2012-01-14 "Romney Offers Praise for a Donor’s Business" by ERIC LICHTBLAU from "New York Times"
WASHINGTON — At a town-hall-style meeting in New Hampshire last month, listeners pressed Mitt Romney on the soaring cost of higher education. His solution: students should consider for-profit colleges like the little-known Full Sail University in Florida.
A week later in Iowa, Mr. Romney offered another unsolicited endorsement for “a place in Florida called Full Sail University.” By increasing competition, for-profit institutions like Full Sail, which focuses on the entertainment field, “hold down the cost of education” and help students get jobs without saddling them with excessive debt, he said.
Mr. Romney did not mention the cost of tuition at Full Sail, which runs more than $80,000, for example, for a 21-month program in “video game art.”
Nor did he mention its spotty graduation rate. Or, for that matter, that its chief executive, Bill Heavener, is a major campaign donor and a co-chairman of his state fund-raising team in Florida.
That team, Mr. Romney said last fall when he appointed Mr. Heavener, “will be crucial to my efforts in Florida and across the country.”
Beyond his fund-raising role, Mr. Heavener has committed his own resources to the cause. He and his wife have each given the maximum $2,500 to the campaign, and he gave $45,000 to Restore Our Future, a “super PAC” run by former Romney aides to bolster his campaign. The chairman of the private equity fund that owns Full Sail University — C. Kevin Landry of TA Associates — gave $40,000 to Restore Our Future, records show.
Mr. Romney has received financial support from other segments of the for-profit college industry as well, and he was quick to praise the industry as an affordable alternative to traditional colleges.
With for-profit colleges under siege in Washington over accusations that they defraud students, Mr. Romney’s full-throttled endorsement puts him squarely in the middle of a political debate over them and dovetails with his strong belief in a free-market system that thrives on competition.
To industry critics and some education experts, however, Mr. Romney’s stance appears at odds with much of the available evidence on the cost and performance of for-profit institutions.
“Except with some rare circumstances, their prices are more expensive than community colleges and even four-year institutions,” said Donald E. Heller, dean of education at Michigan State University, who has studied for-profit colleges. “It’s hard to argue against the idea of competition, but anybody who knows the business will tell you that most of the for-profits are not competing on price.”
The Romney campaign declined to comment on the financial support it has received from executives in the for-profit college industry and the candidate’s support for Full Sail University.
Situated on a 191-acre campus outside Orlando, with 110 studios and production facilities, Full Sail was founded 30 years ago to train students for careers in film, music, entertainment and sports marketing and related fields, often on the production side of the business. With about 15,000 students, it boasts of a number of alumni who have gone on to win Grammys and other prestigious awards or worked with big-name performers like Madonna and Jay-Z.
One focus has been recruiting both active and former military personnel, who are eligible for special federal financing for educational programs. Full Sail has generally been regarded more highly than many other institutions in the for-profit college industry as a whole, which has been the target of withering criticism in the last few years in the wake of federal investigations into fraudulent marketing practices, poor academic records and huge loans assumed by students ill-prepared for the expensive programs.
Still, the school has attracted its share of criticism on Internet discussion boards and YouTube postings from its own students and alumni, with some alumni even deriding it as a “scam” because of what they described as high tuition, inadequate career training and difficulties in transferring credits to other schools.
Some of Full Sail’s 37 degree programs have suffered from high loan burdens and low graduation rates, data show.
The $81,000 video game art program, for instance, graduated just 14 percent of its 272 students on time and only 38 percent at all, while the students carried a median debt load of nearly $59,000 in federal and private loans in 2008, according to data that the federal Education Department now requires for-profit colleges to disclose in response to criticism of their academic records.
While a number of other Full Sail programs also showed low graduation rates, some fared much better. For instance, the master’s curriculum in entertainment business, a yearlong program with a $36,245 tuition, graduated 80 percent of its students, nearly 63 percent of them on time. (Many of the school’s degree programs provided no data at all because Full Sail said students had not yet completed them.)
David Halperin, who until this month ran Campus Progress, a liberal advocacy group focused on student issues, said he was mystified by Mr. Romney’s praise for Full Sail.
“A school offering a program with a 14 percent on-time graduation rate is not a model for higher education in this country,” he said. He questioned whether Mr. Romney was putting the business interests of his political donors at Full Sail ahead of the interests of students.
Mr. Heavener, the Full Sail chief executive, did not respond to repeated requests for comment. An assistant said he was traveling and was not available.
Mr. Landry, the chairman of TA Associates, the Boston private equity company that owns Full Sail, said in an e-mail that he “had no idea” where Mr. Romney stood on for-profit colleges when he donated the $40,000 to the super PAC supporting his candidacy and that his financial support was based on other factors.
”I think Mitt is highly intelligent and can make good judgments,” said Mr. Landry, who has known the candidate through both political and business dealings. He said that his company and Bain Capital, the private equity company that Mr. Romney used to run, did one deal together — the 2002 merger of Ameritrade and Datek — but that Bain Capital has no financial interest in Full Sail.
Among other for-profit college executives who are supporting Mr. Romney, Todd S. Nelson, chief executive at the Education Management Corporation, also gave the campaign $2,500. His company is the target of an $11 billion Justice Department lawsuit over accusations of fraudulent marketing and recruiting practices. Education Management is partly owned by Goldman Sachs, whose individual employees represent a bigger source of campaign revenue for Mr. Romney than any other single company.
Mr. Romney also just brought on Charlie Black, a prominent Washington lobbyist who has worked for for-profit colleges, as an informal campaign adviser.
But the candidate’s closest industry links are clearly with Full Sail University.
At an interview last month in Iowa with editors and reporters at The Ames Tribune, Mr. Romney turned the conversation to Full Sail when he was asked about the costs of higher education, and he volunteered that he had visited the school in Florida. He said he came away impressed by the school’s year-round schedule and its numerous campus production studios for training students in film, music, editing, video games and other fields.
“They bring a new class in every month, so there’s a graduating class every month and they can place people” in the job market, Mr. Romney said, adding that “they hold down the cost of their education” by recognizing that they are in competition with other for-profit and traditional colleges.
He said schools like Full Sail and the University of Phoenix, a much larger and better-known nationwide system, offer students an alternative.
When students look at such schools, Mr. Romney said, “you’re going to find students saying: ‘You know what? That’s not a bad deal. I’m not willing to come out of college with a hundred thousand dollars in debt.’ The alternative is to say the government is going to pay for that.”
He added: “I just like the fact that there’s competition. I like the fact that institutions of higher learning will compete with one another, whether they’re for-profit or not-for-profit.”
The remarks appeared intended to draw a sharp divide between Mr. Romney and President Obama, whose administration has imposed tighter regulations on for-profit colleges and limited the role of private companies in student lending.
At Mr. Romney’s town-hall-style appearance in New Hampshire last month, Kallie Durkit, a junior at Bowling Green State University in Ohio, pressed the candidate on his views on college tuition. She said she was troubled by his suggestion that students look to Full Sail University and for-profit colleges in general as an affordable alternative to traditional schools.
“When he said that, I was just like, ‘You’re kidding,’ ” Ms. Durkit, 21, who described herself as an independent, said in an interview.
After the encounter, she looked up Full Sail’s tuition rate — $40,000 a year for some programs. She said Mr. Romney’s claims about the school’s affordability reinforced her impression that he was out of touch with the realities students face.
When told that Full Sail’s chief executive was a Romney fund-raiser, Ms. Durkit laughed, saying she wished she had known that during her exchange with the candidate.
“I guess it just goes to show that money impresses people,” she said.