Posts Tagged ‘GE NPRM’

The U.S. Department of Education is trying to create a clear financial picture for students with a recently developed, not yet implemented regulation called “Gainful Employment.” The Gainful Employment regulation along with many other new regulations are set to be put into action sometime in 2011. These new regulations have been conceived in response to the growing pressure over for-profit education’s questionable recruitment practices.

What the U.S.D.E. hopes to accomplish with these new policies is to make students more informed about the financials of their degree programs. Simply defined, the regulation will “apply a formula to programs in career-oriented majors, like healthcare, business and education to decide which ones lead to ‘gainful employment.’ Those that do not would be eliminated. Students would also get concrete information about graduation rates, employment rates, potential salaries in their chosen field, loan debt info and the like before they choose their school. This information should help students analyze their risk/reward scenario.”

The U.S.D.E. has defined “gainful employment” as employment that provides students with the income they need to successfully re-pay their education debts.

Randy Proto, CEO of the American Institutes school group which operates healthcare-based career schools in a number of states, says that the disclosure agreement found in the “gainful employment” regulation is an “excellent idea.” But, for the regulation to be effective, Proto suggests that the formulas established to decipher the “gainful employment” statistics must “account for differences in: student populations served, programmatic goals, national economic conditions and many other factors.”

As it is envisioned now, the “gainful employment” regulations would only apply to for-profit education institutions and a minute percentage of students in non-degree programs at ground schools. So, Proto asks, what about the “7.5 million additional students enrolled in career-oriented degree majors at public and private universities? Why leave any students and programs out of its reach? If the proposed regulation is a good idea and provides the anticipated benefits and protections, it should be broadly applied.”

Proto, clearly a proponent of for-profit education, supports the “gainful employment” measure, but would also like to see regulations emplaced across the board to ensure equality, not just at for-profit online schools or career training institutions.

Proto seems to be on the right track. “Gainful employment” regulations are a good idea but shouldn’t be enforced only at for-profit schools. All students should be able to benefit from the information “gainful employment” statistics will provide. Says Proto, “this is a real opportunity for higher education. But only if it is ‘Gainful Employment’ for all students.”

 

Author Description :

Advertisements

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

A great video.

Posted: October 14, 2010 in News
Tags: , ,

By: Mark Hyman at http://www.thelandofthefree.net/conservativeopinion/2010/10/10/assault-on-career-colleges/

The U.S. Department of Education recently conducted a Notice of Proposed Rulemaking (NPRM) that suggests the Dept of Ed will severely restrict access to various federal loan and grant programs to students attending career colleges. Unlike state-owned public institutions and private, not-for-profit colleges, career colleges operate on a for-profit basis.

There are approximately 1,000 career colleges such as the University of Phoenix, Strayer University, DeVry Institute and Westwood College that offer Associate, Bachelor or Master’s degrees. About 1.2 million students were enrolled in these colleges in 2007-08, according to Dept of Ed statistics. Another 1,800 for-profit post-secondary schools offer certificate, continuing professional education or occupation-specific education such as golf academies and culinary, technical and cosmetology schools.
In contrast, there are more than 3,300 public institutions and private, not-for-profit colleges that offer Associate or higher degrees. In 2007-08, about 17 million students were enrolled in these schools.

Career colleges have grown dramatically in the past several years. They primarily market themselves as providing degree and certificate programs that meet local market employment shortfalls and cater to the hectic schedules of a student body that is already in the workforce. Career colleges also provide opportunities to students who are denied admission to public universities and private colleges.

The typical career college student is already employed, 25 years of age or older, minority, female, single and often with dependent children, has lower income, cannot rely on family resources to finance college, and comes from a family without a college degree.
Because of these demographics, career colleges tend to have a much higher percentage of students who rely on federal student financial aid that is doled out under Title IV of the Higher Education Act of 1965 (federally insured loans, Pell Grants, etc.) than do students at public universities and private colleges.

This federal funding totaled $105 billion during the 2008-09 school year. About $24 billion of that amount went to students who attended career colleges.

According to Senator Tom Harkin (D-IA), chairman of the Senate Committee on Health, Education, Labor and Pensions, which has jurisdiction, federal student aid will balloon over the next decade. The U.S. will spend as much as $350 billion just on Pell Grants over the next 10 years. In 2009, $24 billion was spent on Pell Grants; in 2011, the U.S. will hand-out $30.6 billion.
The Dept of Ed has several criticisms of career colleges. The department alleges students attending career colleges default on federally backed student loans at a significantly higher rate than do students at public universities and private colleges. Career colleges dispute this allegation and respond with two points.

First, the demographic of the typical career college student is more prone to defaulting on loans, in general, and this accounts for a slightly higher student loan default rate. This demographic claim is borne out by the high loan default rate of students attending historically black colleges and universities.

Second, career colleges accuse the Dept of Ed of using different accounting techniques when analyzing student loan repayments by career college students. Older students already in the workforce are more likely to consolidate student loans into consumer debt refinance plans. The Dept of Ed, career colleges assert, improperly identify student loans in such situations as “in default” when they are, in fact, being repaid on time or are in approved interest-only payment programs.

The Obama Administration’s first attack on higher education financing occurred when the government conducted a takeover of private student loans. Observers allege the proposed rule change underscores the anti-corporate bias of the Obama Administration.
The Dept of Ed also complains that career colleges create “labor oversupplies” by graduating too many qualified workers for a specific profession causing unemployment and depressing salaries. Of note, the Ed Dept is silent on the thousands of lawyers graduated each year by law schools.

Occupation-specific training programs, argues the Dept of Ed, “that lacked a general education component made graduates of for-profit institutions less versatile and limited their opportunities for employment outside their field.” Career colleges dispute this.
Speaking on background, one career college official stated that graduating students who cannot get employed will cause students to attend school elsewhere. “We are marketplace-driven. We have a strong incentive to ensure our graduates get jobs. And they do,” he said.

According to the NPRM, the Dept of Ed is “determining whether certain postsecondary educational programs lead to gainful employment in recognized occupations.” It further indicates an intent to cut off federal student aid to “educational programs of little or no value.”

One can easily draw the conclusion there is elitism at play. What exactly constitutes a program of “no value”?

Certificate programs leading to jobs in cosmetology, police forensics, and computer repair may not pass muster with the Education Department as having “value” unlike some of the following courses offered in the Fall 2010 at these elite colleges and universities:
• Oberlin College: “Queering the Reel” (RHET 104) – Examining sexual orientation and gender in film.
• Yale: “Gypsies, Tramps and Thieves” (PLSC 154) – Study of “groups who have shown to live outside, or on the margins of, society” including hoboes and 18th century pirates.
• Harvard: “Akkadian Language and Literature” (AKKAD 300) — Study of the extinct Akkadian language that died-out more than 2,100 years ago.
• Columbia: “Transnational Transgender Social Formation” (W3918) — Merely one course offering among the university’s vast human rights curricula.
• Occidental College: “Stupidity” (CTSJ 180) — A Critical Theory and Social Justice offering to prove “[s]tupidity is neither ignorance nor organicity [sic], but rather, a corollary of knowing and an element of normalcy, the double of intelligence rather than its opposite.” Huh?

If the Dept of Ed truly wants “to protect taxpayers against wasteful spending on educational programs of little or no value” then perhaps it ought to prohibit the recipient of any federally-backed student aid from taking classes similar to these or banning tax dollars altogether from going to any school that even offers such nonsense.

Public university officials have been especially critical of career colleges. Students enrolled in career colleges not only attend classes in typical bricks and mortar classrooms but, have also been taking classes online. Public universities have been losing financial aid dollars to students attending career college programs.

GIVEN OLD ACADEMIA’S heavy political support of Democrats, this may be the real motive behind the Obama Administration’s effort to cut-off federal aid to colleges that have profit motives. Adding insult to injury, enrollment at career colleges has steadily increased while enrollment has flat-lined at public institutions and private colleges.

Last year, California denied community college admission to about 140,000 students due to the state’s dire financial predicament. Career colleges have picked up the slack. Today, the University of Phoenix has more than 443,000 students. Only the State University of New York system has a larger enrollment (463,000).

A Government Accountability Office report released in August 2010 (GAO-10-948T) alleges deceptive marketing practices at 15 career colleges and accuses 4 of those schools of conducting fraudulent practices.

The Association of Private Sector Colleges and Universities (APSCU), the industry trade association, has condemned deceptive marketing practices and offers training seminars for financial aid administrators.

There are unconfirmed reports that more than 200 schools were surveyed for the report but, that the GAO cherry-picked only the 15 schools accused of deceptive or fraudulent marketing practices. They are also unconfirmed reports that the Dept of Ed was specifically targeting the University of Phoenix in response to complaints made by public universities. Both of these claims are plausible.

At a June 2010 Congressional hearing, criticism was leveled at career colleges for using “TV advertisements, billboards, phone solicitation, [and] web marketing” to promote their institutions. According to Senator Harkin, “[advertising] spending by a for-profit school system radically [sets it] apart from other [not-for-profit] colleges.”

Career colleges counter that they do not have the monopoly inherent in being a state university nor do they enjoy the free marketing available from the promotion of big-time athletic programs such as football and basketball that are resident in public universities and private colleges.

The NPRM focused on a two-part test to ascertain an institution’s future eligibility for federal student aid. These are student debt-to-income ratios and loan repayment rates. Schools not meeting the minimum thresholds of the two tests would be deemed as not having adequately prepared students for “gainful employment” and would be cut-off from receiving federal student aid dollars.
This proposed rule to determine federal aid eligibility would apply only to career colleges. Career colleges utilizing federal student aid “benefit from billions of dollars in subsidies from taxpayers,” argues Education Secretary Arne Duncan and therefore ought to meet additional burdens not borne by public universities and private colleges.

The APSCU observes that if the same rule were applied to public universities and private colleges then it would severely restrict aid to medical school students. Students attending dental and law schools and other schools with high enrollment costs would also be affected.

According to the APSCU, 9% of nurses and 54% of allied health workers who graduated in 2009 attended career colleges. The trade association argues that drastically cutting back federal aid opportunities to these schools could exacerbate acute health care worker shortages.

There is a related matter that dramatically differentiates for-profit and not-for-profit colleges. Each state pours hundreds of millions of dollars into its public institutions. Additionally, public institutions and private, not-for-profit schools operate on a tax-exempt basis. In contrast, career colleges do not receive direct government subsidies and instead, pay millions of dollars of taxes into federal, state and local governments.

An analysis prepared by Professor Bradford Cornell of the California Institute of Technology on behalf of an advocacy group representing career colleges compared the costs borne by taxpayers by students attending for-profit and not-for-profit colleges.
According to Cornell’s report, “where only direct costs to taxpayers are considered, for-profit 2-year institutions produce graduates at a cost to taxpayers that is $25,546 lower on a per student basis than the public 2-year institutions [emphasis added].” The difference is more dramatic when one factors in tax revenues paid by for-profit schools and the absence of tax revenue from not-for-profit schools.

This assault on career colleges has pit influential groups and 80 members of Congress of both political parties against the Obama Administration. They note that career college students are heavily female and minority and changes to financial aid rules would disproportionately disadvantage them.

According to the Imagine America Foundation, 43% of students at career colleges are minority and 65% are female. Also, thirty-nine percent of degrees awarded at career colleges went to minorities, which is twice the rate at public institutions (20%) and more than double the rate at private colleges (17%).

Reducing access to federal student aid to those who enroll in career colleges would harm an important political Democrat constituency. In a letter addressed to Harkin, one liberal group of politicians urged the Iowa Senator to abandon his “imbalanced” approach to restricting federal aid to career colleges.

The Department of Education is expected to issue new federal student aid rules on November 1 that would take effect next year.

by Grant Explorer on Thursday, October 7th, 2010

For-profit colleges are beginning to launch an all-out war to fight what they see as unfair attacks from such critics as community colleges and the federal government.

Fort Lauderdale-based Keiser University sued a Jacksonville community college on Monday, claiming administrators there maligned its school. At the same time, a group representing 19 other for-profit schools released a study slamming recruiting practices and student achievement at community colleges, which compete for many of the same students and government dollars.

And last week, more than 2,000 career college students and supporters attended a rally in Washington, D.C., to protest proposed regulations that could strip the for-profit colleges of much of their federal aid.

“The misinformation is just extraordinary, and we have been absolutely miserable at defending ourselves,” said Keiser chancellor Arthur Keiser, who also leads the Association of Private Sector Colleges and Universities, the industry lobbying group. “Finally, I think that’s beginning to change.”

The sector has come under fire in the past year, as Senate hearings and federal government reports have raised questions about recruiting practices, student debt and the large amounts of federal dollars the schools receive. For-profits say they are being unfairly singled out.

Keiser claims in its lawsuit that the president and another administrator at Florida State College at Jacksonville launched a smear campaign against Keiser and the entire for-profit sector. The university based many of its claims on documents obtained through a public records request to the community college.

According to the suit, college president Steven Wallace sullied the reputation of Keiser and other for-profit schools in an April 2009 e-mail to a short seller, who would profit if the price of publicly-traded education stocks declined in value, the suit alleges. The community college was launching a new technical school at the time and saw Keiser as competition, according to the suit.

“The new technical college we will launch … is designed, in part, to drive the sleazebags out of our region,” according to Wallace’s e-mail.

The suit also alleges that school officials fed the media stories that for-profit schools “ripped off” their students and provided them with “worthless degrees.” Keiser’s business suffered, with lower than expected enrollments and restricted access to recruit at area high schools.

“They were out to harm our business, and it got to a point where this was intolerable,” said James Waldman, Keiser’s general counsel.

Wallace called the suit “absurd,” adding, “we are not concerned in the slightest because we have done nothing improper.”

Florida State College officials say they suspect Keiser is upset because community colleges have supported tighter controls of the for-profit industry. The U.S. Department of Education has proposed new rules that would limit colleges’ access to student aid if too many students default on their loans or fail to find “gainful employment.”

For-profit colleges received $4 billion in federal Pell Grants and $20 billion in federal loans in 2009, making up the bulk of their revenues, federal data show. And while only 12 percent of college students attend for-profit schools, they account for 43 percent of student loan defaults. Most students in community colleges don’t take out student loans, since tuition is state-subsidized and considerably cheaper.

“We are simply trying to protect our local college students from excessive debt,” Wallace said. “We will continue to do so on behalf of our community and will defend the college vigorously in court. ”

Keiser’s fight is not limited to Florida State College. Last week, it sent 28 students and supporters to Washington, D.C., to join a national rally against proposed federal regulations. Keiser nursing program graduate Greg Shaw, 44, of Tallahassee, was one of them.

“I worked very hard for a program where we lost 60 percent of the students who didn’t make the grade,” he said. “Now I’m hearing people sneering, saying, ‘I understand the government is cracking down on programs like yours.’ It has the effect of devaluing the degree I worked hard for, and it’s offensive.”

Career colleges and their supporters say the industry is being unfairly attacked. For example, a recent Government Accountability Report did an undercover investigation of recruiting practices at 15 for-profit colleges, but didn’t look at other education sectors. Problems were found in all the campuses, with potentially fraudulent behavior at four schools. Keiser was not among those visited.

Several for-profits, including Kaplan Higher Education and the University of Phoenix, have issued a long list of changes to address the problems, including restructuring their pay system so advisers aren’t working on commission, thus discouraging the use of high-pressure sales tactics.

Immediately after the government report, Kaplan suspended enrollment at Kaplan College locations in Pembroke Pines and Riverside, Calif., and that’s still in effect. A company statement said Kaplan is conducting a thorough investigation to make sure students and applicants “are treated in the most responsible and ethical manner possible,” and that employees are following all laws and company policies.

But industry officials say community colleges are also guilty of questionable practices. The Coalition for Education Success, made up of such schools as the Art Institutes and Argosy University, commissioned an undercover operation of practices at community colleges. The report states admission officials wouldn’t release graduation data and gave misleading or evasive data about job placement rates and earnings potential of graduates.

The survey also quotes federal data that shows community colleges have graduation rates of 21 percent, compared to 58 percent for career colleges.

“At a time when community colleges are being touted as the answer for educational achievement and job placement in this country, we found troubling evidence to the contrary,” said Jean Norris, lead researcher on the study.

If all the findings are true, it still doesn’t negate the need for reforms in the for-profit industry, said critic David Hawkins, director of public policy for the National Association for College Admission Counseling.

“The stakes must be extraordinarily high for the for-profits to be responding with such aggressive tactics,” he said. “The regulations proposed would fundamentally alter their business model, which is something they’re not interested in doing right now.”

From: http://www.exploringgrants.com/keiser-university-sues-jacksonville-college/

By Larry Stirling

From: http://www.sddt.com/Commentary/article.cfm?Commentary_ID=141&SourceCode=20101006tza

When Navy Lt. Cmdr. David Chigos retired, he tried to enroll at San Diego State University. Since he was working full-time during the day, he sought night classes.

Silly him … thinking that publically-employed academics might teach at night to accommodate working adults.

It is hard enough to get them to teach during the day.

Mr. Chigos must have been fuming as they laughed him out of the registrar’s office.

The experience helped Dave Chigos recognize that the public schools were failing to serve employed adults who worked all day and could only go to school at night.

The result of his frustration and then foresight and energy is the now widely recognized “National University” an institution that he started “out of the trunk of my car.”

Chigos and his team identified several impediments to reasonably-priced degrees.

Public university students are inured to the inveterate unresponsiveness of tenured, unionized and prickly faculties that require certain classes be taken while at the same time not providing enough of such classes to allow a perspicacious student to graduate timely.

Gone is the notion of a four-year degree because the faculty is just too durned busy to be bothered teaching the necessary hours to allow the enrollees to acquire 15 units a semester.

Chigos and his National University team instead arranged to have student registrations drive faculty decisions, not the other way around. When enough students needed a class in freshman English, an instructor was hired and the class provided.

To keep costs down and maintain maximum flexibility, there were no tenured faculty members. Instructors, who were working adults themselves, were hired based on the fact that they were qualified to teach the class.

Since they had other jobs, they did not need expensive benefits.

Quality control was maintained by having the students evaluate the instructors at the end of each teaching period. Lousy teachers were simply not hired back.

National University was decades ahead in applying computers to their administration further reducing overhead and pioneering “distance learning” throughout the world.

The N.U. template became a nearly overnight success spawning dozens of copy cats like Phoenix University, but meanwhile sending shock waves through the traditional schools.

About the same time, a group of investors realized that the existing law schools suffered from the same insular laziness as the big public universities.

So they started the Western States College of Law to serve working adults, such as myself, at night.

They kept costs affordable by hiring actual lawyers to teach instead of full-time faculty. Western States quickly became the largest law school in California.

Were these two innovative institutions lauded for democratizing education and cutting costs? Nope.

Instead, National University was set upon by the educational establishment led by USD President Author Hughes.

The henchman for the educational establishment is the Western Association of Schools and Colleges (WASC) and their hatchet of choice is to withhold accreditation and thereby cut off student access to federal school loans.

In the case of Western States School of Law, the apex man was the American Bar Association.

How dare the school use lawyers to teach law? How dare they rely on the public law library and the internet for access to legal resources?

To gain accreditation, WSU had to hire a full-time faculty of mostly liberals and establish a large, expensive library thus raising costs while making them less competitive, the real agenda for the accrediting agencies.

Done and done. Student costs rose substantially: a cost initially borne by the taxpayers via student loans and later by the students being burdened with larger debts.

However, the harassment of National University and WSU did not stop the creation of the manifestly superior private post-secondary educational market.

Students and parents came to recognize that public universities specialized in providing little more at the end of six year’s education than young, liberal unemployable social workers, oh, and a huge debt hangover.

As a result students flocked to the private-schools knowing that upon graduation they would likely be employable.

From 2000 to 2008, enrollment in private post-secondary schools ballooned to 1.8 million.

So many students have abandoned the public higher education system that a full panic has overtaken the traditional schools.

So they have called on the federal government to simply crush the competition with a proposed “gainful-employment” rule, a rule which no public higher education institution, especially SDSU, could ever meet. (See: http://www.mycareercounts.org for more information).

If the graduates of the private schools don’t pay back their loans within a stipulated period of time (something the school itself has no control over), the school whence they graduated will be cut off from federal loan eligibility.

The Secretary of Education claims that private students, obtaining employable skills are “less versatile” and the success of the schools may result in an “oversupply” of certain classifications of employees such as nurses.

I happen to know that the Department of Labor does not keep track of vacant jobs of which there are many millions in this nation. I also find it ludicrous that the Secretary of Education would attack the schools for their success and claim “oversupply.”

The “gainful employment” rule is nothing more than the public entities trying to suppress successful competition.

Dr. Chigos and the WSU founders would understand.


Stirling, a former U.S. Army officer, has been elected to the San Diego City Council, state Assembly and state Senate. He also served as a municipal and superior court judge in San Diego. Send comments to larry.stirling@sddt.com. Comments may be published as Letters to the Editor.

http://www.nortonnorris.com/pdfs/spotlight-on-community-college-recruitment_10_04_10.pdf

Here is another http://www.nortonnorris.com/pdfs/spotlight-on-community-college-recruitment_10_04_10.pdf

Washington, D.C.—U.S. Representative Glenn ‘GT’ Thompson, R-Howard, today told a rally of a thousand students that, “You have every right to determine your own educational needs; you have every right to determine your future career path; and, you have every right to make your own destiny.”

Thompson joined his colleagues Reps. Rob Andrews (D-NJ); Alcee Hastings (D-FL); and Brett Guthrie (R-KY) at the foot of the U.S. Capitol in a bipartisan show of support for the students’ concerns about U.S. Department of Education proposed regulations on “gainful employment”.

If the “gainful employment” rules go into effect, they will eliminate access to higher education for as many as 400,000 students per year. These rules apply almost exclusively to the for-profit sector of higher education, while ignoring the same issues concerning student debt found at public and private non-profit institutions.

One of the requirements for for-profit institutions to participate in the federal student aid program is that they offer a course of study that leads to “gainful employment” in a recognized occupation. Despite over forty years of existing precedent, the Education Department is considering regulations to define “gainful employment” by establishing an arbitrary 12 percent debt-to-earnings threshold based on student debt for recent graduates of each program offered by the institution. One way of explaining that is a question posed by the Department: Are graduates with typical student debt able to repay their loans in ten years without taking 12 percent of the expected earnings in the occupation?

Once again, these new regulations do not affect public and private not-for-profit universities and colleges.

“The President has promoted a policy to have 5 million new college graduates by 2020,” said Thompson. “I commend the President for that goal, however, I have to stop and wonder how we’re going to achieve the mission if the Department of Education is going to put up road blocks—or—decide that you can only attend one type of school over another.”

“I represent a very rural district in Pennsylvania,” Thompson told the rally. “Many of my constituents don’t have access to a community college and live a significant distance from universities. Many proprietary schools have sprung up out of necessity.”

The effect of these regulations will be that student choice will be limited, because for-profit institutions may not be able to continue offering certain programs, to ensure the proposed debt-earnings-ratio.

“Many students in Pennsylvania choose these schools because of their convenience. They realize that career colleges offer course work of all types and work to accommodate the busy schedules that we all have. They realize that life does not just stop for four years—so you can go to school. And they realize these institutions will give them the skills they need to enter the work force and earn a decent living,” added Thompson.

In May, Thompson joined 9 members of the Pennsylvania Congressional Delegation in sending a letter in opposition to Education Secretary Arne Duncan on this issue, requesting that the Department vacate the proposed changes. In August, the Department of Education released a formal proposal. Since, Thompson has joined with several of his colleagues on the House Education & Labor Committee in submitting formal comments in opposition to the rules as proposed.

This week, the Department of Education, due to extensive public comment, has decided to move the scheduled publication date of the rules from November 1, 2010, to July 1, 2011.

From : http://friendsofglennthompson.blogspot.com/2010/10/thompson-rallies-with-students-for.html

For-Profit Institution Sues a Public-College President, Alleging a Smear Campaign

In a clear sign of the heightened tensions over proposed new federal regulations on for-profit colleges, Keiser University, a for-profit education system based in Florida, has sued a public-college president there, accusing him and a top administrator of smearing Keiser by communicating derogatory comments about the for-profit education industry to investors and others via e-mail. Keiser itself is not publicly traded, but its founder and chancellor, Art Keiser, has been an outspoken criitic of the proposed regulations. The civil suit was filed in state court against two officials at Florida State College at Jacksonville—its president, Steven R. Wallace, and its vice president for government relations, Susan M. Lehr.

From: http://www.forprofitedu.com/2010/10/keiser-university-files-civil-suit-against-florida-state-college-at-jacksonville/

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

Hi, my name is Amy and I am a misfit. I’ve always been an outsider. I was different than the other kids in school, different than the other employees I’ve ever worked with, am different than the other moms at the PTA; I’ve always been “different”. Honestly I like it. I like that I see the world in ways that others do not or can’t; I like that my perspective is sometimes strange or colorful, that my understanding is often skewed from the norm. I am a misfit. Too, I was the kid that sat in the high school principal’s office anywhere from two to four days a week, labeled as the one who either “did it or knew who did it”, so I was always the first to be questioned. Looking back as an adult on my teen years, I was bored at school. I was brighter than most of my teachers and vocal about it, which of course they didn’t appreciate; leading to my principal telling me that he was going to put my name on his office door because I spent more time in his office than he did. Of course that was when I showed up, I missed some fifty odd days my senior year. I didn’t want to be there and they didn’t really want me there. Hi, my name is Amy and I am a misfit and trouble maker.

It is ironic that I’ve worked in education for the past 12 years. Something that I once fled from is now my passion in life. My joy comes from seeing students and graduates succeed, seeing them fulfill their dreams and reach their highest potential. I worked in the public college sector for over six years and guess what? My name is Amy and I am a misfit and trouble maker. I didn’t fit in. I tried, I really did. I bought the suits and tied scarves around my neck, found the perfect briefcase, smoozed the right people and worked myself into an anxiety ridden, panic attacked life. But my trouble maker self didn’t care about the suits or the scarves, she cared about the students and their needs, their goals and I was vocal about it. I took action. I took risks. And at one point in time was told to “slow down because I was making other employees look bad”.

?.

My trouble-making misfit self thought it was about the student and service to the public I represented (it still does); however my perspective was clearly different than that of my leadership who just wanted to maintain the status quo. So after six years of fighting the good fight, I headed out to find my island, which perhaps I might “fit in” on. The old adage about fitting a square into a hole meant for a circle is true. I was the square with ideas too big for their little circle.

For the past five years and 28 days I’ve worked in the private sector (for-profit) at a small private university. I am still a misfit of sorts and occasionally a trouble maker; but they (I’ll say loosely) like it. Sometimes when I think I am going to get yelled at, I get smiled at; sometimes it is a stern voice with half a crooked smile. The people working in the private sector have an entrepreneurial spirit, they are pioneers and not stuck in the “that’s the way we’ve always done it” mud. Ingenuity and creativeness is welcomed and rewarded; all squares are welcomed. We work with business and industry to make sure what we do is pertinent, we hold students accountable yet create an environment where they can flourish and we treat everyone like they are members of an extended family that crosses every imagined boundary. In the world of top ten universities, state funded schools and 100 year old institutions of higher learning the private sector schools are misfits. We like who we are and our graduates are proud of their alma mater, but the rest of the world doesn’t quite know what to think of us and looking from the outside in, can’t understand our passion or drive. The proposed Gainful Employment regulation before the DOE has further labeled us as misfits and trouble-makers when it couldn’t be further from the truth. Just because our financial/tax structure isn’t like everyone else (our colleges actually pay taxes too) does not lessen our passion to educate and mission to provide the workforce with trained workers for the present and future. In fact my university is family held and that family environment extends into our students lives and way past graduation.

When I look in the mirror I see our students. For the past five years I have worked a full time and a part time job, raised three kids as a single mom and have gone to school full time earning a BSBA and an MBA. This is not my sob story but it is a reflection of who our students are. Single parents, working adults, underserved populations, high school misfits, those who are afraid of college, people who have failed at other institutions and people who hit the age of 30 and realized that in order to build a brighter future you have to get off your @$$ and create the change you want to see in your life. Those who have never thought that they would ever be “college material”, never had anyone believe in them, or anyone to encourage them. Those that took that bold first step to enroll into college to build a future. Now I am not labeling our students and alumni as “misfits” but in many cases they are unique and different in comparison to the traditional college student at the traditional university.

I am angry. Not that anyone that can do anything about it cares, but I am angry. This gainful employment regulation is discrimination at its finest and it affects some of the people I care about most, the students and graduates I’ve watched flourish over the past five years and see great potential in for next millennium. It is going to further limit opportunities for sections of the population that already have limited opportunities. As a teacher and administrator I have supported students through cancer and illness, homelessness, abusive relationships, deaths, deployments to Iraq and Afghanistan and twists and turns that I could never imagine my life taking and many have made it through to the other side and declared “I am the first college graduate in my family”, they have set the bar for the people around them and reached that first rung in their career ladder story. With this gainful employment proposal we would not have had the opportunity to support many of them because our paths would have not crossed if the federal government told them they could not have the monetary support to support an education for a career they envision themselves in at the college of their choice.

The Gainful Employment proposal compares ratios of new graduate’s income to their school debt to see if the employment obtained is “gainful” within a certain time period. My thoughts about this are that no one starts their career where they want to see themselves. There is no magic job wand that makes dreams come true, it comes with hard work, networking and leveraging opportunities; education is the foundation. I’ll never forget the day a grad called to tell me that she had landed a job and had more than doubled her salary. My first thought was “WOW” doubled your salary that is incredible. After talking to her I found out that she is in Tennessee where the minimum wage at the time was $5.85 an hour and indeed landing a job at $12 and hour was more than doubling her salary; a door opened by her education and a huge success for her. She has since has found further success and has gone well beyond that first rung of her career ladder. I have to ask, “Would she have passed the gainful test?” That would depend on who you asked; the graduate would say yes. She would say that education changed her life.

My other issue with the GE proposal is that they are picking on only one sector of education. I am not going to into the statistics; there are a million blogs and reports you can gather those from. But rather I’ll tell you a story that proves my point. I was at a job fair when a man walked up the table and said, “I went to college and it didn’t do me any good”. So I asked him, “What degree did you earn? His reply was “General Education Associate Degree”. I will not name the school, but I ask you, how many of you have ever seen a job posting looking for someone with an associate degree in general education? This man’s state funded alma mater did him a great disservice in having him spend his money and time on a degree that is so non-specific that it led to no outcome whatsoever. On the other hand for-profit college’s educations teach specific skills that lead to specific careers in specific industries. Why isn’t the public sector, non-profits being held to the same standards? Why are we even entertaining this proposal that not only discriminates against a sector of education that does lead to employment but more importantly several demographic pools of citizens?

Hi, my name is Amy and I am a misfit and trouble maker who works for misfits who employ misfits who service unique learners on our little island that changes lives. I am angry. I am a career college graduate. I am a mom. I am a volunteer. I am a teacher. I am a voter. I am a supporter. I am blogger. I am an occasional troublemaker. I work in an industry that isn’t perfect but also isn’t bad. I am asking you, whoever you are, to oppose the gainful employment proposal. Write to your congress member and ask them to oppose it and ask them to approach it in a different way, a way that is fair and equal. The regulation needs to be postponed, rethought and then reapplied to the entire higher education industry.

I close with a quote from a fellow “trouble maker” and possible misfit, Dr. Martin Luther King, Jr. “Faith is taking the first step even when you don’t see the whole staircase.” Whether we are talking about the staircase of life, the career ladder or stepping foot into a college classroom for the first time, faith in ourselves, a higher power, another person is what guides us. Right now my faith is on roughly 7000 students that my private sector, family owned university serves and I simply ask that gainful employment be revisited so that we can continue fostering success stories. The futures of future college graduates depend on it.

In your service,

Amy

From: http://herzingonline.wordpress.com/2010/09/23/private-sector-education-and-gainful-employment-welcome-to-the-island-of-misfits/

Who has the highest level of educational debt?  Not the “for-profit” schools.

What is the saying?  A picture speaks a thousand words?

Sign HERE.

  • Posted by Robert W Tucker , President at InterEd, Inc. on September 13, 2010 at 12:15pm EDT
  • Not everyone who wrote to the Department objecting to the proposed rules has skin in the game.

    http://www.intered.com/storage/deptofed/InterEdTuckerLetter-to-Duncan_090810.pdf

    On balance, my work will be unaffected by the outcome. I wrote my response because the proposed regulations are blatantly hypocritical and unfair, and riddled with logical and empirical errors, half-truths, and at least one lie. Perhaps worst, is the fact that the proposed rules would not accomplish their stated goals. They would work against these goals via a myriad of “unintended” consequences. Sometimes I wonder if there is anything left but politics and special interests in the federal process,and if our leaders are even capable of objective, dispassionate thought. I encourage everyone involved at senior levels of higher education to read the proposed rules.

    A few of more than a dozen key points:

    1. The Administration’s reasons for proposing this narrow application of rules to 12% of the market and not the other 88% are: (a) that for-profits cost the taxpayer more and (b) have higher loan values and default rates. Both claims are empirically false. Not grey areas . . . they are false. First, economists vary in their assumptions and therefore their findings when determining taxpayer costs of institutional types but the absolute range is from zero to $4,500 for for-profits with less than $2,000 being based on the most sound models, and $10,500 to $16,500 for publics. Second, examining the feds own loan database for loan payback and default for public colleges serving higher proportions of lower income, first-generation students, turn in higher loan values and lower payback percentages.

    2. The rules, as proposed, are based on intentionally distorted empirical foundations. The largest proportion of variance in the variables of interest (default, etc.) are accounted for by loan value and debt/income ratios. From a different perspective, these same variances are accounted for by student and family demographics (e.g., University of Phoenix programs offered to established, working business people have among the lowest default rates in the nation; on the other hand, their programs designed to serve the underclass have high drop out and default rates. (I have no interest in defending UOP. They are not a client. I mention them because I know their default rates in detail.)

    Common sense right? I guess not because the schools to be regulated by these proposed rules: (a) will not be permitted any visibility into how much their students borrow, (b) will not be permitted to determine whether their students can reasonably be expected to be able to pay back what they borrow, and (c) will not be permitted to have any influence whatsoever on the amount borrowed. These schools will be held accountable for behavior over which they will be denied any control or visibility. Does that sound fair to anyone?

    Statistics are widely available showing the growing trend of students borrowing as a substitute for saving and working, even taking out maximum student loans to purchase cars and homes. Under the proposed rules, the schools will be held accountable for these excesses but will not be permitted to learn of them until they receive their after the fact default notice from the feds. And, what is the fed’s position this growing loan problem? One need only look at the fed websites to see that they are encouraging students to borrow as much as they “need” and to consolidate loans. At the same time, the proposed rules count consolidations as defaults against the schools. (There is more detail to this but the main point stands.)

    3. The Administration appears to believe that the at-risk students taken away from the “expensive” for-profits will be well served by other choices. “What they mean by this is tax-supported public institutions where the total cost is north of tuition plus $10-16K (~$20K). The Administration seems ignorant of the fact that public institutions across the nation have turned in double-digit tuition increases, some as high as 17%, with hidden fee increases reported as high as 54%. In the meantime, they are closing doors on programs, reducing enrollments, and turning record numbers of applicants away. These are the schools these the Administration would have the displaced underclass students attend. The truth is that these public institutions do not want and will not admit many of these students. Let them eat cake, I guess.

    Much attention has been given to the culinary industry as an example of programs for which students of for-profit schools do not meet reasonable gainful employment tests and that the public institutions could just as easily educate. Today, 59% of the culinary bachelors degrees are delivered by for-profits. No knowledgeable person could suggest that the public 4-year institutions could pick up this load when, at present, they provide only 11% of these degrees. Take a look at what the National restaurant Association said in their plea to the Department to look at the facts. They depend on the for-profits for an educated workforce and they are worried. See: http://www.intered.com/storage/deptofed/NRA_Gainful_Employment_Comments.pdf

    4. The Department has ignored technical shortcomings in the proposed rules, noting they can be worked out later. To suggest this is either disingenuous or naive. The department of education has a near perfect record of creating rules that it does not and cannot enforce. Who — in reality, based on track record — will work out the bugs in this approach and enforce the final versions? How will that work take place and why would we think it will take place since the history of this kind of detailed follow-up is an embarrassment to the Department?Additionally, every single abuse of the student loan system that has been uncovered to date – whether in for-profits, independents, or publics – is covered under existing law. Law that has not been adequately enforced. This and most federal departments follows a standard practice of proposing new rules to address problems created by failing to enforce current rules. Then there is the fact that each administration wants to leave its stamp on every major industry.

    5. There are more than 900 for-profits colleges and universities. Some serve only the underclass. Some offer only advanced degrees to senior professionals. All but a small handful are not publicly traded. They are small companies closely tied to their communities, employers, and the professions they serve. These 900 schools have little more in common than any 900 schools selected at random from the IPEDS database.

    The proposed rules are clearly designed to slow the growth of the large publicly traded for-profits without regard for the fact that they don’t fit hundreds of schools and will close the doors of dozens of small schools that are serving students no one else wants or will admit.

    To anyone working in a public institution who might be enjoying the suffering of your for-profit colleagues, I would advise you to put principle of equity and rationality over immediate self-interest. The feds have plans to come after you next and you will have lost your opportunity to stop this paternalism, unreasonable for 17-21 year olds, notwithstanding the fact the 40% of college students are working adults and something in the area of 75% of the for-profits’ students are working adults.

Enzi Blasts ‘Gainful Employment’ Proposal on For-profit Schools

Sen. Mike Enzi (Wyo.), senior Republican on the Senate education committee, is slamming a White House proposal designed to prevent students at for-profit career colleges from defaulting on their loans.

The proposal, Enzi said in comments submitted this month to the Department of Education (DOE), would not only disadvantage for-profit schools relative to their nonprofit competitors, but also limit access for many low-income and minority students, who tend to enroll in for-profits disproportionately.

“Admissions at for-profit institutions may become more selective, and otherwise academically qualified students may be denied admittance,” Enzi wrote. “This outcome is contrary to nearly 50 years of Congressional efforts to make postsecondary education accessible to all Americans.”

The comments echo those of scores of other lawmakers — many of them Democrats — who are pushing the administration to delay the rule until the issue can be studied further.

The issue is of great importance for the health sector because an enormous number of the nation’s health professionals — from nurses to medical technicians — get their training at for-profits.

Under the proposed rule, for-profit programs would have to demonstrate that annual loan payments among recent graduates are less than 8 percent of their starting salaries. The idea is to ensure that graduates will be earning enough to pay off their debts after graduation.

The penalty for non-compliance is steep: Programs that fail to meet the standards could lose access to federal financial aid — of which 23 percent ($24 billion) went to for-profit schools last year.

Enzi said applying the new standards only to for-profit schools “will be sending the message that the Federal government is not concerned with the outcomes for over 75 percent of the Federal investment in student financial assistance.”

Moreover, Enzi argued, it’s not the government’s role to ensure that students’ educational choices “pay off.”

“Federal student financial assistance has historically been provided to increase access and help make postsecondary education more affordable,” Enzi wrote. “It does not remove the responsibility of students and their families to make informed choices and to understand the financial consequences of those decisions.”

The comments put Enzi at sharp odds with Sen. Tom Harkin (D-Iowa), the chairman of the Senate education committee who’s urging the White House to adopt the so-called “gainful employment” rule as quickly as possible.

“High student loan debt coupled with low repayment rates signal a questionable investment for students and taxpayers,” Harkin wrote to the DOE on Sept. 9. “[W]e encourage swift implementation of the gainful employment regulation and would be concerned with any efforts to weaken the proposal.”

Bolstering Harkin’s argument, the Education Department this month issued new figures showing that the student-loan default rate at for-profits rose from 11 percent in 2007 to 11.6 percent in 2008 — much higher than default rates at nonprofit schools.

“While for-profit schools have profited and prospered thanks to federal dollars, some of their students have not,” DOE Secretary Arne Duncan said in a statement announcing the figures.

Still, not all liberals are supporting the rule. Jesse Jackson, head of the Rainbow PUSH Coalition, is on Enzi’s side, arguing that the change, while well intended, would hurt minority students.

“The amount of debt a student incurs and the student’s ability to repay that debt are not reflections of the quality of an institution,” Jackson wrote in his own comments submitted to DOE. “To apply a standard that looks at debt and repayment as a measure of quality misses a greater opportunity to hold all institutions to a higher standard of student outcomes, namely, graduation rates and successful post-graduation careers.”

The DOE is hoping to finalize its rule by Nov. 1.

The Liberal Paradox

Suppose that a conservative Republican Administration, in the middle of high unemployment and an economic slowdown, proposed new regulations that would most hurt lower income people and minority groups and the for-profit colleges and universities that serve them? Can you imagine the cries of outrage from liberal critics, condemning “hard-hearted” Republicans targeting the most vulnerable young people in our society?

Yet that is exactly what the Department of Education’s proposed “gainful employment” regulations would likely do. They are almost exclusively aimed at “for profit” private colleges, which are predominantly comprised of lower income and minority students. Let’s be careful about characterizing, as some liberals have done, those schools catering to such vulnerable at-risk students with “open admission” policies as “bad actors” whereas the more selective elitist Harvards and Stanfords with less student loan defaults are deemed “good actors.”

This has the uncomfortable look and feel of disparate class and racial treatment – which should make liberals very uncomfortable.

So how to explain the paradox that, in fact, these proposed regulations are being proposed by a progressive Democratic Administration and its strongest proponents are liberal members of congress?

There appear to be three explanations – each one less meritorious than the other.

The first is a simple misunderstanding of the facts. 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 (although liberal commentators and editorial writers continue to conflate the two issues).

Moreover, those 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, when the approximately $1 billion of taxes/year paid by for-profits are taken into account.

Second, this is a classic example of overly broad regulations confirming the law of unintended consequences.

How overly broad? 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. But, supporters of the regulation say, failing just one-of-two tests won’t result in loss of student federal loan eligibility. However, just recently, Iowa Democratic Senator Tom Harkin, one of the strongest proponents of this proposed regulation, suggested that failure of the loan repayment test alone should be enough to bar student loans to those who need them the most.

This is why numerous members of the Congressional Black Caucus have strongly weighed in against these proposed regulations and more and more representatives from minority and blue collar communities are waking up and opposing the proposed regulation.

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, opposition that seemed increasingly paradoxical as more and more inner city parents supported having the choice of charter schools for their children.

The fact is, it is precisely the profit motive that causes for-profits to offer more flexible, consumer-responsive schedules and courses, such as night classes, online courses, and new curricula that are directly responsive to recent changes in the job market.

Clearly Secretary Duncan needs to put an amber light on the “Gainful Employment Regulation” as it is presently written. As Harry C. Alford, President and CEO of the National Black Chamber of Commerce wrote recently, “student debt is a national problem, one that must be addressed, but imposing regulations on schools that are effectively educating students is unnecessary.”

If any regulation is necessary, then Mr. Duncan owes it to the most vulnerable students who will be disproportionately hurt by the current version to use a scalpel, not a hatchet, and to address the issue of excessive student debt at all higher education institutions – not just at for-profits, but at non-profits and public universities as well.

# # # # #

Lanny J. Davis, a Washington D.C. attorney and former Special Counsel to President Bill Clinton in 1996-98, serves as a paid “Special Advisor” to the Coalition for Educational Success, a group composed of several companies that own and operate for-profit higher educational colleges in the U.S.

by Kenneth J. Cooper , September 20, 2010

Some African-American and Hispanic leaders have taken a stand against proposed federal rules designed to curb student-loan defaults at for-profit colleges, arguing the strictures would reduce the educational options of minority students, who represent a large part of the enrollment at the schools.

Rev. Jesse Jackson of the Rainbow PUSH Coalition and some members of the Congressional Black and Hispanic caucuses have sent letters to the U.S. Department of Education opposing draft regulations that would cut off access to federal student aid to for-profit schools that appear to have prepared too few of their graduates for “gainful employment.”

The Career College Association, which represents the schools, states that 43 percent of their 2.8 million students and 39 percent of their graduates are minorities. It says 23 percent of African-Americans and 18 percent of Hispanics with associate degrees attended career colleges, as the trade association calls its 1,500 members.

“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,” Jackson wrote in a Sept. 15 letter to Education Secretary Arne Duncan. “The department’s proposed approach will hinder the access of minority students to higher education and will make it even more difficult to realize President (Barack) Obama’s goal of leading the world in the percentage of college graduates by 2020.”

Similar criticisms are made in letters to Education Department officials signed by 12 of the 39 voting members of the Congressional Black Caucus and four of 23 voting members of the Congressional Hispanic Caucus. The signers include three of the four Black members of the House Education and Labor Committee: Reps. Donald Payne of New Jersey, Bobby Scott of Virginia and Yvette Clarke of New York, all Democrats. Among Hispanic critics are Ed Pastor, an Arizona Democrat who is the third-most senior Hispanic in the House, and Ileana Ros-Lehtinen, a Florida Republican.

A Sept. 8 congressional letter to the department predicts the proposed rules would “disproportionately impact the many low-income, first-generation students, single parents, minority and veteran students served by these institutions.” Payne, Scott and two other Black Democrats, Alcee L. Hastings of Florida and Edolphus Towns of New York, were among the 10 House members who signed the letter.

The department maintains that the proposed rules, released for public comment in July and slated to be finalized by Nov. 1, would protect students who find out too late their occupational training does not impress employers.

“Our proposal is to protect students from taking on debt they can’t afford in exchange for a certificate they can’t use,” said Justin Hamilton, Duncan’s press secretary. “This is no way affects a student’s ability to access federal student aid at programs that would be helpful to them. Our proposal would cut off federal student aid to ineffective programs.”

If for-profit schools fail two tests, the schools would lose their eligibility to accept federal student loans and grants. At least 35 percent of former students — both graduates and dropouts — have to be paying down their federal loans, and those loans have to amount to less than 12 percent of their total income.

In 2007-2008, the department says 55 percent of student borrowers from for-profit schools were paying on their loan balances, compared with 80 percent at public colleges and 88 percent at private, nonprofit ones.

The aid cutoff could apply only to certain training programs that fail both tests, rather than entire schools. The department estimates about 5 percent of such programs would become ineligible to receive federal student aid.

Critics have also argued that the proposed rules unfairly single out for-profit schools while, as the congressional letter suggests, “ignoring legitimate questions that have been raised about some elements of traditional higher education” with similar demographics and student loan default rates.

Under existing federal regulations, traditional colleges can lose federal aid if default rates exceed 25 percent for three consecutive years. The department says the 98 historically Black institutions eligible for federal student aid meet that standard.

Since the 1970s, federal law has imposed a different standard on for-profit schools, allowing only those that prepare students for “gainful employment” to be eligible for federal aid, Hamilton said. This is the first time, he added, federal regulations have attempted to define what that provision means.

Besides Jackson and the members of Congress, a few Black and Hispanic organizations have opposed the new rules, including the National Black Chamber of Commerce, National Congress of Black Women and Hispanic Leadership Fund. But larger organizations, such as the NAACP, National Urban League, League of United Latin American Citizens and National Council of La Raza, do not appear to have taken a similar stance.

And speak out against the Gainful Employment proposal. Here’s Dr. E. Faye Williams, National Chair of the National Congress of Black Women:

Statistics show that for-profit colleges educate 13 percent more women and nearly 50 percent more minorities compared with public colleges. For-profit colleges have also welcomed non-traditional students, such as adults who cannot afford to drop their jobs or commute long distances to attend a community college. Career colleges offer unique flexible course schedules and online classes to meet the needs of adult learners – for instance, 30 percent of students at for-profit colleges are single parents, a much higher percentage than other schools.

Moreover, career colleges produce students who are immediately ready to enter the workforce in high-demand fields such as health care and computer/data processing, which are creating an estimated 1.8 million new jobs through 2016. And for-profit colleges boast a graduation rate nearly 20 percent higher than community colleges.

Critics also complain that career colleges make money from federal financial aid. But career colleges are better stewards of that money compared with their public and not-for-profit counterparts. Taxpayers receive a 9% return on each dollar per community college graduate and 18% per career college graduate. The typical career college student costs $7,000 less per year to educate compared with community college students. Moreover, students at the largest for-profit career institutions have loan-repayment rates virtually identical to those of community college students.

President Obama will have to overcome great obstacles if he wants to achieve his goal of graduating five million additional college students by 2020. However, the Department of Education must realize that for-profit colleges are part of the solution, not part of the problem.