Community College’s Contested Corporate Partnership

“Is this for real?” the American Federation of State, County and Municipal Employees asks on a website touting its free college benefit.

Depends whom you ask. The union answers its own question in the affirmative, noting that the program has saved more than 100,000 people $300 million in tuition, fees and book costs since 2015.

But significant questions exist about the quality of the education the students have received.

The free tuition is delivered in partnership with a below-the-radar for-profit entity known as the Student Resource Center, whose model with at least one of its four college partners has been to pump students in while cutting expenses to the bone. This approach has led Ohio’s Eastern Gateway Community College to nearly double online class sizes to as many as 50 students, largely eliminate textbooks and, most recently, land on probation with its accreditor, the Higher Learning Commission.

In the 2020 fiscal year, SRC walked away with slightly more than $7 million from the Eastern Gateway partnership thanks to its 50 percent cut of profits.

While EGCC now gives the majority of its students free tuition—relying on Pell Grants, union employer reimbursement programs, union education trusts, Ohio state subsidies and very low overhead to make its model viable—the accreditor found that the aggressive cost-cutting also translated to poor quality. HLC blasted the college for failing to provide evidence that its “present business model offers a high-quality educational experience for students” in a scathing probation letter sent earlier this month.

Noting that Eastern Gateway had “increased its student enrollment significantly since fall 2018 due to the partnership with SRC, and revenues have increased due to this growth,” the accreditor went on to cite concerns about subsequent faculty and staff hiring and development trends; the number of full-time faculty for several academic programs; lead faculty–to–adjunct faculty ratios; student dissatisfaction with the quality of advising and engagement with adjunct faculty; lack of ongoing, consistent review of learning outcomes; and low long-term completion rates.

Former and current employees say the community college’s partnership with the Student Resource Center and the union free college benefit it conceived have led a once-revered local institution, spread across two campuses in economically depressed Steubenville and Youngstown, to become an education mill serving 46,606 students nationwide enrolled in poorly resourced online classes.

Today, more of Eastern Gateway’s students are based in California than in Ohio, and 43,890 of the 46,606 are union members or family of union members, who can also attend free. EGCC bills itself as the fastest-growing community college in America.

The SRC’s free college model at Eastern Gateway appears to rely on recruiting as many union-affiliated students as possible. A website promoting the program notes that dues-paying labor union members are eligible to apply—along with unemployed, furloughed, retired and laid-off union members; children of union members, including stepchildren and children-in-law; and grandchildren, siblings, widows, financial dependents, spouses and parents of union members.

President Michael Geoghegan said Eastern Gateway has recruited tens of thousands of union members to attend online classes for free because the model has proven scalable and therefore financially viable—and because the college believes in the mission of providing working adults with a free education.

Higher education experts say that scalability is also a problem, since the 46-to-one student-to-faculty ratio cited by the accreditor does not typically result in a quality online education. But more troubling still, they said, is the way the for-profit SRC has appeared to trespass into academic matters that external providers are supposed to stay out of.

Geoghegan and the Student Resource Center’s CEO, Michael Perik, former CEO of the Princeton Review and chairman of Houghton Mifflin’s Assessment Division, have known each other for several years, dating to when they both worked for Cincinnati State Technical and Community College. Faculty and staff said that Perik seems to have unchecked power in academic matters at Eastern Gateway and cited his long-standing ties to Geoghegan as a factor.

Anne Loochtan, who served as provost at Eastern Gateway until April 2018, came from Northern Virginia Community College to help build the Ohio college’s distance learning program. She said she ran into trouble with SRC almost immediately, because the company wanted to control the curriculum, using prepackaged content from Penn Foster, a company Perik had done business with.

“He was really trying to ram that [curriculum] down our throat,” Loochtan said. “The faculty didn’t like the content—it was basically canned courses.”

Nicole Rowe, a top executive at the Student Resource Center, acknowledged that it had presented the Penn Foster curriculum as an option and noted that SRC was “after all, underwriting the overall online investment.”

Loochtan said it felt as if the Eastern Gateway faculty was muzzled. At one point, she said, two adjunct professors reported to her that they had been pressured by SRC employees to allow students to submit work late when that wasn’t allowed under course policy. An EGCC spokesperson said she couldn’t comment without more specifics, but that faculty should always report incidents they are uncomfortable with. Rowe said that while SRC recognizes that academic decisions always lie with faculty, in cases where “some level of hardship exists, we absolutely advocate for the students.”

Loochtan felt it was inappropriate.

“It became clear that people at the top of distance learning didn’t want to lose students, no matter what kind of student they were,” Loochtan said, adding that there was additional pressure to keep the union students enrolled.

“There were just so many irregularities,” Loochtan said. “It was just weird, because there was so much pressure from SRC. Whenever I would push back, primarily on academic issues and control of certain academics, [SRC leadership] would have me talk to one of their guys.”

Perik told Inside Higher Ed that he and his team do not interfere with academic issues. “We have always said that in this partnership, we are pretty good at staying in our lane,” he said. “And academics, it’s not our lane.”

However, two current longtime professors who asked not to be named due to worries about retaliation said the company’s officials still have outsize influence today.

“Everyone knows that Perik is running the college,” one of the professors said. “It’s supposed to be a community college … It’s heartbreaking.”

This professor said that because the model demands maximizing the student body head count through the union relationships, placement tests have been routinely waived for union students, but not for others.

“There are students, because they haven’t taken placement tests, that are not weeded out, so these students don’t have good sentence structure, they don’t have the ability to read instructions,” the professor said. (An EGCC spokesperson defended the college’s decision to eliminate placement tests for union students, saying many community colleges are moving away from using the tests.)

The accreditor’s report supports the professor’s concerns about placement tests, noting that a “discrepancy exists between enrollment requirements for online versus on-campus student populations” and that online students have been exempted from placement testing since 2015.

Perik acknowledged the college has experienced what he called “growing pains,” but he said Eastern Gateway offers a quality education and has seen its online and in-seat students transfer to more than 1,200 four-year institutions, including more than 120 tier-one research universities. He said he is proud of the SRC model, which focuses on giving working adults in unions a chance to “re-engage with their education.”

Geoghegan said elements of the HLC review were unfair and noted that the review took place at the height of COVID. He acknowledged that the college’s explosive growth has led to a higher student-to-faculty ratio but said feedback from students has been very good, citing a student survey from 2,500 learners, which was given to the accreditor.

“On balance, that was a very, very positive student survey,” Geoghegan said. “The only issue that had negatives were some issues with financial aid.”

Unigo, an online community for students, includes reviews of EGCC. Many student comments are positive, particularly about the efficiencies created by how the college allows them to access services through web portals. However, one online student said professors were rarely available to help her.

“I have decided to wait to take my major related courses until I move to my intended transfer school because I’ve felt like it was not a great idea to do so at this college (because of the lack of help),” a student named Ashley wrote, adding that she had attended Eastern Gateway online for two years. “I have also experienced this in the classroom, as I have asked a question that was a fairly simple one and the professor knew less than I did … If you are a student looking for a good professor or a supportive teaching staff, I would say that this school is not for you.”

Unusual Entanglements

The long-standing relationship between Perik and Geoghegan is not the only example of unusual overlap between the SRC and EGCC executive leadership. Amanda Wurst, the community college’s chief communications and marketing officer, worked for John Haseley, the Student Resource Center’s chief strategy officer, in then Ohio governor Ted Strickland’s office a decade ago. Haseley is a Democratic power broker in Ohio, a hub for organized labor.

Perik’s ties to labor go back to at least 2010, when he was the architect of a proposed partnership between Perik’s former employer, the Princeton Review, the AFL-CIO and the National Labor College, then the academic arm of organized labor, to create what they said would be the nation’s largest online college. The arrangement fell apart by the following year, and the National Labor College has since folded.

Union leaders have zealously shielded Eastern Gateway. A Cleveland law firm sent a letter last month on behalf of dozens of labor and civil rights groups seeking documents about the Higher Learning Commission’s review of the college. Unions had “expressed concerns and objections about that review,” said the letter.

Some outside experts say Eastern Gateway’s 50 percent profit sharing with its outside partner is emblematic of a broader problem introduced by the emergence of online program management companies. While SRC calls itself a service provider, the company’s role and large profit share make it functionally very similar to an OPM, which are growing in number and can include incentive structures that diminish educational quality.

“These so-called partnerships have a tendency to go wrong,” said Robert Shireman, director of higher education excellence for the Century Foundation, which has published several reports critical of these arrangements. “When you have a driver who is distracted from the educational mission and is focused instead on putting money into investor pockets, they make wrong turns and steer into the curb.” Shireman said explosive growth like EGCC’s is a “common characteristic of programs that are low quality.”

“We have always said that in this partnership, we are pretty good at staying in our lane. And academics, it’s not our lane.”
—Michael Perik, Student Resource Center

Scrutiny of such relationships is growing. Congress went out of its way to prevent higher education institutions from using COVID relief funds to pay contractors such as SRC for pre-enrollment recruitment.

While SRC says it does not directly recruit or market for the program and relies on the unions to get the word out, a phone number on the AFL-CIO’s Union Plus Free College website connects to an SRC phone bank, staffed by the company’s employees from the Eastern Gateway campus. An EGCC email address is also listed for those who want additional information, and the EGCC logo is prominently displayed on the free college page. The website offers what it calls “hardship help” to union-affiliated students, including a Union Plus credit card with a 23 percent variable annual percentage rate for those with “good credit.” Union Plus offers dozens of other services, including personal loans, debt settlement and money transfers.

AFL-CIO/AFSCME and SEIU, two of the most represented unions at EGCC, declined to comment despite repeated requests for interviews. Union Plus also did not return a call seeking comment.

Buckling Under Growth

As the union free college benefit program took off, enrollment surged. In 2015, when the program at EGCC began, about 3,000 students were enrolled. By September 2018, EGCC instructors were buckling under larger class sizes as enrollment ballooned. At a union meeting held then with college leaders, minutes noted that faculty had “concerns about how we are addressing the negative impact of large class sizes for adjuncts and the fact that we could lose some of our most dedicated adjuncts due to this overload.”

The HLC probation letter to EGCC noted an overreliance on adjuncts and poor faculty-to-student ratios as a paramount concern, noting that nine academic programs did not have full-time faculty members assigned. HLC also reported that an institutional update filed by the college in the accreditation process noted that the college then employed 67 full-time and 1,223 part-time faculty for 38,613 students.

According to the 2018 meeting minutes, faculty union secretary Shirley Fisher-Ciancetta said she “suggested the college review HLC guidelines and look to base class size on faculty recommendations, curriculum mandates, as well as specific teaching approaches designed for students at a two-year community college, many of whom are first generation college students.”

Many EGCC professors who spoke with Inside Higher Ed acknowledged that the institution may have had trouble staying afloat were it not for the success of the online model and the union free college benefit. But none of them bargained for the stresses associated with adding tens of thousands of students virtually overnight. Minutes from a February 2020 Labor-Management Committee meeting portray a faculty overwhelmed by skyrocketing enrollment and concerned by the “‘perception’ that EGCC is turning into an online school.”

“Does the college consider in-seat classes and students important?” the minutes say. “Is there still support for in-seat with the huge online endeavor?”

In-seat students were unable to get classes, faculty said, because of low enrollment and scheduling that “is all over the place.”

At a separate February 2020 union meeting with SRC’s Haseley, faculty told Haseley they believed the union free college benefit model depended on enrolling a student body that is 40 percent Pell eligible so that “those students subsidize others.”

“We stated concerns about the ethical use of student Pell Grants and the large technology fees with which Pell eligible students are saddled,” the minutes said. “We mentioned the concerns we have with students who seem to be taking advantage of the ‘free college’ program as they are not degree-seeking.” The minutes said Haseley indicated no changes to the program would be made.

Faculty members at the college said technology fees have indeed surged since SRC’s arrival on campus—one example of how they say the “free” college model is actually paid for. An Eastern Gateway spokesperson said the technology fee has not increased but has been consolidated with other fees.

More Money for All

Geoghegan said the college is delivering a high-quality education regardless of what the accreditor reported. He cited a 132 percent increase in the college’s share of state subsidies between 2016 and now. Ohio state subsidies are based on a formula that rewards institutions as they increase the number of students who complete courses, credit hours and credentials, with bonuses for large shares of adult, low-income, academically underprepared and minority students.

Subsidies to EGCC from the state totaled $12 million for the last fiscal year and are on track to hit $15.2 million this fiscal year, an increase of 27 percent.

“We are doing better than all our competitors,” Geoghegan said, referring to what he said is a large share of students excelling academically and “persisting,” or staying enrolled. “If you’re doing better, you’re going to get more money.”

When pressed on how Eastern Gateway makes ends meet with a model providing free college to the majority of attendees, Geoghegan was frank, saying EGCC has been able to “sustain ourselves quite well,” thanks to “efficiency on the expense side.”

Geoghegan said that while 38 percent of the college’s students receive Pell Grants and additional monies come in from union sources, EGCC is still covering a significant amount of full tuition for many of the 62 percent of students who are not Pell eligible.

“It became clear that people at the top of distance learning didn’t want to lose students, no matter what kind of student they were.”
—Anne Loochtan, former provost, Eastern Gateway Community College

The college’s tuition is $135 a credit hour, Geoghegan said, and the vast majority of students access coursework, advising and other college services online or by phone. Most Eastern Gateway students attend online from states other than Ohio, with some as far away as Hawaii.

“The key to making it work is scale and size,” Geoghegan said of the union free college benefit EGCC offers. “If you’re just a regular community college with 1,000 students, that’d be much more difficult.”

That reality could explain why SRC continues to aggressively expand EGCC’s enrollment numbers and why it has long sought to spread its model to additional colleges beyond the four it is already working with. In addition to EGCC, SRC is working with Franklin University and Central State University in Ohio and Paul Quinn College in Texas. Sherry Mercurio, a spokesperson for Franklin, called the university’s partnership with SRC a “pilot” and said via email that in one semester, SRC has delivered 714 students to the university. She said the partnership targets specific unions for three college programs.

Central State entered into a five-year partnership with SRC last fall and said it hopes the partnership drives recruitment of about 4,500 new students annually. The college was introduced to SRC by labor contacts, a spokesperson said.

SRC has long marketed itself as a potential partner for Ohio colleges with flagging enrollment. Constance Bouchard, a retired University of Akron professor, said that SRC was shopping a scalability model to faculty members at that institution as far back as 2016. She said faculty members were outraged when the university’s president advocated for expanding its student body through a partnership with Higher Education Partners, a company Perik formerly led and in which he was a shareholder. The Akron initiative failed.

The model was based on “potential exploitation and unfairness,” Bouchard said of the company’s proposal to help Akron massively boost enrollment through a network of satellite campuses. “We create a course, the college doesn’t have to do anything, the college gets money … It’s win-win, but the people who lose, of course, are the students, because they’re just handed this course in a box.”

A longtime professor at Eastern Gateway who asked to remain anonymous said the faculty is devastated by the changes at the institution since the Student Resource Center came on the scene.

Faculty members “feared losing our identity” as standards slipped, the professor said, adding that full-time instructors were too overwhelmed by surging enrollment to “keep an eye on the adjuncts.” The professor said the elimination of prerequisites also led to ill-equipped students landing in classes.

“We literally had students who could register for calculus without prealgebra,” the professor said. “Prerequisites were taken away … [because] if you remove an obstacle, you can get more people in the class.” With more people in classes, the professor said, came more revenue.

Ben Kennedy, the CEO of the higher ed consultancy Kennedy and Company, said that the educational quality at EGCC needs to be further scrutinized—as does its relationship with SRC.

“Eastern Gateway and its partner are getting money from the federal government and the state of Ohio for these students, but what they’ve done is figure out how to knock down their costs of educational delivery and related student services below what the average student is paying there, when you consider Pell Grants and Ohio’s benefit program for students,” Kennedy said. “It’s not manageable from a faculty perspective to have a digital classroom filled with [as many as] 52 students and have high-quality instruction.” Kennedy said 20 to 30 students is the norm for high-quality digital education.

A spokesperson for EGCC said the college’s staff and faculty are “committed to creating a way for working families, some of whom have never been given a fair chance to get a college degree, to achieve their academic and economic goals.”

Rowe, of SRC, was more expansive, saying via email that after a nearby General Motors plant closure in 2019 eliminated 1,500 jobs, Eastern Gateway provided an affordable college education to many in the Lordstown, Ohio, community “without students incurring crippling student debt.” In the 1990s, at its height, the plant employed more than 10,000, a reflection of the larger themes underpinning the EGCC and SRC story. Rowe added that the partnership has allowed the college to purchase buildings in Youngstown “so there can be a real campus for one of the parts of the state that was badly hurt during the pandemic.”

But an adjunct professor who asked to remain anonymous because he fears for his job highlighted the fact that, regardless of motives, the model based on massive online enrollment comes at the expense of teachers and students.

“They’re focused on maximizing profit—as an adjunct our pay is $650 per credit hour … very much on the low end of what adjuncts get paid,” the professor said.

The professor called the ratio of part-time to full-time faculty “obscene” and said he is unable to give the 48 to 52 students he has in a class anywhere near the amount of feedback he’d like to.

SRC has “an incentive to have students take as many courses as possible,” he said, adding that EGCC sometimes allows students to enroll in too many courses without proper support from advisers, setting them up for failure.

“This should be embarrassing to the labor movement,” the professor said. “When you build profit motives into the equation, it hurts students.”