Coalition for Educational Success
April 27, 2011
WASHINGTON--(BUSINESS WIRE)--Penny Lee, Managing Director of the Coalition for Educational Success, issued the following statement regarding a bipartisan letter signed by 118 members of Congress and sent today to the White House, urging President Obama to reject the U.S. Department of Education’s proposed gainful employment regulation and work with them to enact meaningful reforms to higher education.
“The Department’s proposed regulation was developed through an inappropriate and nontransparent process, driven by a now discredited and flawed GAO report and tainted by ongoing interactions between Senior Department officials and Wall Street short-sellers, which are now being investigated by the Department’s Inspector General.”
“With 118 signatures, including 25 from Congressional Democrats, this letter sends a strong, bipartisan message from Congress to the White House that the U.S. Department of Education’s misguided gainful employment regulation should be completely withdrawn. Members of Congress rightfully point out the far-reaching impact the Department’s regulation will have on underserved and at-risk students, and how the regulation will ultimately limit access to higher education. The Department’s regulation will make it nearly impossible for our nation to achieve the President’s goal of having the highest percentage of college graduates by 2020.
“America’s career colleges can help President Obama achieve his ambitious goal, but the proposed regulation would restrict access to the career college sector of higher education and deny nontraditional students – often working, minority, low-income Americans and active military and veterans – innovative and flexible higher education opportunities. We believe that in dealing with federal support for higher education, all schools should be held to the same standard and not arbitrarily targeted solely because of their tax status.
“The Administration should take notice of this groundswell of opposition, as well as the recent overwhelming and bipartisan vote by the House of Representatives to prohibit the Department from implementing the proposed regulation. If allowed to go forward, the rule will cost in excess of a hundred thousand jobs and deny a pathway to employment for more than a million students, disproportionally effecting minorities and women. There is no question the Department’s gainful employment proposal is a job killer and a prime example of regulatory over-reach.
“The Department’s proposed regulation was developed through an inappropriate and nontransparent process, driven by a now discredited and flawed GAO report and tainted by ongoing interactions between Senior Department officials and Wall Street short-sellers, which are now being investigated by the Department’s Inspector General.”
The Coalition for Educational Success
The Coalition for Educational Success includes many of the nation's leading career colleges, serving more than 350,000 students at 478 campuses in 41 states. Career colleges provide training for students in 17 of the 20 fastest growing fields. The Coalition advocates for policies that support wider access to higher education, particularly for non-traditional students including full-time workers, workforce returners, working parents, minorities and veterans.
Contacts
The Coalition for Educational Success
Noah Black, 202-295-8797
noah.black@harbourgrp.com
Impact of the Department of Defense and Full-Year Continuing Appropriations Act, 2011 on the Federal Pell Grant Program
IFAP
By: David A. Bergeron
Summary: This letter provides information on the impact of the recently enacted Department of Defense and Full-Year Continuing Appropriations Act, 2011 (Public Law 112-10) on the Federal Pell Grant Program. It provides institutions with information about the 2011-2012 Federal Pell Grant Program Payment and Disbursement Schedules. This letter also includes information on changes made to the eligibility of students for second Scheduled Awards and on changes to the requirements for awarding a Federal Pell Grant for a 2011 crossover payment period. In addition, this letter reminds institutions that 2010-2011 is the last award year for the Academic Competitiveness Grant (ACG) and National SMART Grant (SMART Grant) programs.
Dear Colleague:
On April 15, 2011, the President signed the Department of Defense and Full-Year Continuing Appropriations Act, 2011 (Public Law 112-10) that included several provisions impacting the Federal Pell Grant Program. The following provides guidance to institutions on those provisions.
2011-2012 Federal Pell Grant Program Payment and Disbursement Schedules
The Department of Defense and Full-Year Continuing Appropriations Act, 2011 did not include any provisions that change the 2011-2012 Pell Grant maximum award or maximum eligible expected family contribution (EFC) used to develop the 2011-2012 Payment and Disbursement Schedules that were posted to the Information for Financial Aid Professionals (IFAP) Web site on February 1, 2011 (see Dear Colleague Letter P-11-01). Thus, institutions are advised that those February schedules remain in effect for the 2011-2012 award year.
Two Pells Grants in One Award Year
The Department of Defense and Full-Year Continuing Appropriations Act, 2011 repealed, effective with the 2011-2012 award year, the Pell Grant provision that provided that an otherwise eligible student could receive more than one Pell Grant in an award year. That provision – section 401(b)(5) of the Higher Education Act of 1965, as amended (HEA) – was added to the HEA in August of 2008 by the Higher Education Opportunity Act and became effective with the 2009-2010 award year. Final regulations implementing the two Pell Grants in one award year provision were published in the Federal Register on October 29, 2009 [74 FR 55902], and were effective beginning with the 2010-2011 award year. The following provides guidance to institutions on the implementation of the repeal of the provisions allowing for a second Pell Grant in one award year, including its impact on certain regulatory provisions.
Award Years
2010-2011 Award Year – Because the repeal of the provision allowing for a second Pell Grant in one award year is effective with the 2011-2012 award year, otherwise-eligible students are still able to receive Pell Grant funds that exceed one Scheduled Award from the 2010-2011 award year, including for a 2011 crossover payment period (a payment period that includes both June 30, 2011, and July 1, 2011). See the “Regulations” section below for more information on the awarding of a Pell Grant for a 2011 crossover payment period.
2011-2012 and Subsequent Award Years – Because the repeal of the provision allowing for a second Pell Grant in one award year is effective with the 2011-2012 award year, no student will be eligible to receive more than one Pell Grant Scheduled Award beginning with the 2011-2012 award year. Students whose 2011 crossover payment period is assigned to the 2011-2012 award year, as well as subsequent payment periods that are in the 2011-2012 award year, will receive payments from their 2011-2012 Scheduled Award. In general, the earliest a student could be impacted by the elimination of the authorization of a second Pell Grant in one award year will be in the spring of 2012.
Example A – Summer 2011 Assigned to the 2010-2011 Award Year
A student, enrolled in a 2011 summer term that is a crossover payment period, receives, as determined by the institution, a Pell Grant disbursement from the 2010-2011 award year. The award was from either any of the student’s remaining 2010-2011 first Scheduled Award or, if the student was eligible for it, the student’s second Scheduled Award, or both. The student may receive a 2011-2012 Scheduled Award for 2011-2012 payment periods following the 2011 crossover payment period. It is important to remember that, if full-time in the fall 2011 and spring 2012 semesters, the student will not be eligible for additional Pell Grant funding from the 2011-2012 award year for a 2012 crossover payment period. Students who would have remaining 2011-2012 award year eligibility for a 2012 crossover payment period would typically be students who were less-than-full-time for one or more payment periods in 2011-2012. These students may be eligible to receive 2011-2012 Scheduled Award funds during a 2012 crossover period.
Example B – Summer 2011 Assigned to the 2011-2012 Award Year
A student, enrolled in a 2011 summer term that is in a crossover payment period, receives, as determined by the institution, a Pell Grant disbursement from the 2011-2012 award year of one-half of the student’s Scheduled Award as a full-time student. The student, also as a full-time student, receives the other half of the 2011-2012 Scheduled Award for the fall 2011 semester.
Since all of the student’s Scheduled Award for the 2011-2012 award year has been received, there is no remaining eligibility for the rest of the 2011-2012 award year, starting with the spring 2012 semester. Since the spring semester is not a crossover payment period, there will be no opportunity for the student to receive Pell Grant funds from the 2012-2013 award year during that payment period.
Regulations
Under current regulations, an institution must assign a crossover payment period to the award year in which the student receives the greater payment for the payment period (34 CFR 690.64(b)). Because there will be no opportunity for a student to receive a second Scheduled Award during the 2011-2012 award year, the Department of Defense and Full-Year Continuing Appropriations Act, 2011 included a provision that waives this regulatory requirement for any 2011 crossover payment period. Thus, for a 2011 crossover payment period, an institution may choose the award year to which they assign a student’s crossover payment period for purposes of the Federal Pell Grant Program.
This flexibility for an institution to award from either award year for a 2011 crossover payment period does not negate the existing eligibility requirements for 2010-2011 first Scheduled Awards, 2010-2011 second Scheduled Awards, or 2011-2012 Scheduled Awards.
Final Note
We remind institutions that 2010-2011 is the last award year for the Academic Competitiveness Grant (ACG) and National SMART Grant (SMART Grant) programs. Therefore, any ACG or SMART Grant awards for a 2011 crossover payment period must be assigned to the 2010-2011 award year.
If you have any questions on the information included in this letter, you may contact our Research and Customer Care Center staff. Staff is available Monday through Friday between the hours of 9:00 AM and 5:00 PM (Eastern Time) at 1-800-433-7327. After hours calls will be accepted by an automated voice response system. Alternatively, you may e-mail the Care Center at fsa.customer.support@ed.gov.
Sincerely,
David A. Bergeron
Deputy Assistant Secretary for
Policy, Planning and Innovation
Office of Postsecondary Education
Attachments/Enclosures:
P-11-02: Impact of the Department of Defense and Full-Year Continuing Appropriations Act, 2011 on the Federal Pell Grant Program in PDF Format, 136KB, 3 Pages
By: David A. Bergeron
Summary: This letter provides information on the impact of the recently enacted Department of Defense and Full-Year Continuing Appropriations Act, 2011 (Public Law 112-10) on the Federal Pell Grant Program. It provides institutions with information about the 2011-2012 Federal Pell Grant Program Payment and Disbursement Schedules. This letter also includes information on changes made to the eligibility of students for second Scheduled Awards and on changes to the requirements for awarding a Federal Pell Grant for a 2011 crossover payment period. In addition, this letter reminds institutions that 2010-2011 is the last award year for the Academic Competitiveness Grant (ACG) and National SMART Grant (SMART Grant) programs.
Dear Colleague:
On April 15, 2011, the President signed the Department of Defense and Full-Year Continuing Appropriations Act, 2011 (Public Law 112-10) that included several provisions impacting the Federal Pell Grant Program. The following provides guidance to institutions on those provisions.
2011-2012 Federal Pell Grant Program Payment and Disbursement Schedules
The Department of Defense and Full-Year Continuing Appropriations Act, 2011 did not include any provisions that change the 2011-2012 Pell Grant maximum award or maximum eligible expected family contribution (EFC) used to develop the 2011-2012 Payment and Disbursement Schedules that were posted to the Information for Financial Aid Professionals (IFAP) Web site on February 1, 2011 (see Dear Colleague Letter P-11-01). Thus, institutions are advised that those February schedules remain in effect for the 2011-2012 award year.
Two Pells Grants in One Award Year
The Department of Defense and Full-Year Continuing Appropriations Act, 2011 repealed, effective with the 2011-2012 award year, the Pell Grant provision that provided that an otherwise eligible student could receive more than one Pell Grant in an award year. That provision – section 401(b)(5) of the Higher Education Act of 1965, as amended (HEA) – was added to the HEA in August of 2008 by the Higher Education Opportunity Act and became effective with the 2009-2010 award year. Final regulations implementing the two Pell Grants in one award year provision were published in the Federal Register on October 29, 2009 [74 FR 55902], and were effective beginning with the 2010-2011 award year. The following provides guidance to institutions on the implementation of the repeal of the provisions allowing for a second Pell Grant in one award year, including its impact on certain regulatory provisions.
Award Years
2010-2011 Award Year – Because the repeal of the provision allowing for a second Pell Grant in one award year is effective with the 2011-2012 award year, otherwise-eligible students are still able to receive Pell Grant funds that exceed one Scheduled Award from the 2010-2011 award year, including for a 2011 crossover payment period (a payment period that includes both June 30, 2011, and July 1, 2011). See the “Regulations” section below for more information on the awarding of a Pell Grant for a 2011 crossover payment period.
2011-2012 and Subsequent Award Years – Because the repeal of the provision allowing for a second Pell Grant in one award year is effective with the 2011-2012 award year, no student will be eligible to receive more than one Pell Grant Scheduled Award beginning with the 2011-2012 award year. Students whose 2011 crossover payment period is assigned to the 2011-2012 award year, as well as subsequent payment periods that are in the 2011-2012 award year, will receive payments from their 2011-2012 Scheduled Award. In general, the earliest a student could be impacted by the elimination of the authorization of a second Pell Grant in one award year will be in the spring of 2012.
Example A – Summer 2011 Assigned to the 2010-2011 Award Year
A student, enrolled in a 2011 summer term that is a crossover payment period, receives, as determined by the institution, a Pell Grant disbursement from the 2010-2011 award year. The award was from either any of the student’s remaining 2010-2011 first Scheduled Award or, if the student was eligible for it, the student’s second Scheduled Award, or both. The student may receive a 2011-2012 Scheduled Award for 2011-2012 payment periods following the 2011 crossover payment period. It is important to remember that, if full-time in the fall 2011 and spring 2012 semesters, the student will not be eligible for additional Pell Grant funding from the 2011-2012 award year for a 2012 crossover payment period. Students who would have remaining 2011-2012 award year eligibility for a 2012 crossover payment period would typically be students who were less-than-full-time for one or more payment periods in 2011-2012. These students may be eligible to receive 2011-2012 Scheduled Award funds during a 2012 crossover period.
Example B – Summer 2011 Assigned to the 2011-2012 Award Year
A student, enrolled in a 2011 summer term that is in a crossover payment period, receives, as determined by the institution, a Pell Grant disbursement from the 2011-2012 award year of one-half of the student’s Scheduled Award as a full-time student. The student, also as a full-time student, receives the other half of the 2011-2012 Scheduled Award for the fall 2011 semester.
Since all of the student’s Scheduled Award for the 2011-2012 award year has been received, there is no remaining eligibility for the rest of the 2011-2012 award year, starting with the spring 2012 semester. Since the spring semester is not a crossover payment period, there will be no opportunity for the student to receive Pell Grant funds from the 2012-2013 award year during that payment period.
Regulations
Under current regulations, an institution must assign a crossover payment period to the award year in which the student receives the greater payment for the payment period (34 CFR 690.64(b)). Because there will be no opportunity for a student to receive a second Scheduled Award during the 2011-2012 award year, the Department of Defense and Full-Year Continuing Appropriations Act, 2011 included a provision that waives this regulatory requirement for any 2011 crossover payment period. Thus, for a 2011 crossover payment period, an institution may choose the award year to which they assign a student’s crossover payment period for purposes of the Federal Pell Grant Program.
This flexibility for an institution to award from either award year for a 2011 crossover payment period does not negate the existing eligibility requirements for 2010-2011 first Scheduled Awards, 2010-2011 second Scheduled Awards, or 2011-2012 Scheduled Awards.
Final Note
We remind institutions that 2010-2011 is the last award year for the Academic Competitiveness Grant (ACG) and National SMART Grant (SMART Grant) programs. Therefore, any ACG or SMART Grant awards for a 2011 crossover payment period must be assigned to the 2010-2011 award year.
If you have any questions on the information included in this letter, you may contact our Research and Customer Care Center staff. Staff is available Monday through Friday between the hours of 9:00 AM and 5:00 PM (Eastern Time) at 1-800-433-7327. After hours calls will be accepted by an automated voice response system. Alternatively, you may e-mail the Care Center at fsa.customer.support@ed.gov.
Sincerely,
David A. Bergeron
Deputy Assistant Secretary for
Policy, Planning and Innovation
Office of Postsecondary Education
Attachments/Enclosures:
P-11-02: Impact of the Department of Defense and Full-Year Continuing Appropriations Act, 2011 on the Federal Pell Grant Program in PDF Format, 136KB, 3 Pages
The Daily Caller: Why the Department of Education cannot be trusted on gainful employment regulations
The Daily Caller
By Lanny Davis & Harry Alford
Last February, 58 Democrats in the House of Representatives — including major members of the Congressional Black Caucus, the then-speaker of the House, Nancy Pelosi, the current chair of the Democratic National Committee, Rep. Debbie Wasserman Schultz, and such leading progressive members as Reps. Carolyn McCarthy, Rob Andrews and Elliot Engel, and many others — voted to block funding of the implementation of the Department of Education’s (DOE) “gainful employment” (GE) regulation. The GE regulation makes programs ineligible for federal financial aid (grants and loans) if they fail to meet certain debt-service-to-income thresholds or a repayment rate and disproportionately impact minority and lower-income students who predominantly attend for-profit, career colleges, to which the proposed GE regulation virtually exclusively applies.
A substantial majority of the House supported that amendment to the continuing budget resolution. Yet the House measure was dropped in the last minutes of the budget deal, apparently opposed by Secretary of Education Arne Duncan, who was willing to ignore the wishes of these leading House Democrats.
These Democratic leaders have good reasons to oppose this regulation. It targets for-profit, career colleges, which predominantly serve minorities and lower-income students, the Democratic Party’s base. More importantly, DOE has shown that it cannot be trusted to develop a regulation with such far-reaching impact. It still has no idea of the actual impact of the proposed regulation on these students. And it continues to make basic errors on the simple things.
For example, last fall DOE attempted to predict the impact of the regulation nationwide by using Missouri for-profit colleges’ data. It predicted that only 5% of “programs” representing 8% of “student enrollments” would be rendered ineligible for student loans based on the Missouri data. But those percentages turned out to be grossly misleading. In fact, financial aid expert Mark Kantrowitz noted that the GE regulation as proposed would render ineligible more than one-fourth of all for-profit college programs, meaning substantial numbers of minorities and lower-income students wishing to enroll in those programs would not be eligible for federal grants or loans.
The difference between 5% and 26% is significant, especially when you consider that career schools enroll more than 1.2 million students. Yet DOE made this huge mistake, leaving the misleading impression that the impact on career colleges would be minimal (could that have been intentional?). And yet no one seemed to notice or call them on it.
Now just last week, DOE was forced to admit to making an error so obvious, showing such gross incompetence, that it should reasonably cause even the staunchest proponents of the GE rule to halt the GE regulatory process and reassess where it is going and whether DOE could be trusted to pull it off.
Specifically, DOE admitted that in its trial three-year default rate calculations, it had inadvertently counted students who had defaulted after the appropriate cut-off date (September 30, 2010) as defaults, thereby increasing the numerator of its simple calculation and causing the default rates of colleges to be “incorrectly inflated.” Had this not been just a “trial,” this could have resulted in erroneous disqualification of career colleges across the country from eligibility for any federal aid, and thus, the minority and lower-income students who rely on them. Thankfully, colleges have access to the same data and were able to point this mistake out to DOE.
Aside from providing fodder to Senator Tom Harkin and others for the further demonization of career schools, DOE’s inexplicable mistake had no immediate effect on federal aid since these were “trial” calculations. It did, however, have a real effect in California. The California legislature, in the context of the state’s ongoing budget crisis, decided to limit its grants to students using this three-year “trial” FY08 default rate — now admitted by DOE to be “incorrectly inflated.” Schools previously excluded from the grant program will now be included, causing the state’s budget to be in further disarray.
Even after admitting its mistake, DOE was disingenuous. It reported that the mistake “incorrectly inflated” a school’s default rate in only “some” cases. That was not true. It necessarily erroneously inflated most of the data, since any data included after September 30, 2010, by definition would have caused “incorrect inflation.”
So if DOE can’t do the simple math of counting the number of student loan defaults that occurred between two dates, how can it be trusted to do the complex, multi-step, algorithm calculations under the proposed gainful employment regulation?
Worse yet, Secretary Duncan allowed the biased policy-makers driving the drafting of the gainful employment regulation to substitute a transparent basis for determining the debt-to-income ratio test — using the Internet-accessible Bureau of Labor Statistics data on average income of particular occupations — for the totally non-transparent IRS and Social Security data of individual reported incomes, to which only the government would have access.
Can you imagine? In a Democratic administration standing for transparency and fairness, DOE substituted a black box method for determining a key test that could throw hundreds of thousands of minority and low-income students out of their opportunities for college education — meaning the colleges can’t know why they have violated the test because they can’t have access to its graduates’ earnings data, and are “convicted until proven innocent” — raising serious due process concerns.
Moreover the government will be intruding on the private financial and other data of all individual student borrowers without their permission. It is both discriminatory and far from clear that the DOE has the legal, much less the moral, right to do so. We wonder why privacy rights and civil liberties activists have not expressed more public opposition to this ill-thought-out gainful employment regulation. Perhaps they don’t understand it.
So once again, we join the many voices, including many leading House liberals, calling on Secretary Duncan to stop the rush to regulate, stop the sloppy math and sloppy thinking and “black box” and non-transparent processes that are the heart of this regulation.
Hit the pause button — the reset button — and join with the administration’s friends in Congress to re-think this regulation and do it right if you are going to do it at all and apply it across the board and address the serious problem of excessive student debt, especially among low-income students on a national basis, the only way it can be truly addressed.
Lanny Davis is a Washington attorney and represents the NBCC. Harry Alford is President of the National Black Chamber of Commerce (NBCC).
Direct link to article: http://dailycaller.com/2011/04/25/why-the-department-of-education-cannot-be-trusted-on-gainful-employment-regulations-%E2%80%93-part-1/
By Lanny Davis & Harry Alford
Last February, 58 Democrats in the House of Representatives — including major members of the Congressional Black Caucus, the then-speaker of the House, Nancy Pelosi, the current chair of the Democratic National Committee, Rep. Debbie Wasserman Schultz, and such leading progressive members as Reps. Carolyn McCarthy, Rob Andrews and Elliot Engel, and many others — voted to block funding of the implementation of the Department of Education’s (DOE) “gainful employment” (GE) regulation. The GE regulation makes programs ineligible for federal financial aid (grants and loans) if they fail to meet certain debt-service-to-income thresholds or a repayment rate and disproportionately impact minority and lower-income students who predominantly attend for-profit, career colleges, to which the proposed GE regulation virtually exclusively applies.
A substantial majority of the House supported that amendment to the continuing budget resolution. Yet the House measure was dropped in the last minutes of the budget deal, apparently opposed by Secretary of Education Arne Duncan, who was willing to ignore the wishes of these leading House Democrats.
These Democratic leaders have good reasons to oppose this regulation. It targets for-profit, career colleges, which predominantly serve minorities and lower-income students, the Democratic Party’s base. More importantly, DOE has shown that it cannot be trusted to develop a regulation with such far-reaching impact. It still has no idea of the actual impact of the proposed regulation on these students. And it continues to make basic errors on the simple things.
For example, last fall DOE attempted to predict the impact of the regulation nationwide by using Missouri for-profit colleges’ data. It predicted that only 5% of “programs” representing 8% of “student enrollments” would be rendered ineligible for student loans based on the Missouri data. But those percentages turned out to be grossly misleading. In fact, financial aid expert Mark Kantrowitz noted that the GE regulation as proposed would render ineligible more than one-fourth of all for-profit college programs, meaning substantial numbers of minorities and lower-income students wishing to enroll in those programs would not be eligible for federal grants or loans.
The difference between 5% and 26% is significant, especially when you consider that career schools enroll more than 1.2 million students. Yet DOE made this huge mistake, leaving the misleading impression that the impact on career colleges would be minimal (could that have been intentional?). And yet no one seemed to notice or call them on it.
Now just last week, DOE was forced to admit to making an error so obvious, showing such gross incompetence, that it should reasonably cause even the staunchest proponents of the GE rule to halt the GE regulatory process and reassess where it is going and whether DOE could be trusted to pull it off.
Specifically, DOE admitted that in its trial three-year default rate calculations, it had inadvertently counted students who had defaulted after the appropriate cut-off date (September 30, 2010) as defaults, thereby increasing the numerator of its simple calculation and causing the default rates of colleges to be “incorrectly inflated.” Had this not been just a “trial,” this could have resulted in erroneous disqualification of career colleges across the country from eligibility for any federal aid, and thus, the minority and lower-income students who rely on them. Thankfully, colleges have access to the same data and were able to point this mistake out to DOE.
Aside from providing fodder to Senator Tom Harkin and others for the further demonization of career schools, DOE’s inexplicable mistake had no immediate effect on federal aid since these were “trial” calculations. It did, however, have a real effect in California. The California legislature, in the context of the state’s ongoing budget crisis, decided to limit its grants to students using this three-year “trial” FY08 default rate — now admitted by DOE to be “incorrectly inflated.” Schools previously excluded from the grant program will now be included, causing the state’s budget to be in further disarray.
Even after admitting its mistake, DOE was disingenuous. It reported that the mistake “incorrectly inflated” a school’s default rate in only “some” cases. That was not true. It necessarily erroneously inflated most of the data, since any data included after September 30, 2010, by definition would have caused “incorrect inflation.”
So if DOE can’t do the simple math of counting the number of student loan defaults that occurred between two dates, how can it be trusted to do the complex, multi-step, algorithm calculations under the proposed gainful employment regulation?
Worse yet, Secretary Duncan allowed the biased policy-makers driving the drafting of the gainful employment regulation to substitute a transparent basis for determining the debt-to-income ratio test — using the Internet-accessible Bureau of Labor Statistics data on average income of particular occupations — for the totally non-transparent IRS and Social Security data of individual reported incomes, to which only the government would have access.
Can you imagine? In a Democratic administration standing for transparency and fairness, DOE substituted a black box method for determining a key test that could throw hundreds of thousands of minority and low-income students out of their opportunities for college education — meaning the colleges can’t know why they have violated the test because they can’t have access to its graduates’ earnings data, and are “convicted until proven innocent” — raising serious due process concerns.
Moreover the government will be intruding on the private financial and other data of all individual student borrowers without their permission. It is both discriminatory and far from clear that the DOE has the legal, much less the moral, right to do so. We wonder why privacy rights and civil liberties activists have not expressed more public opposition to this ill-thought-out gainful employment regulation. Perhaps they don’t understand it.
So once again, we join the many voices, including many leading House liberals, calling on Secretary Duncan to stop the rush to regulate, stop the sloppy math and sloppy thinking and “black box” and non-transparent processes that are the heart of this regulation.
Hit the pause button — the reset button — and join with the administration’s friends in Congress to re-think this regulation and do it right if you are going to do it at all and apply it across the board and address the serious problem of excessive student debt, especially among low-income students on a national basis, the only way it can be truly addressed.
Lanny Davis is a Washington attorney and represents the NBCC. Harry Alford is President of the National Black Chamber of Commerce (NBCC).
Direct link to article: http://dailycaller.com/2011/04/25/why-the-department-of-education-cannot-be-trusted-on-gainful-employment-regulations-%E2%80%93-part-1/
State authorization under the Program Integrity Regulations
IFAP
By Eduardo M. Ochoa
Summary: This letter provides guidance on State authorization in the context of distance learning under the Program Integrity regulations.
Dear Colleague:
On October 29, 2010, the Department published in the Federal Register final regulations on program integrity issues (75 FR 66832) (Program Integrity Regulations). These final regulations are available at http://www.ifap.ed.gov/eannouncements/110110PubFinalRulesforTitlveIVStudentAidPrgms.html. More recently, we released a Dear Colleague Letter (DCL GEN-11-05) that provided guidance on three areas of those final regulations: State authorization, incentive compensation, and misrepresentation. That guidance was provided to help institutions understand the changes to the October 2010 regulations and does not make any changes to the regulations.
One of the specific issues addressed in DCL GEN-11-05 was State authorization in the context of distance education, including correspondence study and online learning. Under the State authorization regulations, a student that is enrolled in an educational program offered by an institution cannot use Title IV, HEA program funds for that program if the institution the student is attending does not have State authorization in the State in which the student resides. This is true for all educational programs, including distance education. As explained within the preamble to the October 2010 regulations, if a State fails to timely comply with the State authorization requirements at 34 C.F.R. §§ 600.9(a), and (b), for programs other than distance education, an institution may obtain extensions until July 1, 2013, to secure compliance with these State authorization requirements.
However, since publishing the DCL GEN-11-05, we have heard complaints from some institutions, or their representatives, that they are encountering challenges in seeking and obtaining State authorization for distance education programs. We are also aware that some States are considering steps to modify or update authorization requirements for the provision of distance education training. In some cases, the changes may be a part of a broader effort to coordinate such authorizations with other States and streamline the authorization processes. In addition, we have been told that some higher education associations and institutions are preparing information on States’ requirements in an effort to help institutions with compliance efforts. We believe these efforts are valuable and wish to work with the higher education community and States to encourage and support their development.
In the meantime, some institutions have suggested that time and expense could be expended to comply with requirements that may soon change, and some institutions have further claimed that States may not be prepared to manage a large number of applications for authorization. We are committed to supporting State efforts that help institutions ensure that distance education programs are authorized.
Clarification of Enforcement. With regard to the State authorization provisions at 34 C.F.R. § 600.9(c), the Department will not initiate any action to establish repayment liabilities or limit student eligibility for distance education activities undertaken before July 1, 2014, so long as the institution is making good faith efforts to identify and obtain necessary State authorizations before that date. Evidence of good faith efforts by institutions could include any one or more of the following items:
* Documentation that an institution is developing a distance education management process for tracking students’ place of residence when engaged in distance education.
* Documentation that an institution has contacted a State directly to discuss programs the institution is providing to students in that State to determine whether authorization is needed.
* An application to a State, even if it is not yet approved.
* Documentation from a State that an application is pending.
If a State has no applicable regulation or law, then no action on the part of the institution is required. Where States are in the process of establishing new requirements or creating application procedures, institutions acting in good faith would be expected to seek authorization under the new requirements or procedures only after they are established. Monitoring evolving State requirements should be made easier by the many associations, States, and institutions that are sharing on the Internet their analyses of individual State authorization requirements and processes.
However, the Department will review carefully instances where an institution may not be acting in good faith, such as where documents show an institution knew of a State requirement and willfully refused to comply with it.
Development of a Comprehensive Directory. As part of our technical assistance efforts, we are committed to working with appropriate parties to develop a comprehensive directory of State requirements that provides a meaningful opportunity for States to clearly articulate their specific requirements and for institutions of higher education to easily access the requirements and apply to the State for authorization. Once the directory is developed, we plan to make it publicly available on the Department's Web site.
Supporting State Coordination. States determine what requirements, if any, distance education programs offered within their borders must meet. As a result, efforts to clarify and coordinate State laws require the engagement of States and the entire higher education community. We are interested in working with the community to support States’ efforts to develop model reciprocal agreements, common applications, or other methods that States could adopt to foster compliance. We welcome suggestions from institutions and associations about how such efforts could be undertaken to best meet the needs of institutions and States.
The Department recognizes the value of distance education. We are eager to help create an environment that allows innovative approaches to flourish and grow. We thank you for your continued cooperation as we work to implement these regulations.
Sincerely,
Eduardo M. Ochoa
Assistant Secretary for
Postsecondary Education
Attachments/Enclosures:
GEN-11-11: State authorization under the Program Integrity Regulations in PDF format, 126KB, 3 Pages
By Eduardo M. Ochoa
Summary: This letter provides guidance on State authorization in the context of distance learning under the Program Integrity regulations.
Dear Colleague:
On October 29, 2010, the Department published in the Federal Register final regulations on program integrity issues (75 FR 66832) (Program Integrity Regulations). These final regulations are available at http://www.ifap.ed.gov/eannouncements/110110PubFinalRulesforTitlveIVStudentAidPrgms.html. More recently, we released a Dear Colleague Letter (DCL GEN-11-05) that provided guidance on three areas of those final regulations: State authorization, incentive compensation, and misrepresentation. That guidance was provided to help institutions understand the changes to the October 2010 regulations and does not make any changes to the regulations.
One of the specific issues addressed in DCL GEN-11-05 was State authorization in the context of distance education, including correspondence study and online learning. Under the State authorization regulations, a student that is enrolled in an educational program offered by an institution cannot use Title IV, HEA program funds for that program if the institution the student is attending does not have State authorization in the State in which the student resides. This is true for all educational programs, including distance education. As explained within the preamble to the October 2010 regulations, if a State fails to timely comply with the State authorization requirements at 34 C.F.R. §§ 600.9(a), and (b), for programs other than distance education, an institution may obtain extensions until July 1, 2013, to secure compliance with these State authorization requirements.
However, since publishing the DCL GEN-11-05, we have heard complaints from some institutions, or their representatives, that they are encountering challenges in seeking and obtaining State authorization for distance education programs. We are also aware that some States are considering steps to modify or update authorization requirements for the provision of distance education training. In some cases, the changes may be a part of a broader effort to coordinate such authorizations with other States and streamline the authorization processes. In addition, we have been told that some higher education associations and institutions are preparing information on States’ requirements in an effort to help institutions with compliance efforts. We believe these efforts are valuable and wish to work with the higher education community and States to encourage and support their development.
In the meantime, some institutions have suggested that time and expense could be expended to comply with requirements that may soon change, and some institutions have further claimed that States may not be prepared to manage a large number of applications for authorization. We are committed to supporting State efforts that help institutions ensure that distance education programs are authorized.
Clarification of Enforcement. With regard to the State authorization provisions at 34 C.F.R. § 600.9(c), the Department will not initiate any action to establish repayment liabilities or limit student eligibility for distance education activities undertaken before July 1, 2014, so long as the institution is making good faith efforts to identify and obtain necessary State authorizations before that date. Evidence of good faith efforts by institutions could include any one or more of the following items:
* Documentation that an institution is developing a distance education management process for tracking students’ place of residence when engaged in distance education.
* Documentation that an institution has contacted a State directly to discuss programs the institution is providing to students in that State to determine whether authorization is needed.
* An application to a State, even if it is not yet approved.
* Documentation from a State that an application is pending.
If a State has no applicable regulation or law, then no action on the part of the institution is required. Where States are in the process of establishing new requirements or creating application procedures, institutions acting in good faith would be expected to seek authorization under the new requirements or procedures only after they are established. Monitoring evolving State requirements should be made easier by the many associations, States, and institutions that are sharing on the Internet their analyses of individual State authorization requirements and processes.
However, the Department will review carefully instances where an institution may not be acting in good faith, such as where documents show an institution knew of a State requirement and willfully refused to comply with it.
Development of a Comprehensive Directory. As part of our technical assistance efforts, we are committed to working with appropriate parties to develop a comprehensive directory of State requirements that provides a meaningful opportunity for States to clearly articulate their specific requirements and for institutions of higher education to easily access the requirements and apply to the State for authorization. Once the directory is developed, we plan to make it publicly available on the Department's Web site.
Supporting State Coordination. States determine what requirements, if any, distance education programs offered within their borders must meet. As a result, efforts to clarify and coordinate State laws require the engagement of States and the entire higher education community. We are interested in working with the community to support States’ efforts to develop model reciprocal agreements, common applications, or other methods that States could adopt to foster compliance. We welcome suggestions from institutions and associations about how such efforts could be undertaken to best meet the needs of institutions and States.
The Department recognizes the value of distance education. We are eager to help create an environment that allows innovative approaches to flourish and grow. We thank you for your continued cooperation as we work to implement these regulations.
Sincerely,
Eduardo M. Ochoa
Assistant Secretary for
Postsecondary Education
Attachments/Enclosures:
GEN-11-11: State authorization under the Program Integrity Regulations in PDF format, 126KB, 3 Pages
Implementation of Regulatory Requirements Related to Gainful Employment Programs
IFAP
By: David A. Bergeron
Summary: This letter provides guidance on new requirements for institutions that offer educational programs that prepare students for gainful employment in a recognized occupation.
Dear Colleague:
Final regulations published in the Federal Register on October 29, 2010, [75 FR 66665 and FR 66832], by the U.S. Department of Education (the Department), require institutions that participate in the student financial assistance programs authorized under Title IV of the Higher Education Act of 1965, as amended (the HEA), to report certain information about students who enrolled in Title IV-eligible educational programs that lead to gainful employment in a recognized occupation (GE Programs). Those regulations also provide that institutions must disclose to prospective students certain information about their GE Programs. Finally, the new regulations require an institution to notify the U.S. Secretary of Education (the Secretary) if it wishes to add additional GE Programs to its list of Title IV-eligible programs. All of these requirements are effective July 1, 2011.
This letter does not discuss issues related to the eligibility of GE Programs proposed in the Notice of Proposed Rulemaking (NPRM) that was published in the Federal Register on July 26, 2010. The Department is in the process of finalizing those regulations.
This letter provides information on the statutory definition of a GE Program. It also provides preliminary information on the process that will be used by institutions to meet the GE Program reporting requirements. Finally, this letter provides initial guidance on certain aspects of the disclosure requirements and on the notification requirements when an institution proposes to add a new GE Program. Note that this letter provides summary information and operational guidance on the requirements of the new gainful employment regulations. Institutions must review the final regulations as published in the Federal Register on October 29, 2010, to ensure that they are in compliance with all of the GE Program requirements.
Designation of a Gainful Employment Program
In order to be eligible for funding under the Title IV programs, an educational program must lead to a degree (associate, bachelor's, graduate, or professional) or prepare students for "gainful employment in a recognized occupation." In addition, virtually all programs - degree and nondegree - offered by proprietary institutions must prepare students for "gainful employment in a recognized occupation."
Collectively, we refer to these programs, all nondegree educational programs offered by public and nonprofit institutions and virtually all academic programs offered by proprietary institutions, as "GE Programs." Many institutions that participate in the Title IV student assistance programs, even those that are public or nonprofit and that predominantly offer degrees, will likely have one or more GE Programs. In fact, fewer than 1,000 out of the approximately 6,000 institutions that are currently participating in the Title IV programs have no GE Programs. Therefore, all institutions must be aware of the new regulatory requirements and the information in this letter to ensure that they will be in compliance with the new gainful employment regulations.
The following provides specific information, presented separately for different types of institutions, on the educational programs that are considered to be GE Programs and, therefore, subject to the new rules relating to reporting, disclosures, and the addition of new GE programs.
Domestic Proprietary Institutions and Domestic Postsecondary Vocational Institutions
*
Gainful Employment Programs - The following educational programs offered by these institutions are GE Programs subject to the new regulations -
o
Undergraduate and graduate degree programs.
o
Certificate programs. Certificate programs include undergraduate certificate programs, post-baccalaureate certificate programs, graduate certificate programs, and postgraduate certificate programs.
o
Teacher certification programs, including both programs that result in a certificate awarded by the institution and those where the institution itself does not provide a certificate but which consist of a collection of course work necessary for the student to receive a State professional teaching credential or certification.
o
Approved "Comprehensive Transition Programs" for students with intellectual disabilities.
*
Not Gainful Employment Programs - The following educational programs offered by these institutions are not subject to the new GE Program regulations -
o
Programs that lead to a baccalaureate degree in liberal arts if the institution has been accredited by a regional accrediting agency since October 2007 and the institution has offered the program since January 2009.
o
Preparatory courses of study that provide course work necessary for enrollment in an eligible program.
Domestic Public and Domestic Nonprofit Institutions
*
Gainful Employment Programs - The following educational programs offered by these institutions are GE Programs subject to the new regulations -
o
Nondegree programs, including all certificate programs. Certificate programs include undergraduate certificate programs, postbaccalaureate certificate programs, graduate certificate programs, and postgraduate certificate programs. Note that awarding students one or more certificates as part of a degree program does not create GE programs based upon the awarding of the certificate(s).
o
Teacher certification programs, including both programs that result in a certificate awarded by the institution and those where the institution itself does not provide a certificate but which consist of a collection of course work necessary for the student to receive a State professional teaching credential or certification.
o
Approved "Comprehensive Transition Programs" for students with intellectual disabilities.
*
Not Gainful Employment Programs - The following educational programs offered by these institutions are not subject to the new GE Program regulations -
o
Programs that lead to a degree, including associate's degrees, bachelor's degrees, graduate degrees, and professional degrees.
o
Programs that are at least two years in length that are fully transferable to a bachelor's degree program.
o
Preparatory courses of study that provide course work necessary for enrollment in an eligible program.
Foreign Proprietary Institutions
*
Gainful Employment Programs - The only programs at foreign proprietary institutions that are eligible for the HEA Loan Programs are degree programs in medicine, nursing, and veterinary science. These programs offered at these institutions are GE Programs subject to the new requirements.
*
Not Gainful Employment Programs - None.
Foreign Public and Nonprofit Institutions
*
Gainful Employment Programs — Same as domestic public and domestic nonprofit institutions, as provided above.
*
Not Gainful Employment Programs — Same as domestic public and domestic nonprofit institutions, as provided above.
Reporting Requirements
Summary
The October 29, 2010, regulations that go into effect on July 1, 2011, include a provision, at 34 CFR 668.6(a), that requires institutions to report certain information about students who were enrolled in each GE Program during an award year [see 75 FR 66948]. Under the regulations, the first reports must be submitted to the Department no later than October 1, 2011, and must include information on students who were enrolled in a GE Program during the 2006-2007 award year, the 2007-2008 award year, the 2008-2009 award year, and the 2009-2010 award year. For the 2006-2007 award year, institutions must report the information to the extent that it is available. If an institution is unable to provide some of the information required for any award year, it must provide an explanation to the Department of why the missing information is not available.
Students to Include
Institutions must report to the Secretary certain information about all of its students who enrolled in GE Programs, regardless of whether a student received Title IV student aid. However, institutions should not report students for whom the institution does not have a Social Security Number (SSN).
Foreign institutions need only include on their required gainful employment reports students who are U.S. citizens or Title IV eligible noncitizens. These students should be reported whether or not the student received Title IV aid. Additionally, foreign institutions need not report on a GE Program if the number of reportable students who were enrolled in that program during the award year was ten or fewer.
Process and Technology to be Used
Institutions will use the existing Enrollment Reporting Process to submit the GE Program information to the Department. This is the reporting system currently used by schools to submit enrollment information to the National Student Loan Data System (NSLDS).
The Enrollment Reporting data format will be modified to include the additional data items needed for gainful employment reporting. Additional information will be provided after the Department finalizes the GE Program reporting process.
Information to Be Reported
The Department is still finalizing the complete list of GE Program data items that institutions will report, but a preliminary list is attached to this letter. An updated list will be provided after the development of the gainful employment reporting process is finalized.
Disclosure Requirements
Summary
The October 29, 2010, regulations that go into effect on July 1, 2011, include a provision, at 34 CFR 668.6(b), that requires institutions to disclose, for each of their GE Programs, certain information about the programs to prospective students. The institution must include the information required in promotional materials it makes available to prospective students and on its Web site. The regulations also provide that the institution must "Use the disclosure form issued by the Secretary to provide the information ... when that form is available" (34 CFR 668.6(b)(2)(iv)). These disclosures must begin no later than July 1, 2011. Institutions are responsible for meeting these disclosure requirements using their own form until the Department releases its form.
Information to Disclose
The following is a summary of the information that must be disclosed by an institution for each of its GE Programs. Institutions must review the final regulations as published in the Federal Register to ensure that they are in compliance with this and all other gainful employment requirements.
*
The name and U.S. Department of Labor's Standard Occupational Classification (SOC) code of the occupations that the program prepares students to enter, along with links to occupational profiles on the U.S. Department of Labor's O*NET Web site or its successor site.
*
The on-time graduation rate for students completing the program.
*
The tuition and fees the institution charges a student for completing the program within normal time.
*
The typical costs for books and supplies (unless those costs are included as part of tuition and fees), and the cost of room and board, if applicable.
*
The job placement rate for students completing the program.
*
The median loan debt incurred by students who completed the program (separately by Title IV loans and by other educational debt to include both private educational loans and institutional financing) as provided by the Secretary.
*
Other information the Secretary provided to the institution about the program.
Median Loan Debt
As noted, one of the informational items that must be disclosed to prospective students is the median loan debt incurred by students who completed the GE Program. In anticipation of the receipt of student-level information from the institutions and to provide consistency among institutions, the regulation provides that these median amounts will be provided to the institution by the Secretary for the institution's disclosure to prospective students. However, since the first disclosures under the new regulation must be made no later than July 1, 2011, and the first reporting by institutions is not required until October 1, 2011, an institution must include in its disclosures its own calculation of median debt - separately showing Title IV debt and other educational debt - until such time as the Department provides that loan debt information. The loan debt information disclosed by institutions should be consistent with the information the institutions report to the Department.
Disclosure Form
As noted, the regulations provide that the institution must use the disclosure form issued by the Secretary, when available. This form will be provided to institutions through an online Web-application that institutions will be required to use to disclose information about their GE Programs. This application will allow institutions to create a Web page containing the required disclosure information. Similar to the net price calculator template developed by the Department, the institution will enter each GE Program's required data into the online form, resulting in an ‘html’ file that the institution will post to the Web site home page for that program.
Using this process, an institution will first enter (or upload) data into the Web-based application for each of its GE Programs. Some of the information entered (such as the OPEID of the institution and CIP code for the program) will be used to look up and import data from Department databases for use in the output disclosure Web page. Additional institutional program-level data will be entered by the institution and included on the output page. Access to the Web-application and a more detailed description of the data elements required to be entered will be made available at a later date.
New Programs
Summary
The October 29, 2010 regulations that go into effect on July 1, 2011 require an institution to notify the Secretary when it intends to add a new GE Program. 34 CFR 600.10(c) and 600.20(c) and (d). The notification must describe the institution's determination that the new program will meet employment market needs. It must describe how the program was reviewed or approved by, or developed in conjunction with, external groups and its accrediting agency. The notification must also include the date classes will start for that program.
An institution that provided notice of a new GE Program at least 90 days before the first day of class of that new program may begin offering the additional program without receiving Departmental approval unless the Department requests, at least 30 days prior to the date the program is scheduled to begin, additional information or otherwise informs the institution to delay the start of the additional program.
Consistent with regulations in effect prior to these final regulations, in 34 CFR 668.13(c)(4), the Secretary requires institutions that are on provisional certification to have the Secretary's approval before beginning any new program.
Effective Date:
The provisions for reporting new GE programs go into effect on July 1, 2011. Therefore, institutions must notify the Department by July 1 of any new GE program where the first day of class will be on or after July 1, 2011, and before October 1, 2011. For new GE programs where the first day of class will begin on or after October 1, 2011, institutions must provide notification to the Department at least 90 days prior to the first day of class. All notifications to the Department must include information to support the institution's determination of the need for the program, as required by the regulation at 34 CFR 600.20(d)(2).
The requirement for an institution to obtain approval for a new GE program when additional information is requested by the Department at least 30 days before the first day of class will also take effect on July 1, 2011.
For more gainful employment information and updates, please regularly visit http://ifap.ed.gov/GainfulEmploymentInfo/.
For questions on the contents of this letter, please send an e-mail to ge-questions@ed.gov.
Thank you for your continued cooperation.
Sincerely,
David A. Bergeron
Deputy Assistant Secretary
for Policy, Planning and Innovation
Office of Postsecondary Education
U.S. Department of Education
Attachments/Enclosures:
GEN-11-10: Implementation of Regulatory Requirements Related to Gainful Employment Programs in PDF Format, 337KB, 7 Pages
GEN-11-10: Gainful Employment Reporting Draft Data Elements List in MS Word, 32 KB, 5 Pages
By: David A. Bergeron
Summary: This letter provides guidance on new requirements for institutions that offer educational programs that prepare students for gainful employment in a recognized occupation.
Dear Colleague:
Final regulations published in the Federal Register on October 29, 2010, [75 FR 66665 and FR 66832], by the U.S. Department of Education (the Department), require institutions that participate in the student financial assistance programs authorized under Title IV of the Higher Education Act of 1965, as amended (the HEA), to report certain information about students who enrolled in Title IV-eligible educational programs that lead to gainful employment in a recognized occupation (GE Programs). Those regulations also provide that institutions must disclose to prospective students certain information about their GE Programs. Finally, the new regulations require an institution to notify the U.S. Secretary of Education (the Secretary) if it wishes to add additional GE Programs to its list of Title IV-eligible programs. All of these requirements are effective July 1, 2011.
This letter does not discuss issues related to the eligibility of GE Programs proposed in the Notice of Proposed Rulemaking (NPRM) that was published in the Federal Register on July 26, 2010. The Department is in the process of finalizing those regulations.
This letter provides information on the statutory definition of a GE Program. It also provides preliminary information on the process that will be used by institutions to meet the GE Program reporting requirements. Finally, this letter provides initial guidance on certain aspects of the disclosure requirements and on the notification requirements when an institution proposes to add a new GE Program. Note that this letter provides summary information and operational guidance on the requirements of the new gainful employment regulations. Institutions must review the final regulations as published in the Federal Register on October 29, 2010, to ensure that they are in compliance with all of the GE Program requirements.
Designation of a Gainful Employment Program
In order to be eligible for funding under the Title IV programs, an educational program must lead to a degree (associate, bachelor's, graduate, or professional) or prepare students for "gainful employment in a recognized occupation." In addition, virtually all programs - degree and nondegree - offered by proprietary institutions must prepare students for "gainful employment in a recognized occupation."
Collectively, we refer to these programs, all nondegree educational programs offered by public and nonprofit institutions and virtually all academic programs offered by proprietary institutions, as "GE Programs." Many institutions that participate in the Title IV student assistance programs, even those that are public or nonprofit and that predominantly offer degrees, will likely have one or more GE Programs. In fact, fewer than 1,000 out of the approximately 6,000 institutions that are currently participating in the Title IV programs have no GE Programs. Therefore, all institutions must be aware of the new regulatory requirements and the information in this letter to ensure that they will be in compliance with the new gainful employment regulations.
The following provides specific information, presented separately for different types of institutions, on the educational programs that are considered to be GE Programs and, therefore, subject to the new rules relating to reporting, disclosures, and the addition of new GE programs.
Domestic Proprietary Institutions and Domestic Postsecondary Vocational Institutions
*
Gainful Employment Programs - The following educational programs offered by these institutions are GE Programs subject to the new regulations -
o
Undergraduate and graduate degree programs.
o
Certificate programs. Certificate programs include undergraduate certificate programs, post-baccalaureate certificate programs, graduate certificate programs, and postgraduate certificate programs.
o
Teacher certification programs, including both programs that result in a certificate awarded by the institution and those where the institution itself does not provide a certificate but which consist of a collection of course work necessary for the student to receive a State professional teaching credential or certification.
o
Approved "Comprehensive Transition Programs" for students with intellectual disabilities.
*
Not Gainful Employment Programs - The following educational programs offered by these institutions are not subject to the new GE Program regulations -
o
Programs that lead to a baccalaureate degree in liberal arts if the institution has been accredited by a regional accrediting agency since October 2007 and the institution has offered the program since January 2009.
o
Preparatory courses of study that provide course work necessary for enrollment in an eligible program.
Domestic Public and Domestic Nonprofit Institutions
*
Gainful Employment Programs - The following educational programs offered by these institutions are GE Programs subject to the new regulations -
o
Nondegree programs, including all certificate programs. Certificate programs include undergraduate certificate programs, postbaccalaureate certificate programs, graduate certificate programs, and postgraduate certificate programs. Note that awarding students one or more certificates as part of a degree program does not create GE programs based upon the awarding of the certificate(s).
o
Teacher certification programs, including both programs that result in a certificate awarded by the institution and those where the institution itself does not provide a certificate but which consist of a collection of course work necessary for the student to receive a State professional teaching credential or certification.
o
Approved "Comprehensive Transition Programs" for students with intellectual disabilities.
*
Not Gainful Employment Programs - The following educational programs offered by these institutions are not subject to the new GE Program regulations -
o
Programs that lead to a degree, including associate's degrees, bachelor's degrees, graduate degrees, and professional degrees.
o
Programs that are at least two years in length that are fully transferable to a bachelor's degree program.
o
Preparatory courses of study that provide course work necessary for enrollment in an eligible program.
Foreign Proprietary Institutions
*
Gainful Employment Programs - The only programs at foreign proprietary institutions that are eligible for the HEA Loan Programs are degree programs in medicine, nursing, and veterinary science. These programs offered at these institutions are GE Programs subject to the new requirements.
*
Not Gainful Employment Programs - None.
Foreign Public and Nonprofit Institutions
*
Gainful Employment Programs — Same as domestic public and domestic nonprofit institutions, as provided above.
*
Not Gainful Employment Programs — Same as domestic public and domestic nonprofit institutions, as provided above.
Reporting Requirements
Summary
The October 29, 2010, regulations that go into effect on July 1, 2011, include a provision, at 34 CFR 668.6(a), that requires institutions to report certain information about students who were enrolled in each GE Program during an award year [see 75 FR 66948]. Under the regulations, the first reports must be submitted to the Department no later than October 1, 2011, and must include information on students who were enrolled in a GE Program during the 2006-2007 award year, the 2007-2008 award year, the 2008-2009 award year, and the 2009-2010 award year. For the 2006-2007 award year, institutions must report the information to the extent that it is available. If an institution is unable to provide some of the information required for any award year, it must provide an explanation to the Department of why the missing information is not available.
Students to Include
Institutions must report to the Secretary certain information about all of its students who enrolled in GE Programs, regardless of whether a student received Title IV student aid. However, institutions should not report students for whom the institution does not have a Social Security Number (SSN).
Foreign institutions need only include on their required gainful employment reports students who are U.S. citizens or Title IV eligible noncitizens. These students should be reported whether or not the student received Title IV aid. Additionally, foreign institutions need not report on a GE Program if the number of reportable students who were enrolled in that program during the award year was ten or fewer.
Process and Technology to be Used
Institutions will use the existing Enrollment Reporting Process to submit the GE Program information to the Department. This is the reporting system currently used by schools to submit enrollment information to the National Student Loan Data System (NSLDS).
The Enrollment Reporting data format will be modified to include the additional data items needed for gainful employment reporting. Additional information will be provided after the Department finalizes the GE Program reporting process.
Information to Be Reported
The Department is still finalizing the complete list of GE Program data items that institutions will report, but a preliminary list is attached to this letter. An updated list will be provided after the development of the gainful employment reporting process is finalized.
Disclosure Requirements
Summary
The October 29, 2010, regulations that go into effect on July 1, 2011, include a provision, at 34 CFR 668.6(b), that requires institutions to disclose, for each of their GE Programs, certain information about the programs to prospective students. The institution must include the information required in promotional materials it makes available to prospective students and on its Web site. The regulations also provide that the institution must "Use the disclosure form issued by the Secretary to provide the information ... when that form is available" (34 CFR 668.6(b)(2)(iv)). These disclosures must begin no later than July 1, 2011. Institutions are responsible for meeting these disclosure requirements using their own form until the Department releases its form.
Information to Disclose
The following is a summary of the information that must be disclosed by an institution for each of its GE Programs. Institutions must review the final regulations as published in the Federal Register to ensure that they are in compliance with this and all other gainful employment requirements.
*
The name and U.S. Department of Labor's Standard Occupational Classification (SOC) code of the occupations that the program prepares students to enter, along with links to occupational profiles on the U.S. Department of Labor's O*NET Web site or its successor site.
*
The on-time graduation rate for students completing the program.
*
The tuition and fees the institution charges a student for completing the program within normal time.
*
The typical costs for books and supplies (unless those costs are included as part of tuition and fees), and the cost of room and board, if applicable.
*
The job placement rate for students completing the program.
*
The median loan debt incurred by students who completed the program (separately by Title IV loans and by other educational debt to include both private educational loans and institutional financing) as provided by the Secretary.
*
Other information the Secretary provided to the institution about the program.
Median Loan Debt
As noted, one of the informational items that must be disclosed to prospective students is the median loan debt incurred by students who completed the GE Program. In anticipation of the receipt of student-level information from the institutions and to provide consistency among institutions, the regulation provides that these median amounts will be provided to the institution by the Secretary for the institution's disclosure to prospective students. However, since the first disclosures under the new regulation must be made no later than July 1, 2011, and the first reporting by institutions is not required until October 1, 2011, an institution must include in its disclosures its own calculation of median debt - separately showing Title IV debt and other educational debt - until such time as the Department provides that loan debt information. The loan debt information disclosed by institutions should be consistent with the information the institutions report to the Department.
Disclosure Form
As noted, the regulations provide that the institution must use the disclosure form issued by the Secretary, when available. This form will be provided to institutions through an online Web-application that institutions will be required to use to disclose information about their GE Programs. This application will allow institutions to create a Web page containing the required disclosure information. Similar to the net price calculator template developed by the Department, the institution will enter each GE Program's required data into the online form, resulting in an ‘html’ file that the institution will post to the Web site home page for that program.
Using this process, an institution will first enter (or upload) data into the Web-based application for each of its GE Programs. Some of the information entered (such as the OPEID of the institution and CIP code for the program) will be used to look up and import data from Department databases for use in the output disclosure Web page. Additional institutional program-level data will be entered by the institution and included on the output page. Access to the Web-application and a more detailed description of the data elements required to be entered will be made available at a later date.
New Programs
Summary
The October 29, 2010 regulations that go into effect on July 1, 2011 require an institution to notify the Secretary when it intends to add a new GE Program. 34 CFR 600.10(c) and 600.20(c) and (d). The notification must describe the institution's determination that the new program will meet employment market needs. It must describe how the program was reviewed or approved by, or developed in conjunction with, external groups and its accrediting agency. The notification must also include the date classes will start for that program.
An institution that provided notice of a new GE Program at least 90 days before the first day of class of that new program may begin offering the additional program without receiving Departmental approval unless the Department requests, at least 30 days prior to the date the program is scheduled to begin, additional information or otherwise informs the institution to delay the start of the additional program.
Consistent with regulations in effect prior to these final regulations, in 34 CFR 668.13(c)(4), the Secretary requires institutions that are on provisional certification to have the Secretary's approval before beginning any new program.
Effective Date:
The provisions for reporting new GE programs go into effect on July 1, 2011. Therefore, institutions must notify the Department by July 1 of any new GE program where the first day of class will be on or after July 1, 2011, and before October 1, 2011. For new GE programs where the first day of class will begin on or after October 1, 2011, institutions must provide notification to the Department at least 90 days prior to the first day of class. All notifications to the Department must include information to support the institution's determination of the need for the program, as required by the regulation at 34 CFR 600.20(d)(2).
The requirement for an institution to obtain approval for a new GE program when additional information is requested by the Department at least 30 days before the first day of class will also take effect on July 1, 2011.
For more gainful employment information and updates, please regularly visit http://ifap.ed.gov/GainfulEmploymentInfo/.
For questions on the contents of this letter, please send an e-mail to ge-questions@ed.gov.
Thank you for your continued cooperation.
Sincerely,
David A. Bergeron
Deputy Assistant Secretary
for Policy, Planning and Innovation
Office of Postsecondary Education
U.S. Department of Education
Attachments/Enclosures:
GEN-11-10: Implementation of Regulatory Requirements Related to Gainful Employment Programs in PDF Format, 337KB, 7 Pages
GEN-11-10: Gainful Employment Reporting Draft Data Elements List in MS Word, 32 KB, 5 Pages
The Examiner: Education Department financial aid rules may backfire on students
The Examiner
April 19, 2011
By Hans Bader - Special To The Examiner
The Education Department tried to restrict the use of financial aid by for-profit colleges by barring them from getting more than 90 percent of their funding from federal financial-aid programs.
How did they respond? By raising tuition, so that at least 10 percent of their students’ education would not be paid for by federal loans and grants. Thus, financial aid actually encouraged them to increase tuition, radically increasing their students' future indebtedness.
The net result was to “create a perverse, no-win ‘Catch-22’ that could prevent low-income students from attending college,” by encouraging such colleges to raise tuition to outstrip rising financial aid by at least ten percent.
Over the past three years, the federal government has increased student aid by more than 40 percent. As a result, students are entitled to as much as $15,000 in grants and loans during their first year of study. The result has been to drive up tuition at some colleges by even higher percentages.
For example, Corinthian College has diploma programs in health care and other fields that can be completed in a year or less. Until earlier this year, many of those programs had a total cost of about $15,000, which meant that federal grants and loans could cover nearly 100 percent of their cost. In response to the Education Department’s rule, the college raised tuition to comply with the 90/10 rule.
As a result of increasing federal financial aid, colleges have been able to increase tuition faster than inflation, year after year, secure in the knowledge that they can rake in ever-rising government subsidies and skyrocketing tuition. College students are learning less and less even as higher education spending explodes.
Students have little choice but to pay inflated tuition bills into the education industrial-complex, as they vie with each other for scarce entry-level jobs by acquiring ever more degrees that show their ability to jump through hoops and master difficult (but largely useless) skills. The net result is an educational arms race in which people compete to see who can acquire the most paper credentials. There are now 8,000 waiters and 5,057 janitors with PhD’s or other advanced degrees, and millions of Americans have useless college degrees.
The Education Department recently made college officials' lives more difficult by trying to alter the burden of proof long used by many colleges in sexual harassment cases (despite the lack of any legal basis for doing so), and by seeking to discourage procedures such as cross-examination that safeguard accuracy and due process in campus disciplinary proceedings.
Another recent Education Department rule that is likely to backfire on students is discussed here (the so-called "gainful employment rule").
Direct link to article: http://washingtonexaminer.com/blogs/opinion-zone/2011/04/education-department-financial-aid-rules-may-backfire-students-0
April 19, 2011
By Hans Bader - Special To The Examiner
The Education Department tried to restrict the use of financial aid by for-profit colleges by barring them from getting more than 90 percent of their funding from federal financial-aid programs.
How did they respond? By raising tuition, so that at least 10 percent of their students’ education would not be paid for by federal loans and grants. Thus, financial aid actually encouraged them to increase tuition, radically increasing their students' future indebtedness.
The net result was to “create a perverse, no-win ‘Catch-22’ that could prevent low-income students from attending college,” by encouraging such colleges to raise tuition to outstrip rising financial aid by at least ten percent.
Over the past three years, the federal government has increased student aid by more than 40 percent. As a result, students are entitled to as much as $15,000 in grants and loans during their first year of study. The result has been to drive up tuition at some colleges by even higher percentages.
For example, Corinthian College has diploma programs in health care and other fields that can be completed in a year or less. Until earlier this year, many of those programs had a total cost of about $15,000, which meant that federal grants and loans could cover nearly 100 percent of their cost. In response to the Education Department’s rule, the college raised tuition to comply with the 90/10 rule.
As a result of increasing federal financial aid, colleges have been able to increase tuition faster than inflation, year after year, secure in the knowledge that they can rake in ever-rising government subsidies and skyrocketing tuition. College students are learning less and less even as higher education spending explodes.
Students have little choice but to pay inflated tuition bills into the education industrial-complex, as they vie with each other for scarce entry-level jobs by acquiring ever more degrees that show their ability to jump through hoops and master difficult (but largely useless) skills. The net result is an educational arms race in which people compete to see who can acquire the most paper credentials. There are now 8,000 waiters and 5,057 janitors with PhD’s or other advanced degrees, and millions of Americans have useless college degrees.
The Education Department recently made college officials' lives more difficult by trying to alter the burden of proof long used by many colleges in sexual harassment cases (despite the lack of any legal basis for doing so), and by seeking to discourage procedures such as cross-examination that safeguard accuracy and due process in campus disciplinary proceedings.
Another recent Education Department rule that is likely to backfire on students is discussed here (the so-called "gainful employment rule").
Direct link to article: http://washingtonexaminer.com/blogs/opinion-zone/2011/04/education-department-financial-aid-rules-may-backfire-students-0
South Florida Hospital News and Healthcare Report: Dade Medical College Donates $250,000 to Miami Children’s Hospital Foundation
South Florida Hospital News and Healthcare Report
April 19, 2011
Ernesto Perez Jr., President & CEO and co-founder of Dade Medical College, recently announced a $250,000 donation to Miami Children’s Hospital Foundation to support the organization’s leading efforts to improve children’s health care in our community.
“Miami Children’s Hospital is one of our community’s most valuable resources and we are committed to investing in this superior pediatric medical institution that helps so many needy families help make their children better,” said Perez. “Many of our students receive their on-site training at Miami Children's and they graduate with the skills necessary to be successful and productive members of society.”
Through this donation, Dade Medical College becomes a member of the Corporate Leader Program, a group of esteemed businesses that support Miami Children’s philanthropically in order to improve the economic sustainability of the community by ensuring healthy children and a healthy future workforce.
April 19, 2011
Ernesto Perez Jr., President & CEO and co-founder of Dade Medical College, recently announced a $250,000 donation to Miami Children’s Hospital Foundation to support the organization’s leading efforts to improve children’s health care in our community.
“Miami Children’s Hospital is one of our community’s most valuable resources and we are committed to investing in this superior pediatric medical institution that helps so many needy families help make their children better,” said Perez. “Many of our students receive their on-site training at Miami Children's and they graduate with the skills necessary to be successful and productive members of society.”
Through this donation, Dade Medical College becomes a member of the Corporate Leader Program, a group of esteemed businesses that support Miami Children’s philanthropically in order to improve the economic sustainability of the community by ensuring healthy children and a healthy future workforce.
The Chronicle of Higher Education: Letter to the Editor: 90/10 Rule: 'a Story of Consequences'
The Chronicle of Higher Education: Letter to the Editor
April 18, 2011
By Peter Smith
I read with interest the Chronicle of Higher Education article on how different institutions in the proprietary sector are responding to satisfy the 90/10 rule's pernicious effect on tuition ("Colleges Scramble to Avoid Violating Federal-Aid Limit," The Chronicle, April 2). There were many true facts in the article.
The problem is that they were sculpted to create an impression of wrongdoing when, in fact, they tell a story of consequences. How is this so?
• Colleges do not control the amount of debt that students take on or write the loans. So, students can "max" their loans beyond their actual educational expenses. And the institution—proprietary or not—cannot control the loan amount. Nor can we dictate repayment, or withhold degrees for nonpayment. We only get blamed for the defaults.
• Could tuition be lower without 90/10? Yes. But just as nonprofit colleges and universities raise tuition to close the gap when appropriations do not meet their revenue needs, proprietary colleges, if they are going to serve adult learners with multiple risk factors, must seek other sources of income to satisfy 90/10. Continuing and professional education are legitimate parts of the traditional university scene; why not in the proprietary sector?
American higher education boasts a wide variety of choices. That is one of the great strengths of our system. As a former community college and state university president, I recognize the value of a low tuition based on subsidies for students. But with colleges all over America capping enrollment and raising tuition, who will serve the re-marginalized learners, the very people with whom President Obama says we have to succeed to meet his goals?
Peter Smith
Senior Vice President
Academic Strategies & Development
Kaplan Higher Education
Fort Lauderdale, Fla.
April 18, 2011
By Peter Smith
I read with interest the Chronicle of Higher Education article on how different institutions in the proprietary sector are responding to satisfy the 90/10 rule's pernicious effect on tuition ("Colleges Scramble to Avoid Violating Federal-Aid Limit," The Chronicle, April 2). There were many true facts in the article.
The problem is that they were sculpted to create an impression of wrongdoing when, in fact, they tell a story of consequences. How is this so?
• Colleges do not control the amount of debt that students take on or write the loans. So, students can "max" their loans beyond their actual educational expenses. And the institution—proprietary or not—cannot control the loan amount. Nor can we dictate repayment, or withhold degrees for nonpayment. We only get blamed for the defaults.
• Could tuition be lower without 90/10? Yes. But just as nonprofit colleges and universities raise tuition to close the gap when appropriations do not meet their revenue needs, proprietary colleges, if they are going to serve adult learners with multiple risk factors, must seek other sources of income to satisfy 90/10. Continuing and professional education are legitimate parts of the traditional university scene; why not in the proprietary sector?
American higher education boasts a wide variety of choices. That is one of the great strengths of our system. As a former community college and state university president, I recognize the value of a low tuition based on subsidies for students. But with colleges all over America capping enrollment and raising tuition, who will serve the re-marginalized learners, the very people with whom President Obama says we have to succeed to meet his goals?
Peter Smith
Senior Vice President
Academic Strategies & Development
Kaplan Higher Education
Fort Lauderdale, Fla.
Monday's commentary: Harris Miller of Association of Private Sector Colleges and Universities says student loan changes build barriers
April 18, 2011
By Harris N. Miller
Association of Private Sector
Colleges and Universities
For most Americans the message is simple: Go to college. Get a good job. Build a solid career. But the U.S. Department of Education, through its controversial “gainful employment” proposal, could make it much more difficult for those attempting to do so.
At a time of high unemployment, Washington is building barriers instead of bridges to better jobs and lives.
The gainful employment proposal, the government’s answer to excessive student debt, singles out career-oriented private sector colleges and universities (PCSUs) — in the department’s vernacular, “for-profit” schools. More than 100,000 New York students are currently enrolled in these institutions.
Excessive student debt is a problem in all of higher education, in part because borrowers can use federal student aid programs to borrow far more than they need to pay for education. Rather than tie lending amounts to tuition and reasonable fees, the gainful employment rule would create a debt-to-income ratio for determining program eligibility in student aid programs. The government would bar students using federal aid from entering programs that fail the pre-set ratio. The department is expected to issue its final rule on this matter shortly.
Here’s the problem. The payback of attending college takes place over a lifetime. The federal formula covers the first three years following graduation. If the gainful employment proposal is a good idea, it should apply to all college students, not just those in career-oriented programs.
Instead, the proposed regulation targets the nation’s non-traditional students. These are individuals who entered the work force after high school, enlisted in the military, started families or pursued other life interests. Most are returning to an academic setting, not entering directly from high school.
By closing this door, the proposed rule limits student choice and diminishes the value of private-sector education. The move also has the potential to push up to 2.3 million students out of higher education in the next decade. That will mean workers with fewer skills, fewer opportunities to deploy those skills, a less capable local work force to attract employers and investment, and a less vibrant economy overall.
Washington claims its gainful employment proposal is about reining in excessive student loan debt. Among baccalaureate degree programs, students at public and private nonprofit colleges and universities account for 90 percent of excessive debt ($45,000 or more) and, at the associate’s degree level, these students account for 62 percent ($25,000 or more). These disparities exist despite the large taxpayer subsidies supporting both public and private nonprofit postsecondary institutions.
So what’s the real issue here? Private sector colleges and universities account for 12 percent of higher education enrollments, growing from 1.7 million to 3.2 million in the last six academic years. That kind of growth attracts plenty of attention. Making the issue about private sector colleges and universities takes focus away from far more intractable problems, like spurring job growth, spreading equality of opportunity and shoring up the shrinking American middle class.
No sector of higher education is perfect. Private-sector colleges and universities make their share of mistakes — as do all types of postsecondary institutions. If the question is about education quality, frame the debate in that light and include all players, not just some players. If the question is about debt, look at ways of limiting borrowing so that student loans do not become personal loans.
The public understands the relationship between choice, education and jobs. Time for Washington to understand it, too, and to stop experimenting, especially when the livelihoods of hardworking New Yorkers hang in the balance.
Harris N. Miller
President and CEO
Association of Private Sector Colleges and Universities
By Harris N. Miller
Association of Private Sector
Colleges and Universities
For most Americans the message is simple: Go to college. Get a good job. Build a solid career. But the U.S. Department of Education, through its controversial “gainful employment” proposal, could make it much more difficult for those attempting to do so.
At a time of high unemployment, Washington is building barriers instead of bridges to better jobs and lives.
The gainful employment proposal, the government’s answer to excessive student debt, singles out career-oriented private sector colleges and universities (PCSUs) — in the department’s vernacular, “for-profit” schools. More than 100,000 New York students are currently enrolled in these institutions.
Excessive student debt is a problem in all of higher education, in part because borrowers can use federal student aid programs to borrow far more than they need to pay for education. Rather than tie lending amounts to tuition and reasonable fees, the gainful employment rule would create a debt-to-income ratio for determining program eligibility in student aid programs. The government would bar students using federal aid from entering programs that fail the pre-set ratio. The department is expected to issue its final rule on this matter shortly.
Here’s the problem. The payback of attending college takes place over a lifetime. The federal formula covers the first three years following graduation. If the gainful employment proposal is a good idea, it should apply to all college students, not just those in career-oriented programs.
Instead, the proposed regulation targets the nation’s non-traditional students. These are individuals who entered the work force after high school, enlisted in the military, started families or pursued other life interests. Most are returning to an academic setting, not entering directly from high school.
By closing this door, the proposed rule limits student choice and diminishes the value of private-sector education. The move also has the potential to push up to 2.3 million students out of higher education in the next decade. That will mean workers with fewer skills, fewer opportunities to deploy those skills, a less capable local work force to attract employers and investment, and a less vibrant economy overall.
Washington claims its gainful employment proposal is about reining in excessive student loan debt. Among baccalaureate degree programs, students at public and private nonprofit colleges and universities account for 90 percent of excessive debt ($45,000 or more) and, at the associate’s degree level, these students account for 62 percent ($25,000 or more). These disparities exist despite the large taxpayer subsidies supporting both public and private nonprofit postsecondary institutions.
So what’s the real issue here? Private sector colleges and universities account for 12 percent of higher education enrollments, growing from 1.7 million to 3.2 million in the last six academic years. That kind of growth attracts plenty of attention. Making the issue about private sector colleges and universities takes focus away from far more intractable problems, like spurring job growth, spreading equality of opportunity and shoring up the shrinking American middle class.
No sector of higher education is perfect. Private-sector colleges and universities make their share of mistakes — as do all types of postsecondary institutions. If the question is about education quality, frame the debate in that light and include all players, not just some players. If the question is about debt, look at ways of limiting borrowing so that student loans do not become personal loans.
The public understands the relationship between choice, education and jobs. Time for Washington to understand it, too, and to stop experimenting, especially when the livelihoods of hardworking New Yorkers hang in the balance.
Harris N. Miller
President and CEO
Association of Private Sector Colleges and Universities
The Tampa Tribune: Career colleges provide focused education
The Tampa Tribune
April 13, 2011
By Kathy Mizereck
The more than 370,000 students enrolled in Florida's career colleges are testimony to the schools' vital role in the state's system of higher education.
It is unfortunate that your March 27 story's lead example of career-college problems (Westwood College) is not licensed to operate in Florida and, therefore, not subject to our state's tough regulatory requirements ("Students defaulting on loans," front page).
Florida career colleges meet strictly applied standards at three levels of regulation. To obtain a license, all career colleges must comply with requirements set by the Commission for Independent Education, an agency within the Florida Department of Education. Many schools are accredited by national and regional organizations approved by the U.S. Department of Education, which holds all accrediting agencies accountable to the same rigorous process. Schools participating in the federal Title IV student-aid programs also are regulated by the Department of Education's Office of the Inspector General.
We agree that rising student debt is a serious problem, exacerbated by the current recession. Its reach extends to all schools and universities, public and private. In fact, a Pew Research Center study notes that student debt rose dramatically over the past decade, making it imperative that all students receive counseling about taking out excessive loans beyond tuition and fees.
When student debt is analyzed based on income level, default rates are substantially the same across all institutions. The higher percentage of defaults in our schools is due to the population of students we serve: adults with minimal family support seeking to improve their lives.
Schools do not have any control over how much students borrow or how they use the money. Additionally, career colleges do not receive taxpayer subsidies. All revenues are derived from student tuition, which according to the College Board's 2010 Trends in College Pricing is roughly $14,000 — well below in-state private nonprofit tuition and out-of-state Florida public school tuition.
Therefore, the Florida Association of Postsecondary Schools and Colleges advocates for a regulatory standard that applies to all institutions of higher education in the federal government's attempt to rein in student debt.
Regarding transfer of credit, we support fair transfer-of-credit policies that do not discriminate against nationally accredited institutions, that work for students and that are enforceable. The Statewide Course Numbering System works for some and could work for many more students with modifications. We are hopeful that transfer-of-credit issues, as well as accountability for all institutions, will be addressed by the Higher Education Coordinating Council. It was created last year by the Legislature with common goal-setting in mind, for the five sectors of postsecondary education, to better serve students.
Students who choose to enroll in Florida's licensed career colleges do so because they want to be trained and job-ready when they graduate. Awaiting them is a future in growth occupations such as health care, the booming technology sector and criminal justice.
In the health-care field alone, more than 60 percent of the state's credentialed graduates in 2009 — nurses, technicians, medical assistants — came from career colleges. Career-college two-year degree programs successfully graduate 59 percent of their students, compared with the 23 percent graduate rate at community college degree programs, as reported by the U.S. Department of Education Institute of Education Sciences.
Our career-focused programs play a vital role in Florida's postsecondary education system and are the chosen path to independence and advancement for hundreds of thousand of Floridians every day.
Kathy Mizereck is executive director of the Florida Association of Postsecondary Schools and Colleges, which is based in Tallahassee.
Link to article: http://www2.tbo.com/content/2011/apr/13/MEOPINO2-career-colleges-provide-focused-education/news-opinion-commentary/
April 13, 2011
By Kathy Mizereck
The more than 370,000 students enrolled in Florida's career colleges are testimony to the schools' vital role in the state's system of higher education.
It is unfortunate that your March 27 story's lead example of career-college problems (Westwood College) is not licensed to operate in Florida and, therefore, not subject to our state's tough regulatory requirements ("Students defaulting on loans," front page).
Florida career colleges meet strictly applied standards at three levels of regulation. To obtain a license, all career colleges must comply with requirements set by the Commission for Independent Education, an agency within the Florida Department of Education. Many schools are accredited by national and regional organizations approved by the U.S. Department of Education, which holds all accrediting agencies accountable to the same rigorous process. Schools participating in the federal Title IV student-aid programs also are regulated by the Department of Education's Office of the Inspector General.
We agree that rising student debt is a serious problem, exacerbated by the current recession. Its reach extends to all schools and universities, public and private. In fact, a Pew Research Center study notes that student debt rose dramatically over the past decade, making it imperative that all students receive counseling about taking out excessive loans beyond tuition and fees.
When student debt is analyzed based on income level, default rates are substantially the same across all institutions. The higher percentage of defaults in our schools is due to the population of students we serve: adults with minimal family support seeking to improve their lives.
Schools do not have any control over how much students borrow or how they use the money. Additionally, career colleges do not receive taxpayer subsidies. All revenues are derived from student tuition, which according to the College Board's 2010 Trends in College Pricing is roughly $14,000 — well below in-state private nonprofit tuition and out-of-state Florida public school tuition.
Therefore, the Florida Association of Postsecondary Schools and Colleges advocates for a regulatory standard that applies to all institutions of higher education in the federal government's attempt to rein in student debt.
Regarding transfer of credit, we support fair transfer-of-credit policies that do not discriminate against nationally accredited institutions, that work for students and that are enforceable. The Statewide Course Numbering System works for some and could work for many more students with modifications. We are hopeful that transfer-of-credit issues, as well as accountability for all institutions, will be addressed by the Higher Education Coordinating Council. It was created last year by the Legislature with common goal-setting in mind, for the five sectors of postsecondary education, to better serve students.
Students who choose to enroll in Florida's licensed career colleges do so because they want to be trained and job-ready when they graduate. Awaiting them is a future in growth occupations such as health care, the booming technology sector and criminal justice.
In the health-care field alone, more than 60 percent of the state's credentialed graduates in 2009 — nurses, technicians, medical assistants — came from career colleges. Career-college two-year degree programs successfully graduate 59 percent of their students, compared with the 23 percent graduate rate at community college degree programs, as reported by the U.S. Department of Education Institute of Education Sciences.
Our career-focused programs play a vital role in Florida's postsecondary education system and are the chosen path to independence and advancement for hundreds of thousand of Floridians every day.
Kathy Mizereck is executive director of the Florida Association of Postsecondary Schools and Colleges, which is based in Tallahassee.
Link to article: http://www2.tbo.com/content/2011/apr/13/MEOPINO2-career-colleges-provide-focused-education/news-opinion-commentary/
The American Spectator: Selling Career Colleges Short
The American Spectator
March 31, 2011
By Mark Hyman
Seemingly, there is no end to what once started as a relatively straight-forward story. The U.S. Department of Education embarked on an effort to impose new regulations that would severely restrict access to various federal loans and grant programs to students attending career colleges. Unlike state-owned public institutions and private, not-for-profit colleges, career colleges operate on a for-profit basis.
Since last autumn, this Dept of Ed effort to malign career colleges (or for-profit colleges) has been detailed in The American Spectator on several occasions (October 6, 2010; December 1, 2010; December 14, 2010; and January 18, 2011).
Recently revealed information suggests there may have been a financial motive involved in the Department of Education rulemaking.
Emails and related correspondence obtained from a series of Freedom of Information Act requests suggest stock market short-sellers including at least one who was a major donor to the 2008 Obama campaign had unusually strong involvement in the Ed Dept's process of crafting new regulations impacting career colleges. Advance knowledge of the agency's intention to write harsh regulations would benefit anyone shorting career college stocks with the expectation stock prices would plunge.
In late 2009, stock short-sellers Antal R. Desai and R. Kent McGaughy, Jr. of Dallas-based CPMG Investments met with Deputy Assistant Secretary of Education David Bergeron and senior Ed Dept official Ann Manheimer. Desai and McGaughy presented the two government officials with a 17-page document that severely criticized the career college sector. The document outlined recommended steps to be taken against career colleges to include actions by specific Congressional committees and an investigation to be conducted by the Government Accountability Office.
Neither Desai nor McGaughy were known for having expertise on the subject of post-secondary education. They brought little to the discussion aside from a game plan that, if implemented, could significantly degrade the value of publicly-traded stocks of for-profit colleges.
By the following year the key objectives outlined in the Desai/McGaughy document were met. The Senate Health, Education, Labor and Pensions Committee chaired by Senator Tom Harkin (D-IA) held hearings that slammed career colleges. Harkin had also become a personal critic of such schools. For its part, the GAO conducted an investigation and issued a blistering report on career college practices.
Beginning in August 2009 and continuing for nearly a year, emails were frequently exchanged between Desai and McGaughy and Bergeron, Manheimer and other senior Ed Dept officials on the topic of career colleges. Even Lee Godwon of Public Strategies, Inc., the lobbyist for CPMG, got into the act by arranging follow-on meetings between the short-sellers and senior Ed Dept officials.
In early 2010 Desai forwarded a nine-page document to Bergeron and Manheimer that addressed specific points Desai would like to see included in new regulations affecting for-profit colleges. Points addressed in the Desai document bear striking similarity to the proposed rule that was eventually released by the Department of Education.
By the spring of 2010, Manheimer had requested Desai provide her with negative "anecdotes or… examples" of practices the Department could use against career colleges. Desai responded with a claim that career college recruiters were frequenting homeless shelters and "systematically and deceptively recruiting the homeless with empty promises [of college degrees]." Desai then emailed ten pages of anecdotes alleging improprieties by career college recruiters.
Adding fuel to the fire was a joint letter signed by directors of several homeless shelters alleging career college recruiters were targeting the homeless. The letter, which was addressed to Education Secretary Arne Duncan, was fodder to further discredit career colleges. After the letter became public, several shelter directors stated they were misled regarding the intention of the letter and expressed regret for having signed it. Some denied having any first-hand knowledge of the alleged recruiting practices. They also did not know that the woman who coordinated the letter was actually working for Desai.
In mid-April, Desai forwarded to Manheimer an investment research report titled "Early Glimpse of Gainful Employment Regulations Ignites Rally" that suggested the rulemaking "will be considerably milder than originally believed." In other words, the value of career college stocks were on the rise as the sector was viewed as having dodged a bullet. Desai asked Manheimer in his email "Is this reporting correct?"
Only days later articles began appearing in publications claiming career colleges were engaging in unethical recruiting practices. This suggests the Ed Dept may have been reacting to and using the material generated by Desai to publicly discredit for-profit colleges.
It turns out that Desai and McGaughy were not the only short-sellers working with the Department of Education on the new rules for career colleges.
Steven Eisman is the portfolio manager for the FrontPoint Financial Services Fund, a hedge fund. Eisman gained celebrity when his success as a stock short-seller was chronicled in the book The Big Short. He was also a major donor to the 2008 Obama campaign.
In his prepared text before the 2010 Ira Sohn Conference in New York, Eisman delivered stinging remarks regarding career colleges. Eisman attacked the for-profit college industry and predicted new regulations under consideration at the Department of Education -- including one titled "Gainful Employment" -- could drive down the stock prices of publicly-traded for-profit colleges by as much as fifty percent.
A precipitous fall in stock prices would occur only two months later.
On July 19, 2010, Eisman sent an email to David Bergeron. The subject line was "I know you cannot respond." The email read, "But just fyi. Education stocks are running [increasing in value] because people are hearing DOE is backing down on gainful employment."
The email trail reveals that only minutes later Bergeron forwarded Eisman's email marked "high" importance to other senior officials in the agency. Moments after that, the email was again forwarded by Deputy Undersecretary James Kvaal to Phil Martin, the confidential assistant to Education Secretary Duncan, with a simple "Let's discuss."
The following day (July 20), Kvaal sketched out a plan in which he and Bergeron would call several individuals and entities apparently to inform them of the soon-to-be released Education Department regulations.
In his reply Bergeron wrote, "Also there's the Eisman/Schluman [sic]/et al but Eisman is a short seller anyway you cut it and anything you tell Schulman gets to Eisman." Diane Schulman is a partner of the Indago Group. The Indago Group is a research firm that serves clients in several fields including the investment community. Schulman had been working for Eisman and accompanied him on several meetings with Dept of Ed officials in the months leading up to the agency's proposed regulations.
Documents suggest the people on this list were notified two days before the new rules were publicly released.
The proposed rules were released to the public on July 23, 2010. On August 4, Harkin's Senate HELP Committee held a hearing that skewered career colleges. The most damning testimony came from Gregory D. Kutz. He was the managing director of the Forensic Audit and Special Investigations team for the Government Accountability Office.
Kutz's testimony included the submission of a 28-page report detailing an undercover sting of career college recruiting practices in which GAO investigators posed as applicants. Kutz testified that recruiters at all 15 colleges tested made deceptive or otherwise questionable statements to the GAO undercover investigators. Further, Kutz claimed four colleges encouraged fraudulent practices.
The triple whammy of the Harkin hearing, Kutz's testimony, and the proposed Department of Education rules occurred within days of one another. The result was calamitous for career colleges. For-profit college stock prices plummeted. Many of the publicly-traded companies saw the value of their stocks decline as much as 35-50%. No doubt this would have been deeply disturbing to most investors. On the other hand, short-sellers anticipating such a drop could have made an absolute killing in the market.
Post Script Close examination of the GAO report submitted by Kutz to the Harkin hearing and detailed in The American Spectator (October 6, 2010) resulted in a FOIA request by this columnist. The GAO was less than forthcoming in the answering all questions. However, it did quietly revise the original report and replaced it on the GAO's website without public notice.
The revised report included changes that were so dramatic that it called into question either the competence or the integrity of the GAO. This development was enough to lead to FOIAs filed with the Department of Education. It also led to further examination of the GAO report.
A coalition of for-profit colleges obtained all available electronic recordings of the GAO undercover investigation and had them analyzed by a third party. The results of the analysis were damning: For the GAO. The analysis found numerous instances in which the GAO fabricated entire conversations. Further, the GAO studiously ignored statements in the exchanges between recruiters and GAO investigators that portrayed career college recruiters as acting professionally and responsibly. The GAO report could be viewed as completely fraudulent.
In March 2011, U.S. Comptroller General Gene Dodaro relieved Kutz of his duties as the head of the GAO's Forensic Audit and Special Investigations unit. In a written statement, Dodaro said the change will "ensure greater attention to the issues that led to the need to produce the errata to the for-profit schools report and by the subsequent inspection."
Mark Hyman hosts "Behind the Headlines," a commentary program for Sinclair Broadcast Group.
March 31, 2011
By Mark Hyman
Seemingly, there is no end to what once started as a relatively straight-forward story. The U.S. Department of Education embarked on an effort to impose new regulations that would severely restrict access to various federal loans and grant programs to students attending career colleges. Unlike state-owned public institutions and private, not-for-profit colleges, career colleges operate on a for-profit basis.
Since last autumn, this Dept of Ed effort to malign career colleges (or for-profit colleges) has been detailed in The American Spectator on several occasions (October 6, 2010; December 1, 2010; December 14, 2010; and January 18, 2011).
Recently revealed information suggests there may have been a financial motive involved in the Department of Education rulemaking.
Emails and related correspondence obtained from a series of Freedom of Information Act requests suggest stock market short-sellers including at least one who was a major donor to the 2008 Obama campaign had unusually strong involvement in the Ed Dept's process of crafting new regulations impacting career colleges. Advance knowledge of the agency's intention to write harsh regulations would benefit anyone shorting career college stocks with the expectation stock prices would plunge.
In late 2009, stock short-sellers Antal R. Desai and R. Kent McGaughy, Jr. of Dallas-based CPMG Investments met with Deputy Assistant Secretary of Education David Bergeron and senior Ed Dept official Ann Manheimer. Desai and McGaughy presented the two government officials with a 17-page document that severely criticized the career college sector. The document outlined recommended steps to be taken against career colleges to include actions by specific Congressional committees and an investigation to be conducted by the Government Accountability Office.
Neither Desai nor McGaughy were known for having expertise on the subject of post-secondary education. They brought little to the discussion aside from a game plan that, if implemented, could significantly degrade the value of publicly-traded stocks of for-profit colleges.
By the following year the key objectives outlined in the Desai/McGaughy document were met. The Senate Health, Education, Labor and Pensions Committee chaired by Senator Tom Harkin (D-IA) held hearings that slammed career colleges. Harkin had also become a personal critic of such schools. For its part, the GAO conducted an investigation and issued a blistering report on career college practices.
Beginning in August 2009 and continuing for nearly a year, emails were frequently exchanged between Desai and McGaughy and Bergeron, Manheimer and other senior Ed Dept officials on the topic of career colleges. Even Lee Godwon of Public Strategies, Inc., the lobbyist for CPMG, got into the act by arranging follow-on meetings between the short-sellers and senior Ed Dept officials.
In early 2010 Desai forwarded a nine-page document to Bergeron and Manheimer that addressed specific points Desai would like to see included in new regulations affecting for-profit colleges. Points addressed in the Desai document bear striking similarity to the proposed rule that was eventually released by the Department of Education.
By the spring of 2010, Manheimer had requested Desai provide her with negative "anecdotes or… examples" of practices the Department could use against career colleges. Desai responded with a claim that career college recruiters were frequenting homeless shelters and "systematically and deceptively recruiting the homeless with empty promises [of college degrees]." Desai then emailed ten pages of anecdotes alleging improprieties by career college recruiters.
Adding fuel to the fire was a joint letter signed by directors of several homeless shelters alleging career college recruiters were targeting the homeless. The letter, which was addressed to Education Secretary Arne Duncan, was fodder to further discredit career colleges. After the letter became public, several shelter directors stated they were misled regarding the intention of the letter and expressed regret for having signed it. Some denied having any first-hand knowledge of the alleged recruiting practices. They also did not know that the woman who coordinated the letter was actually working for Desai.
In mid-April, Desai forwarded to Manheimer an investment research report titled "Early Glimpse of Gainful Employment Regulations Ignites Rally" that suggested the rulemaking "will be considerably milder than originally believed." In other words, the value of career college stocks were on the rise as the sector was viewed as having dodged a bullet. Desai asked Manheimer in his email "Is this reporting correct?"
Only days later articles began appearing in publications claiming career colleges were engaging in unethical recruiting practices. This suggests the Ed Dept may have been reacting to and using the material generated by Desai to publicly discredit for-profit colleges.
It turns out that Desai and McGaughy were not the only short-sellers working with the Department of Education on the new rules for career colleges.
Steven Eisman is the portfolio manager for the FrontPoint Financial Services Fund, a hedge fund. Eisman gained celebrity when his success as a stock short-seller was chronicled in the book The Big Short. He was also a major donor to the 2008 Obama campaign.
In his prepared text before the 2010 Ira Sohn Conference in New York, Eisman delivered stinging remarks regarding career colleges. Eisman attacked the for-profit college industry and predicted new regulations under consideration at the Department of Education -- including one titled "Gainful Employment" -- could drive down the stock prices of publicly-traded for-profit colleges by as much as fifty percent.
A precipitous fall in stock prices would occur only two months later.
On July 19, 2010, Eisman sent an email to David Bergeron. The subject line was "I know you cannot respond." The email read, "But just fyi. Education stocks are running [increasing in value] because people are hearing DOE is backing down on gainful employment."
The email trail reveals that only minutes later Bergeron forwarded Eisman's email marked "high" importance to other senior officials in the agency. Moments after that, the email was again forwarded by Deputy Undersecretary James Kvaal to Phil Martin, the confidential assistant to Education Secretary Duncan, with a simple "Let's discuss."
The following day (July 20), Kvaal sketched out a plan in which he and Bergeron would call several individuals and entities apparently to inform them of the soon-to-be released Education Department regulations.
In his reply Bergeron wrote, "Also there's the Eisman/Schluman [sic]/et al but Eisman is a short seller anyway you cut it and anything you tell Schulman gets to Eisman." Diane Schulman is a partner of the Indago Group. The Indago Group is a research firm that serves clients in several fields including the investment community. Schulman had been working for Eisman and accompanied him on several meetings with Dept of Ed officials in the months leading up to the agency's proposed regulations.
Documents suggest the people on this list were notified two days before the new rules were publicly released.
The proposed rules were released to the public on July 23, 2010. On August 4, Harkin's Senate HELP Committee held a hearing that skewered career colleges. The most damning testimony came from Gregory D. Kutz. He was the managing director of the Forensic Audit and Special Investigations team for the Government Accountability Office.
Kutz's testimony included the submission of a 28-page report detailing an undercover sting of career college recruiting practices in which GAO investigators posed as applicants. Kutz testified that recruiters at all 15 colleges tested made deceptive or otherwise questionable statements to the GAO undercover investigators. Further, Kutz claimed four colleges encouraged fraudulent practices.
The triple whammy of the Harkin hearing, Kutz's testimony, and the proposed Department of Education rules occurred within days of one another. The result was calamitous for career colleges. For-profit college stock prices plummeted. Many of the publicly-traded companies saw the value of their stocks decline as much as 35-50%. No doubt this would have been deeply disturbing to most investors. On the other hand, short-sellers anticipating such a drop could have made an absolute killing in the market.
Post Script Close examination of the GAO report submitted by Kutz to the Harkin hearing and detailed in The American Spectator (October 6, 2010) resulted in a FOIA request by this columnist. The GAO was less than forthcoming in the answering all questions. However, it did quietly revise the original report and replaced it on the GAO's website without public notice.
The revised report included changes that were so dramatic that it called into question either the competence or the integrity of the GAO. This development was enough to lead to FOIAs filed with the Department of Education. It also led to further examination of the GAO report.
A coalition of for-profit colleges obtained all available electronic recordings of the GAO undercover investigation and had them analyzed by a third party. The results of the analysis were damning: For the GAO. The analysis found numerous instances in which the GAO fabricated entire conversations. Further, the GAO studiously ignored statements in the exchanges between recruiters and GAO investigators that portrayed career college recruiters as acting professionally and responsibly. The GAO report could be viewed as completely fraudulent.
In March 2011, U.S. Comptroller General Gene Dodaro relieved Kutz of his duties as the head of the GAO's Forensic Audit and Special Investigations unit. In a written statement, Dodaro said the change will "ensure greater attention to the issues that led to the need to produce the errata to the for-profit schools report and by the subsequent inspection."
Mark Hyman hosts "Behind the Headlines," a commentary program for Sinclair Broadcast Group.
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