Opinion Piece in The Hill: Hearing or head hunting?

Today, my opinion piece was published on The Hill’s Congress blog. The piece argues that as our Senator, Tom Harkin (D-IA) should look across the national landscape to find ways to increase the number of students in higher education and to encourage education paths for those Americans who will not be able to receive at a traditional non-profit school or public college or university, rather than go after for-profit colleges and universities. See below for an excerpt:

Sen. Tom Harkin (D-Iowa), as chairman of the Senate Committee on Health, Education, Labor & Pensions (HELP), has scheduled a hearing entitled Bridgepoint Education, Inc.: A Case study in For-Profit Education and Oversight. The premise for his hearings has been to investigate the Department of Education. However, it appears that this is a subterfuge for portraying the for-profit sector in the worst possible light in order to restrict students’ access to career-oriented colleges.

In a press release announcing this Thursday’s upcoming hearing, Chairman Harkin noted that the lone target of his “case study” [Bridgepoint Education] was singled-out because more than 60% of their bachelor’s degree students had withdrawn before finishing their degrees.

Click here to read the full piece.

Improving Regulation and Regulatory Review – Executive Order: Part 1

 

 

This past week, President Obama issued the executive order – Improving Regulation and Regulatory Overview.  The actions by President Obama are a very positive sign, especially in light of the newly introduced regulations of the Department of Education this past year.  Those regulations in the areas of “new programs” and “gainful employment” have the potential to be very costly to higher education, and many of us have believed that they did not strike the right balance between protecting consumers of education with assuring consumers access to education.  President Obama had called for an approach that would “strike the right balance” in his Wall Street Journal op-ed, explaining the rationale for his action

The Department of Education’s gainful employment rule and its approval process for new programs have the potential to impact negatively both higher education and the broader economic recovery.  They can do so by slowing the growth of new programs with a “chilling effect” on new programs that comes from the additional, imposed processes associated with adding new programs.  They can also slow growth in higher education by imposing additional risk to the potential yield from new educational programs due to threats from the gainful employment rule.  Their impact may well limit innovation and growth in new jobs in this very large sector of our economy.

But perhaps the more significant potential impact of regulations like the ones the Department of Education chose to implement is on the slowed growth in human capital that comes from limiting job-related training and education for industry sectors where the value of human capital is increasingly critical.  U. S. productivity matters, and one way we increase our productivity is through education that improves the quality of our labor supply.

I applaud the direction that President Obama has announced, and I look forward to its effect throughout government, including the Department of Education.

Be sure to check back on Monday, as I will post Part 2 of this blog on an exciting new issue that I hope to blog about more in the future.

GAO Revises Report on For-Profits

Yesterday there were a number of news articles on the Government Accountability Office’s revisions to its report on recruiting practices of the for-profit education sector. The controversial report was the basis for an August hearing of the Senate Committee on Health, Education, Labor and Pensions Committee hearing held by Senator Harkin (D-IA).

 

In a letter Tuesday, Senator Mike Enzi (R-WY) asked the GAO to withdraw the testimony made regarding the report and explain why the changes were made. The Washington Post detailed significant changes to the GAO report in an article published today.  The reported changes raise serious questions about the validity of the GAO’s study and offers insight into Senator Enzi’s request to withdraw the testimony.

Here are excerpts from the Washington Post article:

The revised report, posted Nov. 30 on the GAO Web site, changed some key passages. In one anecdote cited as an example of deceptive marketing, the GAO originally reported: “Undercover applicant was told that he could earn up to $100 an hour as a massage therapist. While this may be possible, according to the [Bureau of Labor Statistics] 90 percent of all massage therapists in California make less than $34 per hour.”

 

The revised version states: “While one school representative indicated to the undercover applicant that he could earn up to $30 an hour as a massage therapist, another representative told the applicant that the school’s massage instructors and directors can earn $150-$200 an hour. While this may be possible, according to the BLS, 90 percent of all massage therapists in California make less than $34 per hour.”

 

In another example, the report originally stated that a college representative “told the undercover applicant that by the time the college would be required by [the] Education [Department] to verify any information about the applicant, the applicant would have already graduated from the 7-month program.”

 

The revised version states that “the undercover applicant suggested” that possibility and the “representative acknowledged this was true.”

 

There were several other significant edits to the examples detailed in the report.

Department of Education Meetings with Stakeholders

Yesterday, the Department of Education announced in the Federal Register that it would hold meetings with individuals who filed comments on the gainful employment rule. Presentations will allow stakeholders to express their views but offer no new comments. With so many negative comments having been filed against this rule, it is encouraging that the Department of Education is taking the time to listen to those who dissented to the rule. The Federal Register states:

On July 26, 2010, the Department published a notice of proposed rulemaking (NPRM) in the Federal Register proposing regulations for determining whether a postsecondary educational program provides training that leads to gainful employment in a recognized occupation and the conditions under which such a program would remain eligible for the student financial assistance programs authorized under title IV of the Higher Education Act of 1965, as amended (HEA). Comments on the Department’s proposed regulations were due on September 9, 2010. The Department received over 90,000 comments from a wide range of stakeholders, including for-profit universities and colleges, community colleges, students, higher education associations, members of Congress, financial analysts, economists, and college and university faculty.

The Department appreciates the tremendous feedback, both positive and negative, that it received on the proposed regulations. The response from so many individuals and entities demonstrates how important the issues relating to gainful employment and this rulemaking are. To better understand parties’ comments and have an opportunity to interact with commenters, the Department will hold four public meeting sessions over the course of two days. During this time, commenters who have timely submitted comments on the NPRM may orally present their comments to a panel of Department representatives. Commenters also may have an opportunity to respond to questions from the Department about their comments.

Stakeholders to Weigh In on Gainful Employment

A Wall Street Journal article yesterday filled in some of the blanks left by the Department of Education’s postponement of the gainful employment rule.  The article notes that the Department will hold meetings with stakeholders and interested parties to further discuss the rule. See below for an excerpt from the article:

The Education Department will use the extra time to conduct a series of public hearings and meetings, which it said “will allow interested parties to clarify the comments they’ve submitted and respond to questions from Department officials.” The department will not open up a second official comment period.

I’m encouraged by the Department of Education’s initiative to understand the rationale behind the 90,000 comments it received regarding the gainful employment rule. However, I urge the Department to use these meetings as exploratory opportunities to understand why so many individuals dissented to the rule as written, rather than as attempts to convince opposing voices to change their points of view.

“Tight Spot” for For-Profits?

On Monday, Kelly Field, The Chronicle of Higher Ed’s chief Washington reporter, and Sara Hebel, The Chronicle’s politics editor, came together to discuss the recently released Gainful Employment rule. The conversation highlighted the implications of the rule, focusing on the institutions and the individuals that would be affected.

According to Hebel, the rule would “reign in high levels of borrowing for some profit-based colleges,” and would put strict limits on student borrowing. Unfortunately, the rule will have serious negative consequences for the students who rely on financial aid the most – minority students, single parents, and working adults. We should focus our efforts – and so should the Department of Education – on constructing opportunities for success, rather than building obstacles to it.

Gainful Employment in the Federal Register

On Monday, July 26, the text of the Gainful Employment rule was officially published in the Federal Register.

What does this mean? Individuals and other organizations will have 45 days from that date to respond to the proposed rule – sharing their views about Gainful Employment with the Department of Education. The Department will then take those comments into consideration before issuing the final rule in November 2010 and implementing that rule in July 2011.

Click here to read the rule in detail.

Gainful Employment Rule Coming Out Today

The Department of Education is set to release the Gainful Employment rule today according to several news sources:

Chronicle of Higher Education – Education Department Takes Aim at For-Profits With Student-Debt Rule

Inside Higher Ed – Splitting the Difference on Gainful Employment

Associated Press – Proposed federal rules target for-profit colleges

Wall Street Journal – U.S. to Scrutinize For-Profit Career Colleges

Washington Post – Administration proposal aims to tighten oversight of for-profit colleges

Reuters – U.S. rule would force education cos to show work

New York Times – U.S. Releases Rules on For-Profit Colleges

USA Today –  Plan would crack down on for-profit college industry

Rumor has it…

Rumors abound that the Department of Education aims to loosen the restrictions on its proposed gainful employment rule. And recent shifts in stock prices reflect optimism that these whisperings will prove to be true.  But what does this mean?

Department of Education spokesperson Justin Hamilton e-mailed the following statement:

“What our proposal will do is balance the need to protect students and taxpayers while strengthening the critical role for-profit schools will play in helping us meet the president’s 2020 goal: for America to once again lead the world in the number of college graduates.”

 

For months, I have been writing that the proposed gainful employment rule has the potential to leave low-income and minority students out in the cold. The Department’s recent statement indicates the intent to move ahead with a rule that restricts access to higher education by focusing apparent dislike for private sector institutions ahead of the desire to help students seeking higher education.

My admiration for Secretary Duncan leads me to hope that Mr. Hamilton’s emailed statement means that the amended rule will recognize the critical role of for-profit schools.  The rule is scheduled to be released shortly by the Department of Education.

College Complexities

In previous blogs, I have observed how complex the challenges of higher education really are.  The news from three recent, separate sources, when considered together, confirm its complexity and also once again raise concerns about the capacity of U. S. higher education to respond to our growing needs for sophisticated human capital as a foundation of our economic competitiveness.

On Sunday West Virginia Governor Joe Manchin called on state governors to focus this year on higher education productivity – e.g., enrollment, persistence, and graduation.  Governor Manchin is the new Chair of the National Governor’s Association.

And just five days earlier, the Wall Street Journal reported that low and moderate income students are less likely today to enroll in college, underlining the Governor’s call for a focus on productivity.  The Wall Street Journal summarized a report to Congress from the Advisory Committee on Financial Assistance; compared with 1992, the percentage of low income students who enroll in college has fallen 14 percentage points with only 40% enrolling by 2004.  For moderate income students, the burden of college expense had gone from 22% of family income to 26% of family income in the same period.

Monday’s Chronicle of Higher Education added a third, but inter-related piece of news with its report by Goldie Blumenstyk.  Median family income of students in for-profit colleges is just $24,300, 60% of family income of public college and university students.

If we are to raise U. S. competitiveness and increase higher education productivity as called for by Governor Manchin, we must turn around the decline in enrollment among the lowest income group, and we must assure support for students from low income backgrounds who are increasingly choosing for-profit schools for their education.