off trying to develop a drug to treat Alzheimer’s ties say involving top-flight academics more in online courses fail and drop out thousands of researchers during the past disease. directly in the drug-discovery process could more often than those whose course result in more innovative and more effective work is classroom-based, according drugs. And as university researchers shep- to a recent study. herd a molecule scientifically beyond the very earliest stages of its path to becoming a drug, The vast majority of colleges rated they can also make it more valuable when it by Moody’s Investors Service could comes time for the institution to license it to see their credit ratings downgraded a company. if Congressional leaders and Presi- But entwining academic research with the dent Obama fail to strike a deal by pharmaceutical industry has its own special next week to raise the federal gov- risks, notes Susan Solomon, who heads a ernment’s ability to borrow money, nonprofit stem-cell bank in New York City according to a report by the credit- rating agency. The “new economy of drug Nearly three years after causing an in- ternational outcry by ranking humani- discovery” shifts responsibility, ties journals with an A-B-C system based on perceived quality and influ- and financial risk, away from ence, the European Science Founda- tion has released a revised list that industry and onto academe. does not seem to be making scholars much happier than before.

that works with many university scientists. The recent growth in state laws re- The companies’ research priorities can shift quiring voters to show a photo iden- quickly due to competitive and financial tification has advocates for students pressures. And sometimes a research group’s worried that their clout at the polls rights to its own findings and data can get tied could be sharply reduced. up if the company drops the project or plays it down in favor of a more promising one. “If An online activist was charged with they change their mind and they don’t want sneaking into a computer closet at your thing, you’re stuck,” Ms. Solomon says. the Massachusetts Institute of Tech- And even relationships that do produce nology and making unauthorized new medicines pose the potential for prob- downloads of more than four million lems, note some drug-industry skeptics. Don- journal articles from JSTOR, a sub- ald W. Light, who has written critically about scriber-only database. The activist the health risks and high costs of prescription was a fellow at Harvard University’s drugs, for one, warns that unless universities Center for Ethics at the time of the are careful, they could find themselves sim- alleged intrusion. ply becoming “full partners in a system that leads to 85 percent of all new drugs being Read these articles and keep up little or no better” than the existing one, or with the latest news at worse, helping to create drugs that he says too often come onto the market without ad- chronicle.com equate testing for side effects. “If universities are setting out to maximize profits on discov- Inside eries,” says Mr. Light, “then like companies, they become corporatized and become more COMMENTARy ...... A21 likely to emphasize benefits and downplay ADvICE ...... A23 harms” of new drugs. GAzETTE ...... A25 JObS ...... A30 Big Investment, Big Payoff? THE ACADEMIC WORKPLACE . . . . SeCtion B Across the country, academic researchers are taking on a role that was once the pur- VANDeRBILT U. view of the research divisions of Big Pharma Note to Readers A nuclear magnetic-resonance spectrometer, which will be used by drug researchers to evaluate and the biotech industry. Only a few, howev- protein structures in their efforts to devise medically useful compounds, is put into place at Vanderbilt. Continued on Following Page The Chronicle is on its biweekly sum- mer print-publishing schedule. The next issue, dated August 12, will be The Chronicle of Higher Education (issn 0009-5982) is published weekly except for every other week june through august and the last two weeks in December at 1255 Twenty-Third Street, N.W., Washington, D.C. 20037. Subscription rate: $82.50 per year. Periodicals postage paid at Washington, D.C., and at additional mailing offices. Copyright © 2011 by The Chronicle of Higher Education, Inc. mailed to subscribers on August 5. Registered for GST as The Chronicle of Higher Education, Inc. GST No. R-129 572 830. POSTMASTER: SEND ADDRESS CHANGES TO THE CHRONICLE OF HIGHER EDUCATION, P.O. Box 16359, North Hollywood, CA 91615. The Chronicle reserves the right not to accept an advertiser’s order. Only publication of an advertisement shall constitute final acceptance of the advertiser’s order. A4 July 29, 2011 | The Chronicle of Higher Education

NEWS | RESEaRch

Continued From Preceding Page er, have gone as far as Vanderbilt has in de- veloping in-house expertise and facilities. Since the late 1990s, Vanderbilt has in- vested about $50-million of its own money to develop the scientific infrastructure and recruit the personnel that now make possi- ble the work of the program that Mr. Conn co-directs, the Center for Neuroscience Drug Discovery. It aims to develop drugs to treat autism and schizophrenia as well as Parkin- son’s. The full-time equivalent of 100 re- searchers and technicians work with the kind of equipment for screening, synthesizing, and purifying compounds that until recently

At Vanderbilt, researchers are pursuing approaches that were considered “not druggable” by industry. would have been found only in drug-industry settings. Several top scientists from pharmaceutical companies have joined Mr. Conn, including the co-director, Craig Lindsley, also formerly of Merck, and J. Scott Daniels, a recent émi- gré from Pfizer who oversees pharmacoki- netics, the science of how molecules interact in the body, a mainstay of any commercial drug-development program. The Vanderbilt researchers are pursuing JOON POWELL FOR THE CHRONICLE experimental approaches that “were consid- No one at Vanderbilt is about to turn down a financial windfall from drug discoveries, but officials say basic research is still key. ered ‘not druggable’ by industry,” says Mr. “These programs would have never survived in another setting,” says Mr. Conn. Conn, who is a professor of pharmacology. They are following it up with scientific work that advances ideas farther along the develop- deeper into the science of making and then ties to the university if a drug based on the tical-industry partnerships. It has two drug- ment pipeline than has traditionally been the evaluating how permutations of a molecular researchers’ work ever goes on the market, discovery sponsorships with Sanofi-Aventis, case for academic labs—not quite developing compound could actually affect that disease even if the product itself isn’t a Penn inven- plus an agreement with Bayer HealthCare to the pills that a company will eventually sell target. The teams of drug-discovery research- tion. AstraZeneca is expected to announce encourage future collaborations with mini- but, as Mr. Conn describes it, developing a ers at places like Penn and Vanderbilt are do- similar collaborations with other universities mal red tape. knowledge base for a “druggable” molecule. ing just that. by this fall. In late 2010, UCSF was also the first to (Long before it goes into human clinical tri- “It’s not just finding a target, it’s finding Penn calls its AstraZeneca relationship land a partnership with Pfizer—worth up to als, a compound must pass a battery of cel- a drug,” says Michael Cleare, Penn’s associ- an “integrated partnership,” differentiating $85-million over five years—under a new lular and animal-based tests to show that it ate vice provost for research and executive this style of university-industry collaboration collaborative program that matches company can both hit its intended target without excess director of its Center for Technology Trans- from prior models that weren’t as outcome- scientists with academic researchers to create toxicity and retain its chemical potency and fer. focused. new medicines. stability.) At Penn, researchers work directly with A giant deal between Gilead Sciences and Pfizer, which dubs the model “science out- Other institutions pursuing drug discov- AstraZeneca scientists, sometimes side by Yale University for developing cancer-fight- side our walls,” has since announced two ad- ery follow different approaches. “What’s side in university-owned laboratories, with ing therapies, which guarantees at least $40- ditional Centers for Therapeutic Innovation, new is the systemization of it,” says Ste- the Penn professors focusing on basic science million in research support to Yale research- one involving major research universities in phen V. Frye, himself a former head of me- to identify the parameters of what a new drug ers over the next four years and as much as New York City and the other for universities dicinal chemistry at GlaxoSmithKline, who $100-million if the arrangements run for 10 in Boston. For researchers in these programs, now leads the drug-discovery center at the years, also is designed to result in jointly de- Pfizer grants access to some of its proprie- University of North Carolina at Chapel veloped drugs. tary scientific technology to speed the devel- Hill. Thirty-three of the 56 academic-based At Yale, “the intensity of “The intensity of the interactions” between opment of drugs, and liberal terms for intel- drug-discovery centers that responded to the interactions” between researchers from the company and the univer- lectual property and rights to publish results Mr. Frye’s recent survey about their priori- sity is what’s new, says Jon Soderstrom, man- of research. ties and financing were founded within the commercial researchers and aging director of Yale’s Office of Cooperative Another pharmaceutical giant, Eli Lilly past six years. Research. A committee of Yale and Gilead and Company, has taken a different tack. Skeptics question the appropriateness of the university is what’s new. scientists choose which projects will receive Having identified its own goals for treating universities’ taking on the costs of drug dis- support. Then the academics work with cor- Alzheimer’s, diabetes, cancer, and osteopo- covery. But proponents like Mr. Frye say it’s porate scientists on selecting targets and as- rosis, it invites academic and commercial re- a logical step. Drug discovery is more peril- should do and the company’s scientists do- sessing the results. The intellectual-property searchers to submit compounds to the compa- ous for industry because companies need to ing the sophisticated analysis and synthesis terms of the Yale deal are not public. ny for screening as possible drug candidates. make a profit, he says. But in an academic to build molecule after molecule to try to ac- If the molecule shows promise, Lilly has the environment, it can yield new knowledge complish that. ‘They’re All Desperate’ first right to negotiate a research sponsorship and other kinds of results that are also of It’s a new approach for AstraZeneca, Before now, pharmaceutical companies or license to develop it. value. “There’s a different risk equation,” which in 2010 began a four-year plan to cut felt that they were just “throwing money over In the two years that the program has been he says. employment by 8,000, including 1,800 from the wall” when dealing with universities, says under way, researchers at more than 200 in- Academic medical centers have long con- in-house research and development. Now it’s Regis B. Kelly, a molecular biologist and a stitutions, in 26 countries, have submitted ducted clinical trials on drugs as part of the “investing in the best science wherever it may former executive vice chancellor at the Uni- over 30,000 compounds for evaluation. Lil- approval process of the Food and Drug Ad- be,” says the company’s Mr. Reid. “It’s a way versity of California at San Francisco. But ly has struck one deal, with researchers from ministration. Some universities specialize in of sharing risk.” now “they’re all desperate,” he says, and they the University of Notre Dame, for a molecule training students in drug manufacturing. And In addition to the sponsorship support, the expect payoffs from their research sponsor- that shows promise in starving tumors of vi- basic-science researchers often identify en- collaboration includes potential payments of ships. tal blood flow. zymes or proteins in the body that trigger a up to $15-million to Penn if the researchers UCSF, which has given birth to dozens of Professional investors are also looking disease. Finding that target is the first stage hit agreed-upon milestones toward the de- successful biotech and drug companies (a for- to get in on the trend, in some cases offer- of drug discovery. velopment of a drug. It also includes an un- mer top executive at Genentech is the chan- ing financing and scientific advice to uni- But academics haven’t typically gone usually flexible license that promises royal- cellor) has been a magnet for the pharmaceu- versity researchers to help them advance The Chronicle of Higher Education | July 29, 2011 A5

potential drug discoveries before trying this kind of translational research in drug sist that the most significant opportunity who left a vice presidency overseeing can- to license them to pharmaceutical compa- discovery. the center provides is a venue to pursue cer research at Abbott Laboratories to join nies. Most of the rest of the financing comes novel ideas. “These programs would have Vanderbilt in 2009. One such group, a new venture called from foundation grants and industry spon- never survived in another setting,” says For a while, at least, it appears unlikely BioPontis Alliance, promises to evaluate sorships. In 2009 the Johnson & Johnson Mr. Conn. that universities’ expanding role in drug dis- and “pressure test” potential drug candi- subsidiary Janssen Pharmaceuticals an- For example, a Big Pharma company covery will result in lower-cost drugs. Al- dates from its partner universities with the nounced a three-year, $10-million spon- would have never invested in such an un- though some institutions (not yet including help of experts recruited ad hoc, and to pro- sorship to develop schizophrenia drugs—a validated approach for treating Parkin- Vanderbilt) sometimes add clauses to their li- vide financing for those that show commer- deal that could yield an additional $100- son’s, he says. (Indeed, Merck didn’t do so censing deals to require companies to make cial potential. The chief executive, Richard million in milestone payments to Vander- when he was there.) And “a venture inves- their drugs available at little or no cost in the A. Basile, says its model is more suitable bilt if the work succeeds. The center also tor wants something to happen in the first world’s poorest countries, few if any seem to to academic-based drug discovery than the year,” Mr. Conn says. “I’ve been here eight have gone so far as to try to impose general typical, riskier approach, in which venture- years, and we’re just now” close to final pricing controls. capital firms finance start-up companies results with the molecules that he and col- Even the director of the NIH, Francis S. based on early-stage ideas. With BioPontis’s “ We’re still making basic- leagues will soon put forth as drug candi- Collins, says that’s not something he’d want approach—financing projects, not compa- science discoveries. … dates for human clinical trials in treating the agency to encourage. The costs of health nies—“we can kill a technology early” and the disease. care and drugs are a national concern, he said move on, he says. We’re still doing what The Vanderbilt center counts other mea- in a recent interview with The Chronicle, but Penn, North Carolina, and five other uni- sures of success as well. Since 2007 its re- “this is the wrong place to get the leverage” versities have signed nonexclusive agreements scientists in academe do.” searchers have filed for more than 100 pat- to try to fix that. with the alliance, which has yet to conclude ents and published more than 140 scholarly Putting price controls on the table during its first-round fund raising. papers based on their work. Although the negotiations of a university-industry collabo- has a license with a smaller company, Sea- center uses industry processes to advance its ration, Mr. Collins says, “means there will be A Long Horizon side Therapeutics, which supports its work work, including high-tech studies that assess no collaboration.” Vanderbilt’s Center for Neuroscience on an autism drug. Terms of that deal are how its compounds react in test tubes and in Given the times, it’s those collaborations, Drug Discovery began as a one-man op- not yet public. live animals, it doesn’t operate like a com- along with other drug-discovery efforts aris- eration under Mr. Conn, who joined the Vanderbilt’s work on a Parkinson’s drug, mercial-contract research organization. ing from academe, that will be much in de- faculty in 2003. (He got his Ph.D. there which involves regulating neurotransmitter “We’re still making basic-science discov- mand. And as Mr. Kelly, of UCSF, contends, in 1996.) Now it boasts an annual bud- activity in ways that may be more effective eries,” says Susan R. Wente, associate vice it’s not just the ailing drug industry that get of nearly $18-million and is outgrow- than the traditional focus on dopamine, is fi- chancellor for research. “We’re still publish- stands to gain. Higher education, not to men- ing its prime home, in three medical-re- nanced with $4.4-million from the Michael ing papers. We’re still doing what scientists tion society at large, could benefit, too. After search buildings. About $11-million of J. Fox Foundation. Vanderbilt hasn’t yet li- in academe do.” all, governments and benefactors don’t give its budget comes from the National Insti- censed that drug. And Vanderbilt hasn’t limited itself to tax money and donations to universities “be- tutes of Health, up from about $4-million While no one at the university denies neurological drugs. It’s begun a second cause they love our beautiful papers,” says in 2006—a reflection of the federal gov- the desire for a financial windfall from drug-discovery program, in cancer. That Mr. Kelly. “If the universities don’t do it, ernment’s growing willingness to support the drug-discovery program, officials in- program is headed by Stephen W. Fesik, who’s going to?”

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CorNell aNd staNford both want a 10-acre, city-offered site near the southern tip of Roosevelt Island, Atlanta Colleges  which lies in the East River and is connected to Manhattan by tram and subway and to Queens by road. A soon-to-close hospital on the site will probably be demolished. Strive to Outrun the Recession Region’s 11-percent unemployment means layoffs and scholarship cuts

By Lawrence Biemiller

Dunwoody, Ga. he economy blows.” that’s ariel stitt’s take. she “Tlays her textbook flat on a table in the crowded student center at georgia Pe- rimeter College’s campus here and then con- tinues: “the hoPe scholarship got cut, so a lot of students got their hoPe taken away, or got a traumatic cut. one of my best friends’ parents’ house was foreclosed, so they moved back to new york. and gas prices—oMg! i used to have an suV, and i could spend $240 to $260 a month on gas.” “now i have to take Marta”—that’s the Metropolitan atlanta rapid transit author- ity—“to get to school. i walk to the bus, take that to a train, take that train to an- other train, then an- Silicon Valley, New York-Style other bus, then i walk here.” Ms. stitt lives with Paul Cantrell her family and works part time as a server at Universities jockey to build gineers and academic collaborators, the Mr. rosenbloom’s alma mater, Cornell a Mellow Mushroom city too often comes up short. university, along with stanford university pizza restaurant. she’s kendriCk brinson a new tech campus in the city “recruiting engineers in new york City and at least eight other institutions, from as an international-busi- for the ChroniCle is really hard,” says Mr. rosenbloom, and far away as india and israel, are clamoring ness major at georgia Perimeter, a two-year By Goldie Blumenstyk it’s missing institutions with the mind-set for the chance to remake that scenario. college with four campuses on atlanta’s out- of a place like the Massachusetts institute the administration of Mayor Michael r. skirts (the “Perimeter” of the name is interstate New York of technology. as he knows from a com- bloomberg has invited universities to build 285, which encircles the city). but her catalog ew York City hates seeing itself pany he founded near boston, postdocs or expand an “applied sciences” campus of recession-related woes would sound famil- as a second-string town. there routinely keep an eye on commer- here, in a competition that has turned into iar to almost any college student in the region: N yet for technology entrepre- cial trends, and professors are encouraged a head-to-head contest between Cornell unemployment here hovers around 11 percent, neurs here like Micah rosenbloom, ever to work in start-ups. “that’s not what the and stanford for the biggest prize. about two points higher than the national aver- on the lookout for talented software en- new york scene is.” Continued on Page A3 age, and foreclosure signs dot suburban streets and cul-de-sacs. Visits to three local institutions—agnes scott College, georgia state university, and Perimeter—turn up students who say they’re spending more hours at part-time jobs and  Columbia owns an 18-acre site in less money on themselves. faculty members Upper Manhattan near the Hudson River, say they haven’t gotten raises but are glad they assembled over the past decade as still have jobs. administrators say they’ve had part of a 30-year, $7-billion expansion. to resort to furloughs or even layoffs to keep The university would renovate a former budgets balanced. and everyone is worried automobile plant at this “Manhattanville that the recession won’t end anytime soon. campus,” and construct buildings on two a few tables away from Ms. stitt sits asmir other sites. Vehabovic, who says he’d be at georgia tech aN NYu-led CoNsortium seeks a studying computer science if the economy were 370 Jay Street, in Brooklyn, a 13-story better, instead of working full time in custom- former MTA headquarters, located er service for Publix super Markets and taking adjacent to an F train stop. Its reflection classes here. daniela duque, who works full time is shown here on NYU’s Polytechnic as an emergency medical technician, says she just Institute across the street. enrolled this semester as a full-time nursing stu- PhotograPhs by Mark abraMson for the ChroniCle dent—a feat she’s managing by taking classes Continued on Page A8

INSIDE Fulbright Program Looks Forward Despite Budget Uncertainties a Scholars in Northern Ireland and Sierra Leone a See where this year’s students and scholars hail from, discuss their research; a scholar from kabul goes home. A13 and where they’re headed, with charts and maps. A12

Photo Credit The Chronicle of Higher Education | October 28, 2011 A3

The Week in Brief

After a decade of record growth, NEWS | RESEaRch enrollment seems to be slowing at many community colleges. Final fig- ures are not out yet, but California, Connecticut, and Michigan all predict statewide drops in their numbers of full-time students compared with en- rollments last fall, and other states’ figures are uncharacteristically flat.

Colleges and other big nonprofit or- ganizations expect to raise more money in 2011, but the increase won’t come close to making up the donations they lost in the economic downturn, according to a survey by The Chronicle of Philanthropy.

A recent incident in which a stutter- ing student was told to save his com- ments and questions until after class shows how relatively little training on disability issues many adjuncts re- ceive. While full-time faculty members typically get a reasonable amount of training on the Americans With Dis- abilities Act, most two- and four-year institutions offer minimal training to adjuncts, says one expert.

In a precedent-setting move, the Marine Corps cut tuition aid for its service members by 80 percent, reducing the maximum benefit from $4,500 a year to $875. The move could hurt for-profit colleges that rely heavily on military tuition.

Florida A&M University’s president may no longer have an “evergreen” contract. Under a new proposal, Mark abraMson for The ChroniCle James H. Ammons’s contract would TechStars is a New York City business incubator for tech companies near Union Square. David Tisch, TechStars’ managing director, is dubious not renew every day, but a two-thirds about a new technology campus. “Over the next five years,” he says, “this scene is not going to be impacted by academic research.” majority vote of the board would still be required to dismiss him.

Gov. Rick Scott of Florida has sent a letter to each of the state’s 11 pub- Colleges Vie for Tech Tract in the Big Apple lic-university presidents, asking 17 questions about how well the institu- Continued From Page A1 “We just keep reminding ourselves this is stanford, too, is coming on strong, capital- tions are measuring student learning, To encourage bidders, the city is offering about doing something that new York needs,” izing on its stature as the engine of hundreds preparing students for the work force, up to $100-million toward capital costs and says Daniel P. huttenlocher, Cornell’s dean of of silicon Valley successes. and placing them in jobs. The Repub- some prime real estate—including a tree- computing and information science. it grabbed headlines with bold descrip- lican governor also posted online the lined, 10-acre site on roosevelt island with a familiar face on the university bus that tions of its plans for a $2-billion campus salaries of more than 50,000 employ- magnificent views of the Manhattan sky- makes 21 round trips a week between the (and $1-million just to prepare the bid) and ees at the universities. line. Cornell Club, on east 44th street, and the is using its handsome stanford.edu/nyc Web The competition has spawned proposals main campus in ithaca, in rural upstate new site to remind decision makers of the more At a meeting in Mexico of North Amer- for nearly $2-billion in new construction over York, Mr. huttenlocher has racked up more than 700,000 people now employed by ican higher-education leaders, speak- the next 30 years for a commercially focused than 200 meetings with alumni, business companies founded by stanford faculty and ers expressed frustration over barri- campus that boosters say has the potential to leaders, and others in the city over the past alumni. ers like security fears and a lack of reshape the academic and business terrain of four months. (Cornell’s president, provost, it also has the ideal spokesman in its presi- integration among degree programs. one of the world’s most important cities. The dent, John l. hennessy. Mr. hennessy, who bidders are pledging spaces for as many as himself started a company, MiPs Technol- 2,000 tech-focused graduate students—about ogies, as a young professor at stanford, has Read these articles and keep up 20 percent more than the city has in those “ We want to be the next used recent meetings with journalists in with the latest news at fields today—and an influx of academic pro- major innovation center new York City and White house officials chronicle.com grams in new media, “smart cities” technolo- in Washington to highlight how his univer- gies, and other futuristic fields. to be built in the U.S. of A.,” sity can help with the competitive pressures Correction a foothold in new York City, still arguably america faces. the world capital of finance and philanthropy, says Stanford’s president. as he stated in a CnbC interview, “We An article about how some law could also reshape the institution—or institu- want the next major innovation center to be schools are drawing questions about tions—that win. built in the U.s. of a., and from stanford’s the reliability of their job-placement and even with the uncertainties of a world- and dean of engineering have all been active, viewpoint, new York is the place to do this.” data (The Chronicle, October 21) re- wide economic crisis in the air, those with too.) The meetings have helped Cornell de- bids are due by october 28. City officials ferred incorrectly to the location of the wherewithal are taking their shot. cide which degree programs best match the say they’ll make a decision by the end of this John Marshall Law School. There are stanford and Cornell have each spent the city and, Mr. huttenlocher allows, have gen- year. two law schools with that name, and past few months relentlessly courting the erated some “buzz on the ground” as well. besides stanford and Cornell, at least two the one in the article is in Atlanta, city’s business and start-up communities, last week Cornell announced that the other major proposals are expected. one is not Chicago. rallying alumni and potential donors, and Technion-israel institute of Technology had from Columbia University, for what it calls honing ideas for academic offerings and joined its bid, with plans for a Technion-Cor- a Data sciences institute, and the other is commercialization programs in an all-out nell innovation institute, a 50-50 dual-de- from a new York University-led consortium Inside effort to prove that its campus could be the gree-granting collaboration to which the two of companies and five universities: Carnegie COMMeNTARy ...... A30 economic game-changer the city is seek- institutions would contribute faculty and un- Mellon University; the City University of ing. dertake joint research. Continued on Following Page ADvICe ...... A33 GAzeTTe ...... A35 JObS ...... A46 THe CHRONICLe RevIeW ...... SeCtion B The Chronicle of Higher Education (issn 0009-5982) is published weekly except for every other week June through August and the last two weeks in December at 1255 Twenty-Third Street, N.W., Washington, D.C. 20037. Subscription rate: $82.50 per year. Periodicals postage paid at Washington, D.C., and at additional mailing offices. Copyright © 2011 by The Chronicle of Higher Education, Inc. Registered for GST as The Chronicle of Higher Education, Inc. GST No. R-129 572 830. POSTMASTER: SEND ADDRESS CHANGES TO THE CHRONICLE OF HIGHER EDUCATION, P.O. Box 16359, North Hollywood, CA 91615. The Chronicle reserves the right not to accept an advertiser’s order. Only publication of an advertisement shall constitute final acceptance of the advertiser’s order. A4 October 28, 2011 | The Chronicle of Higher Education

NEWS | RESEaRch

Continued From Preceding Page city, he says, would be to create incentives to F. Druckenmiller for Stanford; Irwin M. Ja- ford’s dean of engineering and a key architect New York; the Universities of Toronto and of spur more collaboration between New York’s cobs, a co-founder of Qualcomm, and Abby of the university’s proposal. Warwick, in England; and the Mumbai cam- established universities and its emerging in- Joseph Cohen, a partner at Goldman Sachs, Cornell, already with a medical school in pus of the Indian Institute of Technology. dustries. for Cornell); grass-roots petitions and other Manhattan and a strong alumni base in the Both Columbia and the NYU consortium “It would be a pity,” he adds with all delib- online efforts on Twitter, Facebook, and You- region, sees the New York City Tech Cam- seek the city’s financial support. (The consor- erateness, “if there were an undue fascination Tube (mostly from Cornell alumni and stu- pus as the fulfillment of a long-held dream to tium is hoping to land a different city prop- with the new and the novel.” dents); and orchestrated media tours by uni- extend its technology and business expertise erty, in a bustling Brooklyn business district, John Sexton, NYU’s president, says any- versity leaders (landing Mr. Hennessy those well beyond Ithaca. for its venture.) Carnegie Mellon will also be thing that “maximizes the intellectual ca- four minutes and 45 seconds of featured in- Both Stanford and Cornell hired big pub- part of a somewhat smaller proposal for an pacity and the creative capabilities of the terview time in September on CNBC, a cable lic-relations firms and top city lobbyists (Stan- city” is also good for NYU. He says he’s told channel favored by Wall Streeters and other ford’s choice ran the mayor’s most recent cam- Stanford’s Mr. Hennessy that if he were in business leaders). paign) to help them manage their messaging. his shoes, “it would be obvious to me that I Stanford, considered a front-runner for its Stanford drew the spotlight two weeks ago by “ It would be a pity if there should take a quarter of my endowment and Silicon Valley cachet and the strength of its announcing a partnership with the City Uni- were an undue fascination pour it into New York.” balance sheet, has never before considered versity of New York that would allow it to The applied-sciences proposal that the so big an academic investment outside of its open its tech campus in the fall of 2012 with with the new and the novel,” NYU consortium is proposing is smaller in Palo Alto, Calif., home. The university says a cadre of professors based at CUNY’s City scale than what the city is seeking, but its Stanford-NYC is a test for a new multicam- College campus. The relationship is bound to says Columbia’s president. chief architect says its focus on solving the pus model for research universities and, as win Stanford some points with CUNY’s grow- great problems of giant urban regions is an Mr. Hennessy has described it, a chance for ing legion of political supporters. important one for New York City. “Ultimate- it to tackle important scholarly challenges More than two dozen research institutions entertainment-technology program on an- ly you want Shanghai not to be a competitor from around the world expressed initial in- other city-offered site, in the Brooklyn Navy of New York but a customer of New York,” terest in bidding, but as the costs and city ex- Yard. It’s proposed by Steiner Studios, a gi- says Paul M. Horn, a former director of re- pectations became clearer, many dropped out, ant film-and-television operation that is al- search at IBM who is now senior vice provost “ We can’t sit here and let among them Purdue University, Stevens In- ready there. (See the box for details on who’s for research at NYU. Silicon Valley be bigger than stitute of Technology, Rensselaer Polytechnic proposing what, and how they stack up.) It’s conceivable that the Bloomberg admin- Institute, and the Korea Advanced Institute of Columbia, which wants to make its data istration could give at least some support to us,” says Mayor Bloomberg Science and Technology. Others, like War- institute part of the $7-billion, 30-year expan- each of these other bids if it decides it has the wick, IIT-Mumbai, and Toronto, were part of, sion for about 3,000 new professors and re- will and the wallet to pony up the money. of New York City. or have since joined, the NYU consortium. searchers that is already under way near its It’s harder to see how it can award the bid “This is a great opportunity for any uni- Upper Manhattan campus, recognizes that for Roosevelt Island without making either versity to have a footprint at the center of the it is an underdog, says its president, Lee C. Cornell or Stanford a loser. in an urban environment “like no other in earth,” says Richard O. Buckius, vice presi- Bollinger. The idea of Cornell or Stanford the U.S.” dent for research at Purdue, whose officials moving into town worries him—not, he in- A Fevered Pitch The campus would also present new ave- visited New York donors and alumni several sists, out of fear of competition, but because Universities compete all the time, but aca- nues for its professors and graduate students times before pulling out. he frankly questions whether the city will get demic one-upmanship is usually cloaked in to connect with the financial sector and cre- what it needs. an air of collegiality. The Cornell-vs.-Stan- ative industries like publishing, that aren’t What the City Needs? There’s value to a city from a great uni- ford campaign has more of the feel of a hard- major players in Silicon Valley. Mr. Bloomberg made his own formidable versity, but “I don’t think it happens much fought political contest, complete with du- “We like to think we’re a great university, fortune as a technology innovator, and with through branch campuses,” says Mr. Bol- eling big-name endorsements (Yahoo’s co- but to be honest, one never moves forward by close ties to higher education (he’s chaired linger. “A more imaginative approach” for the founder Jerry Yang and the investor Stanley standing still,” says James D. Plummer, Stan- Continued on Page A6

The New Technology Campus: Handicapping the Contenders New York Mayor Michael Bloomberg’s administration is offering land and up to $100-million for a “game changing,” science-focused academic venture to develop and commercialize new technologies that will diversify the city’s economy. The finalists won’t be known until after the proposals are due, on October 28, but four major bidders have emerged.

Pluses Minuses

stanford u. Proposing what could eventually be a 1.9-million-square-foot campus on a site near the Has the likes of Google and Hewlett-Packard Uncertainties about the transferabil- southern tip of Roosevelt Island for 2,000 graduate students, including academic build- among its spinoff success stories; new academic ity of its Silicon Valley commercial ings, housing, parks, and an incubator for start-ups, with a full-time, New York-based fac- alliance with City University of New York lends it successes to New York; manage- ulty of 100 drawn largely from the university’s design institute and departments of engi- a locally connected partner; world-renowned for a ment challenges for a venture 3,000 neering, computer science, and business. business-friendly academic and technology-trans- miles from the main campus; rela- fer culture; a decade-plus of experience in teach- tively small corps of full-time faculty ing engineering via distance education; very rich. to be based in New York; reliance on distance education.

Cornell u. Proposing what would eventually be a two-million-square-foot campus for academics and Experience running a major local campus, since Not known for big-time technology research commercialization, gardens, and housing, also on the Roosevelt Island site, its medical school is in Manhattan; local business spinoffs; nowhere near as rich as with 250 faculty members plus adjunct and corporate research scientists, offering aca- and philanthropic roots with 50,000 local alumni; Stanford. demic and entrepreneurship programs built initially around research on the “built environ- an international partner, the Technion-Israel Insti- ment, healthier lives, and connective media.” tute of Technology, with commercialization skills and its own strong base of donors in New York and throughout the United States.

ColuMbia u. Proposing to establish a Data Science Institute on portion of its newly developing 18- Has most of the development and neighborhood- Doesn’t bring new players into the acre Manhattanville campus, just north of its historic Morningside Heights home, with a engagement approvals already in hand; physical city’s mix; uptown location is iso- focus on technologies in new media, health analysis, cybersecurity, financial services, and intellectual proximity to the rest of Columbia lated from New York’s emerging “Sili- energy conservation, and other matters related to “smart cities,” with an initial faculty of and its resources; only New York City institution con Alley” tech scene in lower Man- 70 to 100 professors from engineering and business, and ultimately 200 professors and ranked in the top 50 for spending on engineering hattan and Brooklyn; better known in 2,000 graduate students. research; consistently among the top universities New York for its business, law, and for generating royalties from licenses of intellec- medical schools than for technology tual property. entrepreneurship.

new York u. Proposes a university-industry consortium, focused on the energy, water, and transporta- Introduces international partners with global per- Could require financial resources tion challenges of great cities of the world, called the Center for Urban Science and Prog- spectives; doesn’t preclude city from also choos- New York might rather devote to a ress, to occupy a vacant, square-block building at an F train stop in Brooklyn, near its ing Cornell or Stanford for Roosevelt Island; cor- new campus; consortia of this size NYU-Poly engineering campus. Partners include CUNY; Carnegie Mellon University; the porate connections fit well with city’s commercial are complicated to manage. University of Toronto; the University of Warwick, in England; and IIT Mumbai, plus Cisco, goals for the venture; supplements NYU-Poly’s Consolidated Edison, IBM, IDEO, National Grid, Siemens, and Verizon. second-tier engineering status with heft from Carn- egie Mellon and other partners. A6 October 28, 2011 | The Chronicle of Higher Education

NEWS | RESEaRch

Continued From Page A4 the Board of Trustees at the Johns Hopkins University), he sees the campus as a catalyst for the city’s economic future. That was clearly the message he delivered this month at a “Tech MeetUp” talk in Green- wich Village. The event drew hundreds of young, fashionably dressed-down members of the city’s start-up scene, and they responded with rousing cheers as he championed the pro- posed campus as a tool for raising New York’s tech profile, declaring, “We can’t sit here and let Silicon Valley be bigger than us.” Still, for all the applause, the campus may not be what New York City needs to- day. Alexis Tryon and Scott Carleton, both in their early 20s, founded a company, Artsicle, that uses the Internet to connect emerging artists to buyers or renters of art. Artsicle is “desperate for developers and en-

Creating Silcon Valley was a fantastic challenge. “Will that recipe cook New York City ingredients?”

gineers,” Ms. Tryon said before going on MARK ABRAMSON FOR THE CHRONICLE stage at the event. But, she added, a “really Columbia U. is already expanding its campus at this site on West 125th Street, and would build a data-sciences institute here if chosen. well-done continuing-ed program” would serve her company just fine. Mr. Carleton said they’d be “willing to talk to high-school or which wine bar to frequent to bump into Cornell is planning a campus of compa- tributions, it can help, says Robert K. Steel, kids if they could code.” venture capitalists. rable size, with a New York-based faculty of New York City’s deputy mayor for economic David Tisch, managing director of Tech- Translating that ambience to New York “is at least 250, including professors from the development. “We talk about your ability to Stars, a start-up incubator in Manhattan, says a fantastic challenge,” says Mr. Powell. “Will Technion, plus corporate research scientists. support your ambition.” the deep-science ideas that made Silicon Val- that recipe cook New York City ingredients?” That’s equivalent to establishing an institu- Neither Stanford nor Cornell has publicly ley flourish aren’t what energizes the New Stanford’s academic culture, famously in- tion the size of its current engineering col- laid out how it would finance a new campus. York scene now. “New York’s angle is dif- dustry-friendly, is a crucial piece of that. So lege. It would be focused initially on three Stanford’s $19.5-billion endowment is nearly ferent,” he says. The city’s homegrown tech is MIT’s. New York’s universities say that hubs of study, affecting health, interactive four times the size of Cornell’s, but both have companies, like Foursquare, capitalize on they, too, work well with companies, but that commerce and media, and the “built envi- strong records in fund raising, and the Tech- things like population and density. “Over the their contributions aren’t as often recognized, ronment.” nion’s added donor connections could help next five years,” says Mr. Tisch, “this scene because New York’s economy is so large that Cornell. Each would probably rely heavily is not going to be impacted by academic re- their efforts don’t register as much. A Win for NYC on gifts, and on the tax-exempt borrowing search.” Whateveer the case, the Bloomberg admin- Along with information on the contendors’ options the city has offered, to help pay for While several of the bidders say they’re istration is clearly looking for an academic academic offerings and research prowess, the construction. “It’s a big lift for any uni- hoping to get started within a year in tem- venture that will rev the city’s commercial- New York will judge them on the number of versity,” says Cornell’s dean of engineering, porary locations, Bloomberg-administration ization metabolism. patents they’ve won, the number of compa- Lance Collins. officials say they recognize that the applied- Mr. Powell, who has already agreed to nies and local jobs they’ve created, and mat- Mayor Bloomberg will make the final call, sciences campus is really a bet for the fu- teach for a period at Stanford’s New York ters like how their tenure and other policies and despite talk that he’s already decided he ture. campus, should Stanford win, says success encourage faculty-industry ties. Stanford, wants Stanford, city officials insist the compet- Yet, as others have noted, a lot of what fu- would be “vastly easier” for a university very likely the only university in the country itors will be judged on the merits of their bids. eled Silicon Valley successes for the past 50 that’s done it before. that can command as much as $2,000 sim- Aside from CUNY’s role in both Stan- years—including a culture of unusually po- Stanford hasn’t announced the academic ply for a tour of its technology-transfer office, ford’s and NYU’s bids, only the wealthiest rous interaction between academic and in- specialities it plans for New York but says private universities are contending from the dustry research scientists and a sustained they will include things like entrepreneurial United States. They are the kinds of institu- gusher of federal research money, inspired, education, sustainable urban systems, and fi- tions that have rebounded most quickly from back then, by the cold war—are not as easily nancial math and engineering. “ It’s a remarkable the economic crisis that still grips most of the reproduced amid today’s political and eco- Its faculty didn’t embrace the New York opportunity for all rest of higher education. Still, says M. Peter nomic realities. idea initially, concerned that a smaller cam- McPherson, president of the Association of “There are lots of reasons that Silicon Val- pus 3,000 miles away would be too detached of higher education Public and Land-Grant Universities and a ley developed that can’t be replicated in the from the academic culture of the university. former chairman of New York-based Dow 21st century,” says Gina Neff, an assistant But many have warmed to it, ever since the and for the country.” Jones Inc., it’s a remarkable opportunity for professor of communication at the Universi- university sought their ideas for academic all of higher education and for the country. ty of Washington who wrote Venture Labor, and research programs, in a memorandum “Another big operator builds instead of de- a forthcoming book from MIT Press about from Mr. Hennessy himself. no doubt will have the edge on that front. It tracts,” he says. New York’s “Silicon Alley.” Stanford’s leaders have also assured the counts the founders of Google, Cisco, Sun Research universities are in demand all Even Woody Powell, a leading innovation- faculty that the proposal envisions “one uni- Microsystems, and dozens of other compa- around the world, particularly in develop- cluster expert at Stanford who wants to see it versity with two campuses,” and that New nies among its faculty and alumni. Cornell ing regions like China and the Middle East. win, recognizes the obstacles. York wouldn’t drain resources from Palo hopes its new partnership with the Technion, Apart from some very valuable real estate, The “horizontal networks” that connect Alto. One way the university will do that will whose graduates lead 59 of the 121 Israeli New York is offering a lot less upfront than professors and industry “are extraordinari- be through a reliance on distance learning, companies on the Nasdaq, will help it even those places are. Given all that, Seth W. Pin- ly strong” in Silicon Valley, says Mr. Pow- with only 100 full-time faculty positions per- the field. sky, president of the New York City Eco- ell, a professor of education and sociology. manently based in New York. Given the costs (even outside of New York, nomic Development Corporation, says the And many of those connections thrived be- But that, too, has raised some concerns, $100-million doesn’t go very far when it interest of several of the world’s major uni- cause the industrial scientists were far from says William J. Dally, a professor of com- comes to building top-flight academic com- versities is also a heartening vote of confi- their East Coast corporate headquarters. “It puter science at Stanford who chairs a fac- plexes), the city is also looking for a bidder dence in New York City. was a lot less supervised,” he says, which ulty advisory committee for the New York who can carry it off. “What they are all implicitly saying is encouraged creativity and collaboration. campus. Keeping departments and academ- Online petitions and Twitter traffic in and that they believe the future is here in New Plus, he says, in Silicon Valley, it doesn’t ic programs vibrant through a telepresence, of themselves don’t count for much, but “to York,” he says, “and for their own competi- take long to learn the likeliest late-night he says, is “one of the hurdles we need to the extent that tweets calibrate to alumni sup- tive advantage, it is worth it to them to make sushi spot where programmers congregate, overcome.” port,” and alumni support translates to con- that investment here.”