BOB GARFIELD: The Washington Post Company includes the Post newspaper, a half a dozen other papers, six TV stations, a cable company and Internet service provider, Slate.com and, until recently, Newsweek Magazine. What you probably know is that The Washington Post itself is unprofitable. What you perhaps did not know was that 75 percent of its profits come from a non-media business, the Kaplan Education Subsidiary. A leader in the burgeoning for-profit higher education industry, along with such competitors as University of Phoenix and DeVry, Kaplan offers college and vocational training courses to mainly disadvantaged students, financed mainly by federal student loans. But recently, Kaplan has come under fire for recruiting students unlikely to complete coursework and doing so with exaggerated promises of financial success. This is problematic on its own, but at least as concerning is the blurring of lines between the newspaper’s influence and reputation and the cash cow keeping it afloat. Tamar Lewin wrote about this overlap for The New York Times. Tamar, welcome to the show.
TAMAR LEWIN: Thank you.
BOB GARFIELD: Briefly explain the general set of allegations against Kaplan and who’s making them.
TAMAR LEWIN: There are five different whistleblower suits from different parts of the country involving different Kaplan branches.
BOB GARFIELD: And the whistleblowers are former employees, for the most part.
TAMAR LEWIN: Yes, and some quite high up, but all of them have in common some kind of allegation that in their quest for profits they're manipulating their data, they're breaking laws on how they pay their recruiters, they're keeping students on the books too long in order to keep their aid, misdeeds that the whistleblowers say amounts to fraud. So besides that, there are several different things going on in the federal government. Senator Harkin, who’s the chairman of the Health, Education, Labor and Pensions Committee, has had a set of hearings, and they're continuing. And in the course of that, they sent GAO investigators undercover to visit a bunch of for-profit colleges to tape them with hidden cameras. And what they came away with from every single one of the 15 places they visited was at least deception and at most, outright fraud. Two of those were Kaplan ones. Another big thing that’s going on is the Department of Education has proposed some new rules that would stop federal funding completely to any for-profit program if 45 percent of their students weren't repaying their loans. And that would hurt Kaplan because in August they were 28 percent. And the University of Phoenix was at 44 percent, so they had a bad showing even compared to a lot of other for-profits.
BOB GARFIELD: Now, the Post Company has responded to a lot of these allegations, chalking them up variously to long-discontinued practices or to abuses from a handful of low-level employees. You spoke to CEO Don Graham himself, but I didn't get the impression from your piece that you think his explanations scan. Am I right about that?
TAMAR LEWIN: Well, he makes the case that this is a wonderful thing and does a lot of good for very poor students, and I'm sure that there are some for whom that’s true. But what was very troubling was I talked to dozens and dozens of students and employees, and the pattern was so consistent – recruiters who actually left because they felt the practices were so unsavory, and students who ended up with heaps and heaps of debt and nothing useful in the way of a certificate or a degree. So no, I guess it’s fair to say I wasn't convinced by him. I really don't think it would be fair to say this was a little group of outliers because that’s not what I found.
BOB GARFIELD: Now, there were several things in your reporting that raised my eyebrows and so forth. One was the invocation by Kaplan recruiters - the salespeople, basically - of The Washington Post newspaper and of some of the parent company’s famous-name board members, Warren Buffett, Melinda Gates and so on. This has been documented?
TAMAR LEWIN: I heard it from quite a lot of different recruiters. I think it would be kind of odd that recruiters in different cities would all say, yes, that they were trained to say, if you have any doubts about Kaplan, you should know that Warren Buffett and Melinda Gates, Bill Gates’ wife, are on our board, and would they do anything bad? And one recruiter in Florida told me they used to get dinged if they didn't say that. And then after this scrutiny started they were told they shouldn't say it any more and they got dinged if they did say it. And, as you probably know, Melinda Gates, she resigned two days after the story ran.
BOB GARFIELD: Do we have any reason to believe this is a coincidence?
TAMAR LEWIN: I don't have any reason to believe that it’s a coincidence.
BOB GARFIELD: Okay, a second concern is that Donald Graham, the CEO and chairman of the Washington Post Company, has been lobbying on Capitol Hill, in person and via paid lobbyists, to counter legislation or regulation targeting the for-profit education industry.
TAMAR LEWIN: I do think there are real questions about how much clout a person like Donald [LAUGHS] Graham has when he goes to Capitol Hill. He said he hasn't gone to the Hill to lobby personally on anything in at least a dozen years. And it’s an entirely different thing than when a for-profit college president generally would go. Nobody in Washington wants The Washington Post against them. It’s a horrifying thought. And NPR’s own Cokie Roberts, who certainly knows her Congress, said that Congress really isn't likely to go ahead and do that much about for-profits because Democrats would be too fearful of hurting The Washington Post.
BOB GARFIELD: Now, one thing that The Post could do if it were concerned about the appearance of conflict would be to waive editorial coverage of the controversy within the for-profit education industry.
TAMAR LEWIN: I think it’s been substantially less than most other major papers have done. It’s been careful, but they have had some. Their ombudsman has said, bravo, what a fine job the paper is doing of declaring its conflict and going ahead with the coverage. I don't share that bravo.
BOB GARFIELD: All right, but meantime, The Post has editorialized against legislative overreaction to the problem, if any, with the for-profits. Publishers are certainly entitled to flog their interests in their editorials, but it does seem to be the crossing of some line there, no?
TAMAR LEWIN: They can editorialize about anything they want, but, you know, it’s noticeable that The L.A. Times and The New York Times would editorialize for this regulation and say, we have a real problem and this is the way to attack it. And The Washington Post would say, no, no, this is a terrible idea and it’s going to do terrible things.
BOB GARFIELD: Newspapers are under siege. And, you know, I'm a subscriber. I get that paper every day. I don't want anything to happen to it, but I also don't want to feel dirty wondering how this fantastic reporting has been subsidized. As a reader, what’s my stake in this?
TAMAR LEWIN: Well, I think you should be thinking about the fact that it’s not okay to let The Washington Post’s reputation paper over trouble in the unit that’s providing their money. For-profit college students are 11 percent of the students but 43 percent of the ones who default. And this is a debt that is not dischargeable in bankruptcy. It’s going to follow these students for the rest of their lives. And if they're not going to succeed and they're being encouraged to take out big loans for programs that they either won't finish or won't really help them in their careers, there’s something worrisome going on.
BOB GARFIELD: All right, Tamar, thank you so much.
TAMAR LEWIN: Thank you.
BOB GARFIELD: Tamar Lewin is an education reporter for The New York Times. We contacted the Post Company for comment, and it offered a statement that also ran in the November 17th New York Times. “Nowhere in The New York Times story,” the statement says, quote, “is there any mention of learning, though that’s what keeps students coming to Kaplan Higher Education and has launched 275,000 graduates into better lives and careers. Kaplan has brought innovation and excellence to a population of largely low-income students who don't usually have access to either, and the results are striking. Our graduation rates for the higher risk population we serve are 15 percentage points higher than the national average for comparable students and we do it at a taxpayer cost less than half that of traditional institutions. Rather than focusing on the questionable complaints of a handful of serial plaintiffs, the article should have focused on how institutions like Kaplan are bringing new choices to underserved students, complementing a traditional higher education system that is straining to keep up with the economy’s need for a more educated workforce.” Signed, Andy Rosen, Chairman and Chief Executive, Kaplan, Inc. Once again, however, Donald Graham, the CEO of the Washington Post Company, declined our offer to respond personally.
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