By Richard Vedder

I have read and heard some commentators say that the Obama Administration is at war with for-profit private higher education. While in general agreeing with that I would amend that statement to say that the Obama administration has had several battles with the for-profits as part of a bigger war against capitalism. In my view, basically the president is a socialist, a person who craves for collectivist, government solutions to problems, and is deeply distrustful of private enterprise. Thus the government has taken control of iconic private automobile and financial service companies, has viciously attacked Wall Street greed, has tried to manipulate more than ever the private use of money and credit, is favoring a huge increase in taxes on capital gains, etc. I am among those who believe that the current anemic recovery directly reflects the fear that businesses have of Obama, and their corresponding unwillingness to hire workers and invest. Gold prices are soaring, and stock prices are stagnant, a classic indication of poor investor confidence.

For- profit companies are merely part of the capitalistic Evil Empire that Obama despises. Apollo Corporation, Corinthian Colleges, Bridgepoint Education, Kaplan University — these companies are bad mainly because they are in the business of trying to create wealth for private investors. The current bashing of the for-profits by both the administration and Congress needs to be put it that context.

That said, there ARE abuses that the for-profits have committed. No doubt there are recruiters who have misled persons as to the potentialities of a for-profit education, putting them into debt. And abusive practices should not be subsidized by the taxpayer. That said, however, the beating up on the for-profits is largely ideologically based and manifestly unfair. A large portion –indeed probably a sizable majority–of the educational malpractice going on in American higher education is occurring at the not-for-profit schools so richly subsidized by the taxpayers –and they are being given a pass as Congress considers hearings.

It is a fact that the four year graduation rate at the University of Texas at El Paso is about four percent –only 1 out of 25 graduate in a timely manner. Where are federal hearings about that? A smaller proportion of students graduate from UT El Paso than from Corinthian Colleges, but why is Corinthian being threatened by tough new legislation and UT El Paso is not? The loan default rate at Central State University in Ohio is vastly higher than at Kaplan University –why is no one investigating Central State, at either the state or federal level, while Kaplan is scurrying to meet probable new federal mandates? By many indicators students fare more poorly at Chicago State or Denver’s Metro State than at Strayer University, a major for profit. Why are we not talking about legislation curtailing Chicago or Metro State? Why is the government talking about limiting the percentage of graduates of schools like the ITT Institutes or DeVry who pay more than eight percent of their income in student loan interest payments, when almost certainly the problem is probably as bad at Grambling State or Northwestern State University?

In taking on the for-profits, the President and Congress are attacking the very schools that have contributed importantly to reaching an Obama goal –vastly increasing the proportion of high school graduates with exposure to higher education. Some 38 percent of the increase in student head count between 2008 and 2009 occurred at for profit schools –more than at not-for-profit four year public schools (27 percent) or two year public community colleges (32 percent). Many traditional universities don’t want to recruit ghetto and inner city children, or teach in the evenings and Saturday mornings, or do other things distasteful to the life style of the academic elite.

The People (as in “government of the people, by the people, and for the people”) like for-profits, but what Scott Rasmussen calls the Political Class, does not. This is just another example of the huge divide, unprecedented in modern history, between the Political Class and the general public and our political leaders. Our nation is out of political equilibrium, and that means big changes are coming politically, probably starting at the polls this November.

I would note that this huge brouhaha would not have occurred if we had not embarked on a disastrous expansion in federal loans for students beginning four decades ago. Bottom line, too many people are going to college. Too many people are ill-equipped for the rigors of higher learning, manifested in some watering down of standards and high dropout and loan default rates. There are too many students going to too many colleges and paying too much money and getting too few good jobs. Until we wake up to that reality, we will not have truly efficient and worthwhile higher education reform in this country.

And the comments:


1. haohtt – August 31, 2010 at 08:16 am

The answer to the article’s question is, emphatically, yes. The Obama Administration is filled with traditional academics and career politicians–people who have never produced wealth or profit themselves, but always lived off the taxes and tuition of others. While unscrupulous actions by certain for-profits deserve to be exposed and dealt with, my Vedder is correct that similar actions by non-profits should not be ignored. The irony and blatant hypocrisy of an administration and congress that attacks any business that dares to run effectively and efficiently enough to make a profit, while they themselves are unable to run their own operations without sinking ever farther into the red, is the real scandal that needs investigation and action. What occurs at Phoenix and Kaplan are small potatoes compared to what occurs in Washington DC.

2. dank48 – August 31, 2010 at 09:26 am

Precisely. The question of for-profit or not-for-profit is a red herring. The real question is whether schools are in fact functioning as they should. Too many aren’t.

3. 11180655 – August 31, 2010 at 09:30 am

Take a look at ‘Top 100’ link and review the listings of associate degree producers in areas such as Computer Science, Engineering Technologies, African-Americans, and on and on, and you will see the tremendous successes these colleges have had in graduating the highest employer demand skills areas, including success with minorities. Look at much larger community college systems that have graduated a handful of minorities with computer science degrees, while there are smaller for-profit colleges graduating many times that of their local community college counterpart.

This administration has deservedly given non-traditional students year-round Pell Grants, increased loan limits, and an excellent military benefits program….but shame on these for-profit colleges for providing these students the programs and services they desire. This administration thinks these students are making poor decisions, but they deserve more credit than that. The majority of adult students pick the program and institution that provides them the most efficient and effective path to their career goals. Don’t take that away from them.

4. kolds – August 31, 2010 at 09:36 am

This article is full vitriol and gross generalizations (about viewpoints and categories of people). What I find amazing, in this needed debate about for-profit higher ed (and how it is and should be regulated), is that you rarely find constructive enagement with the issues and options. As a foreigner living in the US I know people like to debate, but the tone of the debate, as exemplified in the tone of this piece, is really rather sad. More ideological warfare, more heat vs light.

5. giana711 – August 31, 2010 at 09:40 am

Obama comes from the education field as he himself was a professor for many years and knows firsthand the long term damage that FP’s do to their students. While his administration has made some mistakes, he is NOT a socialist and he was born in Hawaii.

The main difference between Obama and the rest of the past few presidents is that he gets it when it comes from higher education. Obama understands that Community College plays a vital role and knows about the bad FP apples. He advocates for one and fights the other.

Fear mongering,partisan politics should have no place higher education. FP’s growth should be limited and wee need to seriously look into our accreditating agencies and regulating them or eliminating them for one strickly regulated national agency funded by congress to eliminate conflict of interest.

a bit dissapointed that the chronicle even went ahead with this opinion piece…

6. hms3683 – August 31, 2010 at 10:14 am

Poor Obama! Stand up against the right to turn a good deal into a rip-off and you become a socialist. The business model of the FP guarantees that more money will be spent on less educational service than the NFP – while ever-growing profit is returned to the stockholder.
The records of UTEP and Chicago State appear abysmal in terms of what they offer for the time and money students invest. But the tax dollars flowing into these institutions could ultimately be subjected to the scrutiny of public oversight. If they reach a bad enough point, the public will demand that they revise their services and priorities. In theory, barring coruption and dealmaking, UTEP and CS should be seeing greater oversight of their accreditation. FPs can operate without accreditation. In the FPs, there is no accountability. The worse the deal to the student, the greater the profit to the ownership.

7. cwinton – August 31, 2010 at 10:20 am

It’s always a nice diversion to excuse misbehavior by citing the misbehavior of others. Without question the federal student loan program has drawn a lot of bad actors, including the financial middlemen who quietly profit while others are left holding the bag. Apparently Mr. Vedder has no problem with the kind of business plan that characterizes many for-profits, namely one based almost exclusively on tapping taxpayer backed resources, in this case student loan money. Well, if you live off taxpayer money in my estimation that makes you in effect a government agency and so subject to government regulation. The for-profits are on the hot seat because they are the new kids on the block. Whatever happens with them will inevitably, Mr. Vedder notwithstanding, come down on misbehaving not-for-profits. Interestingly, Mr. Vedder is one of those traditional academics haohtt (#1) is so quick to criticize.

Since Mr. Vedder chose to stray off into areas unrelated to his thesis (e.g., his feeble attempt to link Obama and socialism), I might as well do so as well, the point being that a major role of government is to provide a sound monetary system, which means that for any market based on the monetary system (i.e., the financial sector), it is incumbent on the government to insure it is run in a manner that will not endanger the stability of the monetary system. We don’t have to look any further back than 2008 to see what lax regulation of financial markets leads to. Tightening the screws on Wall Street and banks is not socialism, it’s sound government practice. As for the rest, massive spending beyond our means (which was actually initiated early on in the previous administration) is simply an attempt at keeping our increasingly unsustainable economic approach afloat for awhile longer, hoping against hope to come up with some means of avoiding runaway inflation or the economic collapse of a major depression, likely accompanied by anarchy. I think we all had better hope for another bit of economic good fortune such as the Clinton administration enjoyed, since tax cuts absent spending constraint certainly hasn’t helped, and it’s hard to imagine how continued spending beyond our means can possibly do so. One thing is for certain, we need fresh ideas, something economists like Mr. Vedder are quite short of supplying.

8. isambard – August 31, 2010 at 11:12 am

If Obama had a few more socialist inclinations, the country would stand a better chance of surviving the next thirty years or so. The first thing he’d have done is looked for ways of getting health care down from 16 percent of GDP to around 12 – higher than France or Germany, whose systems are vastly more effective than the USA’s. No socialist could have hired Obama’s economics team. As for for-profits, there’s no reason in principle why they can’t deliver perfectly decent, non-academic, training; the dodgy area is a problem they share with community colleges, which is the claim that a fairly low-level general, non-vocational education will do a lot to increase the earnings of the students who take it. It may make them nicer, better citizens, or more interested in their existences, but absent an enormous number more jobs of the appropriate sort than the economy seems likely to produce in the next decade, it won’t improve their earnings, and has to be a bad bargain, economically speaking. Attacking them for selling something they can’t deliver is hardly an attack on capitalism. Not, for the matter of that, that American capitalism as practised for the past few years has been anything a true capitalist could be proud of; it’s depended almost entirely on leaching off government in innumerable obvious ways, while berating government for the sloppiness that allows it to do so. Talk about biting the hand that feeds you…

9. senecan – August 31, 2010 at 11:57 am

The “president is a socialist, a person who craves for collectivist, government solutions to problems, and is deeply distrustful of private enterprise”? Why is this appearing on the Chronicle Web site rather than the Wall Street Journal editorial page?

10. betterschools – August 31, 2010 at 12:20 pm

Growing bodies of evidence will convince the open-minded that Mr. Vedder is correct in his assessment of President Obama’s intentions.

Through sources present in the Whitehouse discussions, we have learned of his belief that the community colleges can assimilate the business he is intentionally taking from the for-profits. Somehow, he believes the taxpayers can and should come up with the $800 billion it will take to meet his education goal of having the highest graduation rate among developed nations.

In October, President Obama plans to announce a stimulus package for the community colleges. Apparently, he is not a student of history. Were he so schooled, he would know that public colleges quickly suck up federal stimuli with tuition and fee increases, returning access to its pre-stimulus level.

I recognize that different ideologies can lead us to different positions with respect to the for-profit v. public debate. I hold mixed views myself and I especially want to see the publics succeed in their challenge of becoming efficient and adapting to changing needs. What is so personally disappointing is to have witnessed the uninspiring bag of dirty tricks the Obama administration used to get its way by trashing the for-profits. Does it not have the skill to get its way on the high road?

This administration spread lies (for-profits do not cost the taxpayer more, they cost significantly less, even with all defaults loaded into the equation), half-truths (for-profits do have problems with graduation rates, loan amounts, and loan repayments when educating the underclass but the nation’s state institutions operating in underclass areas of the nation have even lower rates; see Alexander’s analysis, at the link below), and innuendo (employers do not disdain the for-profits; we have conducted employer impact research for 16 years, interviewing more than 20,000 employers in depth and can easily refute this claim with hard empirical evidence). As an early supporter of this administration, I have been disappointed to see the arrogance and deceptive practices with which it pursues its agenda.

If you hate for-profits or if you think they can do no wrong, little will change your mind. If you recognize the complexity of this issue and can understand that the healthy functioning of the for-profits, publics, and independents is essential to meeting the nation’s education needs, you will be informed by the information posted at this document repository.

Take a look at Apollo’s report. DeVry’s response to the NPRM, Carl Barney’s response to Secretary Duncan, Steve Alexander’s analysis of loan amounts and repayments in public universities serving a portion of the underclass, Mark Kantwowitz’s FA analyses, The Parthenon Group’s comparative analysis, and others.

If you think the publics are already healthy, look at this review

President Obama won the election and his party holds Congress. He has the right to change education policy in accordance with his vision. He does not have the right to lie about, cheat, and steal from the private sector. I thought it was a crisis of exception when he did all three with respect to securing largely undeserved benefits for unions at the expense of Chrysler’s legally secured bond holders. No such crisis can serve as an excuse today.

Keep the President’s education goals in front of you. Unless all of us speak out, this approach to secure those worthwhile goals will fail badly. Besides, its methods are deplorable.

11. 11132507 – August 31, 2010 at 12:46 pm

Well, the Chronicle does have to keep things fair and balanced, which in the rest of the world outside Fox News, means presenting multiple viewpoints. So Chronicle readers can read Mr. Vedder’s perspectives. Or turn the page.

Face it, if Obama announced today that the sun rises in the East, the right wing would find ways to use that as evidence that he’s a socialist, a Muslim terrorist and I don’t know, is going to force us all to wear leisure suits. But as much as the Chronicle does have, I suppose, a journalistic responsibility to present different opinions, it’s still disheartening to see a piece in which we get phrases such as “war against capitalism” and “the capitalistic Evil Empire.” All you’d need to do to this piece to make it Glenn Beck-ready is add a comparison or two to Hitler or Stalin, and you’re good to go.

When Republicans question government spending on flawed programs, it’s done in the name of fiscal responsibility and stewardship of taxpayer money. When Obama does it, it’s because he’s trying to destroy America.

12. jakarlson – August 31, 2010 at 02:52 pm

Indeed disappointing that The Chronicle would publish such a ‘slam’ about our president. You should know better. I think I’ll push the ‘report abuse’ button so you can re-read Vedder’s article.

13. leekantz – August 31, 2010 at 03:36 pm

Didn’t this investigation begin in Congress, not the Executive Branch? And doesn’t Obama’s Secretary of Education repeatedly say that the for-profit education sector has an important role to play in higher ed? I guess that makes Obama a socialist, huh?

There can be a reasoned argument that the for-profits are being portrayed in a negative light, and in an unfair light compared to the inadequacies of the non-profit education sector. But if you’re going to start that argument with the premise that our president is a socialist, it’s a poisonous politics that turns off 50% of our country (and probably a higher percentage of Chronicle readers), and it adds absolutely nothing to this discussion.

Obama may be guilty of silence on this issue, but I would imagine the issue is somewhere below 590 on his list of things to attend to.

Let’s have a reasoned discussion on this issue without turning into Glenn Beck’s and Keith Olbermann’s.

14. reisberg – August 31, 2010 at 04:00 pm

I am not convinced that giving Mr. Vedder (Darth Vedder?) space for his views is required for us to have “balance” in The Chronicle. Mr. Vedder plays fast and loose with data and makes outrageous accusations that have no basis. I think Fox news is a more appropriate platform for this type of ideological rhetoric.

The most laughable part of his specious argument is that the for-profits would not be profitable if they did not exploit federal programs to fund their students. If you take government out of the equation, they collapse. Additionally recruiting practices of the for-profits (paying commission to people for recruiting students) has to make you wonder whose interests they serve–the incentives in the operation are skewed against the students.

15. betterschools – August 31, 2010 at 04:24 pm


Reasonable questions but, no, the assault began with the Whitehouse, specifically the President’s untested vision of new community colleges and the thought that he could secure the foot traffic to make them work by suppressing the successful for-profits and, in effect, stealing their business. A former member of the planning committee the community college logic in a conference call two weeks ago. Best guess, the Harkin committee represents a back-room quid pro quo as part of the coordinated discrediting strategy. I agree that this topic has to come in low on a stressful presidential agenda but honesty is honesty. This guy whom I once respected highly is looking more and more like another Chicago trained politician who happens to possess exceptional public speaking abilities and personal charisma.

If you have more than a passing interest in this, look at the plethora of documents at and make up your own mind.

16. tgroleau – August 31, 2010 at 04:35 pm

Rather than argue about the tone of the article, I’ll hit two points:

1) Yes, of course the standards and regulations should be the same for both for-profit and not-for-profit schools. If our tax dollars flow into either type of school, they should have to meet the same standards. Based on the Chronicle articles I read, I didn’t think many of us felt otherwise.

2) Speaking of tax dollars… I’m generally a big fan of capitalism – bring your products or services to the market and see if you can make it. Therefore, I would never present for-profit colleges as examples of capitalism. They aren’t making profits in the open market, they’re making profits from government subsidies of higher education. Without our tax dollars, most of them would go bankrupt. Some industries need government subsidies to get started (and we can all debate the pros/cons of that startup help). But the for-profit college business model requires never ending tax subsidy. I’m not willing to call that capitalism.

17. betterschools – August 31, 2010 at 04:50 pm


Have an economist map this out.

– Loans are made to students who then choose on their own where to attend (unless you want to argue they are automatons).

– The feds make money on student loans, even including defaults where they are estimated to collect $106 for every defaulted $100 (fines, etc.)

– Including the widest possible range of estimates of all political persuasions, for-profits cost the taxpayers — all in, including 100% of the loan defaults (which are lower than comparable publics serving the underclass) — between minus $500 per student per year and plus $1,700 per student per year.

– Again, including the widest possible range of estimates, publics cost the taxpayer between $11,500 and $16,500 per student per year.

Given this information, where do you get the idea that the for-profits are luxuriating in a tax subsidy? I have an agenda for the improvement of the for-profits but it is not advanced by the lies the feds have spread, and the ill-informed disseminate per their bidding.

Check my facts and if you have counter-evidence (not opinion), post it at . Many of us are only interested in setting the record straight on all issues before proceeding.

18. 11132507 – August 31, 2010 at 04:57 pm

Excellent point #16 – the for-profit schools have done quite well with the so-called 90/10 rule, which allows them to receive up to 90% of their revenue purely from federal aid, and even then they have tried fuzzy math accounting tricks to skirt that gaping loophole of a law.

This is very similar to another group of Republican “capitalist” buddies (and like for-profit schools, very reliable campaign contributors), the banks who made zillions in the Stafford Loan program…all in the name of the free market, but creating no product other than moving other peoples’ money around, and being rather handsomely subsidized by taxpayers for doing it. But it made rich guys richer, so the Republicans were all for it, and the program’s demise is reason #6,714 on the “Why Obama Is A Socialist” list.

19. trendisnotdestiny – September 01, 2010 at 09:30 am

@ To All Readers

After reading this thread, it concerns me that too many here are discussing the power of one person; a figurehead who represents a multiplicity of branded ideologies fused together by monied interests. I can think of several hundred people who have more influence and power to create change than our president, but that is for another time…

Why is it that when the right feels some pressure they yell unfair or uncle using socialism as the great fear weapon? (culturally embedded in our Rocky movies and hockey victories. Dr. Vedder your understanding of Obama’s positions are not supported by his choices of financial advisors, supporters and legislative efforts thus far (all which have supported industry firtst and the middle class last)… Remember, he was funded en masse by the finance sector and would not have received their support if he was… So once again you prove that any movement away from the right in this country requires a corpulent call of socialism… Well done! Predictable… So I will reiterate some things for you to chew on:

First, a president is not the most powerful force in our country, economy or even in policy matters. We must acknowledge this first. No such thing as Obama bailouts or plans of a socialist takeover unless you consider the corporate socialism of the past two decades…. It is important to identify who has the most power to affect outcomes here. In any analysis, the groups that move this country are uniformally from industry: finance, pharma, media and energy…. In the land of predatory capitalism, who has the money controls the power! These people fund elections, lobby legislators and control politicians of what we call government.

By acknowledging this, it is not a far leap as to why all our systems are incurring massive debts all at once (state and local budgets, government deficits, personal and familial debt). This is a planned consequence of a consumer driven economy where credit has been cheap, markets have been gutted/de-regulated and control have moved into elite or private hands for the final consolidation of patriotic selling points (9/11). Government has colluded with this process of being bought off, but the governing power in this society is the corporation. Very rarely can you sue it, change it or vote it out…. It replicates itself into our culture: sports teams, college adminstrations, and our consumption of media…. Let’s not be naive here, presidents who make $400K are more about branding and salesmanship than actual policy. They are told what to do and say by their corporate financiers and our choices as voters are limited to the flavors (Yale or Harvard) that power provides as they whisper their intentions to the lackey adminsitrations…. As a result, each adminsitration is most concerned about GDP growth. Their policies often reflect it, people be damned….

Second, when we read that people want government intrusion out of thier lives, this plays into the hands of both the corrupt government officials as well as their corporate benefactors. However, for most the corporate influence is less visible in the divide and conquer rhetoric designed to break critically thinking people into camps: spending stimulus versus paying down debt, cutting social supports versus soliciting entrepreneurism or shared governance in higher ed versus a top down approach….
We live in a society where the distraction of professional sports entertainment like the NFL often take up more time in our culture than critical thought. Obama is here to distract us just like every president over the past 30 years aided by television and corporately owned media…. In essence, we have a distracted and highly stressed population with a public-private marketing arm designed to create more division between and among (pure Edward Bernays here 1928)…

However, people who are angry about how profits are privatized and losses socialized do have legitimate concerns, but little access to the inside narratives as to why this happening. So, I will speculate and suggest something rather troubling.

One — wealth and currency from FR banking systems are created from debt. This is important to understand that those who issue debt have the most power in a global capitalistic system. They influence and control political figures who serve as their defacto shields for anonimity. (so calls of socialism are disingenuous at best and moronic at worst)….

Two — the world’s resources are dwindling; there is a massive race for information, access, and ownership of the various depleted resources: water, food, oil, precious metals, minerals etc. When you combine this race to privatization with an unsustainable global population demographic, you could begin to see why bubble economics (neoliberal economics) are needed to clearly bifurcate and distinguish the people who have and have not. These bubbles are an instrument of social darwinism….

Three — The forces that led to the creation an indebted population are same ones leading the push for eliminating social security, medicare and spending programs for the poor calling them “entitlements”. You have to ask the why now question. After a period where there have been massive bankruptcies, home foreclosures and systemic unemployment, why would power want to cut social supports now during one of the worst periods in economic history… The answer is that during times of shock, it is the perfect time for power to inflict changes that would have normally been resisted. Again, Obama is helping to dismantle these programs as many democrats before him (see Clinton & many congressional leaders)…. Government officials are more dependent upon industry than the populace; this means that they are the mouthpieces of power not the final decision makers….

four — consolidation of power in every industry has been the corporate culmination of this project. This is the most critically ignored and unexplored issue out there. Very few of us critically analyze why there are so few companies soliciting product in a free market. Banking there are the top 6 who control the industry. Healthcare there are slightly fewer. Energy companies are even less. Media too…. These companies ability to impact our lives is far greater than one person in the white house, one party, one supreme court nominee….

five —- SUMMARY
money is created by debt
future natural resource shortages
over populated and polluted biosphere
transfer of risk onto individuals
cutting supports & renaming them entitlements
disparity between have & have nots grows
consolidation of power at every level
prices rise, jobs disappear
social unrest, anger and competing narratives

Figure it out people! Its right in front of you…. Oh! and quit spewing this nonsense that it is the left’s fault or right’s fault. There are in together. It was obvious when Geithner first spoke about the stress tests….. power calls it a public-private partnership (PPP)…. this does not bode well for the third group: consumers…. So, maybe we should be working together as we all are legitimately angry and have vested interests that have been co-opted…. but socialism is so far off the map as to make this article the comic section instead of an academic article.


20. tgroleau – September 01, 2010 at 09:56 am

betterschools –

I’m taking about Pell grants not loans:

21. adanz1 – September 01, 2010 at 10:44 am

I applaud Mr. Vetter’s cogent and coherent expression of the real driver of Durbin’s and Hawkin’s witchhunt wrapped in public “hearings.” This is, fortunately, an election year in which the democrats are looking to find any cause to which they can point to success for their socialist bent. Why are the “for-profit” institutions being pursued when the “non-profits” are not? Why is nobody bringing into the debate the dependence of the non-profit sector on public financing? Why is such dependence not equally evaluated for what it is? Community colleges depend upon state and federal subsidies to keep their prices down. Yet, somehow, the price point analysis fails to incorporate the full cost of non-profit programs when making comparisons to the students using Title IV funds at the for-profits who, by the way, pay taxes. Fully loaded, folks, the “dependence” of the non-profits on taxpayer funds is virutually identical to reliance of for-profit institutions on Title IV. It’s time that we see this exercise for what it is: another attack on the free market system that has made this country a bright star in the global economy.

According to the Career College Association (CCA), the proposed Gainful Employment (GE) regulation change will limit access to higher education for hundreds of thousands of non-traditional students (primarily working adults and lower income students) at a time when job creation, often requiring skills training or retraining, is a paramount national public policy goal.

Further, pertinent points from the CCA in regards to the many flaws in the GE metric are as follows:

  • According to data released by the Department of Education (“ED”), if the same metric were applied to traditional medical schools, most would fail. An analysis of the data provided show that institutions in the private not-for-profit and public sector that serve populations similar to those attending private sector colleges and universities (i.e. non-traditional, minority, and lower socioeconomic populations) have similar repayment rates. Yet, ED is targeting just one sector—for-profit career colleges that afford students the opportunity and flexibility to work fulltime while pursuing their academic goals.
  • Schools in our sector serve proportionately more low income and minority students who are under-represented in postsecondary education than the traditional sector. This regulation implicitly discriminates against African American and Hispanic students by eliminating program choice and access.
  • Economists have shown that it takes seven years or more after graduation, not three years, for those with higher degrees to begin to experience the real financial advantage of additional education in the marketplace. This is especially true for non-traditional student-workers who are attending college to develop the necessary skills and ascertain the academic credibility that will empower them to move into an entirely new field and/or increase their chances of advancing within their current organization.
  • ED states institutions could comply with the metric by lowering their tuition. Not only is this a back-door way to control tuition pricing, it is a false premise. Students will still be able to take out the same amount of federal loans even if a school lowers tuition because institutions are not permitted to limit loan eligibility even when that eligibility far exceeds institutional charges.
  • ED is telling lower income students who rely on title IV Federal aid to assist them in achieving their postsecondary dreams where they can go to school, what they can study, and what careers they can enter. A student who can afford to pay out of pocket can make his/her own choices.

In fact, not only will the new GE rule potentially dictate who can attend college, where they can attend, and what they can study; if enacted in its current form, hundreds of thousands of non-traditional students may see the elimination of their existing career focused certificate and degree programs in business, education, and healthcare.
The question is why? If the real problem is the inability of students to repay loans, why not consider a cap on the total amount students can borrow?  By establishing borrowing limits based on actual tuition costs and required fees, a college/university would be able to ensure that students can only borrow the actual amount they need to cover the costs of their education while potentially reducing the repayment problem by disallowing students to borrow the mandated maximum amount (which often exceeds the amount required to cover tuition/costs and the excess is often used to fund non-education related matters).  By allowing financial administrators to act as bona fide financial advisers to their students, borrowers and lenders would benefit from a prudent approach that more accurately assesses each student’s needs.  Instead, ED’s proposal will attempt to solve the loan repayment problem by installing a fixed price tuition scheme that will inhibit the working poor from obtaining the funding required to achieve the education they need in order to be competitive in today’s tough job market.  Additionally, the proposal will restrict what programs a career college can offer based on loan repayment statistics that favor larger, public institutions.
Please click here to send a letter to the Department of Education expressing your concerns over the proposed gainful employment regulation change before the September 9, 2010 deadline.

Brian Stoddard

By Kevin Kuzma

“Make a difference” is a call to action that is used so often, it sometimes doesn’t even register with us. The trouble with that phrase is that we frequently give our time or money to causes and we know it makes an impact, somehow, even if the results aren’t immediately evident to us. When it comes to such a call and reaching out to elected officials, it can seem even more futile: the government is a big, inaccessible behemoth, we think. It might pretend to listen, but given the thoughts and views of millions of others who want their opinions to matter, too, how can it?

This summer has been incredibly rough on career education. Nearly every day, the “for-profit” sector of education, as the media has deemed it, has fallen victim to scathing reports using either conflicting data or student anecdotes meant to cast all schools in a negative light. Read the last part of that sentence again: “meant to cast ALL schools in a negative light.”

The cards have been stacked, so it seems, by these biased reports and a Senate that’s done what it can to call to light the flaws of our sector. Some of their findings have been relevant and shown a need for improvement in various practices. But they’ve also gone about their investigation in the most public, unrelenting and potentially damaging way possible. Our schools have been cast in the most embarrassing light you can shine on a sector.

As hopeless as all the negativity toward career education might have made you feel over the last few months, you have a chance to make a difference. Really. You have a chance to make your voice heard – and in a format that matters. While it might sound like a rally cry (and to a certain extent, it is), you can stand up for your students, for your profession, and for what you do by sharing your thoughts on the Department of Education’s (DOE) proposed gainful employment rule.

Less than two weeks remain to submit public comments to the DOE about its gainful employment proposal. The best measure you have available to make sure gainful employment stops stumbling forward is to submit your thoughts directly to our elected leaders. Share your view about why gainful employment is wrong. Explain who it negatively impacts. Tell them why we should explore other alternatives.

The Career College Association (CCA) has made a few clarion calls to its members, requesting that they stand up and be heard by submitting their comments. And, CCA has made it easy to share your thoughts with a website that gives you everything you need to send your letters today.

Your words can be as concise as you like. What matters is that your voice is heard, and that it contributes to the collective din we want legislators to hear. Your words and those of individual students – the people who actually work inside of or regularly attend classes at career colleges – can change the discussion. What you have to say can convince your Congressman and Senators to thwart the proposed metric on September 9.

This is your only chance to file your comments with the US government and have them play a real part in the future of our schools. Our country’s leaders are going to be reviewing those remarks to see how valid counter-arguments are to their proposal and how passionate our sector is about the rule they want to impose. Share it all with them while the floor is yours.

Sent to you on behalf of The Art Institute of Fort Lauderdale President Chuck Nagele:

As you know, The Art Institute of Fort Lauderdale has been a longtime supporter of your organization and the good work you do.  As an education provider, we not only feel the responsibility to help shape the lives of our students, but also to shape the community we call home.  The Art Institute of Fort Lauderdale takes tremendous pride in providing our students the education and skills they need to make an impact in the workplace, and in tandem with you, we also work to provide them opportunities to have an impact on the lives of those around us.   Simply put, we value our association with your organization, as well as the opportunities it affords our students.

At present, our schools are fighting an important policy issue that has the potential to greatly limit opportunities for our students and, thus, limit our ability to give back to our community.  The Department of Education has proposed a rule, deceptively named “Gainful Employment,” that could potentially restrict access to Title IV student loans necessary for most low/moderate-income students.  Under the proposed rule, a program’s eligibility for financial assistance is determined under a series of arbitrary and loosely researched metrics.  Students’ access to financial assistance would be restricted, preventing the student from attending the career program and thereby eliminating future opportunities to partner with your organization.  In fact, one study, conducted by a University of Chicago economist Jonathan Guryan, estimated that 360,000 students would be impacted by the proposed rule.

We respectfully request your assistance.  Please log on to:
and follow the prompts. You can simply choose the paragraph you would like, add a comment, if you wish, and then hit sent. They will automatically send your letter to the legislators.

Thank you, again, for the work your organization does, and for the strong relationship you have with our school.  We value this partnership, and appreciate your willingness to assist us at this important time.  Should you have any questions about the “Gainful Employment” rule or our letter request, please do not hesitate to contact me directly.


Chuck Nagele
President, The Art Institute of Fort Lauderdale 

After high school I attended a LPN course. However I got pregnant and was very ill and missed too many days and was forced to quit. To take the course again I would have to wait a year. I got married and had yet another child a year later. Even though I was happy, I really felt stuck. Not only did I get out of high school and start having babies, I had only one job experience which I had to quit when my husband was deployed\. Without experience I am not worth much in the working field. After I found out I was pregnant with my third child I knew I needed to get a job to help provide. Unfortunately I couldn’t find an employer that would hire me without experience.

Kimberly S – Career College Student, Kentucky

The debate on proposed regulation of for-profit colleges [“How to discourage college students,” editorial, Aug. 22] missed the larger point: As a nation we are failing to connect the dots between college and careers. Our research shows that college is increasingly the only path to middle-class earning power. Students need user-friendly information about the costs of postsecondary education and the potential earnings in their chosen career if they are to successfully become part of tomorrow’s workforce.

We need to do a better job of connecting the dots between the costs and returns of postsecondary education. In truth, the basic data already exist in the form of wage records, transcript and program data, figures on job openings and detailed information on occupational competencies. Properly assembled, such an information system would minimize, though not eliminate, the future need for aggressive federal oversight or state-level regulation, a matter at the heart of the current debate. Rather than get sidetracked by discord, our common goal should be to compile this information effectively and make it publicly available.

Anthony P. Carnevale, Washington

The writer is director of the Center on Education and the Workforce at Georgetown University.

So maybe we should rate for-profit colleges on whether their graduates can turn a profit and measure their “profitability” by the default rate on their students’ loans? This makes at least as much sense as some of the yearly high-stakes, minimum-standards testing that drives (down) much of the curriculum in many K-12 public schools. If we implement this standard, let’s make sure the for-profit colleges don’t meet the standards by reducing the percentage of poor students admitted.

Have the goal be 100 percent on-time loan repayment by 2014 for all economic categories — poor, lower-middle-income, middle-income, high-income — and 100 percent repayment for separate sub-categories: special education students, English-language-learners, fine arts majors, etc. Or is such an approach “good” for public schools but somehow not so good for for-profit corporations?


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Joyce Migdall, Falls Church

President Obama says he wants the U.S. to have the world’s highest percentage of college graduates by 2020, yet his Administration is slapping new regulations on for-profit colleges that would make reaching that goal more difficult.

Last month, the Department of Education proposed new “gainful employment” rules that would cut off federal student aid to for-profit institutions, such as DeVry and the University of Phoenix, if a certain percentage of their students default on loans or don’t earn enough after graduation to repay them.

“Some proprietary schools have profited and prospered, and this is a disservice to students and to taxpayers,” said Education Secretary Arne Duncan in justifying the new rules. The politically operative words in that sentence are “profited and prospered,” not students and taxpayers.

The Chronicle of Higher Education reports that since 1995 nearly 40% of students at for-profit career colleges have defaulted on federal loans. An Education Department study found that fewer than 36% of for-profit college students repaid their federal loans, versus 54% at public universities. Under the government’s proposal, programs at for-profit schools would face federal aid restrictions if one of two thresholds isn’t met: At least 45% of former students must be paying down the principal on loans, or the debt payments of graduates must not exceed 8% of their annual income.

Operators of for-profit colleges—which tend to teach specific job skills as opposed to offering a liberal arts education—say that singling them out for new restrictions is unfair, and they have a point. It’s true that students at these so-called career colleges are more likely to take out larger loans than their nonprofit peers, and that this can contribute to higher default rates. But their tuition is also more expensive, in part because these schools don’t receive state aid and have to pay taxes.

Students at for-profit schools are also more likely to be low-income, racial minorities, single parents, high school dropouts with GEDs, or first-generation college students without parents who can help pay the tuition bill. Studies that control for this “at-risk” student demographic have found that loan default rates at career colleges are comparable to those found at community colleges and historically black schools; neither of the latter would be subject to the new rules.

“Even with this more challenging student population,” concludes a study released in March by the Parthenon Group, a consulting firm, “the private sector generates superior education outcomes as evidenced by a 65% graduation rate (compared to only a 44% graduation rate at community colleges).”

We’d prefer no taxpayer loan subsidies for any colleges, profit or nonprofit, but the Obama Administration’s policy has heretofore been to increase subsidies so that college education becomes a de facto entitlement. At least for-profits repay those subsidies with income tax payments.

The Apollo Group, the parent company of the University of Phoenix, paid $445 million in income taxes last year. “That’s $445 million in income taxes more than every nonprofit college in America combined,” reports Forbes magazine. “The notion that it’s mainly the for-profits that are a giant drain on taxpayer resources is ludicrous.”

If the concern is that career colleges are duping customers into taking on too much debt, then simpler application forms and greater transparency could be required with respect to costs, the amount being borrowed, future monthly payments and likely earnings in a given occupation. By contrast, Mr. Duncan’s proposals are more likely to result in fewer good programs, not more student protections. For-profit schools are obviously filling a need, given that enrollment has tripled to around 1.8 million in the past decade, a rate that far outpaces nonprofit rivals.

It’s hard not to conclude that the real driving political force here is hostility to private education companies. This is consistent with the Administration’s decision to bar private companies from delivering student loans, its near-takeover of the health-care industry, and its denunciations of high business pay and profits. By punishing for-profit colleges, the Administration will push more students into their nonprofit competitors, which satisfies its preference for equality of outcomes and more government control.

No wonder the U.S. economy isn’t creating jobs when anyone who makes money and creates more jobs immediately becomes a political target.

Wall Street Journal –

Can the value of a college diploma be quantified? Should it be quantified? Many would argue no on both counts. The benefits of better critical thinking skills, a rich network of relationships with professors and alumni, or an enhanced sense of your own bright future and capacity to achieve are very difficult to reckon. Researchers report many multidimensional advantages associated with more years of education: better health, more stability in relationships, increased political and civic engagement, and more peace and happiness, even into old age.

It’s hard to put a price on any of these goods. And yet, high and continuously rising tuition is increasingly forcing would-be students and their families to perform some cost-benefit analysis. A college degree, on average, awards you 60 percent higher earnings (PDF), which more than offsets the average $23,000 in student loans that graduates stack up.

But the relative advantage of the degree has been growing for a generation not because college graduates are earning more and more, but because high school graduatess are earning less and less—20 percent less for young men compared to the 1970s. In fact, it might make more sense to speak of a non-college penalty than a college reward.

Then there’s the question of what happens to the 43 percent of college students who, for one reason or another, don’t finish their degree within six years of their freshman year. They may have student loans but no degree to show for it.

Or what about those who graduate into a recession, like the one going on right now, with very high loan burdens? Graduating into a poor job market can reduce your lifetime earnings by 10 or 15 percent—and it’s a disadvantage that never really goes away.

It’s clear that with such sums of money, not to mention people’s futures, at stake, it’s time to have more hard-nosed discussions about the costs and benefits of college. Late last month, the Department of Education under Obama took an important step in precisely that direction. For the first time they’re putting teeth into an existing rule that in order to qualify for federal financial aid, colleges must prepare students for “gainful employment.”

The measure they’re using is how the college’s graduates handle their student loans. If too many of your students leave school with an unreasonable ratio of debt to income (defined as more than 8 percent of total earnings), or if they don’t pay back their loans at all, then presumably they didn’t get enough bang for their buck.

For now, the “gainful employment” standard is being applied only to trade schools, which are usually for-profit. But it’s not a bad question to ask no matter what the status of the college. One would think that this guideline could strike fear into the hearts of the philosophy department at, say, Middlebury College (price tag, $208,600; starting salary, about $35,000) or, for that matter, the film school at USC (price tag, $100,000+; starting salary, $0 to $100,000).

Anya Kamenetz is a staff writer for Fast Company and author of “Generation Debt.” Her latest book is DIY U: Edupunks, Edupreneurs, and the Coming Transformation of Higher Education.”

Read the full article here –

As an employee of Anthem College in St. Louis, Missouri I am writing to oppose the Department of Education`s proposed `gainful employment` definition. At Anthem College, we witness on a daily basis the drive and determination of our students to meet their career goals. We work very hard to provide them with the education and training necessary to obtain high demand jobs and compete in today`s competitive workforce. We have an enrollment of 277 students, primarily female, African American, with the average age between 23-25 years old. Our students are economically disadvantaged and pursue education to improve their lives and the future of their families. Many of my students are single moms that sacrifice their everyday life by continuing their education, an education that is not only for them but for their children. Moreover, these are students who will most likely be a first generation graduate of college something that will show their children that when they graduate they will be second generation graduates which will be in line with President Obama’s vision and quest to be the most educated country in the world by the year 2020. These are also students that have not been well-served by traditional colleges, which are in any event filled to capacity. We accept only students who have a reasonable chance of success in our programs, and I am proud that they graduate, find employment in their fields of study at the rate of 70%. This is much higher than the success rate of community colleges in our city because we work hard to provide academic and other support for our students. Large health care providers such as St. Louis University Hospital apart of the Tenet Healthsystem St. Louis, Inc, Barnes Jewish Hospital apart of the Barnes Jewish Christian Health Care Systems, St. John’s Mercy Health Systems, SSM Health Care St. Louis which includes over 10 hospitals and 250 medical offices, just to name a few, seek out our graduates because they are well-prepared.

Read the full commentary here –

Please visit this website and let your voice be heard!  We need to fight for our rights to keep educational choices available in the United States.

a noted Wall Street short-seller, Steve Eisman, gave a speech criticizing certain public companies that are for-profit colleges and universities. Eisman is known for “shorting” stocks in public companies in the sub-prime industry before the collapse — meaning he made tons of money when these companies’ share values went down or virtually collapsed.

For the uninitiated, at the risk of oversimplifying, you make money “shorting” stock by borrowing someone’s stock at a certain share value and then, if the share values go down, repaying the loan at a lower amount, pocketing the difference.

Eisman, in his May 26 speech before the Ira Sohn Research Conference in New York City, criticized some for-profit colleges and universities that are public companies (such as the Apollo Group, which owns the University of Phoenix, Corinthian College and Kaplan University (owned by The Washington Post). He suggested they were on financially shaky ground due to high student default rates from Department of Education Title IV loans and excessive debt-to-income ratios, to name just a few of his criticisms.

Stories appeared shortly after the speech that the share values of the companies that Eisman had criticized dropped immediately and considerably — and that Eisman had “shorted” these stocks, and thus profited handsomely. Whether the share values fell as a result of Eisman’s criticisms is up to a logical reader — or inquiring member of Congress — to determine.

Eisman also penned an extensive op-ed in the New York Post. But he made no disclosures in that piece as to how much he had shorted in the companies he was criticizing and how much he had profited if and when the share values dropped.

Similarly, on Thursday morning, in front of the Senate Health, Education, Labor and Pensions (HELP) Committee, chaired by Sen. Tom Harkin (D-Iowa), Eisman is repeating similar charges. Yet he doesn’t make any specific disclosures that I can discern, at least from the written testimony I have read, as to what stocks he has shorted in the companies he has criticized in the past, and what his current short positions are and how much.

I’ve known Harkin for many years. He is one of the best senators ever. But he has always stood for transparency. I suspect he will demand such full disclosure and transparency this morning from Eisman.

Private-sector colleges are part of the mix of higher-education options available to lower-income kids, representing 2.7 million (about 7 percent) of the current students in higher education. Many of the students would qualify as non-traditional — working adults, low-income students and minorities — and can fairly be described as “higher risk” compared to students at traditional universities.

One report, using U.S. Department of Education data and issued by the Parthenon Group, said that students at two-year private-sector colleges graduate at rates approximately 50 percent higher than public schools. In addition, the graduation rate for four-year private-sector schools is virtually no different from traditional four-year schools — 43 percent compared to 45 percent, according to the Integrated Postsecondary Education Data System (IPEDS).

In a 2009 report, the National Governors Association (NGA) said this: “Private two-year colleges have much higher graduation rates than public two-year colleges, even though they enroll similar students.” The U.S. Department of Education’s National Center for Education Statistics (NCES) data corroborated the NGA’s study: “Four-year career colleges that are predominantly minority-serving exhibit a higher graduation rate than public and private institutions that also serve minority students (47 percent versus 33 percent and 40 percent, respectively).”

And what happens when private-sector colleges graduate their students? A review of the data shows that these students get a job and pay their debts. Default rates of for-profit students are basically the same as students from community colleges (11 percent versus 10 percent, respectively). While it’s true that for-profit students have higher default rates than public and nonprofit colleges, the GAO reported in 2009 that “the characteristics of the students who attend the schools” account for the differences in the loan defaults, not the kinds of institutions these students chose to attend. In other words, lower-income students have higher default rates than wealthier students, whether or not they attend for-profit or non-profit schools.


Let’s concede that, in the for-profit college industry, there are bad apples. Congressional oversight and U.S. Department of Education rules give ample ability to focus on fraud, root it out and end it.

But the notion of pervasive, systemic abuse and fraud as suggested by Eisman, more with innuendo than hard facts, may not stand up to scrutiny.

We need oversight and regulation for sure. We also need full disclosure and transparency by short-seller critics — for sure too.


This piece appears today, June 23, 2010, in Mr. Davis’s regular weekly column in The Hill, “Purple Nation” and The Daily Caller, an online political website.

Mr. Davis, with his own Washington firm, Lanny J. Davis & Associates PLLC, served as special counsel to President Bill Clinton from 1996-98 and was a member of President George W. Bush’s Privacy and Civil Liberties Oversight Board in 2006-07. He is the author of Scandal: How “Gotcha” Politics Is Destroying America (Palgrave MacMillan 2006).

From the Huffington Post –

I am a graduate of Herzing University – New Orleans Campus. I graduated with my Associates Degree in Business Administration. I am currently working on my Bachelor’s Degree in Human Resources. Herzing University is a wonderful school that taught me the skills that I needed to obtain a great job with pay. I am currently making a great salary as a Business Office Manager in Kenner, Louisiana. Now I have a great career versus working at a fast food job that I did for a long time. Herzing provided excellent instructors that lectured and also brought in real world experience plus hands on training. I was a high school drop out at the age of 16. Becoming a college graduate was a dream for a long time that I never thought would materialize. Herzing gave me the confidence that I needed to become a professional business person. As a citizen I have a right to decide where I want to obtain my education from. I chose Herzing because they have small class sizes and working students like me that I could relate to. I didn’t choose a traditional college for this very reason. I needed to get in and out quickly with a schedule that worked around my job. Herzing provided all of these things for me.

Shelley K, Career College Graduate

The Department’s proposed rules for “gainful employment” underestimate the number of borrowers who are repaying their student loans, according to a recent policy analysis by Mark Kantrowitz, publisher of and

If the Department overestimates the number of students who are not in repayment, some programs could be unfairly penalized for not meeting the proposed gainful employment requirements. In his analysis, The Impact of ‘Persistence of Interest’ on Loan Repayment Rates, Kantrowitz contends that the Department’s proposal “fails to give credit for all borrowers who are making full payments on their loans.”

The Department’s proposal would include an annual loan repayment rate test that would measure the percentage of borrowers who are successfully reducing the principal of their FFEL and Direct Loans. The Department would measure whether borrowers are actually repaying their loans by comparing snapshots of a borrower’s principal balance at the start and end of the most recent federal fiscal year. But, since loan payments are applied to accrued interest before principal, borrowers could be making full loan payments on their loans without actually paying down their loan debt, according to Kantrowitz.
Read the rest –

Especially in a down economy, and with less-privileged students of the sort for-profit colleges serve, this rule would disqualify about 307,000 students, according to the Department of Education‘s own estimates. Even worse, the government would change the rules for what qualifies as a “default.” Students still current on paying off their loan interest – with Education Department encouragement for that arrangement – would be considered in default if they have not yet paid off any principal. In short, the new rule would punish students and colleges for abiding by the old rules.

The scheme would make for-profit colleges less attractive and probably would lead to many of the 307,000 affected students being dumped into state-sponsored universities and community colleges. Advocates for for-profit schools offer convincing arguments why this is bad social policy. First, they say loan defaults at these colleges aren’t all that high: about $1 billion annually out of more than $600 billion in outstanding loans. The rate of default is almost exactly the same as for students from the same socioeconomic strata at state colleges.

Second, state-sponsored colleges often can’t serve the educational needs of students who choose for-profit schools. For out-of-state students, they cost more by an average of $4,374. In-state, the taxpayer subsidies for state-sponsored colleges are about $4,500 higher per student than at for-profits, even after accounting for loan defaults. Moreover, the for-profits uniquely offer flexible class scheduling that “regular” colleges rarely match. For poor and minority students often fitting classes around full-time jobs or other hurdles, these flexible schedules can mean the difference between getting a college degree or not.

This is my student story.  I don’t know if it’s exactly what you were looking for but it’s the story that keeps me coming to work every day:

On my third day of employment with a proprietary school, I contacted a student for an attendance call.  When I spoke to the student, she asked me to please not leave her a message referencing the university.  She requested that I just say my name, as if I was just one of her friends calling to hang out.  When I asked her why, she informed me that her live in boyfriend was not aware that she was going to school.  She stated that he was very controlling, and didn’t want her going to school, but she needed to better her situation so she could leave him.  After asking a few tactful questions, I determined that the student was safe physically.  I gave her some information for women’s shelters in her area, but this wasn’t what she wanted to do.  She was going to do this on her own, and that was that.

We had a few bad terms, but overall this student did quite well.  She had to withdraw two times, and each time I anxiously awaited to see if she would re-enter.  When she did, I always would call right away to see how she was doing, and if she was still “safe.”  The student first completed her Diploma and got a job from her internship.  She then continued on and got her Associate’s degree.  When she started her Bachelor’s Degree, she got promoted and moved out of her boyfriend’s house.  He came after her.  She called me to let me know that she was going to a battered woman’s shelter and didn’t know if she would have internet access.  She would try to keep up in her homework.  That term, she got straight A’s.  It was apparently the best way to keep her mind off of what was going on.  She filed a restraining order.  She worked with her company to transfer to a new location in a different state.  She graduated from her Bachelor’s program with a 3.5 GPA.

I talked to her last week and she is thinking about coming back to get her MBA in Health Care Management, but isn’t sure.  She likes her current job, but is considering going back to school to be a teacher.  She wants to help women in her situation better their lives, “like our school helped her.”

Student Services Staffer, Privately Held University

As alumni from four separate colleges and having been employed by a career college for the past 6 ½ years I have a unique and valuable perspective. At age 15 I started at the University of Saint Thomas, a private four year college, then transferred to the University of Minnesota – Twin Cities, a public 4 year college, then enrolled at High-Tech Institute – Minnesota (now Anthem), a career college. Later on I went back and completed an online program with Anthem College Online. Each of these schools provided enrichment in my education and all of them have helped to some degree in my professional life. For someone in their early 30’s I’ve had a successful life in the private sector, public sector and within education. I’ve also held 3 different public offices at levels in my community, metropolitan area around Minneapolis / Saint Paul and at the state level. The education I received at Anthem College granted me an opportunity to enter the workforce in the field of radiology where I quickly rose to a management level. About 6 years ago I came back to the career college where I’ve worked in a variety of roles as an instructor, externship evaluator and coordinator, and currently am employed as a career services advisor. None of this would have been possible without the career college education I had received. The position I currently hold as a career advisor helping people find work can be one of the most rewarding positions. What is rewarding is watching someone for the first time in their life entering a profession or career rather than a job; someone that was homeless while in school finally reach the point of receiving their first paycheck; having a graduate I taught in a classroom several years ago call and let me know they received a promotion to be a clinic manager. Career colleges, like Anthem, work toward the end goal of having that graduate gain employment in their field of study and advisors like me work to no end to make certain that opportunities are presented to a prepared graduate. I mentioned earlier about holding public office and noted that for a reason. I did so because I also understand what politics is about. It is sad that this proposed policy from our president is more about politics and not people. This policy will destroy all career colleges under a cover of regulation that only has isolated instances of abuse. The president has a history of supporting public institutions over private institutions on this topic and others. What he fails to realize is that it is not necessary to destroy career colleges as a whole that are doing great things for our citizens, often the poorest in our country. Those are the same citizens that we need to have in the workforce to bring this nation to the great place we all want it to be. Career colleges help them reach these goals and dreams. Career colleges often provide the foundation to the healthcare industry. Without medical assistants, x-ray technicians, surgical technicians, medical billing coders and other allied health professionals our physicians wouldn’t be able to handle the number of patients they have today. The federal bureau of labor and statistics sites dramatic shortfalls of staff in all these areas in the coming future with baby boomers retiring and not enough people to replace their positions and the expected growth with their healthcare needs. We need our leaders to find ways to guide people into these fields and reward schools that are bringing highly qualified staff into these positions rather than build barricades. Should this policy see the light of day I will be fortunate enough to find employment with the diverse and extensive background I have. I am doubtful of finding opportunity to directly see success for so many as I am fortunate enough to see today and am even sadder for those who would be stripped of ever reaching their American dream.

Eric L, Anthem College Graduate

From a privately held university: “One of our Medical Assisting students who is graduating this August 2010 has been working as a fulltime employee since March at the medical facility that she fulfilled both her proctored practicum and externship requirements at, which is very exciting and an ideal situation for the student.  She wrote in an email to me about her “awesome experience” with our online university and told me that she’s had many people ask about her education and that she’s personally been spreading the word about us.  Her externship site gave her a great evaluation as well (all “Excellent” performance ratings).   This student is a prime example of someone who may not have had the time, budget or resources to attend a traditional four-year university but through our college has earned a degree while gaining experience in the medical field AND came out with a full-time job before she even graduated.”

THE OBAMA administration is considering rules that could sharply limit the availability of for-profit colleges to American students. The government is right to fashion reasonable regulation to discourage fraud or misleading practices, but it would be wrong to impose rules that remove an option that is especially useful for poor and working students.

Readers should know that we have a conflict of interest regarding this subject. The Washington Post Co., which owns the Post newspaper and, also owns Kaplan University and other for-profit schools of higher education that, according to company officials, could be harmed by the proposed regulations.

But our feelings about career colleges, as the for-profits are often called, are consistent with our editorial policy on education more broadly: that is, the more options available to parents and students, the better. Particularly among some Democrats, that’s not always the prevailing view. But for the most part it has been the philosophy of the Obama administration, which is why an effort to narrow choice in this area would be inconsistent as well as misguided.

In a speech on higher education in Texas this month, President Obama noted that getting more Americans into — and successfully out of — college is an economic imperative. “It’s an economic issue when the unemployment rate for folks who’ve never gone to college is almost double what it is for those who have gone to college,” Mr. Obama said. “Education is an economic issue when nearly eight in 10 new jobs will require workforce training or a higher education by the end of this decade.” But the president noted that in college completion the United States has been “slipping. In a single generation, we’ve fallen from first place to 12th place in college graduation rates for young adults.” He vowed to reverse that trend.

Read the rest of the article at –

From “The Hill” –

Harry C. Alford
President/CEO of National Black Chamber of Commerce

In an opinion piece (“Don’t discriminate against proprietary colleges” 8/19), John R. McKernan, Jr., former U.S. Congressman and former Governor (R-Maine), makes a very important point about the Department of Education’s proposed regulation on career colleges: Limiting access to these schools will drastically hurt minority and low-income students. While President Obama is setting goals of increasing graduation rates, the department is creating massive hurdles for students to get there, especially at-risk students who need help the most.

Currently, black unemployment rates are well above the national number and are hovering around 15 percent. It’s a critical time to educate and train students to be prepared for a career upon graduating college.

Unfortunately, if programs at career colleges are shut down because of the proposed rule, we are going to close the door on opportunity and limit higher-education access for thousands of students. I agree with the former governor and hope the department will see the value in giving all students of all backgrounds a chance to succeed.

Larry Edward Penley, Ph.D.,
former president of Colorado State University and professor emeritus at Arizona State University

Critics of private sector education have been working overtime over the past few months. And despite some bad behavior from a few for-profit providers, there is a substantial misunderstanding of this part of the higher education industry and the real consequences of the Department of Education’s proposed actions.

The Department of Education’s proposed gainful employment rule endeavors to curb rampant student debt; actually it will limit educational opportunities for thousands of students across the country. In his opinion piece “Don’t discriminate against proprietary colleges”, Governor McKernan notes that the purpose of federal student aid is to provide access by helping disadvantaged students reach their potential. Unfortunately, the gainful employment rule will achieve just the opposite – limiting access.

Whereas private sector schools provide low-income and non-traditional students with educational access and opportunity, the gainful employment rule moves to strip that opportunity from some of the most vulnerable students.

The gainful employment rule has the potential to hurt the very students it was written to help, as Governor McKernan notes. Instead of helping, it undermines the true congressional intention of Title IV grants and loans. As a vehicle to enable opportunity in education, Title IV’s purpose is undermined as the gainful employment rule strips away access and becomes fundamentally altered if implemented as currently written.

Instead of imposing a one-size-fits-all solution to combat student debt, the Department of Education and Congress should strive to hear from those most affected by the proposed rule. I fear that the most vulnerable student will be the real losers.
Chandler, Ariz.

From the Washington Post

If we need more graduates why is Congress pushing for this gainful employment regulation?  Career Colleges train workers!

Washington Post Staff Writer
Monday, August 9, 2010; 3:05 PM

AUSTIN — Saying that the country’s long-term economic recovery depends on a wholesale improvement in education, President Obama on Monday pledged his administration’s best efforts toward increasing the number of college graduates.

“Lifting graduation rates. Preparing our graduates to succeed in this economy. Making college affordable. That’s how we’ll put a higher education within reach for anyone who wants it,” Obama said in prepared remarks for a speech here Monday. “That’s how we’ll reach our goal of once again leading the world in college graduation rates by the end of this decade.”

As his Democratic allies in Congress face the voters this fall, one of Obama’s chief tasks is to remind voters why they chose him for the White House back in 2008. And that involves reminding them what he’s accomplished, particularly when those accomplishments have gone largely unheralded.

The speech marks a return to the University of Texas, where Obama rallied as a candidate with more than 20,000 supporters during the campaign, to tout his administration’s higher education record.

The government in the past 20 months has revamped the student loan system, done away with the banks that used to serve as middlemen and redirected about $60 billion to increased Pell Grants for college students and other education programs. Officials have also added money to the community college system, created a new tax credit for college tuition and simplified student aid forms.

Obama, speaking in a UT gymnasium, declared education to be “the economic issue of our times.”

“It’s an economic issue when the unemployment rate for folks who’ve never gone to college is almost double what it is for those who have,” he said. “It’s an economic issue when nearly eight in 10 new jobs will require workforce training or a higher education by the end of this decade. It’s an economic issue when we know beyond a shadow of a doubt that countries that out-educate us today will out-compete us tomorrow.”

The president did not announce any new proposals in his speech but sought to summarize his administration’s higher education efforts.

The speech is “primarily a recap of what we’ve done,” said communications director Dan Pfeiffer, though he added that the president was attempting to place those accomplishments within the “context of dealing with the economy.”

That’s important as the Democrats seek a reaffirmation of their policies at a time when many people are struggling with unemployment in a sluggish recovery.

White House officials said the president’s speech was designed to highlight the administration’s overriding goal when it comes to higher education: making the United States No. 1 in the proportion of students who graduate from college.

“Today we have flat-lined, while other countries have passed us by,” Education Secretary Arne Duncan said. He called the president’s goal of leading the world in proportion of graduates by 2020 “the North Star for all of our educational initiatives.”

Duncan and other officials said the United States has a long way to go, with only 40 percent of Americans between the ages of 25 and 34 having earned college degrees. To lead the world, Obama wants that proportion to be 60 percent.

That would mean adding 11 million more college graduates to the ranks of that age cohort. Even assuming some additional graduates just from population growth, officials predicted the country will have to find a way to add more than 8 million new college graduates.

“This isn’t just a target for target’s sake,” said Cecilia Rouse, a member of the president’s council of economic advisers. “It’s really important that we have the workers that will compete in the 21st century.”