Tag Archives: Abraham Lincoln

Profit or Not?

profit-or-not

If you can’t beat them, join them. The solution, or perhaps at least a smart business strategy, is to convert from the for-profit sector to the nonprofit sector.

 In an era of increased regulation and speculation, some career colleges have made the jump to nonprofit status. So, is it nobler to be profit or not-for-profit? That is the question only you can answer.

Read the entire article featured in Career College Central Magazine, March 2015  page 28.

This idea causes me to become a little … irrational. Regardless of which flavor institution you might be, forprofit or nonprofit, at the end of the day you have to make more money than you spend in order to stay in business. The more money is called profit, and our modern political society has deemed it the new four-letter word. (Yes, I know profit has five letters, but this is my article and four letters is rational in my irrational world.) In the late 1970s, the federal government began a campaign to encourage equal access to higher education by creating regulations to make college loans accessible to more students. What next occurred in higher education is the business concept called supply and demand. Institutions from both sides of the for-profit/nonprofit aisle could now raise tuition, because more lenders were willing to lend money to more students. A golden business practice for creating more revenue is to raise prices at a time when customers are having no difficulty buying products and services at current prices. So when more money becomes available at current tuition prices – raise tuition. That is exactly what the for-profits and nonprofits did. When the tuition bubble visibly broke around 2011, the nonprofits felt the first sting. The wider availability of higher education to every student did not produce lower tuition costs. Imagine that: The higher-education industry has a strong capitalist business mindset.

When the tuition bubble visibly broke around 2011, the nonprofits felt the first sting. The wider availability of higher education to every student did not produce lower tuition costs. Imagine that: The higher-education industry has a strong capitalist business mindset.

The money problems quickly began to unfold. The states were the first to pull back funding. In 2011-12, college appropriations were reduced by 7.6 percent, the largest recorded decline in a half century, according to William Elliott, Melinda Lewis, Michal Grinstein- Weiss and IlSung Nam in their article “Student Loan Debt: Can Parental College Savings Help?” In 2010, the Obama administration, seeing the potential impact of the grumbling that was occurring in the states, attempted to reduce the effects of the anticipated state funding cuts by releasing the highly controversial Gainful
Employment Rule (GER) and a strategy to overshadow the effects of the easy money from the 1970s that resulted in higher tuition costs.

The Gainful Employment Rule was designed to create career colleges and training programs that could better prepare students for gainful employment – a great idea, but one that did not materialize. What happened instead was that the U.S. Department of Education decided to track the relationship between the debt students sustained and their earned incomes after graduation, as well as their rate of student loan repayment.

A catch-22 is an unreliable situation from which an individual cannot escape because of contradictory rules. By this definition, the GER is a catch-22. Under it, if a higher-education program graduates a large number of students with high debt-to-income ratios, that program may become ineligible for participation in federal student funding. Yet this higher-education debt-to-income ratio requirement is unfair.

The American Association of Community Colleges (AACC) comprises nearly 1,200 two-year colleges, according to the AACC. Many of the students at these colleges are part-time students working full time or full-time students working part time. Many of these students’ employers provide education benefits that significantly offset the student’s tuition costs. Because of this, the ratio between the level of debt these students sustain and their earning incomes after graduation is spectacular. The rate of student loan repayment is equally spectacular for only a fraction of the for-profit community.

The nonprofit public sector was measured by the U.S. Department of Education to be twice as good as the for-profit private sector. I would hope so, because in reality, the nonprofits and for-profits are in two different leagues. The metric itself is out of control and would not pass under any real scientific scrutiny, but again, this is government and politics. It is like the joke about the job-seeking accountant: Two plus two equals whatever you want it to. But the reality is that whoever owns and controls the metric manages the results, and the for-profits receive less-favorable marks in the higher-education catch-22.

The economy has been in decline, and institutions of higher learning are indeed businesses. Now with a decline in public institution enrollment and fighting for market share, the government comes to the rescue with the GER. Don’t take it personally – it’s just business mixed with politics. Further fueling the drama, college tuitions are still trending up, lenders are
lending less, and declining family incomes are making even less money available for students attempting to enroll today.

Now we have the perfect storm in higher education, including the decay of the purchasing power of financial aid. Again from the Elliott article, just 10 short years ago, the maximum allowable Pell Grant covered 98 percent of the average tuition and fees at public fouryear institutions; in the 2012-13 academic year, this figure dropped to 64 percent. All we really know is that the current system of debt-to-income measurement does not match reality, because again, nonprofit and for-profit institutions are not in the same league.

Even so, the metrics are driving change, and the GER holds for-profit programs to a higher standard than nonprofit programs. The U.S. Department of Education’s own performance data indicates that the average debt-to-earnings ratio for all Bachelor’s degree graduates in their first year of repayment is 13 percent, versus 12 to 16 percent for nonprofits. Yet under the GER, for-profit colleges and universities would be held to an 8 percent standard. Why the different standards? The Association of Private Sector Colleges and Universities (APSCU) challenged the GER on exactly that issue, and the court agreed, throwing out the rule. In its comments, APSCU cited the U.S. Department of Education’s use of “misleading” statistics in formulating the rule, including the claim that 72 percent of for-profit college graduates earn less than high-school dropouts. This casts doubt on the U.S. Department of Education’s neutrality. In my opinion, there is no conspiracy theory here; it is simply an example of the manner in which the government conducts business – nonsensically
and inefficiently, all while creating regulations that keep it in the regulation-creating business.

If you can’t beat them, join them. The solution, or perhaps at least a smart business strategy, is to convert from the for-profit sector to the nonprofit sector.

Rupert Murdoch said, “The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow.” Our for-profit private sector understands moving fast to market, and fast is the countermeasure that negates the catch-22 every time.

by AMERICAN WRITER
Dr. Pietro Savo © 2015

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Common Sense Folks

common sense

We find ourselves wondering if the government is honestly paying attention to the economic experts or the common sense experiences of its citizens.

Common sense seems obvious if you want to simulate job creation the government needs to reduce or eliminate small business taxes. Small businesses in the United States make up over 75% of the new jobs in our economy and this number represents over 99% of all employers. With reduced or eliminated taxes, business owners can invest money back into their business; they can invest in new business markets, invest in new technologies, and invest in honest American job creation.

Reducing or eliminating business taxes is only half the common sense solution, the other half is not spending money our nation does not have. Most Americans budget for what they need and want, and our government needs to learn the same common sense approach to finance. Becoming a nation that is fiscally smart is not a four-letter word. Fiscally smart begins with the government, because common sense folks understand this important lesson.

Common sense folks created this nation, and it appears common sense folks will need to move away from the kings and princes’ the career politicians of the 21st Century. What is interesting is how we have come full circle, and it appears it is 1776 once again. Voting revolutions by the people, is always welcomed in society because they represent positive progress in a political wasteful environment caused by career politicians.

The intent of the founding fathers was a system of citizen politicians made up of common sense folks well-grounded, in reality, and today the financial waste is clearly controlled by the career politicians. The great intellect and scientist Albert Einstein said; “We can’t solve problems by using the same kind of thinking we used when we created them.” Common sense folks the voters understand that 2010 the year of the common sense voting revolution!

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The Will of the People

During a conversation with a gentleman I met yesterday, he made a statement that the Democratic Party had become hijacked by the far left liberals and the Democrat moderates and conservatives, the self-proclaimed Democratic Blue Dogs are beyond belief that this has occurred.

It then occurred to me that perhaps the same statement about the Conservative right hijacking the Republican Party is possible. I do agree something has changed with the Republican Party over the past twenty-five years; I would not call it a hijacking, perhaps more resembling a transformation that began with President Ronald Reagan.

However, the Republican Party does not have the community organizing skills we have witnessed on the Democratic Party side, especially during the past presidential election. Today with the various Tea Parties, and the events of 9/12 what we are witnessing once again is a transformation of historical proportions and it is occurring in all directions around America.

It is not clear if one political party should receive the credit for driving this transformation across America, or perhaps simply the credit belongs to “the will of the people”. “The will of the people” always wins over career politicians, the will of the people” has no political boundaries, and “the will of the people” is what our founding fathers intended.

by AMERICAN WRITER

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God and Our Government Do Mix!

Our Founders established the great truth and core values in the Declaration of Independence. President Abraham Lincoln reminded the nation of that great truth contained in the Declaration of Independence when he said, “We hold these truths to be self-evident: that all men are created equal; that they are endowed by their Creator. The Declaration of Independence appeals to God no less than three times (Source: Declaration of Independence, Lincoln’s Gettysburg Address).

The solutions are simple, by God’s Grace; we became the greatest nation on earth. Our employees the politicians that work for us must never lose sight of that Grace. Today we have examples that indeed politicians are losing sight of the importance of God’s grace. An event that took place on April 14, 2009 surrounded by American flags and presidential seals, there was something missing when President Obama’s economic speech at Georgetown University, and that was Jesus. The gold “IHS” monogram symbolizing Jesus’ name in Gaston Hall was covered over (Source: The Washington Times, NBC Washington).

Now it becomes difficult to understand why the National University of the Catholic Church, would ever cover up significant religious art or signage for any reason. Upon the Obama administration’s request, the gold “IHS” monogram was openly disrespected. What the administration did was violate the Georgetown’s freedom of religion because the administration knowingly held their political economic speech in a religious hall. The First Amendment guarantees the Freedom of Religion is an inalienable right. This is not an example of separation of church and state because the president could have held their speech somewhere else. Once the president selected a religious setting, the Obama administration obligated to church rules, not a church over-rule. The second example is President Obama decided against holding a White House National Day of Prayer ceremony. (Source: CNN)

As a concerned citizen my question is, what’s next, will the White House attempt to omit “under God” from the Pledge of Allegiance?

by AMERICAN WRITERAMERICAN WRITER

Business

Manufacturing Research Practitioner ™ by Pietro


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Read, write, and question everything!
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Pietro Savo E-Mail Link PietroSavoUSA@aol.com