Posts Tagged ‘proprietary education’

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.



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

What are your thoughts?

A lot of people will have to forfeit their right to a higher education because of this “Gainful Employment” act. The President and congressmen are stating and campaigning on how “we” as Americans need to continue our higher education, enroll in universities and colleges so that we can get high paying jobs and stimulate the economy. Well the only problem with that, is that we can’t afford to attend these colleges, nor do we have the time to attend these major universities that ultimately require you to attend school during the day. Granted some colleges have evening courses but not all of them. And beyond the financial aid you still have to come out of pocket for a lot of things that are needed to attend those universities, like books, supplies, meals, parking, lab materials, etc… The only thing that low income families can afford are (“second rate”how some senators like to label it ) career colleges.

About half of the people in this supposedly great nation are considered low income. The only thing they are accomplishing by enacting this new law/rule is taking away the last bit of hope that these (“lower income”) people (like myself) had for themselves as well as their children. For most, this is the only way to better their children’s lives, to one day be above the lower income stigma and to not have to struggle or even worry about whether or not they’ll be able to make ends meet. The only thing the government will be stimulating is the continuation of a vicious cycle that will keep the rich people rich and poor people poor.

The Department of Education has proposed a new regulation called “Gainful Employment” that will limit access to Title IV financial aid for approximately 360,000 career college students per year if they do not meet an arbitrary one-size-fits-all debt-to-income ratio.

The National Black Chamber of Commerce believes this rule would limit education and economic opportunities for thousands of African American and other minority students throughout the nation.

The chamber represents 95,000 Black-owned businesses with 190 affiliated chapters operating internationally to sustain Black communities through opportunity.  We recognize that opportunity is built largely on getting a good education and obtaining the skills necessary to gain employment.  That is why we believe the Gainful Employment rule would disproportionately impact minority, low-income, non-traditional and other underserved students who rely on Title IV financial aid to pay for higher education.

We are asking the Department of Education to rethink this rule because of the negative consequences it will have on Black students across the country. Write to the Department of Education and let them know that we are against this rule! Go to Regulations.gov and click on “Submit a Comment.”

http://www.nationalbcc.org/index.php?option=com_content&view=article&id=1129:gainful-employment-will-limit-opportunities-for-black-students&catid=1:latest-news&Itemid=7


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

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

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

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

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

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

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

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

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

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

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

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

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

About NHCSL

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

SOURCE National Hispanic Caucus of State Legislators

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

According to Fateri’s Open Letter to Congress:

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

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

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

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

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

About International Education Corporation

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

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

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



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

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

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

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

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

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

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

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

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

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

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

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

Defining Gainful Employment

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

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

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

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

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

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

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

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

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

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

Who Would Be Hit

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Feedback

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

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

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

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

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

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

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

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

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



By Kelly Field

Washington

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

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

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

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

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

Rule Due Out Soon

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

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

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

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

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



By mschnittman

In Senator Harkin’s opening remarks during the recent congressional hearings on higher education, he stated, “We have a responsibility to ensure that taxpayer dollars are being spent wisely, and that for-profit colleges are serving students, not just shareholders.” As the CEO of TopSchool and previously serving as the president of eCollege, I understand the need to serve shareholders. However, I couldn’t agree more that the ultimate goal of those of us in education is to serve the student.

For-profit colleges have a huge opportunity to move education forward, and at a great value to taxpayers. They have already made great strides in driving access, innovation and a trained workforce.

ACCESS:
For-profit colleges make education possibilities a reality for the underserved, non-traditional student population. The Department of Education states that the Student Aid Objective is “to ensure that low and middle income students have the same access as high income students do.”

The for-profit education industry delivers an attractive alternative to students who are lower income, minority, older and/or more financially independent. Roughly 76% of for-profit college students are financially independent compared to 50% at public schools, and 45% of for-profit college dependent students come from families in the lowest income quartile compared to 24% at public and 22% at private non-profits.1 These for-profit college students are not choosing between paying their own way or getting federal financial aid – rather they are choosing between not getting educated and federal financial aid.

In fact, according to the U.S. Department of Education, the average Estimated Family Contribution for a student attending a four-year, non-profit school is almost $17,000, which is 123% greater than the $7,500 average for a student attending a four-year, for-profit school. Ironically, this is almost exactly the same ratio of the federal aid required by a student attending a for-profit school compared to a non-profit school.

INNOVATION:
For-profit colleges sit on the forefront of innovation when it comes to flexible delivery and schedules, giving more students the chance to succeed.

When you consider that 60% of for-profit college enrollments occur on a rolling basis, 2 meaning frequent intervals during the year, flexibility is key. For-profit colleges invest significantly in meeting the complex needs of their non-traditional students through online education, night and weekend offerings, and smaller suburban/satellite campuses. This consistent drive to satisfy their students has resulted in 65% of for-profit college students attaining a degree within six years after enrollment, slightly higher than students attending four-year, non-profit schools.3

SKILLED WORKFORCE:
For-profit colleges also focus on aligning their programs with the fields and jobs that are most in demand. According to Imagine America Foundation, for-profit colleges currently enroll more students (44%) in high demand fields than do public (18%) and private, not-for-profit (13%) institutions.2 In fact, 17 of the 20 fastest-growing occupations are in the key focus areas of for-profit schools, including the healthcare and computer/data processing industries, with an estimated 1.8 million jobs being created in these fields through 2016.2 These are positions that graduates of for-profit colleges can fill.

Not only are for-profit colleges training students, but they are getting them placed in the workforce. Consider the percentage of students who are employed within six months of graduation – in 2009, DeVry University reported a 90% placement rate for these students, while larger universities such as UCLA and Johns Hopkins reported only a 45% rate.4 And overall, 76% of for-profit college students who completed an award in 2005 were employed directly following graduation.2

WHAT DOES THIS MEAN FOR TAXPAYERS?
Before we jump into the numbers, I think it important to point out that both for-profit and non-profit models work effectively. For-profit institutions are similar to state systems of higher education in that graduates of both models step out into a demanding job market after earning such degrees as an Associate’s in Accounting, a Bachelor’s in Finance or Computer Engineering Technology, a Master’s in Business Administration or Education – and the list goes on and on.

That said, what do taxpayers invest in students at for-profit schools? And to round out the equation, what is the taxpayer investment to support students at non-profit schools as well?

For-profits
Let’s start on the for-profit side. I analyzed four large, publicly traded for-profit institutions – DeVry, ITT, Strayer and Corinthian Colleges. Using the data available in their most recent annual reports, I wanted to determine the taxpayer investment required to educate one student for one year. I calculated a “net taxpayer investment” by taking the annual Title IV revenue received for all four schools, in this case $3.5 billion, and subtracting the annual taxes provisioned by the institutions, in this case $377 million. As noted in the table below, this number, divided by the student population served, which was around 313,000, resulted in the net cost to taxpayers of roughly $10,000 to educate a student for one year at one of these for-profit schools.

Non-Profits
Keeping that equation in mind, let’s take a look at the non-profit side. In addition to federal financial aid, students enrolled in public, non-profit institutions reap the benefits of state funding for education. You’ll notice that no federal taxes are provisioned for these non-profits as they don’t pay them.

Since I reside in Colorado, I’ve used publicly available information about our own higher education system. According to the Colorado Department of Higher Education, in the Fall Term 2009, the state enrolled just over 240,000 students in its 28 two-year and four-year institutions. During that same year, the Department was allocated almost $2.8 billion in state funds and received over $1.2 billion in federal student financial aid. The table below shows that the net cost to taxpayers to educate a student in the Colorado Department of Higher Education in 2009 was almost $17,000, which is 66% greater than at the for-profit institutions.

Federal Loans
Of course, if we are looking at a net investment to taxpayers, we need to remember that much of the federal subsidies for higher education come in the form of loans. For a variety of reasons, students default on their loans. According to an analysis by the Chronicle of Higher Education, the 15 year loan default rate for for-profit students enrolled in four-year programs is 30%, as compared to 15.1% for non-profit students.5

Using the example from the Colorado Department of Higher Education, when you account for the percentage of education subsidies that are loans (compared to grants or state appropriations) and the difference in default rates, the adjusted taxpayer investment per student at a for-profit school is roughly $4,100, compared to $13,200 at a non-profit school, driving the State of Colorado non-profit education to a 224% premium over for-profits.

THE VALUE TO STUDENTS AND TAXPAYERS ALIKE:
Both for-profit and non-profit institutions play valuable roles in our country’s need to educate the masses. All aspects of our society benefit the more educated we become. The fact is that we need both choices to effectively serve our country’s diverse population.

We can’t deny that the high growth, for-profit college industry should be held accountable for its recent issues, including the misguided information given to students by admissions representatives, higher default rates and so on. However, we also can’t ignore the tremendous value these schools provide to students. I believe the overall value to taxpayers is well worth the growing pains.

The critical factor in both the for-profit and non-profit models should always be the students. Students need accurate and credible information to make an educated choice in determining their path. At the same time, schools need to use data to better understand the type of student who is a good fit for their program and the ways in which they can ensure the success of that student.

In my career in the education market, I’ve learned the importance of data in providing a quality educational experience, both in the way education is delivered and the way it is managed. This principle guides everything we do at TopSchool, as we have built a next generation student information system – and that is exactly what the leaders of both for-profit and non-profit schools like about our model.  The majority of the data and information that Senator Harkin and others want to provide to prospective students can be accessed through a system like ours. We believe the key is making it accessible and available to the right audiences.  In addition to the many uses for prospective students, access to data can also guide college and university leaders to better understand their students and drive stronger learning outcomes, student satisfaction and retention.

Regardless if the school fits the for-profit or non-profit model, those schools that rely on data to make decisions that benefit their students will deliver a tremendous value not only to their students, but also a high return to us as taxpayers, to our workforce, and to the future of our country.

TAXPAYER INVESTMENT IN HIGHER EDUCATION:

Taxpayer Investment in Higher Education

Last week, I spent a few days in Pennsylvania and have returned to Denver energized for things to come. Along the way, I was stuck behind a number of major traffic accidents and was re-routed extensively. It gave me an opportunity to see much of the PA country side and was worth the detour.

A colleague and I had a great meeting with a business college in the region. They have significant growth plans and are looking to utilize a student management system to increase operational efficiencies. We all look forward to further discussions with them.

I was honored to be invited to speak at the Pennsylvania Association of Private School Administrators Annual Conference.  I welcomed the opportunity to discuss the power of Software as a Service (SaaS) solutions to the attendees. SaaS solutions are flexible, low maintenance and can help schools focus on recruitment, retention and placement, rather than IT. It was great to see schools embrace the concept of SaaS.

In addition, I was excited about Mike Artim’s presentation, and he didn’t disappoint. Mike is the Executive Director of Cambria-Rowe Business College. Cambria-Rowe has been talking with employers in the region to better understand the skills and competencies they are looking for to fill positions. The school is evolving its program curriculum to adapt to the changing needs of the employers. Mike also discussed how Cambria- Rowe is leveraging technology in the classroom through the use of digital content, iPads and other vehicles.

Thanks to the efforts of the group at PAPSA for an enlightening career college conference, I look forward to participating next year.

I’m always looking for feedback, how is your school leveraging technology to create efficiencies?

Sources:

1U.S. Department of Education, National Center for Education Statistics, “National Postsecondary Student Aid Study 2003-2004 (NPSAS: 2004).”
2Imagine America Foundation, “Economic Impact of America’s Career Colleges (2007).”
3U.S. Department of Education, National Center for Education Statistics, “1995-96 Beginning Postsecondary Students Longitudinal Study, Second Follow-up (BPS: 96/01).”
4Daniel Hamburger, DeVry University, “The Vital Role of the Private Sector Higher Education,” 2010, (data originally pulled from institutional websites, May 2009).
5 The Chronicle of Higher Education, “Government Vastly Undercounts Defaults” July 11, 2010.

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

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

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

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

Brian Stoddard

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

By Kevin Kuzma

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

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

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

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

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

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

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

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

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



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

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

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

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

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

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

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

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

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

Read the full article here – http://www.good.is/post/gainful-employment-no-pain-no-gain/

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

Read the full commentary here – http://www.congress.org/congressorg/bio/userletter/?letter_id=5701278706

Please visit this website http://www.bipac.net/page.asp?g=cca&content=alerts and let your voice be heard!  We need to fight for our rights to keep educational choices available in the United States.

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

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

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

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

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

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

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

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

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

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

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

Duh.

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

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

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

——————————-

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

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

From the Huffington Post – http://www.huffingtonpost.com/lanny-davis/transparency-by-shorts-on_b_622999.html



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

Shelley K, Career College Graduate



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