Posts Tagged ‘for profit education’

This summer, the U.S. Department of Education introduced a proposal to regulate for-profit universities. Referred to in education circles as the “gainful employment” regulations, the proposal seeks to protect students with the highest financial need who enroll at these institutions, to ensure the likelihood that they will be able to find employment and repay their loans after completing their certificate or degree programs.

The Department of Education is proposing a new sanction, namely that if the for-profit programs are not producing “gainful employment” opportunities for these students, those institutions will lose their student aid eligibility — a major source of income for these education companies. As usual, the issue has raised partisan rancor in several congressional hearings (the latest on Sept. 30) held by Iowa Democratic Sen. Tom Harkin, chairman of the Health, Education, Labor, and Pensions Committee.

As a not-for-profit, four-year and graduate residential university, my institution is not directly affected by these federal rules. But they do bring a critical issue to light for all of higher education, for-profit and not-for-profit alike: What are we doing to prepare and enable our students to secure jobs and succeed in an increasingly competitive and dynamic workforce, especially for those in the highest-need brackets? Are we doing enough? Are new models needed?

According to the Bureau of Labor Statistics, the youth unemployment rate reached 19.1 percent in July, and the United States is experiencing some of the worst youth joblessness of the post- World War Two era. These statistics should sound an alarm across the nation. While penalizing for-profit universities for programs that produce little results and high debt for their students might be an effective short-term solution to protect students and our student loan system, we need a broader national vision from Washington, from corporate America, and from higher education about how to ensure that our young people have a future in our nation’s workforce. Punitive measures from the government and “business as usual” from our nation’s colleges and universities just won’t cut it. Students need a new deal — a promise of access that can actually lead to job opportunity when they complete their degrees.

With the state of our economy, the question is even more urgent for students and their families: What will a degree get me after I graduate? In the salad days of job opportunity, we university administrators could afford to wax a bit more vague about this. For many traditional academicians, this question might even seem out of place. After all, college is about imparting knowledge, the collective inheritance of humanity — not about something as mundane as a job.

Of course that is the case, but our students also want and need to work. I see this mindset in the kind of students we attract to Stevenson University. Almost one-third are first-generation college students. Their parents did not attend college, but they nurtured that dream for their children. These students expect that attending college will lead to a good job, and they consciously chose an education with programs and experiences structured to help make their dreams a reality.

Several years ago, representatives of Maryland’s public and independent colleges and universities joined forces with the Governor’s Workforce Investment Board on a listening tour, dialoging with business leaders around the state about the kinds of programs and initiatives that prepare students to work successfully in their companies and economic sectors. This tour was extremely productive and helped to build the kind of collaboration that higher education, business and government need.

But this process needs to be national, continual and at the top of the president’s and Congress’ agendas.

President Barack Obama’s “Skills for America” initiative, announced Oct. 4, is a step in the right direction. By encouraging partnerships between community colleges and industry, students will be able to connect their educations to careers, many in new and emerging industries. This initiative should also move beyond community colleges to four-year institutions, public and private, that are serving many of the nation’s highest-need students.

What else can higher education do? Diverse employment internships should be a near mandate across college curricula; federal and state employer advisory boards for higher education can update academia on the changing and emerging workforce skills for industry; and we should promote career development standards and requirements that challenge our students and grow their skills as much as their academic coursework expands their knowledge.

Instead of punitive measures that might ultimately limit access and discourage students and working adults from achieving a degree, we need creative measures from leaders in education and the top policymakers that ensure degrees — and the college experiences that support them — remain relevant in an increasingly dynamic and global workforce. Career education should not be sidelined; it needs to be front and center in our strategic institutional plans and national economic policy.

Kevin J. Manning is the president of Stevenson University with campuses in Stevenson and Owings Mills. His e-mail is kmanning@stevenson.edu.
From: http://www.baltimoresun.com/news/opinion/oped/bs-ed-colleges-jobs-20101013,0,2442120.story

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Debunking Career College Myths and the Dismal Truths About Community Colleges

Community Colleges Graduate 20% of their students;
Career Colleges Graduate 58%

The Obama Administration is attacking career colleges at the same
time they are lauding community colleges. They propose sweeping
and arbitrary regulations against career colleges while turning a blind
eye to the deep and intractable problems among community colleges.
A look at the facts would suggest that the Administration is attacking
the wrong target and their proposed regulations would hurt the
economy, jobs — and most of all students.
The President has launched Skills for America’s Future to build a
nation-wide network to maximize workforce development strategies,
job training programs and job placement. He has only included
community colleges. By excluding career colleges, he is unnecessarily
shortchanging millions of students and a wide swath of the nation’s
future workforce. The President should include all interested colleges in
this initiative
The fact is students need more higher education choices not less —
and more information, not less. It is in the students’ best interest to
have all colleges judged by the same standards and treated the same
regardless of the school’s structure (for-profit, non-profit or public.)
Take a look at how community colleges and career colleges stack up:
Community colleges have lower, much lower, graduation
rates than career colleges.
■ Career colleges graduate 58 percent of their students. Community
colleges graduate 20 percent.*
■ Career colleges graduate 48 percent of their African-American
students. Community colleges graduate 12 percent.
■ Career colleges graduate 60 percent of their Hispanic students.
Community colleges graduate 15 percent.

■Community colleges participating in the White House
Summit on Community Colleges have graduation rates as
low as 7 percent.
■ Northern Virginia Community College, where Dr. Jill Biden teaches,
has a graduation rate of 13 percent which results in a total taxpayer
cost per graduate of approximately $74,000.
■ City Colleges of Chicago has an average graduation rate of less
than 7 percent which results in a total taxpayer cost per graduate of
approximately $137,000.
■ Ivy Tech Community College has a graduation rate of 8 percent
which results in a total taxpayer cost per graduate of approximately
$120,000.

Community colleges cost taxpayers more, much more, than
career colleges.  It costs taxpayers more than $32,000 for each community college
graduate, over four times the amount it costs taxpayers for a career
college graduate. Career colleges have similar student loan default rates as
community colleges for similar kinds of students.

It’s the type of student not the type of institution that matters most.
Career colleges have the same default rates as community colleges
when taking into account their much higher enrollments of low income
and minority students.

Community colleges have lower job placement success than
career colleges.

75% of career college graduates find employment within 6 months of
graduation.
Career colleges educate and place students in 17 of the 20
fastest growing fields, with career college graduates representing 42%
of all medical workers.

It’s time that all colleges are held to the same high
standards.  The Obama Administration is attacking career colleges while turning
a blind eye to the larger performance issues that exist at community
colleges.  Career colleges offer access and choice to millions of students
who otherwise would not have a pathway to a higher education
or career. But, these students and their schools are being targeted
through burdensome regulations that must be stopped before they
do any more harm. The President cannot achieve his goal of being the
world’s leader in graduation rates by 2020 without the innovation and
flexibility of career colleges.

To learn the facts visit: http://www.ed-success.org/facts.php

Former Clinton aide and current for-profit higher education lobbyist Lanny Davis–whose other clients include Equatorial Guinea President Teodoro Obiang Nguema Mbasogo, a man who Foreign Policy ranked as the 14th-worst dictator in the world after he “amassed a fortune exceeding $600 million while the masses are left in desperate poverty”–has dutifully published an anti-”gainful employment regulation” article on behalf of his paymasters that doesn’t even try to be truthful or make sense. For example:

Liberals supporting these proposed regulations rightly complain about marketing and other abuses. But the fact is, such abuses occur at non-profits and public institutions as well as at for-profits and, in any event, the gainful employment regulation doesn’t even address the issue of these abuses

So we should be against regulations that prevent some abuses in the for-profit sector because they ignore other abuses in the for-profit sector? This is a defense? Also, I’m pretty sure that non-profits and public institutions don’t actually engage in boiler-room style recruiting tactics. Davis continues:

Liberals who cite the excess “cost” of student loan defaults among the lower income and minority students ignore two inconvenient, indisputable facts: first, billions of dollars of taxpayer subsidies that go to non-profits and public colleges are not available to for-profits; and for-profits cost taxpayers substantially less per-student each year than non-profits and public colleges.

Liberals (and everyone else) who cite the cost of student loans are most concerned about the cost to students, not the taxpayer, since students are the ones who get stuck with unmanageable, undischargable loans that metastacize with fees and penalties over time.  Davis then says:

According to the Department of Education’s own data released last month, its proposed “gainful employment” regulations are so poorly crafted that if applied to non-profits too (which they currently are not), Harvard Medical School, D.C.’s famous minority school, Howard University, and 93 of 100 Historic Black Colleges in the U.S. would all fail the so called loan repayment test.

Presumably the fact that the regulations would catch Harvard Medical School et al are the main reason that, as Davis notes, they don’t apply to Harvard Medical School et al. Lurching  for the finish line, Davis says:

The third explanation appears a classic example of ideology trumping facts: the instinctive negative reaction of many liberals to the word “profit” when associated with providing education. This seems uncomfortably similar to opposition by most liberals to private “charter” schools within urban public school districts…

That makes perfect sense, except for the fact that charter schools are public, not private, and don’t make any profits. Otherwise, a wonderful analogy.

Generally when Exxon / Mobil or the American Federation of Teachers or whomever want to publish opinion pieces expressing their views in journalistic publications, they pay for space that is clearly demarcated as such. Why does the Huffington Post allow lobbyist shills to use its space this way?

From: http://www.quickanded.com/2010/10/what-do-for-profit-colleges-and-the-worlds-worst-dictators-have-in-common.html

The U.S. Department of Education plans to enact new rules targeting the financial aid eligibility of programs at for-profit career institutions; regulations, which they said, are part of an “effort to protect students from aggressive or misleading recruiting practices.”

However, some Black business and political leaders, including Rev. Jesse Jackson, founder of the Rainbow PUSH Coalition, famed trial attorney Willie Gary, Randal Pinkett, chairman and CEO of BCT Partners, Harry Alford, president and CEO of the National Black Chamber of Commerce and members of the Congressional Black Caucus, said the regulations are unfair.

Under the department’s planned “Gainful Employment” regulations, institutions of higher education and post-secondary vocational schools would have to disclose graduation and job placement rates, along with debt levels and incomes of their graduates to prospective students and the department.

Additionally, institutions would also have to provide a five-year projection of enrollment, documentation from employers stating that the institution’s programs meet their business needs, projected job vacancies and job requirements before the program can become eligible to participate in federal student aid.

Milton Anderson, president of Virginia College’s branch in Jackson, Miss. and a spokesman for the Coalition for Education Success, which opposes the proposed regulations, said that 1.2 million students enrolled at career schools are minorities.

“I am concerned that the proposed rule casts too broad and too general a brush on many institutions, some of whom are doing an excellent job at serving economically disadvantaged and minority students,” wrote Jackson in a letter to Education Secretary Arne Duncan on Sept. 15.

Gary voiced his concerns in a newspaper op-ed. “The proposed regulations are aimed at institutions whose graduates don’t often become CEOs, doctors and lawyers. Career schools produce nurses, auto mechanics, computer technicians and other skilled workers, whose services are often overlooked and devalued in our society.”

In response to the objections and concerns raised, the department said in a statement that it would delay publication of the new rules to take “additional time to consider the comments we received and to host several meetings and public hearings in the coming weeks.” The new regulations were scheduled to go into effect on Nov. 1.

“Let me be clear: we’re moving forward on gainful employment regulations,” Duncan said in a statement. “While a majority of career colleges play a vital role in training our workforce to be globally competitive, some bad actors are saddling students with debt they cannot afford in exchange for degrees and certificates they cannot use.”

The department expects the regulations to now take effect in the summer of 2012.

From: http://www.afro.com/sections/news/national/story.htm?storyid=2727

By Kelly Field

With millions of dollars in revenue at stake, for-profit colleges and their supporters have flooded the Education Department with tens of thousands of comments opposing its proposed “gainful employment” rule.

During a 60-day public-comment period that ended last week, the department received more than 83,000 comments from opponents and supporters of the proposed rule, which would cut off federal student aid to programs whose students have high debt-to-income ratios and low loan-repayment rates. Many came from students and faculty members of for-profit colleges, and many were submitted through Web sites offering pre-crafted letters.

An Education Department spokesman said the influx of comments represents a record for higher-education rule making.

In contrast, in 2007, during a controversial rule making on student-loan issues, the department received only 323 comments. A 2008 rule making that created an income-based repayment plan for student loans and expanded student-loan forgiveness generated 1,832 comments. And last year’s rule making on a hodgepodge of topics stemming from the renewal of the Higher Education Act yielded only 358 comments.

http://chronicle.com/article/Education-Dept-Gets-Record/124390/

The president of an online school watches the government’s unfolding campaign against schools that seek profits, and is aghast.

By Richard Bishirjian

July 30, 2010

Editor’s note: Richard Bishirjian is president of Yorktown University, an Internet-based school whose undergraduate programs are rooted in the liberal arts and whose graduate programs focus on business and government.

The Obama administration, working with congressional Democrats, has rolled out a concerted effort to change American postsecondary education.  As with health care and finance, the administration has a consistent method: Focus on a felt need, find a scapegoat, and use the full force of coercive state power to effect radical change.

Today’s scapegoats are the proprietary higher education companies. In addition to offering online education, some of those firms are starting to purchase near-bankrupt nonprofit colleges and convert them into platforms for Internet-based courses. If they are allowed to proceed in that, American higher education will become more diverse, less expensive, and more consumer-oriented.  But the Obama administration apparently believes that profits are resources better distributed by government agencies than by the marketplace.

The U.S. Department of Education has begun a multi-pronged attack on for-profit schools.  One offensive consists of proposed regulations. The “gainful employment” rule, for example, would cut off proprietary colleges from access to federal tuition assistance unless they can show that their graduates earn enough to pay off student loans. Another thrust is to prevent accrediting agencies from allowing for-profit investors to purchase traditional schools (even when those schools are failing financially). We are already seeing a response to that pressure from the Higher Learning Commission of the North Central Association of Colleges and Schools.

Yorktown University, which I head, has followed these unfolding developments with acute interest. We are accredited by the Distance Education and Training  Council (DETC), a national accreditor. We hope to obtain regional accreditation as well, so that our students can transfer the credits they earn at Yorktown to regionally accredited institutions; these schools will not accept transfer of credits from schools that have “only” national accreditation.

In April, I attended a seminar conducted by the Higher Learning Commission. This was the second such seminar I have attended in order to prepare Yorktown for applying for regional accreditation.

Until recently, the Higher Learning Commission was a trendsetter, the only regional accrediting association willing to accredit institutions that teach mostly or entirely over the Internet; until 2008, no excessive barriers to accreditation were placed on Internet-based applicants. A few months before the election of President Obama, however, Sylvia Manning became president of HLC, and the policy changed.

At the April 2010 seminar I attended, Karen L. Solinski, vice president for legal and government affairs, informed the seminar that not only must all accredited institutions be incorporated in one of the states in the region but they must have a state license in each state in which they have a “substantial presence.”

During the break I asked Ms. Solinski to specify what constitutes “presence” in a state. In good lawyer-like fashion she asked me, “Do you have representatives in any states?” I said “no.” Her raised eyebrows suggested that I did, and I thought, well, we do have instructors who reside in and instruct our students from states other than Colorado, where Yorktown University is incorporated.

She then asked, “Do you have proctors in states?” I replied, “Yes, but surely you aren’t saying that the use of a proctor triggers a state licensing requirement?”  She said that it would. Proctors supervise the exams taken by students in online courses. Solinksi seemed to be saying that merely having a student taking an exam, and thus having a proctor monitor it, whatever the state, would require the university to have a license in that state. In addition to the cost of multiple state licenses, each state has its own regulations. Some states require annual fees, others require a hefty surety bond, and Virginia even taxes authorized shares of stock companies.  Keeping track of them would be costly, time-consuming, and difficult.

During a break, I asked Solinski, “Do you mean that HLC intends to enforce state licensing regulations?” She said, “Yes.” This means that HLC, a private organization, is taking on the responsibility of enforcing regulations promulgated by the state. Not only is this inappropriate but it is probably unconstitutional.

I called to Solinski’s attention a Federal Trade Commission finding that it is a restraint of trade for states to require out-of-state optometrists to be licensed if they sell contact lenses in the state. The example seemed to be exactly parallel. To my comment, Ms. Solinski replied, “Education is a special responsibility of the states.” Okay, education has historically been responsible for education (the U.S. Constitution doesn’t mention education), but regulating private companies from other states is not a recognized state responsibility, whether the companies are in education or not.

During this seminar I was sitting at a table along with two representatives of an institution also accredited by DETC. They were shocked by this exchange.  I explained to them that the inspector general of the Department of Education had informed the Higher Learning Commission last December that its charter could be revoked. According to InsideHigherEd.com, HLC had endangered its status “because it granted accreditation to a for-profit university despite a single flaw that the inspector general deemed to be serious.”

Apparently, HLC has decided that by promoting and emphasizing state licensing, it is making clear that it will no longer accredit solely Internet-based distance-learning institutions.  That may save it from censure or revocation of its charter by the Department of Education.

But it will also harm numerous institutions, both profit-making and non-profit. There are two methods of attaining regional accreditation:  earn it or buy it. In June, the Higher Learning Commission denied the application for change of ownership to two proprietary companies that were seeking to purchase regionally accredited institutions, Dana College in Nebraska and Rochester College in Michigan.

The message is coming through loud and clear that the Department of Education simply doesn’t want for-profit institutions to exist.  On April 28, Robert Shireman, deputy undersecretary of education, gave a speech emphasizing the large amount of federal aid that is channeled to the for-profits.

And on June 30, U.S. Senator Dick Durbin (D-Il) gave a speech to the National Press Club in which he stated that purchasing colleges for their accreditation should be banned, and he outlined a comprehensive plan for reining in proprietary education companies.

Sen. Durbin referred to testimony by Wall Street arbitrager, Steve Eisman, that proprietary education companies are analogous to mortgage companies that created the subprime credit crisis. Since then, it has become known that short-sellers, a group to which Eisman belongs, have been working with Durbin—and probably others, including the Department of Education—to discredit for-profits in order to reap the rewards of declining share prices.

Durbin then outlined a broad plan to attack for-profits, by the following steps:

  • Denying access to federal grants and loans to schools that have defaults of 30 percent over three years or 40 percent in one year
  • Restricting “institutions that receive federal student aid from paying their admissions recruiters on the basis of enrollment numbers”
  • Instituting “new regulations that would require for-profit colleges to disclose job placement rates”
  • Relating student loans to “gainful employment.”  If degree programs do not lead to good jobs that enable student to repay student loans, then the institutions offering those degree programs will lose access to federal tuition assistance programs (this regulation has been proposed).
  • Lowering the 90-percent threshold that allows schools to receive up to 90 percent of their income through federal programs
  • Restricting the use of federal financial aid dollars that can be used for  “slick advertising,” such as “billboards, television commercials, and advertisements on the sides of buses”
  • Controlling how much these institutions lend to their own students
  • Stopping the practice of buying accredited institutions.

Sen. Durbin’s assault raises severe constitutional questions. Restricting normal advertising violates the First Amendment of the U.S. Constitution. Requiring state licensing of companies not domiciled in that state violates the commerce clause of the Constitution. And singling out for-profit education for using Title IV funds without including non-profit colleges violates the due process clause.

On these constitutional grounds alone, the Obama administration attack on for-profit education should be rejected.

But other consequences are equally objectionable. By deterring the purchase of accreditation, for example, the administration will challenge the ability of marginal nonprofit institutions—including institutions with large minority populations—to survive. And whether the for-profits can survive this assault is an unanswered question. My worst fear is that for profit education delivered via the Internet will experience the fate of the nuclear power industry after Three Mile Island.

The adage that “federal money brings federal control” is proving to be true. It confirms the suspicion of some that President Lyndon Johnson knew that if he could control the financing of higher education he could control the content of higher education. That control is now in federal hands.

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NjI2NzZ8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

What are your thoughts?

David Mahan, a 29-year-old student studying digital design, says an angry Sen. Dick Durbin noticed him wearing a T-shirt for his college — Illinois Institute of Art, Schaumburg (ILIS) — while protesting outside an education hearing Durbin was holding at the Dirksen building last Tuesday. Mahan (a veteran who served in Iraq, Kuwait and Afghanistan) tells me that after some back-and-forth, Durbin said: “I don’t give a tick s— about ILIS.”

A Durbin spokesman denied the Democratic senator made that particular remark, but Matt Reams, another ILIS student who witnessed the encounter, insists that he did.

One might wonder why a college student would take such umbrage at criticism of his school, but Mahan tells me he has invested himself so much in ILIS that he feels an attack on it is tantamount to an attack on him.

There’s more to the story, of course. Durbin has called for more oversight of for-profit colleges such as the one Mahan attends. The hearing was intended to look at complaints that such colleges entice students to take on massive debt while failing to deliver on their promise of jobs that pay enough for graduates to pay back what they owe.

A proposal by the Department of Education would require for-profit educational institutions to demonstrate that their graduates are repaying student loans (and that they do not have a high debt-to-income ratio) before qualifying for additional loans. There have also been proposals that for-profit colleges should bear a percentage of the risk if their students default. (For-profits received more than $24 billion in federal grants and loans last year.)

Studies show that students who attend for-profit schools like Strayer, Devry, and The University of Phoenix, for example, currently have a lower rate of repayment than students who attend other schools.

These proposed changes, of course, could have a major impact on for-profits. Earlier this year, as part of the health care reform bill, the Obama administration pushed most private lenders out of the student loan game (they can still manage the loans) in favor of having the government almost exclusively make direct loans to students. As such, withholding government loans is a serious stick to wield over for-profit schools.

Critics charge that when it comes to picking winners and losers in higher education, as might be expected with the Obama administration, for-profits are now at risk — even though, on average, for-profit institutions charge less than private non-profits, according to the College Board (and less that public non-profits, once taxpayer subsidies of public schools are taken into consideration).

Nevertheless, a proposed “gainful employment rule,” which ostensibly seeks to ensure that graduates of an institution are able to find work after graduation — may well end up favoring traditional non-profit schools over for-profits. This, of course, has for-profit institutions worried.

For example, ITT Technical institute ran a full-page open letter to President Obama in Sunday’s Washington Post about it.

To be sure, there are some bad actors — colleges that run TV ads promising the moon to students, but then failing to deliver — but these schools are the minority. One school that could be hurt by the changes is ILIS, which is accredited by The Higher Learning Commission.
In a June letter to the editor, ILIS campus president David W. Ray wrote, “The proposed rule, cleverly termed ‘Gainful Employment,’ will remove student choice and deny access to programs and degrees for many. The result is that entire programs now available under Title IV federal financial aid could be ineligible if they don’t meet the Education Department’s unrealistic ‘one-size-fits-all’ debt-service-to-income ratio test. Career-focused education is at particular risk.”
(According to ILIS: “Of all 2008 graduates of The Illinois Institute of Art — Schaumburg available for employment, 88.1% were working in a field related to their program of study within six months of graduation, at an average starting salary of $31,722.”)

These for-profit schools serve a lot of non-traditional students like Mahan. Many are older students who often work part time, making one wonder if government skepticism may be at least partially due to how different these students are from the people making the rules. Ken Blackwell, a conservative columnist who also taught at Xavier University, thinks the proposed rules reflect elitism, noting that, “A college or university that primarily serves working-class adults is, apparently, somehow illegitimate to these liberals.”

Such criticism, however, is not merely coming from the right. Many of the students attending these schools come from poorer families than those attending traditional colleges. As The Washington Post recently editorialized: “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.”

http://www.careercollegecentral.com/news/Dick_Durbin_Allegedly_Insults_Student_as_For-Profit_College_Debate+Unfolds

Tell Dick what YOU think – http://durbin.senate.gov/contact.cfm


// FOR IMMEDIATE RELEASE
//

PRLog (Press Release)Sep 02, 2010 – Representative Rob Bishop (R) encouraged faculty and supporters of Stevens-Henager College to continue to fight against the Department of Education’s proposed “gainful employment” rule. While visiting the campus, the Congressman, who taught high school for 20 years and sits on the Committee of Education and Labor, pointed to free enterprise as a sufficient regulator of so called bad actors in higher education.

As one of the oldest colleges in Utah, Stevens-Henager has helped generations of students achieve their dreams of a better career through degree programs in Healthcare, Computer Programs, Business and Graphic Arts. Congressman Bishop visited the Logan campus yesterday to meet with faculty, students, campus advisory board members and local business partners.

He encouraged all the event attendees to voice their concern through letter writing campaigns against imposing the “gainful employment rule,” which would regulate for-profit colleges based on student graduation and loan default rates. The Congressman said the closing of unsatisfactory colleges would happen organically because of loss of business and should not be the result of federal regulation.

“Congressman Bishop has long been a friend to education and to our college,” said Vicky Dewsnup, Stevens-Henager Regional Director. “The misconduct of a few individuals has fueled scrutiny of career colleges. We are glad to know Congressman Bishop recognizes that the whole barrel of apples is not rotten and is an advocate for the vital role Stevens-Henager serves in the community.”

This was the Congressman’s first trip to the Logan campus, having visited the Ogden campus several times. During his visit, the Congressman toured the campus, attended a few campus events and met with key campus personnel. At the end of his visit, Congressman Bishop was presented an official Stevens-Henager stadium blanket on behalf of the college.

About Stevens-Henager College®
Established in 1891, Stevens-Henager College has built up a reputation in training generations of successful graduates over the years as well for being one of the oldest colleges in Utah. It is located over seven convenient campuses in Utah and Idaho. Stevens-Henager College is accredited by the Accrediting Commission of Career Schools and Colleges (ACCSC), which is recognized by the U.S. Department of Education as a national accrediting agency.

Contact:
Audrey Strong
astrong@csg-pr.com
303.433.7020

I just skimmed the report, “For-Profit Colleges and Universities: America’s Least Cost and Most Efficient System of Higher Education,” from Nexus Research. I see significant praise for the University of Phoenix and other for-profit colleges. There is a great deal of data presented to respond to the current initiatives in Congress. I know that UOP sponsored this research group in or around 2008. This report should have listed the people that served on the “independent, nonpartisan research institute” so that the general public wouldn’t assume the research was biased by UOP.

The full report is available here: http://nexusresearch.org/1/NexusStudy8-31-10.pdf.

I’m going to make a plug for my employer, The College of St. Scholastica. The leadership here does an outstanding job of managing the operations associated with education. We actually had significant surplus of revenues last year when most public universities were struggling financially. We are efficient! This goes against the examples being used in the Nexus Report.

What did you think after reading the report?
Kurt

http://blog.kurtlinbergblog.com/

http://edocket.access.gpo.gov/2010/pdf/2010-17845.pdf

WASHINGTON, Sept. 1 /PRNewswire-USNewswire/ — The National Hispanic Caucus of State Legislators (NHCSL), today launched its web-based center on Higher Education. NHCSL’s creation of this initiative was fueled by its desire to closely follow for the Department of Education’s proposed gainful employment rule, a rule that NHCSL believes should be re-examined for unintended consequences before implementation. The website, meant to provide a central platform for updates on current issues surrounding access to higher education, will act as a portal for information, news and other resources.

“The Department of Education’s gainful employment rule and its impact on our student’s ability to continue to pursue higher education is concerning. Out of this concern, we have created an online center, where concerned individuals can learn more about the proposed rule and its potential impacts,” Illinois State Senator Iris Y. Martinez said. “It is our hope that the Department of Education will re-examine the rule and the impact it may have on the Hispanic community.”

NHCSL’s Initiative on Higher Education website explains the importance of access for Hispanic students and weighs in on various higher education issues that affect the Hispanic community.  Additionally, the website asks visitors to “speak out” and tell the Department of Education how they feel about the proposed gainful employment rule by filing a comment in the public docket.

“We are not alone in our concern about the proposed rule. Many groups and individuals have already made their voices heard and we encourage more to do the same. NHCSL believes that the Department of Education’s rule may be overbroad, a one-size-fits-all solution to the student debt issue that may harm already vulnerable students,” Senator Martinez said. “We hope that our comments will encourage the Department of Education to take another look and further study the rule for unintended consequences.”

To learn more about NHCSL’s Higher Education Initiative, visit http://higheredu.nhcsl.org/.

About NHCSL

The NHCSL is the premier national association of Hispanic state legislators working to design and implement policies and procedures that will improve the quality of life for Hispanics throughout the country. NHCSL was founded in 1989 as a nonpartisan, nonprofit 501(c)3 with the mission to be the most effective voice for the more than 300 Hispanic legislators. For more information visit www.nhcsl.org.

SOURCE National Hispanic Caucus of State Legislators

IRVINE, Calif., Sept. 1 /PRNewswire-USNewswire/ — In an open letter to congress, Fardad Fateri, President and CEO of International Education Corporation (IEC), opposed the proposed federal regulation on Gainful Employment. Fateri asserts that U.S. Senate’s Help Committee chair Senator Tom Harkin is supporting a federal regulation called Gainful Employment that will prevent millions of low-income and ethnically diverse students from pursuing a college education. For the full copy of the Open Letter to Congress, go to: An Important Message from IEC’s President & CEO or visit the Newsroom section of the IEC website at http://www.iecglobal.com

According to Fateri’s Open Letter to Congress:

The proposed regulation sets formulas that will mostly hurt historically underserved and under-represented students. This proposed regulation targets the career education sector of which IEC is a member and is comprised of for-profit education companies serving hundreds of thousands of students and employing thousands of individuals all over the United States. The U.S. Senate’s Help Committee’s support of this regulation is in line with their zeal to destroy the sector which will in essence eliminate access to students who need postsecondary education the most in addition to eliminating thousands of jobs all over the country. Students have been flocking to private for-profit institutions because of the sector’s ability to provide timely and relevant programs and offer true access to postsecondary education. Ethnic and racial diversity in traditional public and private non-profit universities is rare; in fact, the University of Iowa’s own website touts a student population comprised of only 2.4% African American/Black and a 2.8% Hispanic/Latino. Senator Tom Harkin of Iowa has been fighting vigorously against the career education sector just because of the for-profit tax status of the companies in the sector.

The entire proprietary postsecondary sector exists because of an incredible need for career education. All the pundits on the U.S. Senate HELP Committee must understand that the growth of this sector is not due to ingenious marketing methodology or unconventional recruitment tactics. The for-profit career education sector prepares students for the workforce with tuition rates that are of tremendous value considering that this sector does not have access to additional funding only accessible by public and non-profit colleges and universities. In addition, when referring to recruitment tactics of the for-profit career education sector, let’s remember the approaches of traditional public and non-profit colleges and universities who manage to convince students and their sophisticated parents to pay approximately $400,000.00 for an undergraduate degree that will seldom lead to an academically related career. There are anecdotes on all sides; the most prudent approach would be to focus on thoughtful as well as meaningful decision-making grounded in evidence.

The students attending for-profit colleges are smart, ambitious, and they care deeply about their future. So, the claim that these students are naive and are easily abused is offensive and disrespectful. An individual’s household income and ethnicity should not be grounds for unfounded assumptions about their aptitude, judgment and ability. Without the for-profit education sector, millions of students will not have access to post-secondary education because public colleges and non-profit colleges have historically ignored and avoided these students.

When assessing a college, quality demonstrated through student retention, graduation and employment rates must be considered, not repayment rate of student loans. Consider the strain on federal entitlement programs when students remain on welfare as opposed to securing employment. And as taxpayers, many companies on the for-profit education side frequently question the lack of accountability for quality in education and lack of fiscal responsibility illustrated through atrocious expenditures of public and non-profit colleges that are tax-exempt.

For the full copy of the Open Letter to Congress, go to: An Important Message from IEC’s President & CEO or visit the Newsroom section of the IEC website at http://www.iecglobal.com

About International Education Corporation

Headquartered in Irvine, California, International Education Corporation is one of the largest private providers of postsecondary career education in the United States, offering quality programs in high-demand verticals such as healthcare, business, technology, transportation, and criminal justice. International Education Corporation is the parent company of UEI College and United Education Institute.

For more information about International Education Corporation, please visit http://www.iecglobal.com

Contact:
Hanan Awad
International Education Corporation
(949) 272-7200 begin_of_the_skype_highlighting              (949) 272-7200      end_of_the_skype_highlighting
(714) 368-0885 Fax
mordaah@iecglobal.com
http://www.iecglobal.com



It has been over two weeks since the gavel came down at the U.S. Senate hearing examining for-profits and deceptive recruitment/financial aid tactics. The highlight was the release of videos of congressional investigators catching the largest for-profit schools “in the act.” While the hearing was little more than a forum for politicians to pontificate, it had a devastating impact. The secret-shopper scenes could not be defended and ever since, the media has been full of highly critical articles of how for-profit schools are taking gross advantage of students and taxpayers.

Over the past week, much of the chatter has turned to the implementation of so-called Gainful Employment regulations that would in effect establish price controls and eliminate certain occupational programs. These career programs are some of the most popular and profitable offerings for companies such as Kaplan, EDMC, and Corinthian Colleges. While the proposed regulations would apply to all institutions, the impact would mostly be felt by for-profit entities. Ironically, many of the schools that were highlighted by the secret-shopper videos are schools that would be most impacted by Gainful Employment.

Many of the larger for-profit education corporations have warned investors that regulatory changes and most specifically Gainful Employment could have a materially adverse impact on their businesses. These warnings coupled with all the negative press out there are not only hammering stock prices but also leaving many of the for-profits with questions on what to do next and what may happen next. Conversely, many non-profit institutions are trying to determine how they might be able to benefit from all of this.

STRATEGIES FOR FOR-PROFITS

Let’s start with ideas for the for-profits. The largest obstacles for having students obtain “gainful employment” so that they are in a position to benefit from their education and repay their student loans are a) making sure students actually persist until completion and b) securing appropriate employment opportunities for students. For-profits that have found ways to address these two issues (and there are ones that have) have a significant advantage.

For-profits should consider implementing proactive retention strategies as well as career placement solutions. This starts with providing each and every student with a caring, dedicated Retention or Reenrollment Counselor. The focus of this counselor should be to get to know each and every student as well as their unique needs. Furthermore, this counselor should make consistent contact with the student to check-in, motivate, and mentor. Whether it is providing a bridge to student services, social services, academic advisors, or financial aid; this counselor should be trained and empowered to help remove any and all obstacles that might prevent a student from completing a specific program. In essence, a counselor should act as a student’s advocate and be just as passionate about seeing a student graduate as an Enrollment Counselor might be to matriculate a prospective student.

Retention Counseling should be supplemented by professional Career & Education Advisors who not only help students write a resume or show them how to login to Monster.com but can prepare students for interviews, build confidence, and work as each student’s partner in securing employment. These advisors should be available to students not only before graduation but long afterward.

Another key strategy is administering a simple online personality assessment to all new students that measures student strengths and weaknesses in 15 key areas. The assessment provides counselors, career advisors, and faculty with a proactive glimpse of how each individual needs to be motivated, mentored, or coached.

These solutions seem costly and complex. The reality is they are, however, the ROI is substantial. Clients of ours that utilize these solutions see on average a 26% improvement in graduation rates and a 39% improvement in career placement even in today’s challenging economy. Not only do these solutions allow schools to better serve their students while providing better outcomes but they also help schools with their bottom line. Finally, schools that promote the existence of these services will recruit more students – especially in the current press climate!

For-profits also need to ensure their programs are at the cutting edge of employment demand – ensuring that students have a better chance to secure employment and maximize earning potential. The cumulative effect of all these strategies is to enhance enrollment revenue and profitability, possibly enabling schools to lower prices without reducing their margins which is so important to Wall Street.

HOW CAN NON-PROFITS BENEFIT

There is no way to sugar coat it. With each passing day, the for-profits are gaining a worse reputation than BP and the common cold combined! This provides non-profits with a unique opportunity to benefit at least in the short-term. While I prefer strategies that allow for long-term gains, a short-term advantage can help many non-profits generate more momentum that can produce long-term results. So what are the 3 key steps that every tuition dependent non-profit that loses student enrollments to for-profit schools should consider taking?

First, an applicable institution (schools that are not highly selective and cater to non-traditional students) must come to the realization that even though they may not compare themselves to a for-profit school, they may be losing students and relevance at the hands of for-profits. Stakeholders must decide to change and act with time of the essence so that they may effectively compete. Part of this decision involves taking risks and thinking outside of the box. There are many resources out there to help schools do just this. Further, institutions do not need to sacrifice their values or educational quality but they should realize that whether they like it or not for-profits will and (in the long-term) probably continue to be a growing competitive force that will draw students.

Next, schools must reevaluate their offerings. If non-traditional students are being served, fully online options should be available. Online programs should be of the highest quality, interactive, accelerated, and applicable to today’s most relevant career opportunities. In some cases, this may mean that institutions may need to look to offer new programs. In other cases, existing programs may need to be modified or reinvented. By way of example, an MBA with a concentration in Accounting that was popular 5 years ago may need to be retooled into a Masters of Accounting program that has much greater career relevancy today.

Finally, non-profits should not only focus on their strengths such as history, having traditional campuses, reputation, full-time faculty, and distinct missions but also on areas that have been traditional benefits offered by the for-profits – acceleration, career-focused programs, flexibility, and in many cases technology. Providing special support services including the type of proactive retention and career counseling mentioned earlier is also key – as it is a competitive advantage compared to most for-profits and non-profits alike.

Do you have other ideas? We would like to hear them!

John Hall
Greenwood & Hall
jhall@greenwoodhall.com

http://greenwoodhall.com/blog/2010/08/gainful-employment-into-gainful-advantage-how-non-profits-for-profits-can-turn-the-tables/

WASHINGTON — A long recession and a wavering job market have brought for-profit higher education institutions into the public eye as never before. Big advertising budgets have given them name recognition. Dramatic enrollment growth (fueled by increasing amounts of federal financial aid) and assurances to students that a degree or certificate is the path to a comfortable job in a specific field have brought them scrutiny.

Many newspapers, websites and TV networks have told the tale of programs at for-profit institutions that don’t prepare students for the jobs they’ve been all but promised — and plunge them into debt in the process. While the anecdotes are often true, they’re only part of the story; some for-profit colleges (the institutions themselves prefer the term “private sector” or “market funded”) do prepare students for good jobs and don’t sink them in an overwhelming pool of post-graduation debt.

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Title IV of the Higher Education Act of 1965 requires all for-profit offerings other than those clearly designated as “liberal arts,” and non-degree vocational programs at nonprofit institutions, to show that they prepare students for “gainful employment in a recognized occupation.” If they don’t, they’re not supposed to be eligible for federal financial aid dollars.

No one, the U.S. Department of Education has contended, seems to have a satisfactory way of determining which programs meet that standard. “It’s illuminating for us that when we ask institutions how they’re complying with this current law, we have not received adequate answers,” says Bob Shireman, deputy undersecretary of education. “And this is the law.”

Through a process of negotiated rule making that began last year after passage of the Higher Education Opportunity Act in 2008, the department has sought to develop a formulaic solution to the dilemma, in the form of regulations that define “gainful employment” using data on incomes and debt loads, as well as completion, job placement and loan repayment rates.

In essence, this is a crude mechanism to assess the quality and value of vocational programs. The “good” programs that help students get jobs without saddling them with debt could continue to exist and deliver Pell Grants and subsidized loans to their students. The “bad” programs — the ones found to lead graduates to jobs they could’ve gotten without the educational experience or that don’t pay well enough for borrowers to repay their loans — would be identified and put under closer scrutiny.

Representatives of the for-profit sector have aggressively fought such an approach, but most analyses so far suggest that the proposed regulations are unlikely to be a sector killer. The department has acknowledged the need for nonprofit and for-profit vocational programs, and has estimated that just 6 to 8 percent of programs that qualify for Title IV under gainful employment would potentially need to change under the proposed rules.

In research that’s been circulated but not yet publicly released, the Career College Association, the trade group that represents for-profit colleges and universities, has less-conservatively estimated that close to 20 percent of career college programs and a third of the colleges’ students would be affected. In what the department would consider a positive outcome, some of the “bad” programs would shut down, while others would lower prices or work to improve their completion and job placement rates.

Though some observers have suggested that rewriting federal financial aid policy would be a better way to address these problems, the Obama administration’s Education Department is seizing on the opportunity it has now, with Democratic majorities in both houses of Congress, to effect change. The revision of the gainful employment rules could be a once-in-an-administration (if not once-in-a-career) chance for Shireman — who has advocated for reform and increased protections for borrowers since serving in the Clinton White House — and his staff to tackle what they consider to be a major source of student debt.

Shireman himself does not put it that way. “We have to do everything we can in the regulatory process, as well as in the legislative process, to protect taxpayers and students,” he says. “We have these regulatory opportunities so we have to take them.”

He does acknowledge that he is unwilling to wait for the next renewal of the Higher Education Act, in 2013, when lawmakers would be most likely to make major changes in the law. “We’re not going to wait for a reauthorization to ensure that federal funds are being used appropriately.”

The department sent a version of the regulations to the White House Office of Management and Budget this month, and, though it’s still being revised, a final draft will be published by mid-June. Over the summer, there will be one last chance for public input and, by Nov. 1, the regulations will be printed in the Federal Register, to go into effect on July 1, 2011.

Defining Gainful Employment

The Education Department was slow to formulate a proposed definition of gainful employment. In November and December, during the first two week-long rule making sessions, the discussion among negotiators focused on whether the department had the statutory authority to establish a formulaic definition of gainful employment.

Many negotiators saw the department’s suggestions — particularly one that sought to determine the value a credential would add to a recent graduate’s earning power, and to use that to determine an acceptable maximum tuition — as price controls. The most vocal opponent was the lone negotiator representing for-profit institutions, Elaine Neely, senior vice president of regulatory affairs at Kaplan Higher Education. In December, Neely said she was “flabbergasted that [the department] would impose price controls when clearly Congress itself has not been able to come to the decision to do that on higher education.” By warning of a “slippery slope” toward price controls throughout higher education, Neely was able to get many representatives of nonprofit institutions on board in opposition to the proposal.

An idea that took up much less of the panel’s time was the department’s proposal to determine whether the starting salary in the field for which a program prepared students was sufficient to pay the average annual debt obligation of the program’s graduates. If the average debt load for a program’s graduates was $9,000 on a 10-year loan with a 6.5 percent interest rate, students would have loan obligations of $1,250. With a debt-service-to-income ratio of 5 percent, the starting income in that field would have to be at least $25,000 to be considered “gainful employment.”

By mid-January, as the department and negotiators prepared for the third and final round of rule making, this debt-service ratio had become the department’s preferred regulatory path. Based on a partial reading of a 2006 paper by Sandy Baum, of the College Board, and Saul Schwartz, of Ontario’s Carleton University, the department’s ratio became 8 percent. (While Baum and Schwartz’s paper discusses 8 percent as a generally accepted standard, most likely derived from mortgage underwriting standards, the authors suggest that a ratio as high as 18 percent could be appropriate for single people earning $150,000 annually.)

Under the proposal made in January, which remains the only complete definition made public by the department, vocational programs would be eligible for Title IV funds if their graduates’ median annual payments on a 10-year loan were no more than 8 percent of the Bureau of Labor Statistics’ 25th percentile of annual earnings for people in occupations for which a given program prepared students.

Programs that exceed 8 percent could still be eligible for Title IV funds by producing what the department considers good outcomes: by showing that its graduates’ annual earnings are higher than the BLS’s 25th percentile and keep the debt-income ratio below 8 percent; by documenting that students have at least a 75 percent repayment rate on federal loans; or by demonstrating a program completion rate of at least 70 percent and an in-field employment rate of at least 70 percent.

In the third round of negotiations, debate was contentious and without resolution. Terry W. Hartle, senior vice president for government and public affairs at the American Council on Education, said he worried about cost, privacy and the potential for “unintended consequences.” A former Bush administration Education Department official, Todd Jones, president and general counsel of the Association of Independent Colleges and Universities of Ohio, said he saw the proposal as ripe for lawsuits.

Department officials were unwilling to reconsider the approach entirely, though they were open to constructive feedback. “We put things on the table partly because we think they’re a good idea and partly to get input,” Shireman says.

The department started with its most extreme — but politically viable idea — and was ready to negotiate, but many negotiators seemed too intent on persuading officials to obliterate the proposals to make good, constructive suggestions.

And, since the third round of negotiations ended in late January, the department has continued to discuss the proposals with stakeholders and to get feedback. “We recognize that some people felt – even we felt – that there was not enough discussion at negotiated rule making for whatever reasons,” Shireman says. “So we continue to hear from associations and institutions, getting input from them that continues to be helpful, to continue to hear what suggestions they have about what the term gainful employment should mean.”

Who Would Be Hit

In broad terms, the Department of Education’s goal is to determine which programs really are preparing students for gainful employment and not sinking graduates into chasms of debt.

“There’s a tremendous number of students graduating with incredibly high levels of debt,” says Rich Williams, higher education associate at the U.S. Public Interest Research Group, who represented students on the negotiated rule making panel. “And in some cases they’re unable to enter the fields they studied at the levels they thought they’d be qualified for.”

Pauline Abernathy, vice president of the Institute for College Access and Success, anticipates the regulations “will lead to programs that are currently leaving students in terrible debt either having to change the quality of their programs or their cost structure.” Before Shireman joined the Obama administration, he was TICAS’s president.

But it’s unclear whether the department’s proposed rules would really weed out those programs and would do so in a way that kept all good programs up and running. “I don’t think you can draw a line that separates the wheat from the chaff perfectly,” says Mark Kantrowitz, publisher of Finaid.org. “The choices are tough — you either throw out the baby with the bathwater or, because you want to keep the baby no matter what, you’re going to get some bathwater too. I think that’s a reality that everyone needs to come to terms with.”

When applied to the existing landscape of vocational programs, the department’s approach would seem to favor programs at public institutions over private ones (either for-profit or nonprofit), those that required fewer credits earned over more credits, and those in higher-paid fields like nursing and information technology over lower-paid careers in the arts.

Because the rules would apply only to certificate programs at community colleges, state universities and private, nonprofit institutions, they’re less likely to force any real change at nonprofits. Tuition on these programs at public institutions is so low that it’s relatively rare for students to take out loans. If they do, they’re likely to be small. Even at private nonprofits, where tuition is likely to be of a similar magnitude as at for-profit colleges, the fact that the rules apply only to non-degree programs will keep many programs out of regulatory reach.

Shireman and other department officials have insisted in many instances that the department is not “out to get” for-profit colleges and that it is not the department’s intention to regulate the sector out of existence. “We have made it quite clear that we are interested in improvement and outcomes all across the spectrum, all across the sectors,” he says.

Nonetheless, it seems clear that the gainful employment regulations will force the most change on for-profit institutions, which will have to choose between lowering tuition, improving student outcomes or shutting down programs that don’t align with the rules. In the short run, at least, all of these options would hurt the institutions’ bottom lines.

Even if some programs end, says Abernathy, of TICAS, “there will be plenty of other for-profit programs that will be very eager and capable of being able to meet that need, but that do so in a way where students and taxpayers are better off.”

For a field in which a for-profit institution offers multiple certificate and degree options, the ones that cost the least — and often require the fewest credits — are the ones least likely to be regulated out of existence. If an institution offered certificates, associate degrees and bachelor’s degrees in, for example, culinary arts, that all led to the same Labor Department-classified jobs and the same Bureau of Labor Statistics-reported 25th percentile of income, it’s logical that the 8 percent rule would make the preferred outcome a certificate and not a bachelor’s degree.

Kantrowitz, of Finaid.org, says that though the department’s existing proposals “really didn’t consider the impact on bachelor’s and graduate degrees,” he thinks the next draft of regulations will because the department hasn’t shown any indication of wanting to discourage students from pursuing longer programs. “Take an associate’s degree versus a bachelor’s degree. Students are in school twice as long, paying twice the tuition, but they don’t have twice the income.”

Though programs would have the option of collecting their own salary data rather than relying on the BLS numbers, institutions often find it difficult to collect this information. As of now, observers say, few institutions have a comprehensive view of their graduates’ incomes.

Kantrowitz and others have suggested that the department use different labor data — in his own calculations, Kantrowitz used federal Census data, which details age group and educational attainment but not field of employment — but the ideal data set does not exist.

Apollo Group, which owns the University of Phoenix and other institutions, said in a March 30 earnings call that it has begun the process of analyzing its programs. But, “given the number and range of disciplines offered by our universities as well as the uncertainty regarding the implementation process of the draft proposal, our analysis is both extensive and complex.”

In mid-March, analysts at Morgan Stanley said they thought that Education Management Corp. (which runs the Art Institutes and Argosy University, among others) and ITT Educational Services would need to undergo the most widespread change to meet the regulations because of high tuition rates and, at Education Management, an enrollment that leans heavily toward low-paying arts fields.

Two companies that would have very few endangered programs, according to Morgan Stanley: American Public Education, Inc., which focuses on serving members of the military and public servants, who are less likely to take out student loans; and Capella Education Company, whose programs have very low loan default rates and would be able to qualify for Title IV funds under one of the alternative definitions of gainful employment.

Gregory W. Thom, Capella’s vice president of government affairs and general counsel, agrees that his company would probably have to make few changes to abide by the gainful employment regulation. “Capella is viewed by folks within the department as a high quality institution,” he says. “We have a degree of comfort that however this plays out, Capella would be fine and Capella would be in good shape.”

And yet, until the final regulations go into place and the institution can collect and calculate all the appropriate data, Capella can’t be sure that it’s out of the woods. “There are so many moving parts,” Thom says. “It’s premature to engage in speculation on how this is going to play out … at Capella on a program-by-program basis.”

A leader at another for-profit institution with low cohort default rates said he also thought his programs would meet at least one of the gainful employment rules, but still worried that they might not. Insufficient data and a still-unclear sense of the precise regulations the department will decide upon has left him feeling a bit uneasy about the outcomes.

The Feedback

At every hint that the Department of Education is backing down from proposed regulations that would force some programs offered at for-profit colleges to lower their prices, improve their outcomes or shut down, Wall Street analysts and the for-profit institutions breathe a sigh of relief.

When Secretary of Education Arne Duncan testified before the House of Representatives’ Education and Labor Committee on March 3, and was questioned on the gainful employment regulations, his comments that the department was “by no means wedded to any one direction” and “[didn’t] want to be overly heavy-handed” were perceived by for-profit boosters as signs that the department was open to scaling back the regulations.

Before and since, the Career College Association and lobbyists for for-profit institutions have pounded the halls of Congress trying to get members to put pressure on the department. Some members of the Congressional Black Caucus sent a letter to Duncan charging that the rules are discriminatory because for-profit institutions disproportionately serve minority students. A bipartisan group of 18 House members wrote to Duncan asking that he pull the plug on the department’s approach altogether.

Last week, when a report from Credit Suisse cited someone “close” to the Office of Management and Budget as saying that the department had seemingly decided to soften one of the alternative methods of qualifying for Title IV, higher education stocks soared as the rumor spread. The source told the bank that the option to demonstrate a program completion rate of at least 70 percent and an in-field employment rate of at least 70 percent had become a 50 percent completion rate and a 70 percent employment rate.

Though it is one of the possibilities the department is considering, the switch to a 50 percent completion rate is not final. Officials submitted a draft to the OMB to begin the process leading to the publication of rules and the public comment process, but are said to be continuing to analyze data and listen to feedback.

The for-profit institutions tout these small bits of news and others as indications that the department may be backing away from its tough-line approach, but it is unclear whether any perceived motion on the department’s part will actually materialize as dramatic changes to the next draft of regulations.

Teddy Downey, of Washington Research Group, says he doubts the department would take any steps that would dramatically lessen the reach of the regulations. In an e-mail message last week after the Credit Suisse rumor circulated, he said he anticipates “a very low chance that this change will amount to a truly significant loophole.”

In an interview, he went further. “I don’t think the department would do anything it doesn’t think will have the desired effect. I think they have the data to support whatever they choose to do.”

Kantrowitz, of Finaid.org, is skeptical of whether the department has the data, but he agrees that the department isn’t backing down on gainful employment. “They’re not going to do anything that doesn’t have teeth in it,” he says. “It may just be some kind of educated guess, but it’s going to have teeth.”



By Kelly Field

Washington

Warning that a proposed limit on student borrowing would force thousands of programs serving low-income students to close, the Career College Association on Thursday released an alternative that would require for-profit programs to provide prospective students with more information about their graduates’ debt levels and salaries.

The move comes as the Education Department is finalizing a rule that would withhold federal aid from for-profit programs whose graduates are likely to carry high debt-to-income loads. An early version of the “gainful employment” rule, released during a negotiated rule-making session that ended in January, put the cap on loan payments at 8 percent of graduates’ expected earnings, based on a 10-year repayment plan and Bureau of Labor Statistics. Programs could escape penalty by showing that their graduates’ true earnings were higher than the government averages or that 90 percent of all graduates repaid their loans. (Existing law requires for-profit colleges to show that they are preparing their graduates for “gainful employment,” but the Department of Education says the term hasn’t been well defined.)

The association, which represents for-profit colleges, says the department’s proposal lacks an empirical basis and appears to be driven by stories of students who took on large debt loads to finance worthless degrees. The department recently rejected the association’s Freedom of Information Act request seeking the data behind the 8-percent limit.

“The department is basing this on anecdotes, not systematic research,” said Harris N. Miller, president of the for-profit college association.

To bolster the case for its alternative, the association released a study of more than 10,000 for-profit college programs estimating that a fifth of those programs would exceed the 8-percent cap and be eliminated. The study, which was conducted by a professor at the University of Chicago, also predicted that more than 300,000 students would be displaced by the proposed rule. However, the study did not consider how many programs would be exempt from the rule because their graduates earned more than average or repaid their loans.

Rule Due Out Soon

The department is expected to release its rule by mid-June. Last week, analysts at Credit Suisse reported that the department is weighing another exemption to the rule, for institutions with a completion rate of at least 50 percent and a job-placement rate of at least 70 percent. The first draft of the rules had set both rates at 70 percent, but the exemption was removed from later drafts.

In addition to expanding disclosures to prospective students, the association’s plan would require programs to prove that they prepare students for employment by vetting them with employers in the field and making sure they pass licensure and certification exams.

Asked about the association’s study and alternative proposal, the department issued a statement saying it was “pleased that many participants in the program community have expressed views and presented information in this important area.

“We look forward to considering their comments as they react to what we will propose in our notice of proposed rule making,” it continued.

Congress weighed in on the controversy in March, sending a letter to the Education Department that raised “serious concerns” about the department’s plan and urged its officials to consider “other means to address overborrowing that would not create additional barriers to service for at-risk students.” The letter, which asked the department “why your goals for this proposal cannot be met simply through expanding disclosures,” was signed by 15 Democratic and Republican lawmakers.



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:

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 http://www.ccweek.com ‘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.

http://www.intered.com/for-profit-regulation

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 http://www.intered.com/higheredbriefing/2010/8/27/are-public-universities-responsible-for-the-success-of-for-p.html.

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

@leekantz,

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 http://www.intered.com/for-profit-regulation 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

@tgroleau,

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 http://www.intered.com/for-profit-regulation . 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.

Peace

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

betterschools –

I’m taking about Pell grants not loans: http://chronicle.com/article/Data-Points-For-Profit/63388/

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

http://www.examiner.com/conservative-in-new-orleans/doe-s-gainful-employment-proposed-regulation-change-is-attempt-to-solve-problem-at-the-wrong-end

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 – http://www.good.is/post/gainful-employment-no-pain-no-gain/

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.”