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.
Student-loan case throws down regulatory gauntlet 18 Jan 2017 In a page from the crisis playbook, the CFPB accused Navient of cheating borrowers paying for college. Suing days before Donald Trump becomes president is a bold gambit for the same agency that nailed Wells Fargo for fake accounts. It's fighting as much for survival as consumers.
Pearson chief Fallon gets an F 18 Jan 2017 The education publisher's shares fell almost 30 pct after a profit warning from boss John Fallon - not his first. A hit to textbook sales through retailers should have been foreseen, and Fallon's tenure has been bad for investors. This latest shocker puts him on the naughty step.
Investment banks’ next trade will be EU education 30 Dec 2016 No European city has as many international school places as London. That’s a problem for firms thinking of asking staff to move their families out of the UK capital following the Brexit referendum. The solution will be for banks to get into the education business themselves.
A teachable moment in for-profit education 15 Dec 2016 DeVry is paying $100 mln to settle fraud accusations under a crackdown by the Obama administration. For-profit colleges can expect looser oversight when the founder of Trump U. takes office. DeVry's post-election stock surge suggests investors are discounting regulatory risk.
U.S. scandal is blot on China’s educational sector 9 Dec 2016 Shares of the $7 bln New Oriental have fallen 11 pct since Reuters reported allegations that staff helped applicants cheat to get into U.S. colleges. The claims are dismaying. But the financial fallout should be limited. Investing in Chinese education remains a first-class idea.