Flake, McCain Introduce Bill to Increase Transparency in Gainful Employment Regs - Press Releases - United States Senator Jeff Flake

September 18, 2014

Washington, D.C. – U.S. Sens. Jeff Flake (R-AZ) and John McCain (R-AZ) today introduced S. 2863, the Transparency in Education Act as a Senate companion bill to legislation originally introduced by Reps. Matt Salmon (R-AZ) and Alcee Hastings (D-FL) in the House.

The bill would increase transparency during consideration of the gainful employment rule by requiring the Department of Education to determine the impact of the rule on all students participating in federal financial student aid – not just those at for-profit institutions – in order to better understand the impact on the higher-education system.

S. 2863 is cosponsored by U.S. Sens. Orrin Hatch (R-UT) and Johnny Isakson (R-GA).

“This administration has a troubling tendency to advance rules and regulations like this one without fully understanding how they might negatively affect people’s lives,” said Flake and McCain. “We're pleased to introduce legislation that requires a fair and transparent process on behalf of countless students who will feel the impact of this rule.”


Higher Education for All Blog:Private Sector Institutions’ Graduation Rates Head And Shoulders Above Community Colleges

11 Sep 2014 
By APSCU Communications 
According to the Integrated Postsecondary Education Data System (IPEDS), in the 2010-2011 school year, private sector colleges and universities conferred over 868,000 degrees between two and four year and certificate programs. This represents about 18 percent of all degrees conferred in the US that year. Not only do private sector institutions play a pivotal role in preparing hundreds of thousands of students for careers in a changing economy, but they do so for a population historically underserved by traditional higher education.

As the U.S. Department of Education data shows, two-year private sector institutions’ average graduation rate is nearly triple that of public community colleges – 62.7% at private sector institutions, compared to 21.9% at public community colleges.
This fact cannot be overlooked when discussing private sector institutions and the “gainful employment” regulation.

Private sector institutions and community colleges serve similar student bodies in terms of demographics, risk factors, and academic goals.  But as the data shows, they are doing so with drastically different results.

The simple fact that “gainful employment” regulation could potentially shutter programs that are graduating students at rates so much higher than the alternative again points out the flawed logic behind the gainful employment regulation.
Direct link to article: http://www.highereducationforall.com/private-sector-institutions-graduation-rates-head-shoulders-community-colleges-2/

Watchdog.org: The Department of Education can’t even count

September 9, 2014 

The U.S. Department of Education doesn’t know for sure how many comments the public submitted to it nearly four months ago about the controversial “gainful employment” rule.

Experts say the “witch-hunt” like rule ought to be able to stand up to feedback from those affected by it, but while the public comment period closed May 27, the department still hasn’t “counted up an exact figure” of comments received.

The department is instead “spending our time having conversations and crafting a rule that will best serve students,” a spokesman from the department said on background in an email to Watchdog.org.
The gainful employment rule is a proposed regulation within the Higher Education Act of 1965. It would rescind federal funds from vocational programs and for-profit institutions if its graduates defaulted on their student loans more than 30 percent of the time.

Additionally, if the average student’s ratio of debt was more than 12 percent of their incomes, the school or program could also become ineligible for funding.

The department spokesman confirmed staff received “less than 100,000 comments this go-around.”
Advocates worry the department’s opaque treatment of these comments is not only a transparency issue, but a disservice to the rule-making process.

“The word ‘public comment’ means ‘public comment,’” said Richard Vedder, director of the Center for College Affordability and Productivity. “People have the right to know the intensity with which people are commenting on things.”

The Institute for Liberty submitted 10,000 comments to the department.

Releasing the number of comments would send  “a clear signal to Congress that there is tremendous public interest in these issues,” said Andrew Langer, president of the institute.

“If the public feels strongly enough about agency actions to send tens of thousands of letters, then perhaps it signals to Congress that they need to weigh in,” he said.

The Association of Private Sector Colleges and Universities stated that over 57,000 comments sector-wide were submitted to the department.

“We hope the department carefully reviews and considers the input and concerns of those impacted by the regulation,” said Noah Black, vice president of communications at APSCU. “To date, this is something that has been missing from the regulatory process.”

The proposed rule has become controversial because of the impact it would have on for-profit institutions.

Inside Higher Ed reported in March that roughly 8,000 academic programs enrolling 1 million students would be required to comply with the standards.

“Most will pass,” said Arne Duncan, the education secretary, according to Inside Higher Ed’s report. “Many programs, particularly those at for-profits, will not.”

Experts believe gainful employment regulations disproportionately impact for-profit schools.
“They’ve created a witch hunt against the for-profit institutions,” said Lindsey Burke, Will Skillman fellow at the Heritage Foundation. “If it was really about limiting default, then they would also be shining a bright light on community colleges as well because they have comparable default rates and (attract) similar students.”

The department’s previous history with gainful employment regulations sheds light on how they are handling the rule-making process now, Vetters said.

In 2012, a federal judge struck down a previous attempt to create a gainful employment standard because the loan repayment metrics were found to be arbitrary.

“They’ve been beaten up on this gainful employment issue before,” he said. “The department has been working for years on this issue and probably just wants to get through this public comment period.”

Contact Bre at bpayton@watchdog.org, or follow her on Twitter @bre_payton. 

Direct link to article: http://watchdog.org/169338/gainful-employment-count/

Higher Education for All Blog:The “Gainful Employment” Regulation Will Cost Taxpayers Over $1.7 Billion

03 Sep 2014 /
By APSCU Communications 
Education Secretary Arne Duncan has acknowledged that private sector institutions are “helping us meet the explosive demand for skills that public institutions cannot always meet.” However, the U.S. Department of Education’s proposed “gainful employment” regulation will severely limit private sector institutions’ ability to meet these expanding needs. The “gainful employment” regulation will result in our nation seeing a gaping hole in educational capacity.

Research by Drs. Jonathan Guryan of Northwestern University and Matthew Thompson of Charles River Associates estimates that over 7.5 million students will be displaced by program closures resulting from the “gainful employment” regulation by 2024. The Department unrealistically and unconvincingly expects that 90 percent of displaced students will find comparable alternatives – Drs. Guryan and Thompson examining several scenarios found comparable alternatives at best for between 25 and 50 percent of displaced students.

Contrary to the Department’s claims, the “gainful employment” regulation promises to be just as costly to taxpayers as it is to student access. A recent study by Jorge Klor de Alva and Mark Schneider from the Nexus Research and Policy Center found that if states were to educate the students displaced from failed and zoned programs by the regulation, New York alone would have to appropriate an additional $68 million for one graduating class. A state like Arizona would face a crippling $509 million in costs if it had to educate the 2012 graduates in their own two or four-year institutions. Even taking into account state funding that some proprietary institutions receive for the benefit of individual students, taxpayers across the country would foot a total bill of nearly $1.7 billion per year in additional expenditures.

map tuition

These staggering numbers multiplied over future graduating classes would strap states with billions of dollars in extra expenditures. The “gainful employment” regulation will force states into an unpalatable choice between hiking taxes to cover the excess education expenditures, raising tuition, or simply turning away the students from unfunded programs. The likely result is a significant decrease in educational access, which promises to have severe individual and national economic consequences down the road. The Department’s ill-advised regulation is a lose-lose for students and taxpayers.

Direct link to article: http://www.highereducationforall.com/gainful-employment-regulation-will-cost-taxpayers/#.VAhyQmMYB72