Art Kirk
President
Saint Leo University
Many campus exeutives have an eye on the fracas involving the U.S. Department of Education and for-profit higher education providers. One of them is Art Kirk who oversees what might be described as a non-profit college conglomerate. Or perhaps an educator's mall. Clever descriptions aside, Kirk's insights are fresh and engaging.
Is your school for-profit or non-profit, and who are your 15,500 students?
We are decidedly non-profit (but not for loss). Our students are a diverse lot. Among them are 1,900 youthful undergraduates, 1,300 living on our St. Leo, Florida campus. We also have 4,800 adult undergraduates attending St. Leo classes on military bases in seven states. Also enrolled are 3,200 undergraduates in all 50 states and some other nations who study with us exclusively online. We enroll 2,400 graduate students, about 1,500 of them online as wells as others in multiple locations in multiple states. And 2,000 St. Leo students pursue our Bachelors degrees on various community college campuses and corporate parks. Nearly half of all our students are ethnic minorities. The average age of our adult students is 35. Some 54 percent of St. Leo students are female. Our enrollment grew a welcome 10 percent in the past year.
Who are the competitors that you respect the most?
Our activities are so diverse that we have different competitors in different academic and geographic areas. In Florida we respect University of Tampa, Rollins College, Flagler College and Nova Southeastern, among others. Outside Florida we respectfully compete with University of Dayton, Fairfield University, Sacred Heart University. On military bases our respected competitors include Troy University and Old Dominion University. Online we compete respectfully with Kaplan University, UMassOnline and others. There are many schools we respect with whom we do not compete. And there are some schools with whom we compete that we don't respect.
Under political attack, some of the for-profit colleges are claiming that giving a student loan to a poor unemployed adult is preferable to giving that person a welfare check. Do you agree?
In most cases no. In the case of a person who truly wants to attend college and can demonstrate an ability to benefit, yes.
Throughout higher education, do you see some similarities between student loans today and mortgage loans six years ago?
The slippery slope of lending to a growing population of high risk borrowers looks very similar whether it's home mortgages six years ago or student loans today. The actual value of homes were overstated - in many cases drastically. The actual value of a paper degree today in some cases may be considerably less than the buyer is led to believe.
So in student loans, there are two risks ... the student borrower and the service being purchased?
Absolutely. Students come in all ages and experience levels. Regarding their upcoming higher education purchase, their shopping abilities and buying savvy vary widely. Meanwhile, if he or she is an 18-year-old straight from high school, there may be no career or job skill clearly in focus. In fact, they or their parents may view college attendance as a way to help make the future less murky, more clear. Lending to an 18-year-old first-time freshman can be risky business.
How might risk be mitigated on the borrower side?
No student should be fully-funded by a campus or with loans. He or she should have 'skin in the game' in the form of cash. By allowing full substitution of an expected family contribution with loans, current financial aid policy is flawed. Adult students should undergo a credit evaluation. In many cases co-signers should be required.
How might purchase risk be mitigated by the college?
It may not be a popular notion among my colleagues, but perhaps colleges should assume some of the risk with cash reserves. Then the college would also have skin in the game.
How might reduction of the purchase risk be monetized?
It should not be done with interest rates. As interest rates do now, they should reflect the market availability of money. One proposal worth investigating might involve an insurance premium based on true actuarials with the cost shared by buyer, seller and lender.