Pittsburgh Post-Gazette: DeVry CEO backs regulation

By Daniel Malloy
The CEO of one of the country’s biggest for-profit college companies told the Senate on Thursday that the industry should be regulated based on student outcomes.

DeVry Inc. CEO Daniel Hamburger said that schools’ eligibility for federal funding should be contingent on their ability to graduate students and place them in jobs without sinking them in unmanageable debt.
The Obama administration has taken a crack at that goal with recent controversial “gainful employment” regulations that the for-profit college industry has fought in the courtroom and elsewhere. Mr. Hamburger’s testimony, though, broke with the industrywide view.

Downtown-based Education Management Corp., which owns the Art Institutes and other schools, enrolls the second-most students of any for-profit higher education company.

The industry’s primary congressional inquisitor, Sen. Tom Harkin, D-Iowa, convened a roundtable discussion Thursday featuring Mr. Hamburger, the CEO of the Regency Beauty Institute, an official from the new Consumer Financial Protection Bureau and advocates to explore possible laws governing the industry. He has heavily scrutinized for-profit colleges for the past year by giving whistle-blowers and critics a forum to discuss evidence of fraud in an industry that relies on federal grants and loans for the vast majority of its funding.

“We are going to look at making changes,” Mr. Harkin said. “I want them to be meaningful.”
But the obstacle to any new legislation was plain in the empty Republican chairs: GOP senators have boycotted all hearings on for-profit schools in protest. Republicans argue that Mr. Harkin is unfairly targeting the for-profit sector when student loan debt and low graduation rates are seen in public and nonprofit higher education, as well.

The recent scrutiny has targeted the “career” section of higher education, as policymakers argue that those programs are designed to lead directly to employment in certain fields, as opposed to a liberal arts education, where outcomes are tougher to judge.

But when Mr. Hamburger pressed the point of enforcing standards across all of higher education, Mr. Harkin replied, “You’re exactly right.”

Some advocates argue a new law is the only way to bring true reform. Barmak Nassirian, of the American Association of Collegiate Registrars and Admission Officers, criticized the recent gainful employment regulations for being weaker than those initially proposed, due to a furious industry lobbying effort.

“Procedural regs are not going to do the trick,” Mr. Nassirian said. “What you want to do is you want to have very meaningful requirements that tie the outcomes for students and taxpayers to company managers and shareholders.