Spellings’ for-profit past, students as ‘customers’ comments troubling

Although our fellow university professors have become used to the UNC Board of Governors’ wrong-headed priorities when it comes to higher education in North Carolina, the board’s chaotic scramble to hire former Bush administration bureaucrat Margaret Spellings as system president represents a disturbing new low.

Spellings’ selection process was so rocky that Board Chairman John Fennebresque was forced to resign the following Monday. But in the aftermath of the board’s rushed and controversial decision, Margaret Spellings’ résumé raises serious questions about her commitment to UNC’s tradition of an affordable college education.

The UNC system is at a crossroads in its legacy of giving all North Carolinians the opportunity to earn a world-class education. UNC-Chapel Hill is consistently ranked the No. 1 best value in the nation for public higher education, but the last few years have seen some of the worst cuts to public education in our state’s history. When adjusted for inflation, higher education funding in North Carolina has been cut by more than 20 percent since 2008. Meanwhile, average tuition levels have increased by 36 percent over the same period.

UNC needs a president who will help the university system continue to give students the best education possible while avoiding unnecessary tuition hikes. Unfortunately, Spellings’ background of supporting for-profit colleges who prey on students – and then profiting off those same students when they default on their loans – suggests that she and the Board of Governors have very distinct priorities.

Spellings made over $330,000 working for the Apollo Group, the parent company of University of Phoenix, a for-profit online college that has been widely criticized for taking advantage of its students and delivering poor results. Although federal education funds account for nearly 90 percent of the company’s revenue, graduation rates were as low as 4 percent under Spellings’ tenure.

The Apollo Group’s corporate goals are to increase shareholders’ profits by lowering standards and raising admission and fees. The company has even come under fire for targeting veterans to obtain G.I. Bill funding. After a federal investigation into the Apollo Group’s practices, the for-profit company laid off 600 workers and closed 115 “campuses” – while its founder received a $5 million “retirement bonus.”

The investigation found that students who attend for-profit colleges end up defaulting on their student loans at nearly three times the rate of students who attended public and nonprofit schools. As a result, nearly half of all student loan defaults nationwide are from students who attended for-profit colleges.

That’s why it is particularly troubling that Spellings also served as board chair of the Ceannate Corporation, a student loan collection agency. Student loan debt now accounts for the highest percentage of consumer debt, and despite widespread calls to reform the student loan industry, Spellings and the Ceannate Corporation have simply profited off of it.

More than 60 percent of North Carolina college graduates have student loan debt – an average of $24,319 per student, according to the Project on Student Loan Debt. Right now, the average North Carolinian with a bachelor’s degree pays about $350 a month on student loans for almost 19 years.

Spellings’ defense of for-profit colleges is perhaps just as disturbing as the predatory practices these institutions use to fleece students. “(For-profit colleges) invented higher education in a way that was more convenient for working adults, and many in traditional higher education have responded,” she told the Board of Governors. “The reason I did it was because I learned a lot about how we can serve our students and think of them as customers in providing a product in convenient ways for them.”

In a state that claims to value public education and prides itself on a top-notch university system, students should not be viewed as “customers” to profit from and then discard. In treating higher education merely as a “business,” instead of one of the most worthwhile investments a society can possibly make, the Spellings choice reflects priorities that are the opposite of what our university system needs.

The founders of the University of North Carolina said the cost of public higher education should be as “free of expense” as possible. Instead, we have a new president who has profited from her ties to one of the most troubled for-profit universities. She even helped to lead a company that collects student loan debt. Given this track record, Margaret Spellings owes all North Carolinians an explanation before she sets foot on any of our campuses as UNC system president.

This story was originally published November 2, 2015 at 5:06 PM with the headline "Spellings’ for-profit past, students as ‘customers’ comments troubling."