This ain’t grandma’s typing school anymore, folks. Miami-Jacobs Career College, located in downtown Dayton, Ohio, stands cloaked in the respectability of a college that has been operating since 1860. When you enter the hallowed halls of the building that they have currently been occupying since 2002, you will see several giant pictures on the wall of students in class in the early days of the last century. After learning some secretarial skills, they went off to have successful careers at such notable places as NCR, Frigidaire, General Motors and others. There is a distinct possibility that grandma, grandpa or Great Aunt Edna -- someone that you know -- successfully attended The Miami- Jacobs Business College of that era.
This history is played up using the pictures, a written version of their history on their website and trotted out by Darlene Waite, current Miami-Jacobs president since December 2000, to the newspapers whenever necessary to give credence to their claims of a long and continued existence. However, according to an article from the Dayton Daily Newspaper, dated December 17, 2003, this particular school was sold to a private for-profit company on December 2 of that year. “Other schools in the chain have grown significantly. . .” Waite was quoted as saying at the time, while declining to identify the buyer.
The Miami-Jacobs Business College Company has remained undisturbed as a corporation, according to public records, since the first filing shown for the company on November 2, 1904. On the school’s website, there is no mention in the history of the school about being sold to another corporation, unlike a similar for-profit school that has been around Dayton since the 1950’s -- RETS Tech Center -- who also lists the name of the company that bought them in 2005. At the Miami-Jacobs website, there is no list of executives, board of directors or trustees. There is only Darlene Waite, president.
In fact, they’ve gone so far to remain anonymous, that the same Charles Campbell whose family had owned The Miami-Jacobs Business College Company for nearly 100 years at that time, continued on as the Domestic Agent designee for corporate filings with the Ohio Secretary of State’s office until January 4, 2008, over five years later. When Darlene Waite became the designated agent, her appointment, as required by law, was signed by authorized representative Kevin A. Smith, CFO, but doesn’t say what he is the CFO of.
What are they trying to hide? I asked Marcia Byrd, Financial Aid Director of Miami-Jacobs, how many locations the school has. She said she didn‘t know. When I questioned how she could not know, she then informed me that, in addition to the 5 other Miami- Jacob locations, they have “sister associations.” She could not tell me how many. It is clear that even the employees know little about the operation -- or they are not telling. I asked her for an organizational chart for both companies but never received them. I had to find out that information for myself.
I don’t have access to property records going back as far as 1860, but I can tell you that Miami-Jacobs is leasing their current location. In other words, even though they are a 149 year old institution in this town, they are not investing in it.
Why does all this matter to us? We are pouring our state and federal tax dollars into a private for-profit company that has taken great steps to remain anonymous, or at the very least, Miami-Jacobs has taken great steps to hide them. Why? And why should we care?
Whether you are a concerned parent or frustrated taxpayer, according to data obtained from ed.gov, the official Department of Education website, 100% of Miami-Jacobs students receive federal student loans, 91% receive federal grants and 81% receive state grants. The tuition for the 2008-2009 academic year is $11,590. Per Student.
Ed.gov reports 811 students attending the main campus of Miami-Jacobs. According to press releases, the Troy and Springboro locations have a student capacity of 400 each, and there are 3 more locations: Cincinnati, Columbus and Akron.
With specialized training, very few, if any credits transfer to other schools, even other trade schools with the same program. For example, Rets Tech Center reports that a maximum of 16 credits may be transferred to their school, and strict criteria must be met. A “retention rate” is calculated by how many enrolling freshman come back the following year to continue their education. Miami-Jacobs retention rate is currently 57%.
Still, 100 % of Miami-Jacobs students at the main campus receive federal loans that do have to be paid back. If the students do not come back and get their degrees for whatever reason, even though the credits go away, I can assure you the loans do not. According to ed.gov, the average loan for a student at Miami-Jacobs for the school year 2006-2007 is $4,008.
With only a 33% graduation rate at Miami-Jacobs and a loan default rate that at 21.9% is well over 3 times the national average of 6.9%, according to the school’s statistics at the Ed.gov website. We are not getting much for our investment and neither are the students.
Consider this, early last year Miami-Jacobs was in the news due to two different programs that it offers. The nursing program was in trouble after a review in September 2007 by the Ohio Board of Nursing ended with the program placed on a conditional approval due to inadequate “clinicals” in the proper range of health care settings. The program was also accused of “consistently” lacking to provide a qualified administrator for the program. That program has been fixed, according to later articles from the Dayton Daily News and a new administrator was put in place. A new review was supposed to take place in March of 2009, but the web site is still showing a conditional approval as the date of this post.
Additionally, 7 former students from the surgical technology program sued the school last year alleging that the program wasn’t properly accredited. Due to the enrollment agreement that contains an arbitration clause, they were forced to take the case to arbitration instead of the court system. According to Jane Peach, attorney for the students, that case is still pending a year later. Unfortunately for the students, the low level publicity that most arbitration cases receive has kept that case out of the news. The last newspaper coverage was a letter to the editor of the Dayton Daily News from Darlene Waite on June 12, 2008 defending the school and, again, trotting out its sterling 148 year history.
None the less, in light of Miami-Jacobs heavy reliance on government aid for its students and their poor record of educating them, it is time for the school to quit hiding behind its past and look to the future of its students. This is not a 149 year old school; it is a 5 year old school. It is not still owned by a century’s worth of Harbottles and Campbells.
It is, in fact, owned by a company called Delta Career Education Corporation that is owned by a $700 million dollar private equity company called Gryphon Investors, who bought it from the original purchaser, Huron Capital Partners LLC. Getting dizzy yet? To be fair, it is true that Huron Capital put out a press release when they bought Miami-Jacobs, as did Gryphon Investors, but I don’t think we got the memo.
According to Gryphon Investors website, Delta Career Education Corporation is “one of the leading privately held education providers in the U.S.” All of the schools are similar to Miami-Jacobs in that they all offer vocational education and provide certificates, diplomas and degrees to their students -- and offer federal financial aid to their students. With Miami-Jacobs and its 5 other locations, they have 30 campuses in 12 different states and 12,000 students to go along with them. They operate under “strong regional brand names, some with over 100+ years of history,” according to Gryphon's website.
These schools include Miller-Mott Technical School, founded in 1916 by Judge Leon Mott in Wilmington, North Carolina. They now have 9 locations. Lamson College was founded in 1889 by Colonel Edwin M. Lamson in a house in Phoenix, Arizona and is the oldest private college in the state. They now have 2 locations. The McCann School of Business was founded in Mahanoy City, Pennsylvania in 1897, 112 years ago. Some of the schools admit to being owned by Delta, but none say that they are being held (up?) by a $700 million dollar private equity firm.
No, I wasn’t kidding about the big bucks those federal loans and grants bring in. When Huron Capital sold Delta Educational Systems to Gryphon Investors, it was sold for 11.1 times what Huron had originally paid for it all: $120 million -- just 2 short years after bringing Miami Jacobs into the fold. These companies have been very aggressive in expanding Miami-Jacobs since they bought it. Miami-Jacobs has added 5 new locations in as many years.
I am not against capitalism nor am I against specialized training. In fact, I am a big proponent of vocational education. Many students thrive in a hands-on learning environment who fail in a traditional class room setting. What I am against is making that money on the backs of our young people while leaving many of them without an education, but with a boatload of debt in the form of student loans. To be fair, not all the schools under the Delta umbrella have the same sorry graduation rates. McCann’s in Pottsville, Pennsylvania has an 87% rate. The Miller-Mott campus in Wilmington, North Carolina has a 49% graduation rate.
But where is the government oversight? Can it possibly be legal for a school like Miami-Jacobs who receives so much government money in the form of student financial aid, both state and federal, to “decline to name their buyer?” In any case, I don’t understand why that article on the sale didn’t raise a red flag for a reader, or possibly even the newspaper itself, to do a bit more investigating.
For instance, Huron Capital Partners LLC, Miami-Jacob’s original buyer, hasn’t gotten out of the education business. Huron still owns Ross Education LLC, a postsecondary career school company that has 14 locations, including 2 in Ohio. Joseph Kennedy, the current CEO of Delta, who owns Miami-Jacobs, is a member of the Board of Directors for Ross Education LLC. He is also listed as an “Executive Partner” of Huron Capital, even though his company is now owned by Gryphon Investors. Huron Capital also lists as a “Select Limited Partner” National City Bank, among other financial institutions, who is a purveyor of federal student loans for the government. As the old saying goes, it sounds like they are all in bed together. Shouldn’t we all have a right to know that?
Due to a federal loan default by my daughter because of false information received by the financial aid office at Miami-Jacobs, we turned to Congressman Michael Turner’s office for help. During a phone conversation with an employee of his local office who deals with constituent education problems, I mentioned the ownership of Miami-Jacobs. I asked this very question: Why don’t we have government oversight of these private companies that own these for-profit colleges and receive all these government dollars? Her answer? “Don’t you think that we have government oversight?” Well, frankly, no . . . . no, I don’t. At least, not nearly enough, if an institution like Miami-Jacobs can mislead the public for so many years about who they are.
There seems to be something intrinsically wrong when our tax dollars, in the form of federal and state financial aid, goes unchecked into the bank accounts of the super rich. This is happening on the backs of some of our most vulnerable citizens: students fresh out of high school. Many of these students are poor and Miami-Jacobs represents a way out. Many, if not most, of these students begin Miami-Jacobs with little or no credit history, not a bad credit history. Thousands of dollars later, they leave, but do they leave armed with an education? Not many of them. Remember, the school only has a 33% graduation rate.