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Moody’s: Higher education sector outlook negative

Dive Brief:

  • The credit-rating agency Moody’s downgraded the outlook of the higher education sector from stable to negative, reports the Chronicle of Higher Education.
  • Moody’s cites the industry’s inability to lower tuition rates and uncertainty around potential federal policy and tax reform changes, which could have an impact on “enrollment and tuition-revenue growth, philanthropic support and the cost of borrowing.”
  • Moody’s assigned a negative rating to the sector in 2013, but amended it to stable two years later in anticipation that states would increase funding and revenue would grow at four-year institutions.

Dive Insight:

With the election of Donald Trump — which Education Dive named “Disruption of the Year” for its 2017 Dive Awards — it is even more unclear what types of policy and tax reform changes could potentially impact higher ed. The topic generating the most conversation in higher ed circles is the proposal to tax endowments of private institutions with more than 500 students and endowment assets of more than $250,000 and $500,000 in the House and Senate bills respectively, per full-time enrollee.

Likewise, the potential outcomes of the Higher Education Act — now back on the table — has the industry on even more precarious footing in terms of finances, as Republicans have made clear they want institutions to provide student ROI. Specifically, the bill’s proposed penalties would force institutions to use their endowment funds to make college more affordable for more students. 

Meanwhile, institutions will continue to seek ways to cut costs. For instance, Connecticut recently announced plans to consolidate all 12 of its community colleges under a single system, after Wisconsin proposed to merge the University of Wisconsin’s two-year colleges into its four-year institutions. 

Free speech issues and campus protests will continue to capture headlines, with recent research indicating students are more politicized than at any point in the last five decades. Colleges have spent upwards of hundreds of thousands of dollars for security for controversial speakers and protests, while administrators have come under scrutiny for how they respond these issues. For example, Evergreen State College — which shut down the campus due to unrest — now faces a potential bill to have its public funding stripped and has seen a 4.5% drop in enrollment this year. 

To tackle these realities, presidents and administrators will need to show students their safety and security are top priorities. A recent study from researchers at the University at Albany offers six tips for presidents handling emergencies. These include creating pre-conditions that facilitate collaboration during an incident, effectively interpreting the complex context of the unrest, fast response and targeted decision making, extending information to stakeholders and constituents on decisions carried out, figuring out the right moment to shut-down the crisis and learning from, as well as documenting, the event to enhance safety and performance.

As tuition and other costs rise, leaders at pubic colleges need to continue to work with legislators to prove value to how they are addressing student ROI. One strategy being discussed is performance-based funding, where state policymakers would work out a plan with institutions to offer funding based on whether certain achievement benchmarks have been met. Institutions also are looking at alternative sources of funding, such as Purdue University’s purchase of for-profit Kaplan, which Education Dive named Innovation of the Year.  

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Education funding a priority in 2018, new senate chair says

State Sen. Max Wise
State Sen. Max Wise

State Sen. Max Wise said pension reforms should likely wait until the 2018 regular session and added funding must be found for education as legislators work to craft a new two-year budget among budgetary issues. Wise also stated that while comprehensive tax reform is key to making Kentucky more competitive, he feels it needs more study before the system is overhauled this year.

Wise said he would prefer to see the legislature wait until the regular session of the General Assembly starting Jan. 2 to tackle pension reforms, noting the letter sent to Gov. Matt Bevin by members of the House asking to wait and the concerns expressed by many of his constituents.

Wise discussed chatter of a “watered down” version of the original pension proposal possibly coming before the legislature that would not include 3 percent employee salary contribution going to the retiree health insurance fund, some changes to how cost of living adjustments are handled, and other tweaks.

Heading into the 2018 session, Sen. Wise has been tapped as the new Senate Education Committee chair. As an educator at the graduate and undergraduate levels and a father of four children currently in Kentucky schools, Wise said he looks forward to bringing his experience to the new role. Wise also said he expects to work closely with House Education Committee Chair Bam Carney and lean on his expertise as they seek to move important education issues forward.

The main focus of education discussions in 2018 will revolve around funding as legislators craft the next two-year state budget with limited resources. In the most recent budget, cuts were seen in almost every area of state government except for K-12 education. Wise said he expects the legislature to again try to hold education harmless in any budget cuts (discussion starting at 3:00 in the video segment below).

As for higher education funding and the cuts seen by the state’s colleges and universities in recent years, Wise said he expects the performance-based funding model passed by the General Assembly in 2016 to help improve the use of those funding sources but added that many of the higher education institutions will have to “tighten the belt” as funding continues to be an issue.

An education issue outside of the budget expected to see movement in 2018 is essential skills legislation dealing with ensuring Kentucky students have the skills they need to enter the workforce. This comes as many businesses across the state struggle to find applicants able to show up to work on time, work on a team, dress properly for the job, and other critical skills required to fill the positions they have available.

Wise noted the Senate and House have worked over the interim to study the issue further and said he expects to see some movement on that issue this year, stating he feels it is something the state must address moving forward.

Hear more from Wise on education issues and budgetary needs in 2018 here:

With all of the funding issues facing the legislature in 2018, tax reform continues to be a key area of discussion in Frankfort. In an exclusive interview with The Bottom Line, Gov. Bevin said he could potentially introduce two separate budget proposals in 2018, one with tax reform and one without.

Wise said he feels comprehensive tax reform is necessary for the state, but added that it is unlikely the legislature will be able to tackle that issue along with the budget and pension reforms in 2018.

“I think Kentuckians know that tax reform is going to happen. But I think also at the same time when they hear tax, they are automatically saying ‘woah, hit the brakes.’ But I think tax reform can be looked at in a way that says we aren’t raising property taxes, we aren’t doing all these things that sometimes make people fearful when they hear that three letter word,” Wise said.

Watch the segment on tax reform in the video below:

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Reversal on Graduate Lending

The GOP’s proposed update to the law governing higher education would force a U-turn for long-standing federal policies on graduate student lending.

Students who pursue graduate degrees have been allowed to take out an unlimited amount in federal student loans since Congress authorized the Grad PLUS program in 2005. But the legislation proposed last week by Representative Virginia Foxx, the North Carolina Republican who chairs the House education committee, would cap annual borrowing amounts for grad students at $28,500 annually. The bill also would change benefits for borrowers by altering income-driven repayment options and eliminating Public Service Loan Forgiveness.

Republicans said the proposed changes would put pressure on institutions to keep costs down and fits with their broader vision to simplify the federal student aid system.

But advocates for graduate education warned that the bill would limit less-well-off students’ access to advanced degrees. And they said public service-oriented fields in particular would be hurt by limits in federal loans and the end of PSLF.

Beth Buehlmann, vice president for public policy and government affairs at the Council of Graduate Schools, worked in the office of Wyoming Senator Mike Enzi, who was the ranking Republican on the Senate education committee when Congress authorized Grad PLUS loans. That move was partly designed to reduce students’ reliance on the private loan market, she said.

“And it has done that,” she said. “It has been very successful in doing that.”

Republicans’ opening bid in the reauthorization of the Higher Education Act signals just how much the party’s thinking on student aid has changed in the last decade. Not only do GOP leaders want more simplicity — a departure from the current landscape that offers a number of repayment options for student loan debt — but they also want a bigger role for the private loan market.

Many Republicans in recent years have argued for eliminating both Grad PLUS and another loan program that allows unlimited lending to parents of undergraduates, called Parent PLUS. The private sector, they argue, will do just as well as any federal regulation to weed out useless programs.

However, Buehlmann and others warn that leaving the private market to fill gaps in the cost of graduate education for certain service-oriented fields — such as public-interest law, counseling and drug rehabilitation, and social work — would make those careers unattainable. Grad students, Buehlmann said, can’t access grant funding. Lending is the only option to finance their education, and federal loans provide protections not available in the private market, she said. If the private lending market doesn’t fill the gaps in cost of graduate education, according to this argument, fewer students will be able to enter those professions.

Chris Chapman, president and CEO of AccessLex, said the elimination of PSLF and a cap on graduate lending would make it more difficult for underrepresented student groups to pursue graduate education.

“It would really take away a very strong benefit and strong tool to encourage graduates who go into public service professions,” he said. “Even more than that, it really eliminates the incentive to persist in the profession.”

Higher education groups and student aid advocates, meanwhile, are watching a federal tax reform process that could have major implications for graduate students. The House passed a tax plan last month that includes several provisions to strip current benefits in the tax code for students. One change would mean that graduate students’ tuition discounts effectively are taxed as income. Another would end student loan interest deductions, costing student borrowers an additional $24 billion over the next decade. That change would be particularly burdensome to grad students, many of whom are paying off undergraduate loans.

Those provisions were left out of a Senate bill earlier this month. But the details of the final tax reform legislation that emerges could weigh on whatever changes are made to graduate benefits in a reauthorization of the Higher Education Act.

The GOP’s Rationale

Republicans have been critical of the increasingly high taxpayer cost estimates for the Public Service Loan Forgiveness program. And GOP lawmakers believe the benefit is poorly targeted. A committee aide pointed to one recent report arguing that in many cases public sector workers are no less well compensated than private sector workers. PSLF though would also provide loan relief to many low-salaried employees of qualifying nonprofit organizations. 

Regardless of what wage data shows, the GOP says no worker should get special benefits on student loans based on their employer.

“Our proposal offers the same deal for everyone regardless of occupation and puts downward market pressure on institutions to keep costs down,” a committee spokesman said. “We believe all work is valuable and should be held in the same high regard.”

Republican bill writers also believe the unlimited availability of federal funds has led college to raise tuition and fees. The committee cited one UCLA study from last year examining the use of Parent PLUS loans that appeared to back that notion, commonly known as the Bennett hypothesis. But that study didn’t look at the relationship between program costs and graduate lending (Parent PLUS can only be used to fund undergraduate education). And a recent paper from Robert Kelchen, an assistant professor of education at Seton Hall University, found limited evidence of the theory’s relevance to graduate lending for legal education.

Kelchen said that in 2005, before Grad PLUS was authorized, federal graduate student loans typically did not cover the full cost of education. The proposed changes in the House bill, he said, would have implications for for-profit chains as well as a substantial number of private nonprofit colleges that have used professional and master’s degree programs to help subsidize undergraduate education.

“It could put pressure on colleges to try to get more revenue from undergraduates,” he said.

Students entering higher-paid fields likely would be able to find private loans at similar rates to Grad PLUS, Kelchen said, but students entering high-tuition, low-paid fields like social work could struggle.

While the evidence is limited of tuition increases linked to unlimited graduate lending, average borrowing amounts by graduate students rose sharply between the 2004-05 and 2010-11 academic years, before subsequently declining through 2014-15, according to a College Board tally of federal loans made to students and parents. But the loan amounts began to rise again in 2015-16.

Critics of unlimited graduate lending also have attributed the unexpectedly high costs of federal income-driven repayment programs to heavy use by graduate students. A U.S. Government Accountability Office report last year found that the expected cost of IDR plans has shot up to $53 billion from $25 billion, for federal loans issued during the 2009 to 2016 fiscal years, primarily because of the growing number of loans expected to be repaid through the program. And changes by the Obama administration to income-driven plans made the program more generous to grad students as it steered more borrowers into those plans.

Preston Cooper, an education data analyst at the conservative American Enterprise Institute, said the research was clear that allowing unlimited borrowing by parents of undergraduates has led to increases in tuition. The evidence is much more mixed on unlimited graduate borrowing, he said, but capping that lending accomplishes another conservative goal by opening new space for private lenders.

“The rationale for having a federal student loan program is that there is a market failure, that basically no lenders are going to lend to an 18-year-old student who doesn’t have any credit history, doesn’t have any work history, because that’s just too risky,” he said. “Those arguments don’t really apply to the graduate lending sphere.”

Graduate students have ample opportunity to establish a credit history. And private lenders will lend only to students in programs with a reasonable chance of paying off loans, he said. Cooper also argued that income-driven repayment is adequate to ensure students in lower-paying public service fields can afford to repay their loans.

Sarah Flanagan, vice president for government relations and policy at the National Association of Independent Colleges and Universities, said institutions want students to be able to cover the full cost of their education with federal loans. Private lending has less generous terms and conditions, she said, and pushing students to take out those additional loans undercuts the Republican theme of greater simplicity in the student aid system.

“That’s really a step backward,” she said.

She said an aggregate limit on graduate lending could be preferable to annual limits and would reward shorter, more efficient programs.

Others have noted that in the case of legal education in particular, private lending would likely fill any gap in costs for students attending prestigious law schools, that may not be the case at lower-ranking law programs. 

The bill does include higher lending amounts for students pursuing graduate education as doctors or other medical professional positions. And while it would otherwise limit graduate lending, it does increase annual lending limits for undergraduates and would raise the aggregate lending limit for federal direct loans from $138,500 to $150,000. Grad PLUS was authorized to meet gaps in need for students who had already reached their aggregate borrowing limit. So some see the higher limit as partially addressing the need met by the program.

Large for-profit college chains, among them Walden University, focus primarily on graduate education. Jennifer Blum, senior vice president of external relations and public policy at Laureate Education, Walden’s parent company, said the university supports efforts to streamline federal loan and repayment programs if the results are more efficient for student borrowers.

“As an institution focused primarily on graduate-level education, we are examining the legislation closely to determine the relationship between any loss of Grad PLUS funding to the other loan reforms and improvements proposed,” she said in a written statement. “We are hopeful that any final legislation will strike the right balance to ensure continued access and completion for graduate students who need educational funding.”

Some advocates for student aid recipients see graduate students taking it on the chin in the House bill. Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators, said grad students don’t just lose access to Public Service Loan Forgiveness in the bill. They would also be shut out of the federal work-study program.

Draeger said it’s important to be clear about the specific problems lawmakers are setting out to address in the higher education bill’s reauthorization. Loan repayment rates, defaults, tuition inflation and the cost of loan forgiveness are all separate issues, he said.

Graduate students typically aren’t the ones struggling to pay back their loans, said Draeger. To the extent Congress is looking to address the moral hazard of loan forgiveness — too many students taking out large amounts of loans with the expectation that the government would pick up much of the cost — it could cap future loan forgiveness, rather than capping borrowing and eliminating Public Service Loan Forgiveness, he said.

“Sometimes I feel like these conversations are all going by each other,” Draeger said. “Our take is there are ways to address all these issues. Putting caps on the loans might be one of those ways.”

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UVU, Utah Women & Leadership Project honored by Envision Utah

What’s good for women is good for Utah, and the Utah Women Leadership Project at Utah Valley University has helped both women and the area, enough to earn one of two Common Good Awards presented this year by Envision Utah.

“ULWP embodies everything the Common Good Awards represents,” wrote president CEO of the group, Robert Grow, in a letter to Susan Madsen, head of UWLP. “By providing women in Utah with resources and support, you’ve had a positive impact on our entire state both socially and economically. It would be so meaningful for us to recognize the work you’ve done. We have so much to learn from you and this incredible project.”

“We would like to honor you for taking on an incredible challenge and creating such a successful program,” he wrote.

The Envision Utah board of directors unanimously approved awarding UWLP the Common Good Award.

In addition to the Common Good Award, UWLP recently received a $5,000 grant from the central Utah chapter of SCORE, an organization associated with the Small Business Administration, to study women in business.

Madsen said she was pleased with the honors.

“Envision Utah is a highly respected nonprofit in the state, doing important work to make sure the future of Utah is bright,” she said. “I am deeply honored to receive this award on behalf of the UWLP team.”

“Recognition like this can have a powerful impact on the work we do, as awareness is a key first step in creating lasting societal change,” she added. “We are so grateful to Envision Utah for drawing attention to our efforts to benefit girls and women in the state of Utah.”

“SCORE is a fantastic national organization working hard to support small businesses,” she said. “They are leading in the work to help women especially in their entrepreneurial efforts. We are so grateful for this grant funding which will allow us to track the current status of women in business leadership in the state of Utah. Awareness of the current situation is a key step in moving the needle on behalf of women in business.”

Dan Wallace, chair of the SCORE Central Utah Chapter, said the UWLP was a good choice for the grant.

“We like the fact that the money was going to stay local,” he said. “It will be having a direct on our communities locally, helping advance local programs with a direct impact. We thought that the UWLP was right in line with what we were trying to do nationally.”

The local SCORE chapters nominate ideas or projects to a national group, which then evaluates them and determines the ones that will be given the grants.

The honors are gratifying. The funding will help. An additional benefit of the honors is the feeling of accomplishment and of reaching the right people, said Robbyn Scribner, who works with the grants and development area of the UWLP.

“We are always thrilled to receive recognition,” she said. “The work can only move forward when it is recognized. We need people to come to our events. The more recognition we have, the greater impact we can have and the more good we can do. One of our primary goals is to connect with other organizations and work together. That way we can have the maximum impact. It makes us feel like we are doing our job when groups are aware of our goals and we work together.”

“Receiving the award draws attention and funding is imperative to everything we do,” she said. “We are so thrilled with this partnership with SCORE. There are more women succeeding in business and leading in business.”

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From a record endowment to funding threats, here’s what happened to Penn’s finances in 2017


Photo: Julia Schorr

With Penn’s ranking as the eighth richest university in the world, it’s vast financial resources are always a topic of discussion within the world of higher education. 

In 2017, the University’s endowment reached an all time high, making it one of the best years for investment returns in Penn’s history. While experts say this spike in returns will have little impact on University spending, the controversy that erupted over a series of leaked documents known as “The Paradise Papers” in November placed the financial maneuvering of various elite universities in the spotlight — Penn included. 

Federal and state policies from the new Trump administration also brought increased attention to Penn’s finances this year. In early 2017, Penn faced a $30 million funding cut when Gov. Tom Wolf (D) proposed large budget cuts that would eliminate all state funding for Penn’s School of Veterinary Medicine. Just as this proposal was reversed in October, the new GOP tax plan began introducing a range of concerns for other members of the Penn community. 

Now in December, the University continues to face many unanswered questions about its investments and how they will hold up against shifting federal guidelines. To understand how Penn is moving into 2018 as a financial entity, here is a guide to the year’s most important milestones in University finances.

Photo: Alana Shukovsky

Ben Zhao

Penn had one of its most successful financial years

The University’s multi-billion dollar endowment, the main source of school funds, reached new heights in the 2017 fiscal year. Penn reported a 14.3 percent investment return on its endowment, bringing the endowment’s total value to a record-high of $12.2 billion. 

These high returns were largely driven by equity investments, which refers to the buying and holding of shares of stock on a stock market — but the larger endowment is unlikely to change University spending for 2018. Penn administrators and experts noted that one good financial year would not alter parts of the institution’s operating budget, which suggests that funds impacting students directly like financial aid will not be changing.

Students and experts criticized the University for how it allocates its money

Penn’s successful returns on its endowment were paired with new questions on how this money was being spent. 

Fossil Free Penn, a campus organization pushing for the University’s divestment from fossil fuels, took new steps in their activism this year. In February, the group wore surgical masks at a University Council Open forum demonstration before staging a multiple day sit-in in March that gathered over 100 people and ended with the Office of Student Conduct citing 13 students. 

Despite the multiple protests, the University did not respond to FFP, prompting the group to re-orientate its strategy from “inflammation” to recruitment and education in the fall. While the shift has expanded the membership of the group, it has not led to tangible policy change from the administration. FFP leaders say they will continue to work on refining their approach in the new year. 

Students aren’t the only ones calling attention to Penn’s investments. The investment techniques of large universities like Penn became a topic of national discussion with the release of “The Paradise Papers” — a collection of more than 13 million documents revealing that Penn was among dozens of universities to store millions of dollars in offshore tax havens. 

The University’s tax forms revealed four funds in the Cayman islands where Penn has stored more than $80 million dollars. These offshore private accounts, while riskier than government equities that universities have traditionally placed their money in, can also be much more lucrative, bringing higher returns for Penn. 

Photo: Camille Rapay

Penn actively worked against state and federal policies that affected its finances

As a private institution, Penn is less swayed by government higher education decisions than public institutions. Nonetheless, major state and federal policy changes presented a range of concerns for University administrators in 2017. 

When Pennsylvania Gov. Tom Wolf announced sweeping cuts to state funding for universities in February, the University  found itself at the risk of losing almost $30 million for Penn Vet, 20 percent of the school’s budget. After months of uncertainty, which sparked outrage from veterinary students and faculty, Wolf signed a bill allocating state funding for Pennsylvania schools and alleviating Penn Vet’s financial stress. 

However, just weeks after, new concerns arose around the new GOP tax bill which has officially passed the House of Representatives and Senate. Both bills propose a 1.4 percent excise tax on private universities’ endowments. This means Penn’s highest paid employers, like President Amy Gutmann whose pay totaled $3.5 million, could also stand to lose large parts of their income under the new proposal

The version of the bill that passed the House also includes several provisions that could significantly increase the price of a graduate education, prompting protests from students across the country, including at Penn. Dozens of graduate students marched into College Hall in November calling on Gutmann to “protect” them from the repercussions of this bill. 

In the coming weeks, state representatives will head to a conference committee to solve the differences between the House and the Senate proposals of the GOP tax plan. Given the potential repercussions of the plan, many members of the Penn community will be looking to University leaders to exert their influence on the legislation. 

In April, reporting from The Daily Pennsylvanian showed that  Penn spends over a million dollars each year trying to influence legislation on the state, local and national level, which is almost twice as much as any of its peer institutions. 

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Officials: Myths about higher education can be dangerous

Getting a college degree can cost hundreds of thousands of dollars, yet once you are out, there is no guarantee of success. A pretty risky investment.

Many business-minded people decided to take the less conventional route to fame and fortune — instead of going to (or finishing) college, they chose to start their own businesses.

Many of these people are now considered to be the Elite of the Elite and did so all without a piece of paper stating that they were approved to be in the American workforce.

Here is a list of the top 100 entrepreneurs that never received a college degree. Many of them you will know while others decided to remain slightly under the radar.

1. Abraham Lincoln, lawyer, U.S. president. Finished one year of formal schooling, self-taught himself trigonometry, and read Blackstone on his own to become a lawyer.

2. Amadeo Peter Giannini, multimillionaire founder of Bank of America. Dropped out of high school.

3. Andrew Carnegie, industrialist and philanthropist, and one of the first mega-billionaires in the US. Elementary school dropout.

4. Andrew Jackson, U.S. president, general, attorney, judge, congressman. Home-schooled. Became a practicing attorney by the age of 35 – without a formal education.

5. Andrew Perlman, co-founder of GreatPoint. Dropped out of Washington University to start Cignal Global Communications, an Internet communications company, when he was only 19.

6. Anne Beiler, multimillionaire co-founder of Auntie Anne’s Pretzels. Dropped out of high school.

7. Ansel Adams, world-famous photographer. Dropped out of high school.

8. Ashley Qualls, founder of, left high school at the age of 15 to devote herself to building her website business. She was more than a million dollars by 17.

9. Barbara Lynch, chef, owner of a group of restaurants, worth over $10 million, in Boston. Dropped out of high school.

10. Barry Diller, billionaire, Hollywood mogul, Internet maven, founder of Fox Broadcasting Company, chairman of IAC/InterActive Corp (owner of,

11. Ben Kaufman, 21-year-old serial entrepreneur, founder of Kluster. Dropped out of college in his freshman year.

12. Benjamin Franklin, inventor, scientist, author, entrepreneur. Primarily home-schooled.

13. Billy Joe (Red) McCombs, billionaire, founder of Clear Channel media, real estate investor. Dropped out of law school to sell cars in 1950.

14. Bob Proctor, motivational speaker, bestselling author, and co-founder of Life Success Publishing. Attended two months of high school.

15. Bram Cohen, BitTorrent developer. Attended State University of New York at Buffalo for a year.

16. Carl Lindner, billionaire investor, founder of United Dairy Farmers. Dropped out of high school at the age of 14.

17. Charles Culpeper, owner and CEO of Coca Cola. Dropped out of high school.

18. Christopher Columbus, explorer, discoverer of new lands. Primarily home-schooled.

19. Coco Chanel, founder of fashion brand Chanel. A perfume bearing her name, Chanel No. 5 kept her name famous.

20. Colonel Harlan Sanders, founder of Kentucky Fried Chicken (KFC). Dropped out of elementary school, later earned law degree by correspondence.

21. Craig McCaw, billionaire founder of McCaw Cellular. Did not complete college.

22. Dave Thomas, billionaire founder of Wendy’s. Dropped out of high school at 15.

23. David Geffen, billionaire founder of Geffen Records and co-founder of DreamWorks. Dropped out of college after completing one year.

24. David Green, billionaire founder of Hobby Lobby. Started the Hobby Lobby chain with only $600. High school graduate.

25. David Karp, founder of Tumblr. Dropped out of school at 15, then homeschooled. Did not attend college.

26. David Neeleman, founder of JetBlue airlines. Dropped out of college after three years.

27. David Ogilvy, advertising executive and copywriter . Was expelled from Oxford University at the age of 20.

28. David Oreck, multimillionaire founder of The Oreck Corporation. Quit college to enlist in the Army Air Corps.

29. Debbi Fields, founder of Mrs. Fields Chocolate Chippery. Later renamed, franchised, then sold Mrs. Field’s Cookies.

30. DeWitt Wallace, founder and publisher of Reader’s Digest. Dropped out of college after one year. Went back, then dropped out again after the second year.

31. Dov Charney, founder of American Apparel. Started the company in high school, and never attended college.

32. Dustin Moskovitz, multi-millionaire co-founder of Facebook. Harvard dropout.

33. Frank Lloyd Wright, the most influential architect of the twentieth century. Never attended high school.

34. Frederick “Freddy” Laker, billionaire airline entrepreneur. High school dropout.

35. Frederick Henry Royce, auto designer, multimillionaire co-founder of Rolls-Royce. Dropped out of elementary school.

36. George Eastman, multimillionaire inventor, Kodak founder. Dropped out of high school.

37. George Naddaff, founder of UFood Grill and Boston Chicken. Did not attend college.

38. Gurbaksh Chahal, multimillionaire founder of BlueLithium and Click Again. Dropped out at 16, when he founded Click Again.

39. H. Wayne Huizenga, founder of WMX garbage company, helped build Blockbuster video chain. Joined the Army out of high school, and later went to college only to drop out during his first year.

40. Henry Ford, billionaire founder of Ford Motor Company. Did not attend college.

41. Henry J. Kaiser, multimillionaire founder of Kaiser Aluminum. Dropped out of high school.

42. Hyman Golden, co-founder of Snapple. Dropped out of high school.

43. Ingvar Kamprad, founder of IKEA, one of the richest people in the world, dyslexic.

44. Isaac Merrit Singer, sewing machine inventor, founder of Singer. Elementary school dropout.

45. Jack Crawford Taylor, founder of Enterprise Rent-a-Car. Dropped out of college to become a WWII fighter pilot in the Navy.

46. Jake Nickell, co-founder and CEO of Did not graduate from college.

47. James Cameron, Oscar-winning director, screenwriter, and producer. Dropped out of college.

48. Jay Van Andel, billionaire co-founder of Amway. Never attended college.

49. Jeffrey Kalmikoff, co-founder and chief creative officer of Did not graduate from college.

50. Jerry Yang, co-founder of Yahoo! Dropped out of PhD program.

51. Jimmy Dean, multimillionaire founder of Jimmy Dean Foods. Dropped out of high school at 16.

52. John D. Rockefeller Sr., billionaire founder of Standard Oil. Dropped out of high school just two months before graduating, though later took some courses at a local business school.

53. John Mackey, founder of Whole Foods. Enrolled and dropped out college six times.

54. John Paul DeJoria, billionaire co-founder of John Paul Mitchell Systems, founder of Patron Spirits tequilla. Joined the Navy after high school.

55. Joyce C. Hall, founder of Hallmark. Started selling greeting cards at the age of 18. Did not attend college.

56. Kemmons Wilson, multimillionaire, founder of Holiday Inn. High school dropout.

57. Kenneth Hendricks, billionaire founder of ABC Supply. High school dropout.

58. Kenny Johnson, founder of Dial-A-Waiter restaurant delivery. College dropout.

59. Kevin Rose, founder of Dropped out of college during his second year.

60. Kirk Kerkorian, billionaire investor, owner of Mandalay Bay and Mirage Resorts, and MGM movie studio. Dropped out eighth-grade.

61. Larry Ellison, billionaire co-founder of Oracle software company. Dropped out of two different colleges.

62. Leandro Rizzuto, billionaire founder of Conair. Dropped out of college. Started Conair with $100 and hot-air hair roller invention.

63. Leslie Wexner, billionaire founder of a Limited Brands. Dropped out of law school. Started the Limited with $5,000.

64. Marc Rich, commodities investor, billionaire. Founder of Marc Rich Co. Did not finish college.

65. Marcus Loew, multimillionaire founder of Loews theaters, co-founder of MGM movie studio. Elementary school dropout.

66. Mark Ecko, founder of Mark Ecko Enterprises. Dropped out of college.

67. Mary Kay Ash, founder of Mary Kay Inc. Did not attend college.

68. Michael Dell, billionaire founder of Dell Computers, which started out of his college dorm room. Dropped out of college.

69. Michael Rubin, founder of Global Sports. Dropped out of college in his first year.

70. Micky Jagtiani, billionaire retailer, Landmark International. Dropped out of accounting school.

71. Milton Hershey, founder of Hershey’s Milk Chocolate. 4th grade education.

72. Pete Cashmore, founder of at the age of 19.

73. Philip Green, Topshop billionaire retail mogul. Dropped out of high school.

74. Rachael Ray, Food Network cooking show star, food industry entrepreneur, with no formal culinary arts training. Never attended college.

75. Ray Kroc, founder of McDonald’s. Dropped out of high school.

76. Richard Branson, billionaire founder of Virgin Records, Virgin Atlantic Airways, Virgin Mobile, and more. Dropped out of high school at 16.

77. Richard DeVos, co-founder of Amway. Served in the Army and did not attend college.

78. Richard Schulze, Best Buy founder. Did not attend college.

79. Rob Kalin, founder of Etsy. Flunked out of high school, enrolled in art school for a time, faked a student ID at MIT so he could take classes. His professors subsequently helped him get into NYU, they were so impressed.

80. Ron Popeil, multimillionaire founder of Ronco, inventor, producer, infomercial star. Did not finish college.

81. Rush Limbaugh, multi-millionaire media mogul, radio talk show host. Dropped out of college.

82. Russell Simmons, co-founder of Def Jam records, founder of Russell Simmons Music Group, Phat Farm fashions, bestselling author. Did not finish college.

83. S. Daniel Abraham, founder of Slim-Fast, billionaire. Did not attend college.

84. Sean John Combs, entertainer, producer, fashion designer, and entrepreneur. Never finished college.

85. Shawn Fanning, developer of Napster. Dropped out of college at the age of 19.

86. Simon Cowell, TV producer, music judge, American Idol, The X Factor, and Britain’s Got Talent. High school dropout.

87. Steve Madden, shoe designer. Dropped out of college.

88. Steve Wozniak, co-founder of Apple, billionaire. Did not complete college.

89. Ted Murphy, founder of social media company Izea Entertainment. Dropped out of college.

90. Theodore Waitt, billionaire founder of Gateway Computers. Dropped out of college to start Gateway – one semester before graduating.

91. Thomas Edison, inventor of the lightbulb, phonograph, and more. Primarily home-schooled, then joined the railroad when he was only 12.

92. Tom Anderson, co-founder and “friend” of MySpace. Dropped out of high school.

93. Ty Warner, billionaire developer of Beanie Babies, real estate investor, and hotel owner. Dropped out of college.

94. Vidal Sassoon, founder of Vidal Sassoon, multimillionaire. Dropped out of high school.

95. W. Clement Stone, multimillionaire insurance man, author, founder of Success magazine. Dropped out of elementary school. Later attended high school, graduating. Attended but did not finish college.

96. W.T. Grant, founder of W.T. Grant department stores, multimillionaire. Dropped out of high school.

97. Wally “Famous” Amos, multimillionaire entrepreneur, author, talent agent, founder of Famous Amos cookies. Left high school at 17 to join the Air Force.

98. Walt Disney, founder of the Walt Disney Company. Dropped out of high school at 16.

99. Wolfgang Puck, chef, owner of 16 restaurants and 80 bistros. Quit school at the age of 14.

100. Y.C. Wang, billionaire founder of Formosa Plastics. Did not attend high school.

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Tax Bills Could Expand Private School Benefits and Hurt Public Education

“We have provisions that are incentivizing parents to keep students in private schools or send them to private schools,” said Sasha Pudelski, assistant director for policy and advocacy at the American Association of School Administrators. “If there’s going to be tax breaks in the bill, giving it to the parents in the private education system over the public education system doesn’t make any sense.”

How generous the new tax preference for private education would be is subject to debate. As with current 529 plans, contributions would not be tax deductible, but interest and capital gains would not be taxed. Withdrawing funds for elementary school would not give families much time to see their investments grow tax-free. That alone has divided advocates of school choice.

“As currently structured, 529 plans are not designed to deliver significant benefits to poor families in college,” wrote Nat Malkus of the conservative American Enterprise Institute. “Giving families flexibility to spend those funds sooner does nothing to address their capacity to save; it only minimizes the potential benefits.”

In urging his colleagues to vote for the amendment, Mr. Cruz said the expansion “ensures that each child receives an education that meets their individual needs, instead of being forced into a one-size-fits-all approach to education, or limited to their ZIP code.” He said the provision would “help working class and middle-income families save and prepare for their children’s educational expenses.”

But that assumes that those working-class families have money to save, and many do not.

“The opinion ranges from being marginally helpful, to a nothingburger, to being harmful because it plays into the narrative that school choice is about helping rich people,” said Michael J. Petrilli, president of the Thomas B. Fordham Institute, which favors government-funded vouchers for private school tuition. “Are there people out there who cannot afford school choice and will now be able to? No.”

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Some conservatives say the amendment falls well short of the president’s request for Congress to “pass an education bill that funds school choice for disadvantaged youth.” Instead, they say, it benefits wealthy families who already have thousands of dollars at their disposal to pay for their children to attend nonpublic schools.

But other conservative groups, like the Heritage Foundation, which began advocating the expansion of 529 plans in 2012, praised the amendment. Lindsey M. Burke, director of the foundation’s Center for Education Policy, said that when more families learned that anyone could contribute to the savings plans, they would become more popular at all income levels.

Ms. Burke disagreed with public school advocates that the 529 expansions would hurt public schools by incentivizing families to leave them.


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“If their district-assigned school is a good fit, they have nothing to worry about,” she said.

For homeschoolers, the Cruz amendment was a cause for celebration. For years, homeschool advocates have denounced what they called a “discriminatory” tax code. Not only were 529s limited to just college costs, but existing K-12 expense accounts, called Coverdell Education Savings Accounts, are recognized for homeschools only in a handful of states where they can win designations as private schools. Coverdell contributions are limited to $2,000 a year, while contributions to 529 accounts can reach $14,000 a year without incurring gift taxes.

Will Estrada, a lawyer for the Home School Legal Defense Association, called the Cruz amendment a “massive win” for homeschooling families.

Mr. Estrada said that since the Trump administration took office, the organization had been working behind the scenes with the education secretary, Betsy DeVos, and Ivanka Trump’s staff to have the nearly two million students in home schools recognized. Homeschooling families spend about $500 to $600 a year on average on instructional materials like books, Mr. Estrada said.

“We want to be treated fairly,” he said.

For public school advocates, the 529 expansion was just the latest in a series of decisions they said illustrated the Trump administration’s disinvestment in public education.

“It’s just icing on the cake,” Ms. Pudelski said. “It seems they’re just asking how many different ways can we not support public schools.”

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Guest Opinion: Badger Club to discuss role of higher education – Tri

What is the value of public higher education? How does it affect societal and economic issues in the Tri-Cities, the state and regional communities? This will be the topic of discussion at the Dec. 14 Badger Club forum.

The decrease in state funding of post-secondary education in Washington state has compelled our public institutions to redefine their role to students and the communities that they serve. The state of Washington is spending 15 percent less on post-secondary education, while tuition has increased 34 percent since the last recession. With changing funding models drifting from state taxpayers to student tuition, institutions have an increasing responsibility to provide educations attuned to the expectations of their students in challenging economic times.

Conversely, state funding is not — nor has it ever been — something taxpayers have paid for but seen as an investment. Since the beginning of the American higher education system, one of the perennial questions is how much of the cost of education should be borne by the government and how much by students and their families? Many Americans are quick to point out free public university education in nations such as Germany and Switzerland, but it is commonly omitted that public universities can only offer programs that have a workforce need. How should American universities balance workforce requirements with the other missions of generating knowledge, serving the community and advancing research?

The state of Washington has unique challenges aligning the state’s education and career training systems related to its dynamic STEM-driven economy (science, technology, engineering and math).

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A 2015 report by the state’s leading educational agencies illustrated the challenge by estimating a 22 percent difference between state workforce supply and demand in fields that require mid-level, bachelors and graduate credentials. The workforce demand is also exasperated by the state’s low performing rates of college completion (46th in the nation) and high export rates of college-bound students to out-of-state institutions (16th in the nation).

One emerging model in the state designed to meet the workforce demand is the expansion of technical schools and apprenticeship programs. These initiatives have shown immediate returns in meeting workforce demands. But while graduates from the program have significant applied skills, they may lack the broader foundational skills that a liberal arts education provides.

This coming Thursday provides an opportunity to explore the value of public higher education, the responsibility of the education and whom the institution should be responsible to. A presentation will be given by state leaders from the three major sectors of higher education in our state. Michael Meotti, Executive Director of the Washington State Achievement Council, and Cody Eccles, Director of Government Relations Business Affairs for the Washington State Council of Presidents, will join me for the formal portion of the presentation.

After the formal presentation, there will be a 30-minute question-answer period, where we hope to explore the topic from a local, national and global perspective. Please remember that to ask a question, you must be a member of the Badger Club, and it is possible to join at the forum.

The Columbia Basin Badger Club is a nonpartisan Tri-City organization that is dedicated to civil discourse on topics important to our region.

Christopher Nesmith is the Career and Technical Education Director for West Valley School District.

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Universities Risk ‘Mis-Selling’ Degrees To Unsuspecting Students


Universities could be accused of mis-selling courses to unsuspecting students, according to an explosive new report.

Poor advice, a lack of meaningful competition between universities and weak or non-existent links between quality and tuition fees are creating a market heavily tilted against the consumer, the U.K.’s public spending watchdog warned today.

The findings will put further pressure on higher education institutions to justify their fees, at a time when soaring pay packets for university bosses have come in for fierce criticism.

In a highly critical report, the National Audit Office said higher education had a more limited level of consumer protection than other financial services, even though for many people it would be their second-largest lifetime investment, after buying a house.

Amyas Morse, head of the NAO, said that although the government saw higher education as a market, it was a market with multiple failings.

‘Young people are taking out substantial loans to pay for courses without much effective help and advice, and the institutions concerned are under very little competitive pressure to provide best value,’ he said.

‘If this was a regulated financial market we would be raising the question of mis-selling.’

Information presented to students before they chose their course was inadequate, there is no meaningful price competition between universities and students can do little to influence quality once they have enrolled on a course, the report said.

There was also a weak relationship between the quality of a course and the fee income a university received. Out of 90 English universities, 87 charged the maximum permissible tuition fees of £9,000 ($12,000) for all courses.

The increase in the maximum universities are allowed to charge in tuition fees has seen total public funding for higher education rise from £6 billion ($8 billion) in 2007/8 to £9 billion ($12 billion) now, 85% of which is in the form of tuition fee loans.

Although the government has relied on student choice to improve quality and value for money, there is little sign of this working, the report found.

While graduates earn an average of 42% more than non-graduates, graduate earnings vary hugely and for some institutions and subjects are lower than for non-graduates.

The difference in median earnings between subjects 10 years after graduation is estimated to be up to £24,000 ($32,000), and between providers up to £13,000 ($17,000). The average student debt on graduation is £50,000 ($67,000).

Only a third of university students said their course was value for money.

The report also highlighted the risk of a two-tier system. Although higher education participation rates among students from disadvantaged backgrounds had risen, they were more likely to attend lower-ranked universities.

Meg Hillier, who chairs the House of Commons public accounts committee which oversees public spending, said the government’s hands-off approach had created a generation of indebted students, with many doubting their degree is worth what they paid for it.

‘The government is failing to give inexperienced young people the advice and protection they need when making one of the biggest financial decisions of their lives,’ she said.

The NAO called for the Department for Education to take a more comprehensive approach to overseeing universities and focus on addressing weaknesses in the the higher education market.

The DfE said its reforms were helping students make more informed choices about where and what to study and ensuring they get value for money.

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Controversial Sussex vc got £230K pay-off on departure

The University of Sussex’s former vice-chancellor was given a £230,000 pay-off in his final month in office, Times Higher Education can reveal.

Michael Farthing, who led the university for nine years until August 2016, received the payment “in lieu of notice” on his departure, the university’s latest accounts show. Overall, he was paid £252,000 in the month of August 2016, of which £249,000 was salary and £3,000 employer pension contributions.

Overall, the South Coast university paid £545,000 to its two leaders in 2016-17 as Adam Tickell, the incoming vice-chancellor, was paid £293,000 between September 2016 and July 2017. Of this sum, £17,000 was for relocation costs for the former University of Birmingham provost and £9,000 for employer pension payments.

News of the latest “golden goodbye” for a departing university head follows Times Higher Education’s revelation this week that Bath Spa University’s former vice-chancellor Christina Slade was paid a total of £808,000 last year, including £429,000 “for loss of office”.

Labour peer Lord Adonis will use a House of Lords debate today to call for an independent inquiry on “excessive vice-chancellor pay”, which he believes should be led by the Archbishop of Canterbury.

Commenting on the payout, a University of Sussex spokesman said that “in the case of our former vice-chancellor, we met our contractual obligations to him and this has been clearly published in our annual financial accounts”.

“The university’s approach to senior staff remuneration continues to be open and transparent and we take our governance responsibilities and sector compliance requirements very seriously,” he added.

Earlier this week, the Higher Education Funding Council for England announced that it would investigate the six-month sabbatical that will be taken by Dame Glynis Breakwell when she retires as the University of Bath’s vice-chancellor in September. On her current full salary of £468,000, this would equate to a £230,000 payment.

Last week, it emerged that Sir Christopher Snowden, vice-chancellor of the University of Southampton, became one of the UK’s most highly paid higher education leaders in 2016-17, on a remuneration package totalling £433,000. This is in comparison with the £352,000 that he was paid the previous year for the 10 months that he was employed, and comes after the institution announced plans to cut 75 academic jobs.

In his final years in office, Professor Farthing attracted much criticism from staff and students as he presided over the outsourcing of hundreds of service staff and the suspension of five students who demonstrated against the changes.

Disciplinary hearings against the “Farthing Five” collapsed in January 2014 and the university was ordered to apologise and offer them compensation after a later investigation by the Office of the Independent Adjudicator in January 2015.

An independent inquiry, published by the university in January 2017, also criticised Sussex’s decision not to suspend a media studies lecturer after he was convicted of assaulting his student girlfriend in June 2016.

Michael Shattock, visiting professor of higher education at the UCL Institute of Education, who researches university governance, said that Sussex’s payment would almost certainly result in a further Hefce investigation.

“Hefce has warned universities about these golden goodbyes so they cannot really avoid some kind of inquiry,” said Professor Shattock. “We now have three cases of payments made to vice-chancellors and if Hefce’s audit team will not start asking questions, I believe the National Audit Office will,” he added.

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