FINE-TUNING THE FREE MARKET Stock Buybacks: Beyond Beauty Schools
Boo, Katherine
FINE-TUNING THE FREE MARKET Stock... Buybacks: Beyond Beauty Schools There are lots of things the government should train thepoor to do. Sculpting nails isn't one of them. by Katherine...
...Six months’ training at the Washington Urban League costs the government $4,000 per student...
...Besides, research consistently shows that solid reading and math skills are more fundamental to workplace success than the minutiae of some ever-changing technology...
...We said, great, fantastic...
...Since that population tends to fail in great numbers, it’s unfair to penalize trade schools for trying to save a few...
...Yet, as the public schools retrench, more of America's blue- and pink-collar workforce now spawns in private institutions-which spawns the likes I of Tommy Wayne Downs...
...These days, as grocery stores and other institutions pack up and flee the center city, trade school fliers and friendly sales reps remain a constant of urban life...
...And in the name of lean, mean, free-market education, the federal government graciously funds them all...
...it’s economics...
...Examination of educational quality . . . is not part of the certification process, and [the Department of Education] has no authority to make it so,” Inspector General James Thomas recently reassured the public...
...Last year, New York Telephone interviewed 57,000 applicants before unearthing 2,100 capable of performing an entry-level technical job...
...In 1989, Downs was sentenced to 11 years in prison for criminal fraud and ordered to repay $175,000...
...While states are free to lower their placement goals during recessions or a contractors’ revolt, few have done so...
...Thanks to 1988’s federal Family Support Act, the figures for the nineties may be even higher, as states are forced to enroll 20 percent of their welfare clients in educational or job training by 1995 in order to retain federal public assistance...
...By the time his secretary inadvertently tipped off the feds a few years later, his ghost graduates had reaped hundreds of thousands of dollars in government loans...
...Today, American companies spend far less than their Japanese, German, and Korean counterparts on training noncollege employeeswhich means that while our competitors champion skill mastery, we create more dead-end jobs...
...In fact, in some cases a trade school degree actually hurt income...
...And quite a few of them, oddly enough, are already graduates of D.C.’s private trade schools...
...Noncollege youth," sociologists call them, defining them by what they don't have...
...It was a great issue of educational access and civil rights,” says Jeffrey Plaut, who recently studied New York state’s private trade schools for the nonprofit group, Interface...
...That's never been more true than now, as basic academics reclaim high school classrooms, and vocational training falls by the wayside...
...jobs don't require a college degree, our education system has long been geared to train the white-collar class...
...After 14 years, he found, trade school graduates showed no gain in income compared to people with basic high school diplomas...
...An Ohio heating and ventilation repair school housed in a fruit stand, whose students scavenged garbage dumps for broken equipment to work on...
...You call 31st Street Southeast in the middle of the afternoon and hear “Gilligan’s Island” in the background,” says one agent, “and you know vou’ve hit the jackpot...
...Buybacks: Beyond Beauty Schools There are lots of things the government should train thepoor to do...
...Government created a market for these schools by infusing hundreds of millions of dollars, but then stood back and allowed the industry to regulate itself...
...Jxkpot, indeed...
...Small wonder, then, that Florida’s American Career Training Schools, a travel-agent and secretary training academy, spent 52 percent of its money on advertising and sales reps in 1989, and barely 2 percent on teacher salaries and class materials...
...In beauty school...
...Rutledge College...
...To his astonishment, it worked...
...It can, however, instigate quality control so convincing that the private sector will come running for graduates of federally funded programs...
...Evaluating Tennessee schools for one such agency was that educational arbiter Tommy Wayne Downs...
...A success story...
...The equity arguhaircutting than any other vocational subject...
...Stephanie Percy-Garrett, a phalanx of Department of Education reformers tinkers in the margins with default rates, branch campuses, and admissions testing to plug a few of the holes...
...It would be expensive...
...A training tax on business would force companies to carry their share of the burden...
...In America, dreams like the ones Tommy Wayne Downs sold shouldn’t have to be lies...
...That's not just an accident of semantics...
...No government can mandate that contractors do what’s right for their clients, providing superior training that prepares them for decent jobs...
...In itself, mind you, that's a pretty smart move: deciding which 14-year-old gets Wordsworth and which gets welding is simply too dangerous a responsibility for a school system as marred by racism and classism as ours...
...That brain drain has a higher psychic and economic price tag for America than any billiondollar default...
...have to type all the periods and commas, too?’ ” “A few bad apples” -that’s been the trade schools’ standard response to distasteful reports like Percy-Garrett’s...
...If that story scored a few local headlines, the hundreds of thousands of unsensational educational failures rarely do...
...Thus as long as an institution is financially strong and capable of administering Title IV programs, [the department] cannot deny participation even if educational programs lack merit...
...Today, “deans...
...Even as civil rights and legal services advocates scream for radical trade school reform, trade school lobbyists raise the specter of inequity to protect the status quo...
...Department of Education, but its expectations for the poor are a world apart...
...Why'd he do it...
...With their six- to twelve-month courses for incipient truckers, computer repairmen, secretaries, and beauticians, those schools consume nearly 30 percent of the federal government's grants and guaranteed loans for higher education...
...While that fact probably delights the owners of federally accredited broadcasting, bartending, and casino-dealing schools, it has discomfiting results in the marketplace...
...Thanks to an annual $2 billion federal liability for defaulted school loans-a disproportionate percentage of it from trade schools-the federal student aid program now teeters, in the words of Senator Sam Nunn, "on the brink of disaster...
...By contracting to the private sector, it trains workers at far less cost than even “market” schools...
...With the help of business, union, and education leaders, the German government has developed national competency exams for several hundred technical, manufacturing, and clerical vocations-which may be one reason Germany, with a quarter of our population, nearly equaled us last year in exports...
...There’s no mauve, no paisley anywhere, but as Smith-Macklin tells her students, “This may be a raggedy building, but you decide what happens inside...
...Fortunately, as Congress reauthorizes the Higher Education Act this session, programs like JTPA offer the makings of a solution...
...But while sensational default costs earn headlines and congressional hearings, they're a symptom of more subtle, basic flaws: the quality and kind of training we eagerly subsidize for millions of noncollege youth...
...But they still aren’t skilled enough to get a job...
...The catch-verb was “democratize...
...The IBM PCs and low teacher-student ratios would undoubtedly pass federal muster, but in director Effie SmithMacklin’s modest classrooms, what really stands out are the intangibles...
...Outcomes are even more relevant in the vocational sector, where students study specialized, technical trades...
...Cinderella schools Hefley & Brown Secretarial Schools...
...While the number of traditional college students fell off during the eighties, trade school enrollment swelled as much as 13 percent a ognized by his accrediting agency colleagues, a trade school owner could apply for eligibility for federal grants and loans-a complicated, time-consuming procedure with roughly the same results as a rubber stamp...
...The chief argument against quality-controlled, market-conscious federal job training is money...
...And by extension, the feds should start a system under which, if you can successfully train those secretaries and electricianswhether you’re the PTC Career Institute or the Urban League-you can get federal funds...
...During the eighties, educational “outcomes”-not the money spent on classroom time, but the results of that classroom time-became the central criterion for evaluating America’s K- 12 education...
...Yet proprietary schools have consistently resisted those standards...
...Having obtained a state license and having been recthe greater the amount of federal financial aidwhich for some trade schools makes poverty the single most important criterion for admission...
...But federally accredited fruit stands are less amusing when you consider that trade schools like these produce more than a third of America's front-line work force...
...More important, in the seven years since its inception, JTPA’s been surprisingly successful at training the poor to meet real labor needs...
...But that’s just money...
...Although industry groups claim that 8 1 percent of trade school graduates find work in their fields, that healthy return disintegrates in other, more independent studies...
...So many people searching, so little coordination...
...Flipping past Georgetown, Cleveland Park, and other well-appointed neighborhoods, they swiftly zero in on the slums...
...is not part of the certification process, and [the Department of Education] has no authority to make it so,” DOE’S Inspector General James Thomas recently reassured the public...
...What they’re not fussing with is far more fundamental: whether or not the graduate knows enough about periods and commas to get a job...
...Yet few discussed the trade school training available to the 50 percent of I Americans who will never go to college at all...
...And you don't have to look at the stagnant GNP to realize it's a spotty front line...
...A Miami respiratory therapist training school with broken equipment and a notable entrance: a hole blasted in the drywall of an Xrated record and tape store...
...Hurt us, their argument goes, and you’re bound to hurt the poor...
...Paradoxically-as with today’s celebrated school choice proposals-these “market” schools would also be fueled by a vast injection of public money...
...Massachusetts, South Carolina, and other states have actually raised theirs...
...I’ve heard some schools don’t take people from the halfway house...
...workforce...
...Rectifying both social and economic imbalance was precisely what Congress had in mind when it welcomed proprietary schools into federal student aid programs back in the seventiesan educational reform made possible by a rare confluence of liberal sentiment and free-market infatuation...
...Instead of serving the stigmatized few, the marketwise, outcome-oriented JTPA should be a model for all federal vocational education-and could easily be, with a sturdier commitment from Congress...
...Today, , many of the men and women who viewed his federally sanctioned trade school as a ticket out of poverty are still holed up in the Nashville projects...
...Tuition for a six-month course at a private trade school runs thousands of dollars more, for which more than 85 percent of students receive substantial federal aid...
...For the Training Center’s students, the distinction between circumstance and possibility is apt, for virtually all of them fit the federal government’s nonetoolenient definition of disadvantaged...
...But the results will reverberate-not simply by weeding lousy schools from federal programs, but by ensuring the quality of nearly half of the U.S...
...No slack, no attitude allowed...
...If you can run conduit, pull wire, and fathom the interplay between amps, volts, and watts, you can be an accredited entrylevel electrician...
...Training our sights The English poet Gerard Manley Hopkins, bouncing from job to wretched job, once confided his despair to his diary: How difficult it was to locate that infinitesimal point where he and the world might intersect...
...Today, more than 2 million U.S...
...It may have less in real life...
...The Washington Urban League’s Information Processing Training Center sits a few miles from the U.S...
...Of course, scores of trade schools claim numbers like Smith-Macklin’s...
...Norton Grubb of Berkeley’s National Center for Research in Vocational Education recently completed the first long-term study of the sector...
...That's not an inexpensive phenomenon...
...But real training is worth it, not just as a sop to the underclass, but as a boost to America’s rank in the new economic order...
...by Katherine Boo T ommy Wayne Downs spent the eighties 1 in the ghettoes of Nashville, selling per- 1 manent waves as the path to the American dream...
...Barclay Career Schools...
...One March day, he simply made up a name, an address, and a social security number and applied for a guaranteed federal loan on the imaginary student's behalf...
...Inspired by the same market consciousness as the Department of Education’s trade school plan and committed to the same privatization of training, JTPA shows what federal money can accomplish when it’s tied firmly to results...
...Over the past five years, more than $50 million in federal loans and grants went to the following federally approved institutions: >The Culinary School of Washington, whose students paid $6,900 for the privilege of frying eggs and flipping burgers-without pay-in the cafeteria of a local sewage treatment plant...
...A 1989 New York City government analysis reported that, despite ample federal aid, only 4 percent of disadvantaged trade school students were off the welfare rolls one year after their training...
...But they only got half of the equation...
...And now they wonder why it turned into such a disaster...
...With a little federal funding, private schools would be able to train the noncollege workforce more cheaply and efficiently than logy government programs ever could...
...In 1990, although New York government officials warned that the market was glutted, more city residents used federal funds to study nail sculpting and haircutting than any other vocational subject...
...Wake him up and get him down here, advises the receptionist, kindly proffering a phone...
...students attend 4,000 accredited private trade schools, the ugly stepchild of American higher education...
...The woman arrived at her interview on time, proudly bearing a diploma from PTC Career Institute, certifying her typing at 75+ wpm...
...That’s a lethargy that trickles down to contractors less dogged than Effie Smith-Macklin...
...To make that absurd proposition a probability, one has to look away from JTPA to Germany, which places a premium on intensive noncollege training...
...So he tried again and again...
...Then community colleges, nonprofit agencies, public schools, businesses, and other institutions compete for contracts to train workers in those fields...
...We shouldn’t have any trouble placing her,” Percy-Garrett recalls...
...Every year, in every state, “private industry councils” made up of business executives, union officials, and community leaders decide what type of training is most needed in the community, using labor market information collected by state and local governments...
...Radical as national trade-testing sounds, its advocates here include three former labor secretaries, the CEOs of Eastman Kodak and Xerox, union heads, top officials of the New York State Department of Education, leading economists, and the nonprofit National Center on Education and the Economy...
...The poorer the student, To most observers, a booming trade school business seems like good news not just for the underclass, but for America, whose training gap has become a political cliche...
...To an entrepreneur like Downs, that's a pretty stupid question...
...As the Department of Education crunches loandefault numbers, it overlooks the real bottom line: whether students get genuine, marketable skills for their billions in federally guaranteed grants and loans...
...With just six months' training at his school of hair design, Downs cajoled, erstwhile welfare moms could earn $30,000 a year as stylists in Nashville's tonier salons...
...As Xerox chairman David Kearns recently put it, “This has the makings of a national disaster...
...therapists and X-ray technicians, though the latter are among America’s most undermanned occupations...
...So fluent in the idiom of civil rights is the trade school lobby that one accrediting agency head posed reform to apartment has had real the hardcore unemployed...
...Guaranteed student aid, intended by Congress to ensure all students an affordable education, whether at Harvard or Downs's school of hair design...
...most of the rest are what’s known as JTPA makes for an unlikely vanguard...
...Serving tiny enclaves of disadvantaged youth , adults, displaced workers, Eskimos, and Indians across the country, In 1990, more city residents used federal funds to study nail sculpting and recently compared a proheid...
...With no safeguards on educational quality and little connection to labor market needs, the answer all too often is no...
...Although the school’s a job placement counselor with D.C.’s Mitch Snyder Shelter for the Homeless, comes across more than her share every day...
...Yes, Downs may have sacrificed students while reaping a fortune in federal aid...
...But don’t count on trade schools to bridge the chasm...
...Reinventing America’s trade training will ultimately give American business a competent, competitive front line...
...Several have been homeless...
...Yet the impulse behind such recruitment isn’t altruism...
...Do you take people in the halfway house...
...While many of America’s “professional” licensing exams are a barely relevant barrier to entry (passing the bar, for instance, qualifies you to try capital cases and close real estate deals without testing to see whether you can do either), by its nature, vocational education allows for practical testing...
...Behind those cold numbers, obviously, there’s an awful lot of human carnage...
...The names may be cribbed from Burke’s Peerage, but the longing is straight out of Dreiser: to grasp the bottom rungs of the bourgeoisie...
...Developing equitable, sensible tests will be a challenge, no question...
...currency in Congress over the years...
...Several researchers concede that trade schools offer students short-term economic gains, but long-term prospects look less certain...
...A Chicago trucking school that enrolled students too physically disabled to turn the steering wheel or reach the gears...
...Then surprise: they started hitting their targets...
...But in their own way, the feds too forgot the middlemen-the thousands of real students who mistook Downs's entrepreneurial zeal for a genuine educational opportunity...
...She sat down, stared at the keyboard, and said, ‘OK-do I owners claimed 90 percent placement rates, a former financial aid officer recently testified that the real rate was closer to one or two in 10-and many of those successful graduates began their “careers” behind the night desk of Miami’s Motel 6. All that for $43 million a year in federally guaranteed loans-a figure that amply covered the milliondollar salaries of the schools’ tou two “ Examination of educational quality...
...A spokesman for PTC Career Institute puts it coyly: “We’re a product of the population we serve...
...But in the long run, there’s a level of accountability that even JTPA hasn’t tackled: training quality-a word that implies more than simple, low-level placement...
...Only now, they owe thousands in loans...
...Sort of...
...But a mid-eighties General Accounting Office study of 1,600 schools counted up an orchard’s worth, charging that more than twothirds of trade schools “misrepresented” their placement rates, curricula, or student aid...
...Finding glaring educational failures in the federal student loan program is like hunting in a wildlife preserve-there are almost too many easy targets...
...Attendance mandatory...
...Even using the trade schools’ own unverified numbers, another study by Interface discovered that less than a quarter of enrollees eventually found jobs in their field of study...
...But there’s something even more important involved here...
...If you can demonstrate your ability to read, spell, type, and use a computer, you can be a certified secretary...
...To qualify for federal aid under current regulations, a trade school may have to keep a neat file of student loan records, but it doesn’t have to prove it found its graduates a place in American business...
...Industry Week notes that twothirds of American personnel officers report difficulty finding workers with adequate technical skills...
...Add those revenues to the billions of dollars already squandered on grants and outstanding federal loans made to unemployable trade school graduates, and you can salvage a lot of wasted potential...
...When the high placement standards were first proposed, potential JTPA contractors raged, pointing to their clients and spouting culture-of-poverty rhetoric...
...Before long, though, Downs discovered an easier way than ghetto-combing to drum up federal student loans: eliminate the middle- , man-the student...
...But then we asked her to take our own test...
...After six months under her tutelage, though, more than 85 percent go off to work for IBM, Mobil, defense contractors, and law firms...
...Although 82 million U.S...
...Where were all those potential electricians...
...Karherrne Boo IS an edltor of The Wash~ngtonM onthly...
...Continuing to countenance a broken trade school system sends an ugly message to the poor: Some people-even those who work to beat the odds-are simply born to lose...
...In the neat mauve-and-paisley waiting room of PTC Career Institute, D.C.’s largest trade school, a young woman nervously queries the receptionist...
...She remembers one wellgroomed young graduate particularly well...
...And what of educationally deficient...
...to the Department of Education, this case is closed...
...Today, JTPA operates on the margins, serving less than 5 percent of eligible disadvantaged adults, providing unsophisticated, short-term training, and watching its federal funding wither away...
...By the year 2000, the skill gap may grow even wider, as nearly half of America’s new jobs will require vocational training...
...To the vestigial Great Society sensibility, restricting loans to four-year colleges was elitist...
...The feds can’t say: in most cases, they’ve never even seen the schools...
...President Bush and dozens of governors now advocate tying teachers’ pay raises to test scores and other measurable results...
...I mean, you are talking about the ability to steal unfathomable amounts of money...
...Possibly because in most states at least 60 percent of adult JTPA graduates must find jobs at the end of their training (figures verified by state departments of labor) or the contractors lose a chunk of their money...
...But in I the crazy world of government-subsidized voI cational education, that offense is unindictable...
...I If Downs had a talent for this rags-to-riches spiel, it was probably because their rags were i his riches: for every poor student he lured in, he reaped thousands of dollars in federal student aid...
...According to the National Alliance of Business, 75 percent of CEOs observe declining skills in their entrylevel workforce...
...But unlike them, she has to back them up, because her program is funded by another federal program, the Job Training Partnership Act (JTPA...
...Our competitor nations recognized the connection between job competence and national economic health decades ago, which is why their training is partly funded by levies on those who directly benefit from the results: employers...
...Recruiters for D.C.’s Barclay schools use a Haines reverse telephone directory to make their quota...
...And what, the woman asks, about her boyfriend, still asleep at noon...
...These are people who have considerable loans,” clucks Smith-Macklin...
...Seven hours a day for six months, more than SO students study “business English,” word processing, and other secretarial skills inside a grubby, 80-year-old school, stopping only to go to the bathroom and eat lunch...
...Achievement expected...
...As America slips into recession, helping 5 million members of the underclass find that nexus will be one of the federal government’s toughest jobs...
...During the eighties, countless Hirsches and I Blooms stepped forward to deplore the quality ' of elite education...
...While the new cottage industry paid ex-Department of Education officials handsomely to help it pilot the shoals of federal loan programs, the feds deputized a fraud squad straight out of Mayberry: a handful of trade school “accrediting agencies” made up of, and largely funded by, trade school operators...
...Though trade schools are eligible to compete for the $3 billion available through JTPA, most of them don’t bother to apply...
...They currently offer more programs for cosmetologists, radio and TV broadcasters, and casino dealers than for respiratory year...
...Between ’86 and ’88, 97 percent of the 2,870 trade schools that asked for federal money ultimately got it-even though the Department of Education’s inspector general later found 38 percent of them financially or administratively “deficient...
Vol. 23 • March 1991 • No. 3
