Will the real story…please stand up…please stand up? (Part 1)

laureateBy Kelly Swanson

As an On-Demand Global MBA correspondent, it is my job to know what’s going on around the globe and report back to my fellow T-Birds. Recently much hoopla has been fronted by many alumni, media pundits from within, and outside the organization of Thunderbird asking… no, demanding that an explanation be given for the partnership with Laureate Education, Inc., formerly the Sylvan Learning Systems, founded by entrepreneur Douglas L. Becker. I, your trusted reporter have found out the following:

Who else is involved? Why Now?

First of all this isn’t just about the business of making money. Any Thunderbird would appreciate that. The MBA Application statistics are complex and based on many variables. Full-time, Executive, and Part-time Enrollments, based on the report from GMAC indicated that in 2011 were headed downward (EMBA), and since 2008, FT and PT were in a downward slump. This was cause for alarm. These forecasted results were seeing no end. With the media all over Wall Street, bailouts, and placing blame some articles focused in on MBA’s, overcompensation, glut in the MBA market due to firings, which had a devastating effect on demand.

The staff, board, and leaders at Thunderbird forecasted the future with awesome results. Based on these same results, trends were showing that the demand in Online Education was exploding around the MBA. 45% of all MBA programs saw a decline, but Online/Distance MBA’s grew by 66%(Graduate Management Council). Diversity and Global growth is in demand. More and more MBA programs are recruiting worldwide seeking to attract foreign applicants. In order to do this, it makes it easier to partner with companies, Universities, and governments in those countries. If Thunderbird didn’t act based on the trends, we may have closed our doors.

Thunderbird is not alone in its struggles. Colleges and Universities such as Harvard, Stanford, MIT, Princeton, and Yale have all gone online, are in the process of consolidating or partnering with other Universities playing catch-up to us “misfit”, global seeking, winner-take-all, T-Birds. We are leading the way again! Thunderbird is a private institution just like Harvard, just like Stanford, all seeking the quality applicant and vying for first place. Thunderbird maintains its niche #1 International status on many shores and let’s the others have domestic #1 places. We are international and plan on maintaining that edge across the globe. We are not just an American school. We are an international school based in America. Look back at our history and you will find our original name underlies our original goal, The American Institute for Foreign Trade and then the The American Graduate School of International Management. We serve an international market and always have and always will!

Our international market is not just for International students in America. We are now able to go to their countries and teach. With technology bringing us even closer, we can take that golden work ethic, and teach it anywhere in the world.

Like Thunderbird, Liverpool University is in the top 1% institutions in the U.K. They are a part of the Russell Group of schools, like the Ivy League in the U.S. Included in the esteemed Russell Group is Oxford, Exeter, and Leeds to name a few. Liverpool University is a part of the Thunderbird family via the Laureate Family of Universities. This is certain cause to celebrate that relationship, but what does that mean for us?

Who is Douglas L Becker…and how is he tied to this relationship?

Well Douglas Becker is an entrepreneur who founded the Sylvan Learning Systems, who knows how to buy companies, and maneuver in political circles, he has contributed money to the Democratic Party, Hillary Clinton for President, John Kerry for President, Obama for America, and belongs to a Political SuperPAC, Reuniting Our Country PAC. He is the principal for Sterling Capital and Sterling Capital Partners. Sterling Capital Partners is an affiliate of Sterling Partners (“Sterling”), a private equity fund group with over $1.2 billion of capital under management. Founded in 1983, Sterling is a leading investor in the for-profit education industry. Sterling Capital Partners typically will assume controlling interests in middle-market companies through equity investments ranging from $15 million to over $100 million per company. Industries of focus include education, healthcare, business services, direct marketing, specialty manufacturing and distribution, and technology. But they target educational institutions particularly.

In past agreements, Laureate and Sterling Capital Partners usually wanted concessions for the agreement like any good deal. In the termination clause, in the Form-8K filed with the SEC for the Educate, Inc deal in 2007, there was a $16 million termination fee along with various other cancellation concessions that are designed to further bind the relationship with the company they are merging with.  Several companies are a part of this arrangement due to their affiliation of sitting board members of Laureate, is CLN, Inc. formerly known as Caliber Learning Network has eight employees on the Laureate Board. What does this mean for Thunderbird? How does all this tie together? We shall find out.

On an interesting side note about Sylvan Learning Systems, they are partners with John Hopkins’s Institute for the Academic Advancement of Youth (IAAY), which joined Sylvan; to offer advanced tutoring for students at Sylvan centers. IAAY focuses on top-performing students through its own advanced summer workshops, for which Sylvan does computerized admission testing via the SAT and owns ETS.

I have read the comments on LinkedIn, Facebook, and other rags about how this is bad for Thunderbird, and tarnishes the long esteemed reputation. I went so far as to look up some of the posters who stated that they were a contributor of money to the college only to find they contributed to the lowest category ($50 to $250) or they were out of work and complaining (based on their LinkedIn Profiles and Facebook). While it might be a great, fantastic, super special degree to get at Thunderbird it doesn’t replace hard work and determination to go out and start or restart a career. What you do with the degree in hand is a white slate. You have the paintbrushes so go paint your picture. Thunderbird is trying to make the right decisions to keep the wheels turning for future generations.

In the meantime, come next Das Tor, you will see, laid out for everyone, what is in store for alumni and students, and On-Demand students for the future. Interviews, news clip, facts, and public records, and interviews with those close to the deal because you wanted to know! It’s going to be great for everyone. Stay Tuned!!

In the mean time, don’t forget the suntan lotion, and remember the bird is the word!!!!

 

Sources

Graduate Management Admission Council. “2012 Application Trends Survey conducted by the Graduate Management Admission Council.” 2012 Application Trends Survey conducted by the Graduate Management Admission Council. Version 2012. Graduate Management Admission Council, n.d. Web. 22 Apr. 2013. <www.gmac.com/~/media/Files/gmac/Research/admissions-and-application-trends/2012-application-trends-survey-report.pdf>.

Michael Reardon

Michael Reardon

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