Posts Tagged ‘private college’

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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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.

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.

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



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.



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

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

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

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

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

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

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

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

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

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

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

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

Wall Street Journal – http://online.wsj.com/article/SB10001424052748704407804575425830335709738.html



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

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

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

http://www.cca-now.com/2010/08/washington-times-defends-for-profit.html

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

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

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

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

Student Services Staffer, Privately Held University

From “The Hill” – http://thehill.com/opinion/letters/115621-limiting-access-to-proprietary-colleges-will-hurt-prospective-students

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

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

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

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

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

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

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

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

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

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

From the Washington Post

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1. The proposed regulation 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.

  • Student demand for professional and career education is at historically high levels partly because of the transformation of the U.S. economy from a production-based to a skilled services-based economy and partly because of the high unemployment rate.
  • At this time, only proprietary (i.e., for-profit) colleges and universities have the resources to increase capacity to meet the demand. Alternative educational paths for students seeking such training do not exist because those institutions, e.g., community colleges, are facing substantial funding shortfalls.President Obama has set a goal of regaining the nation’s number one rank internationally for the highest proportion of college graduates by 2020. Even critics concede that we cannot reach this goal without a robust proprietary sector of higher education. The Gainful Employment metric is directly at odds with this national policy goal.

2. The regulation will eliminate high quality programs that offer graduates a lifetime of improved earnings because the initial post-graduation earnings in those careers are low.

  • 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.

3. The regulation falls most harshly on low income and minority students.

  • 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.

4. The proposed rule, which pegs the calculation of the debt-to-income ratio on earnings in the first three years post graduation, is heavily biased against longer term (baccalaureate and above) and costlier (e.g., health care) programs, because students in those programs have to borrow more in the aggregate but their earnings differential from those with lesser degrees do not emerge until after the first three years after graduation.

  • 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.
  • The explanation given by ED for using the first three years of earnings is that the gap in earnings in the first three years is about the same as the gap in later years. This measure of the gap in earnings does not measure the gap in earnings between those with a high school degree and those with some postsecondary education, but rather only the level of earnings. In ED’s explanation it is admitted that the level of earnings increases significantly even over the first ten years after school. Whether the gap, measured this way, stays the same is not relevant to the proposed rule.

5. Although the proposed regulation is lengthy and complex, it is still basically the same concept ED previously proposed that created such strong opposition when it surfaced in January 2010—programs must show a debt to income ratio of 8% or less to continue. In this version of the regulation, ED simply recognized the need for adding a more nuanced measure of income, namely discretionary income.

  • Most independent research by authorities such as Dr. Sandy Baum and Mr. Mark Kantrowitz has shown that an 8% metric, borrowed from other types of consumer debt metrics, is wrong for higher education.
  • While the addition of the discretionary income to the debt-to-income metric results in fewer programs being impacted, the vast majority that do not meet the flawed 8% metric would still fail and a majority of programs that do not meet the 8-12% metric would remain in the restricted category.

6. The regulation creates a complex taxpayer funded regulatory regime within ED without a sufficient basis of research to assess its national impact.

  • ED does not have the current infrastructure to monitor and enforce this complex regulation and significant resources will have to be expended to implement this new regime.
  • ED selectively cites research findings and interprets experts on financial aid issues to support and promote its flawed proposal.

7. ED’s Gainful Employment metric exceeds statutory authority by going well beyond the definition of the term “gainful employment.”

  • It provides new authority for ED to pre-approve all new programs.
  • It uses a narrowly defined repayment rate to measure acceptable levels of debt for the first time rather than the congressionally sanctioned and well-tested cohort default rate.
  • It does not permit students using congressionally supported debt management programs such as deferments or forbearances, or who choose lower-wage jobs in social service fields and rely on the Income Based Repayment Plan, to be counted in the repayment calculation, although those are fully legitimate means of repayment for any graduate.

8. Although ED offers the repayment rate test as an alternative qualification test for programs that fail the debt to income ratio metric, by ED’s own analysis that alternative test will benefit only a tiny fraction of programs and arbitrarily hurt smaller programs and small schools.
9. The repayment rate test may often be the only test available to smaller programs and, as a result, small programs, often at smaller schools, would suffer random and severe consequences.

  • Small programs are more likely to be unable to meet the debt ratio metric due to small student numbers, and will have to rely on the repayment test according to ED.
  • As a result, repayment problems by just a few students could eliminate the entire program. The repayment test results for small programs would be random and impacted by economic volatility at much higher rates than larger programs, for no quality reason.

10. The proposed regulation does not balance risks and interests in pursuit of a common policy goal, but instead appears to advance an agenda unrelated to student debt.

  • Institutions bear all the risks of repayment without taking into account student populations served.
  • Institutions will know whether a program fails only after it fails because only ED will have access to the repayment information and income data (using social security reported earnings) used to calculate the metric.
  • The retroactive application of the regulation violates a basic principle of legal fairness and points to the agenda of ED to eliminate, not reform, programs.
  • Institutions will have no way to monitor compliance and make adjustments until after a program has failed the metrics.
  • If a single program is out of compliance with the metric, the entire institution can be placed on provisional certification, limiting the institution’s ability to add new programs and increase enrollments. The Department has stated that when reviewing an institution’s application for recertification of its program participation agreement – the school’s agreement with ED for participating in the title IV Federal student aid programs – they will take into consideration the fact that an institution is provisionally certified due to being out of compliance with one of the gainful employment measures for one program. Thus, the institution’s participation in the title IV programs can be terminated due to one program not meeting the gainful employment provision.
  • By excluding students utilizing deferments, forbearances, and in some cases IBR from the repayment calculation, institutions will have to choose between assisting students in selecting the best method of managing their student loan repayments or risking running afoul of the metric.
  • Institutions will lose their right to due process because without access to the income data (out of privacy concerns for the students) they will not be able to defend themselves against action by ED.
  • The requirement that institutions on restricted status obtain testimonials from an employer unaffiliated with an institution that the program aligns with expected job skills is weighted against institutions. While many private sector institutions have well-established relationships with employers, they may not be permitted to speak on behalf of the school and the students they have hired. An unaffiliated employer has no reason to take the time and effort needed to support a program.

11. The proposal is social engineering at its worst.

  • 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.
  • 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. Also, institutions would run afoul of the 90-10 rule if they lowered their tuition to the degree ED infers in the proposed regulation.
  • By placing an entire institution on provisional certification if a single program is out of compliance with the proposed gainful employment metric, the regulation stunts one of the great advantages of private sector education for our economy: the rapid development of new programs closely tied to changing workforce needs.

12. CCA supports substantially increased, and yet easy to understand, consumer disclosures to prospective students that gives detailed information on the costs of the educational program, the likely occupations in which the student may work after graduation, the overall loan burden the student is likely to have at graduation (including the predicted monthly repayments), and the range of earnings in those occupations, as determined by the U.S. Department of Labor.

  • Increased consumer information, not a complex and convoluted set of metrics, is the direction ED should take to address concerns that prospective students do not fully appreciate the risks and rewards of entering an educational program.