CECU Press Release: Career Education Colleges and Universities Sends Letter to U.S. Department of Education, Federal Trade Commission, and Consumer Financial Protection Bureau Asking Them To Address Student Loan Debt-Relief Scams


7/14/2016 
 
Washington, DC – July 14, 2016 – America’s Career Education Colleges and Universities wrote the leaders of the U.S. Department of Education, Federal Trade Commission, and Consumer Financial Protection Bureau, asking them to establish an inter-agency coordinating committee to fight the growing student loan debt-relief scams in America.
 
​In the letter, CECU president and CEO Steve Gunderson wrote:

“Every day, through the use of social media, trial lawyers are data-mining names and using this information to file misleading and unlawful actions against colleges for debt relief. The action, in the name of student loan debt forgiveness, is the classic misrepresentation seeking funds from students for loan forgiveness while promising actions that in most cases have no basis. Again this week our office has been filled with examples of scam postings on the web inviting students of any given college to call specific numbers to engage in student loan forgiveness. Such action not only is an injury to innocent students/graduates; it also impugns the reputation of high-quality career education schools by suggesting a problem when none exists.

“The Administration has been very aggressive in using an inter-agency coordinating committee to confront accusations of misconduct by our sector schools. We are asking that you engage the same effort and commitment to protect BOTH students and schools from this current scam engaged by some lawyers seeking monetary benefits at a cost to students.”

CECU Press Release: Shortage of Skills: Construction & Skilled Trades


7/8/2016 
 
​July 8, 2016 – Washington, DC – This month the Bureau of Labor Statistics reported that 7.8 million Americans are unemployed, while at the same time 5.8 million jobs remain unfilled in America. This crisis exists because employers demand "job ready" employees and prospective employees are simply not able to bridge the skills gap without appropriate education and training. 
 
With summer construction projects underway across the country, Career Education Colleges and Universities’ latest look at the shortage of skills in America turns to the construction sector. From January to April of this year, construction spending in the US amounted to $334.8 billion, 8.7% above the $307.9 billion for the same period in 2015, according to data released by the US Census Bureau. But the sector’s growth is shedding light on an increasingly worrying problem – a shortage of skilled construction workers.

Although spot labor shortages in the construction sector began in 2012, as the industry began to recover from the real estate crash in the 2000s, the shortages have intensified as the demand for new projects increases. However, employment is failing to keep pace with increased spending. The result is real impact on both business and future homeowners. Projects are delayed and with that home prices increase.

“The thing we’re seeing and we’re hearing in the field is there’s just not enough qualified people at all,” Jay McCanless, a homebuilding analyst with Sterne Agee CRT in Nashville, Tennessee, told Bloomberg.  In fact, industry officials previously said that the construction industry “would be sizzling if not for a critical shortage of workers.”

The problem is expected to worsen in the coming years as demand rises. BLS projects a 13% growth in the construction sector between 2014 and 2024 – far above the average 7% growth rate – resulting in 180,100 new jobs.  If one assumes a conservative 20% replacement rate for retiring baby boomers, the total new demand in the decade ahead is 457,380 added professionals in the construction trades.

Over the next 10 to 15 years, the weak growth rate of labor productivity and the retirement of baby boomers are expected to further exacerbate the issue. A recent study by Conference Board analyzing 457 occupations ranked construction workers ninth in its labor shortages index, and found that the occupation faces a higher risk of labor shortage than 91.4% of all others examined. Skilled trades, such as electricians and welders, are at an especially high risk of experiencing a scarcity of labor.

Moreover, Census Bureau economists have noted the limited number of new entrants in the sector. “The percent of hires accounted for by the 19-25 age group declined from approximately 18% at its peak before 2006 to 13% in 2012-13,” Hubert Janicki and Erika McEntarfer told The Wall Street Journal.

Ensuring young workers are prepared to replace retiring baby boomers will be a crucial component of limiting the effects of the construction worker shortage on the American economy. Career colleges and universities can help fill this need. As the Conference Board pointed out in its recent study, businesses will have to be proactive in finding a solution to the shortage of skilled trade labor, either “on their own or in partnerships with training and education institutions.”

“Our Electrician, Electronic Systems Technician and Heating, Ventilation, Air Conditioning and Refrigeration programs help train the next generation of skilled workers who will build safe and reliable construction projects that adhere to relevant building codes and are environmentally friendly,” said Jim Bologa, President and Chief Executive Officer of Porter and Chester Institute/YTI Career Institute. “Our students in the Computer Aided Drafting and Design program are laying the foundation for employment by learning industry specific software like SolidWorks to design 3-D models of today’s complex building projects, making them attractive candidates for entry level positions in the construction industry.”

“Career colleges and universities equip students with the skills they need to find construction industry jobs, and their emphasis on career-oriented education also helps employers find qualified candidates. Career education will play an essential role in helping American businesses confront the looming labor shortage in the construction sector and ensure that the American economy continues to build and grow,” said Steve Gunderson, president and CEO of CECU.

About Shortage of Skills 
Each month CECU will profile America's "Shortage of Skills" (SoS) in one key industry. We will examine industries that are critical to America's economic advancement and explain how a well-educated and well-trained workforce can address these issues.

About Career Education Colleges and Universities (CECU) 
Career Education Colleges and Universities (CECU) is a membership organization of accredited institutions of higher education that provide postsecondary education with a career focus. CECU's work supports thousands of campuses that educate millions of students.
 

Higher Education Tribune: APSCU analyzes how for-profit colleges provide graduates for growing industries

By Higher Education Tribune Reports  

June 27, 2016


Over the past several months, the Association of Private Sector Colleges and Universities (APSCU) took a close look at the shortage of skills in America’s growing industries in a series of "Shortage of Skills" analyses.

The Bureau of Labor Statistics (BLS) reported this year that 7.4 million Americans are unemployed while 5.8 million jobs remain unfilled across the nation.

Because employers are seeking “job ready” employees, many prospective employees fail to make the cut due to their lack of adequate education and training.

In June, APSCU examined the heating, ventilation, air conditioning and refrigeration (HVACR) industry.

A September 2015 report by the HVACR Workplace Development Foundation indicated that the Bureau of Labor Statistics predicts a 21 percent increase in the number of HVACR mechanic and installer jobs through 2022 -- almost twice the overall employment growth.

Unlike some skilled professions, HVACR jobs cannot be outsourced. And with average salaries being over $49,000, plus bonuses and overtime, the industry offers good compensation but still struggles to find new applicants to keep pace with America’s growing demand.

Burning Glass Technologies found more than 220,000 vacancies for various HVACR jobs in 2014 alone. But only an estimated 21,239 new employees met the qualification requirements to join the workforce after completing programs from technical or community colleges during the 2014–2015 school year, according to a HVACR Workplace Development Foundation report.

For-profit colleges and universities play a vital role in helping provide talent for skilled trades like HVACR technicians.

In its assessment of the beauty and wellness industry, APSCU partnered up with the American Association of Cosmetology Schools (AACS) to assess concerns within the industry, which includes product manufacturers and distributors, independent salons and spas, major chain and franchise salons, and the institutions that provide them with licensed professionals.

The most recent data from the BLS suggests stable employment within the beauty and wellness industry, with projections indicating that the beauty and wellness communities are a growing component of the nation’s economy. In fact, according to the bureau, hairdressers, barbers and cosmetologists are predicted to experience a 10 percent increase in employment from 2014 to 2024.

Regardless of the economy, people across the country routinely seek out services performed by cosmetologists, barbers, estheticians, nail technicians and massage therapists, which has contributed to industry’s growth. But the nation faces a shortage of licensed professionals needed to enable salons and spas to operate at their peak.

APSCU President and CEO Steve Gunderson said in a news release that with 10 percent annual growth predicted, the nation needs an additional 6,400 new professionals each year to meet demand.

The cosmetology school industry equips graduates with entry-level skills and the ability to successfully pass required state licensure examinations required for employment.

In another analysis, APSCU focused on the shortage of skills in the information technology and cyber security sectors. The demand for careers in information technology is very high with median wages greatly exceeding average pay.

According to the BLS, software developers are projected to grow by almost 19 percent between 2014 and 2024, and overall, all computer occupations are projected to grow by over 13 percent -- more than double the projected growth of 6.5 percent for all occupations.

Data shows that the average salary for computer occupations is $79,420, while the median wage for software developers is $95,510.

In recent years, the demand for trained cyber security professionals has exploded partly due to headlines on high-profile, top-level security breaches in government and businesses.

Because technology is ever-evolving, companies are grappling with a large human capital shortage.

A Burning Glass report found that in 2014, U.S. employers posted close to 50,000 jobs requesting a CISSP – one of the main cyber security certifications. Yet only 65,300 people in the country hold a CISSP, according to the International Information Systems Security Certification Consortium’s July 2015 membership counts.

For-profit colleges and universities strive to provide adequate training to millions of students across the country, equipping them with the necessary skills to compete for jobs in cyber security and information technology.

APSCU is a membership organization of accredited institutions of higher education that provide postsecondary education with a career focus.

Direct link to article: http://highereducationtribune.com/stories/510940087-apscu-analyzes-how-for-profit-colleges-provide-graduates-for-growing-industries

Inside Higher Ed:Wiping Out Debt

Education Department unveils draft regulations for borrowers seeking federal debt forgiveness, which include an end to mandatory arbitration agreements and requirements for some for-profits to be on the hook to pay for debt relief.



June 14, 2016

The U.S. Department of Education on Monday released a broad set of draft regulations designed to clarify and strengthen the process for federal student loan borrowers to seek to have their debt forgiven when they have been misled or defrauded by a college.

The draft regulations include new requirements that apply only to the for-profit sector, including that institutions must issue warnings to prospective students about poor loan-repayment rates, and financially troubled institutions must to set aside money to pay for loan-forgiveness claims.

“The Obama administration won’t sit idly by while dodgy schools leave students with piles of debt and taxpayers holding the bag,” John King Jr., the U.S. secretary of education, said in a phone call with journalists. “These rules ought to make them think twice.”

Consumer groups and Democrats in the U.S. Senate largely praised the department’s proposal, which also would eliminate colleges’ use of mandatory arbitration agreements that limit students’ ability to sue over allegations of wrongdoing, a fairly common practice among for-profits.

“Today’s proposed rule from the Department of Education is about justice: compensating the victims of past misdeeds, and making it more difficult for disreputable colleges to escape responsibility,” said Robert Shireman, a senior fellow at the Century Foundation and former Education Department official, and Tariq Habash, a policy associate at the foundation. The two wrote a report criticizing arbitration requirements some for-profit colleges have students sign as part of their enrollment agreements.

Advocates for the for-profit sector, however, said the regulations target them unfairly. And Republicans in the U.S. House of Representatives called the proposed regulations a "vague and subjective regulatory regime" that should be withdrawn.

Steve Gunderson is president and CEO of Career Education Colleges and Universities, the primary for-profit college association, which recently changed its name. He said the regulatory push was ideological and would threaten many for-profit and career colleges, and the students who attend them.

“We agree that poor-performing institutions, as well as those institutions that are financially at risk, should be monitored closely to protect students,” Gunderson said in a written statement. “But what the department fails to acknowledge is that these issues exist across all of higher education, not just private-sector institutions.”

The draft regulations began to take shape last year, as the feds were scrambling to respond to the collapse of Corinthian Colleges, a controversial for-profit chain.

In the two decades before Corinthian’s demise, a total of fewer than 5,000 students had sought to have their federal loans forgiven under the current borrower defense rule, which was created in 1995, according to the department. But Corinthian, which enrolled 72,000 students when it shut down, changed the stakes.

The department has received debt-forgiveness claims from thousands of former Corinthian students, as well as from students who attended other troubled for-profits. By this spring, the department had wiped away more than $42 million in debt held by 2,048 former Corinthian students. And more than 23,000 claims, including those from students who attended other institutions, had been filed by earlier this month.

The Obama administration said last year that the borrower defense regulations needed significant changes to better protect students and taxpayers. For example, federal officials said it was unclear what evidence former students must give to show that a college’s misconduct warrants debt relief.

The department brought together a negotiated rule-making panel earlier this year to come up with the new standards. But that group did not come to a consensus, so the department was able to draft its own regulations. The public comment period for the draft rules ends Aug. 1, and the department plans to publish a final version Nov. 1.

The 530-page notice about the regulations includes widely varying estimates on the cost of debt forgiveness to the federal government, with a range of $199 million to $4.23 billion annually.
Ted Mitchell, the under secretary for education, said on the call with reporters that the department is still learning about the how the process will work. But he said it will be both efficient and fair.

“Taxpayers shouldn’t be on the hook for institutions’ mistakes,” he said.

Defining Risk

King, in unveiling the rules, said they were part of the administration’s broader attempt to crack down on poor-performing for-profits.

For example, he said, military veterans’ educational benefits should be factored into a rule requiring that for-profits receive no more than 90 percent of their revenue from federal sources (the Post-9/11 GI Bill and other military benefits currently do not count toward that limit). Likewise, he said the requirement should be tightened to allow only 85 percent of revenue to come from federal sources.
He called for an end to “fighting against common-sense rules” to protect students, and said, “It’s time for Congress to get into the game, too.”

Advocates for the for-profit sector, however, argued that borrower defense rules do not apply equally to nonprofit colleges.

For example, the draft regulations would only force for-profits to provide students with information about the rates at which former students repay their loans. Some nonprofit colleges also have low repayment rates but will not be forced under to warn students under the rules.

Some for-profits also will be subject to a requirement that they set aside an amount equal to at least 10 percent of their annual federal aid revenue in the form of a letter of credit. That rule would kick in if a for-profit is snagged by various triggers related to financial stability, including if a state or federal agency files a “major” lawsuit against the institution. (The department recently increased the amount it required ITT Educational Services to set aside in its letter of credit.)

“The complex and burdensome nature of this regulation will crush career education with financial requirements not imposed on others in higher education -- including institutions that have lower graduation rates and higher default rates,” Gunderson said.

Mitchell said the regulations focus on for-profits because those institutions are more likely to perform poorly on metrics such as loan-repayment rates.

“It really is the proprietary sector where most of the risk exists,” he said.
While consumer groups seemed to be pleased with the draft regulations, some said aspects of the rules don’t go far enough.

For example, Public Citizen, which has pushed for an end to arbitration clauses, said the regulations should ban all such agreements, not just mandatory ones tied to a student’s enrollment or ability to continue at a college.

“We applaud the Department of Education for taking this important step,” said Sonia Gill, counsel for civil justice and consumer protection for Public Citizen, in a written statement, “but urge it to adopt a rule with teeth to protect the interests of students and families when they are defrauded by unscrupulous schools engaged in predatory practices.”

The Institute for College Access and Success (TICAS) also said the rules could be improved. For example, instead of providing full loan forgiveness to defrauded students, the department instead proposed an "unclear and complex method for limiting relief to borrower," the group said.
Senate Democrats, however, were effusive in their praise.

Senator Dick Durbin, an Illinois Democrat and frequent critic of for-profits, said the rules would be the Obama administration’s higher education legacy. And Senator Patty Murray of Washington said the proposed regulations are strong new safeguards.

“This is a very positive ‎step forward that will make an important difference for cheated student borrowers who have been left to dig themselves out from under a mountain of debt they cannot repay,” Murray said in a written statement.

House Republicans said the department already had the tools in place for a fair debt-forgiveness process.

The new proposal "threatens to ensnare institutions that are following the law and serving the best interests of their students," Representative John Kline, the Minnesota Republican who leads the House education committee, and Representative Virginia Foxx, a Republican from North Carolina, said in a written statement. "Taxpayers will be on the hook for billions of dollars in discharged loans, and ultimately, students will have a harder time accessing the education they need to succeed in life."

Direct link to article:https://www.insidehighered.com/news/2016/06/14/draft-federal-rules-debt-forgiveness-please-consumer-groups-anger-profits