Education

UK student loan sale has costly Corbyn hedge

31 Oct 2017

Britain is pushing ahead with the sale of 4 bln pounds of loans, despite Labour leader Jeremy Corbyn’s promise to ease student debt. Investors will get compensation from a complex scheme if government policy changes. That further strains the logic of the sale.

For-profit college deal textbook merger of equals

30 Oct 2017

Strayer and Capella are forming a company worth $1.9 bln as regulatory pressures force them to improve the quality of their degrees. Pooling resources, and slicing out $50 mln in costs, gives them a better chance to disrupt America's overpriced higher-education racket.

Pearson’s improved report card could be erased

17 Oct 2017

The education publisher issued a slightly more optimistic forecast for operating profit and said its U.S. textbook business is unlikely to repeat its catastrophic 2016. But Pearson has misread its key market before. The shift to digital publishing still looks painful.

Harvard endowment risks wasting its big advantage

20 Sep 2017

An 8.1 pct gain in the year to June was far from Ivy League. Newish boss Narv Narvekar says it will take years to fix performance. But worrying about short-term returns misses a Harvard strength. Its $37 bln pot is ideally suited for the ups and downs of very long-term investing.

Endowment CIO pay demands greater academic rigor

23 Aug 2017

The boss of Harvard’s $35 bln fund recently made nearly three times as much as the head of Yale's $25 bln pot despite much weaker returns. Colleges generally base compensation more on size than performance, as companies tend to do with CEOs. They should grade more carefully.

Exchange Podcast: Duff McDonald

25 Jul 2017

Harvard Business School has trained world leaders, billionaire entrepreneurs and convicted felons. Duff McDonald, author of “The Golden Passport,” discusses the seamier side of Harvard's teachings with Rob Cox.

U.S. colleges may need to start on M&A course

25 Jul 2017

After tripling in real terms since the early 1970s, tuition costs are now rising only a hair faster than CPI. Cost cuts won't offset flagging enrollment, the result of a stronger job market and demographic shifts. Merging could help, especially for small private schools.

U.S. student debt dims home-ownership outlook

17 Jul 2017

Economic growth is supposed to lure millennials out of their parents’ basements. But a study from the New York Fed suggests that borrowing for surging college costs accounts for up to a third of the decline in home buying by 28-to-30-year-olds. That purchasing power won’t return.

Pearson’s $1 bln Penguin sale papers over cracks

11 Jul 2017

The education group is selling almost half its 47 pct stake in Penguin Random House to co-owner Bertelsmann. Pearson has maximised the cash proceeds, but the valuation looks low. With a still-troubled core business, boss John Fallon is running out of assets to sell.

U.S. for-profit colleges get presidential clemency

15 Jun 2017

The education secretary chosen by the founder of defunct Trump University is set to rework two Obama administration rules that targeted dodgy degrees. They could be improved, but more likely they'll be weakened. Students may need to be more vigilant and taxpayers could lose out.

Hadas: Free university for all is good policy

14 Jun 2017

The UK Labour party promised to abolish the current tuition-plus-loan system for tertiary schooling. That’s normal in most of Europe. It’s also fair and enriches society, whereas student debt does the opposite. Clever use of taxation might offer an answer.

Chinese school IPOs require some serious homework

5 Jun 2017

Several school groups are going public in Hong Kong and New York. Catering to an emerging middle class that is obsessed with education sounds like a first-class idea. Given the legal grey areas in private education, however, prospective investors will need to swot up.

Cost cuts won’t save Pearson or its CEO

5 May 2017

The UK education publisher is planning 300 mln pounds of savings by 2020, with the troubled North America business taking some of the pain. Markets aren’t giving embattled boss John Fallon much credit for the plans, and falling revenue could cancel out the gain to shareholders.

Kansas’ fiscal fiasco a warning for Trump tax plan

3 May 2017

The president’s tax plan echoes sweeping cuts by the Plains state in 2012. The GOP governor’s bet on trickle-down economics slashed revenue but failed to spur growth. Lawmakers now want to reverse the reductions amid a school-funding crisis. It may be a crystal ball for D.C.

Collegiate corporate finance may prove infectious

1 May 2017

Indiana's top public university is gambling its reputation for a shot at disruption. Purdue is buying online diploma mill Kaplan from the Graham family. The deal could either pre-empt a digital education revolution - or spread the bad behavior of for-profit schools even wider.

U.S. workforce could use some German engineering

16 Mar 2017

Donald Trump wants to bring back manufacturing jobs despite a lack of skilled labor. Executives advising the president point to the success of European apprenticeships. There are educational and cultural challenges in America, but it's a good time for more radical training ideas.

UK student debt sale is a third-class idea

9 Feb 2017

The government is selling 12 bln pounds of student loans. If wage growth motors, the sale price could wind up looking cheap. Given its reluctance to sell RBS shares that are depressed in value, and the reduced imperative to balance the budget by 2020, it's a needless risk to run.

Duped students teach a costly moral-hazard lesson

30 Jan 2017

Obama's crackdown on for-profit colleges raised standards and shut down bad actors. A $7.3 bln lawsuit filed by ex-students of bankrupt ITT seeks federal debt forgiveness too. It underscores the high price of doling out loans without first ensuring schools can make the grade.

BT boss is behind Pearson’s in CEO sack race

27 Jan 2017

Both the UK telco and the education publisher have recently released profit warnings wiping a fifth off their market value. BT boss Gavin Patterson has a less-bad shareholder return record than Pearson's John Fallon. Some of the firm's bigger problems are also out of his control.

Harvard transfers to new school of investing

25 Jan 2017

After years of lagging returns on its $36 bln pot, the Ivy League endowment is slashing staff to rely more on outside managers. New boss N.P. Narvekar is also getting a tighter grip on the portfolio's underlying risks. Harvard is finally admitting it can learn from others.