Feature, For-Profit, University & College - Written by on Tuesday, June 28, 2011 1:44 - 0 Comments

Michael Clifford: Committed to lowering tuition every year.

Image courtesy Michael Clifford


Part 2 of 2: Innovation, Thiel, and What’s next in online education.

By Paul Glader (Photo: Courtesy Michael Clifford)

NEW YORK — Michael Clifford never attended college, himself. But as CEO of Significant Federation in Solana Beach, Calif., he’s been a major deal-maker and investor in for-profit colleges and online education. He’s a trumpet player turned former cocaine user turned Judeo Christian turned entrepreneur. In recent years, he’s helped orchestrate six institutions including Bridgepoint Education Inc., L.A. College International., Grand Canyon Education Inc., Patten University, Chancellor University, and Victory University.

That industry faces new regulations from the Department of Education designed to improve quality. Clifford, 57, spoke with WiredAcademic editor Paul Glader to talk about the new regulations, his new for-profit colleges and the way forward for the industry (Interview edited for brevity):

WA – What are the most innovative technologies you’ve seen in the industry lately?

MC – We’re building our own technologies, spending millions of dollars. It is a completely integrated system that looks at the student through various eyeballs. On regulatory and compliance, it is built to give the leadership – anyone in the school – a view of the institution from a compliance standpoint. There is never a doubt of what’s happening from a compliance standpoint. It is all integrated completely into the accounting system.

WA – How is it different from what other schools are using?

MC – The student services. I believe a student should get the same level of customer service from an online school that we have all come to expect from online banking. You need to have that same level of real-time services for your students. It gives the faculty more research tools, professional development tools. It gives them tech support to do their job better and to be better teachers. I think it’s going to be highly marketable.

WA – Isn’t tuition too high at online colleges? That’s one of the concerns of the DOE?

MC – The schools I have invested in are committed to lowering tuition every year. We’re much cheaper than state schools in Tennessee and California. We work with adult learners. We charge $250 a credit hour. Average state tuition is $300 to $350.

WA – What’s an example of your cost savings and how you can provide lower tuition?

MC – We’re going to e-texts right now. Our average student spends about $900 a year on books. We’re now converting to e-texts. We’ll be able to cut those costs down from $900 to $200. It’s relevant. It’s current. It can be updated with the flick of a switch and it’s not of date right away. There are so many areas of efficiencies where technology can drive the costs down. The survivors will be people who know how to get the costs down.

Peter Thiel

WA – Facebook investor and venture capital billionaire Peter Thiel recently started a scholarship that pays young people to drop out of college and start companies. What do you think of his message?

MC – It irritates me when Thiel says people shouldn’t go to college. Go to Afghanistan and see how it is.

WA – Thiel and others argue that too many people – 70% of Americans after high school – are going to college … that a college degree is becoming cheapened. Students are spending less time studying. What do you think about that?

MC – I have mixed feelings. I have mixed feelings about it. I never went to college myself. With my own children, I haven’t forced them to go to college. But I do think if you are given the opportunity with grants from the government or parents, I don’t see how someone is not better off. My life would have been a lot easier in business if I had gone to school and learned something.

WA – What do you think of education secretary Arne Duncan’s leadership at the DOE?

MC – I think Arne Duncan went to Washington to really make a difference. I think people like Robert Shireman moved really quickly in this administration and created a lot of problems for Arne Duncan that he is having to manage. I think he’s a pretty good guy and his intentions are good.

WA – Wall Street hedge fund leaders like Steve Eisman bet against online education. Do you think they will continue to do so?

MC – They did [sold the stocks short] it last year and are already out of it. They crushed the stocks. I think Eisman used the government just like they [some hedge funds] did in the mortgage meltdown. I think they used and manipulated the government.

WA – Where do you think online education will be in 5 or 10 years?

MC – I saw some projection that 80% of all education in America will be for profit schools by 2020. I’m convinced that the disciplines and the model of for profit schools will prevail. It’s just basic, logical business. In California, in January, they are going to turn away 300,000 qualified college students. Where are they going to go? In California, you can only take so many credits at a community college. You can’t get in. The states are rationing education.

WA – How do you react to Arne Duncan’s quote: That career colleges play a role in training a workforce but that some have been saddling students with debt they cannot afford in exchange for degrees and certificates they cannot use?

MC – From a Judeo Christian perspective, the only reason to get a college degree is to help further the gospel of Jesus Christ. What better place to represent Jesus than at the bedside as a nurse or in the classroom as a teacher or as a psychologist in a social services setting. I think a college degree needs to be coupled with a passion – and not just to make more money. If the goal is to make more money, than college may not be the right place to go. Making money is easy. You don’t have to have a college degree to do that.

WA – Your efforts so far are in online colleges. What about online high schools?

MC – I’m looking at it very carefully. There were 1 million people at online high schools last year. I feel badly. I dropped my son off at high school. He will sit there with 35 other people in a box listening to a 27-year-old in front of them reading notes. Those critical years of 14 to 17… We’re just killing these kids with the high school system the way it is. All of this college prep and more college prep. What happened to life prep? I believe it is crazy for kids to go to high school and be locked up in these jails for six hours a day.

WA – How should the high schools be different?

MC – The role of trade schools has been hammered pretty badly… Trade schools only came about because high schools stopped teaching trades – basic health care, wood working, book-keeping, film-making, journalism, home economics, IT and other subjects. That should all be taught in high school. As soon as the Russians put Sputnik in space, Kennedy said we need to have math and science, period. People thought the Russians were going to dominate us from space. The whole high school systems shifted to math and science. That’s done more damage. Now, there are huge drop-out rates because the students are bored to death. If you want to be a web site designer, there’s nothing for you. A construction guy? A chef? There’s nothing for you. The high school system has gone in the wrong direction.

WA – The industry has drawn the ire of investigative reporters and GAO investigators and rightly so. How do these colleges recover from these repeated PR black eyes?

MC – Employers are hiring adult workers. They don’t look at what schools they went to. They look at high level. Does this person have work experience. They improved themselves. They got a bachelor’s degree. They look at a brand rather than where you went to school. Brands are more important to 17 or 19 years olds going out in the workplace. I do think the industry has a black eye. I think the industry brought it on itself. For years, I was asking these leaders to form best practices group and combat some of the problems. I think the government has solved the biggest single problem. They see a problem and overkill.


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