Higher Education for All: The Earnings Gain from A Private Education

23 Dec 2014 /By APSCU Communications 

 

The value of college has been repeatedly affirmed by numerous experts. The gain that degree holders see in their earnings is significant and worth the cost of postsecondary education. The earnings gain that graduates experience is critical to measuring the worth of a degree or credential, but the Department of Education is not taking this into account. Instead they are determining the value of postsecondary education by a static measure of early career earnings that does not take into account graduates’ incomes prior to enrolling.

This approach is shortsighted because it ignores gains over time and tells an incomplete story of the real value of a college education. According to the University of Georgetown Center on Education and the Workforce, individuals who receive a bachelor’s degree experience a lifetime earnings gain of roughly $1 million, thus demonstrating the capricious nature of the Department’s decision to measure only early earnings. As seen in the graph below, based on data from the U.S. Census Bureau’s 2013 Annual Social and Economic Supplement, much of the earnings gains that degree holders experience occur midway through their careers.

One way to better quantify the return on investment for students would be to measure their earnings gains, or the difference between an individual’s earnings before and after receiving a degree from a private sector institution. As has been explained previously, a majority of private sector students study in high return fields, specifically computer/information sciences, business, and healthcare. Thus, we should expect to see significant earnings gains for many individuals who graduated from private sector institutions.

Not surprisingly, according to analysis of survey data and the Department’s gainful employment informational rates, private sector institutions provide graduates who receive an associate’s degree in high demand fields with earnings boosts greater than 100 percent. The chart below shows some examples. These types of earnings gains are completely ignored by the gainful employment regulation.

Rather than arbitrarily using early year earnings, metrics intended to determine student success should take into account the relative increase in earnings to measure the benefits that private sector students receive from their programs. New traditional students choosing higher education institutions are not making a bad investment—they are making smart long-term decisions. Their returns on this investment prove it.

Direct link to article: http://www.highereducationforall.com/earnings-gain-private-sector-education/#.VJ1Hc8ABTA

Higher Education for All: Why Student Choose Private Sector Institutions

23 Dec 2014 /By APSCU Communications 

 

Individuals considering higher education take a number of factors into account when deciding what type of institution is best for them. While each student has a different set of determining factors that influence their decision, many of the students that enroll in private sector institutions are new traditional students. These students are likely to rely on federal financial aid, be older than the average student, work while attending class, and support a family. Thus, our nation’s higher education institutions must be equipped to meet the needs of these new traditional students, and private sector institutions are best suited to do so.

As has been well documented by a number of experts, including members of the New York Federal Reserve, higher education remains an excellent investment for individuals. However, many students, specifically new traditional students, have needs that require the flexible learning opportunities that private sector programs offer. Simply put, many individuals want to further their education because of the value of a degree, but not all can attend the traditional routes offered by public and private not-for-profit institutions.
One of the many ways that private sector institutions offer more flexibility is through distance education. According to data provided by the U.S. Department of Education’s National Center for Education Statistics, “in 2012, a higher percentage of students at private for-profit institutions (46 percent) exclusively took distance education courses than did students at public institutions (8 percent) and private nonprofit institutions (10 percent).” The emphasis that private sector institutions place on delivering instruction to students who are not physically present in a classroom is certainly not traditional, but it offers a degree of flexibility that is often helpful, if not essential, for many new traditional students.

Unfortunately, the U.S. Department of Education’s recently released gainful employment regulation will limit options within higher education for new traditional students by shutting down programs that don’t meet their arbitrary debt-to-earnings metric. Though some argue that students displaced by the closing of these programs will have other options available to meet their education needs, the data indicates otherwise. These alternatives will most likely not be practical or flexible enough to meet the needs of new traditional students. Thus, the gainful employment regulation will deny access to education for millions of students in the coming years.

Direct link to article: http://www.highereducationforall.com/students-choose-private-sector-institutions/#.VJ1HcMABTA

Crain's Chicago Business: DeVry looks to score with new Minor League Baseball deal

December 08, 2014


By: Danny Ecker

DeVry Education Group may not have an athletic program, but the for-profit school is claiming a major stake in baseball.

Aiming to replicate the success it has seen from a marketing partnership with the U.S. Olympic Committee, the Downers Grove-based higher education company today will announce a three-year deal with Minor League Baseball that makes it the official education and career development partner of Major League Baseball's affiliate system.

In addition to signage and promotion at all 160 minor league franchises ranging from rookie leagues to AAA, the sponsorship will include 20 full-ride scholarships available to minor league players, staff, alumni and other team and league employees, as well as reduced tuition for interested players and their spouses.

Both DeVry and the governing body of minor league baseball declined to provide financial details of the contract.

The new deal stands to facilitate academic degrees for the thousands of players and employees involved with the MLB farm teams while also exposing DeVry to roughly 42 million fans that attend minor league games each year.

"These young men spend quite a bit of time focused solely on their baseball career and getting ready for going to the big leagues, but so few of them actually end up making it," said Amanda Geist, DeVry's director of partnership marketing. "Our primary goal is really to help them focus their academic and career goals and prepare them for what comes next in their post-baseball careers."
While the top minor league players are on fast tracks to the big leagues, many minor league players are drafted directly out of high school or before completing their college degree.

That represents hundreds of potential DeVry students each year but also provides a promotional tool. Much of the school's marketing has spotlighted successful case studies showing people balancing work and higher education to earn degrees.

"We want prospective and current students to see themselves in these athletes and say, 'if (that) athlete can balance training and going to college, I can balance working full-time and going to school," said Geist. "It's really about helping athletes focus on what comes next and using those stories to inspire people to go back to school."

DeVry previously had sponsored individual teams like the NFL's Jacksonville Jaguars, the NBA's Philadelphia 76ers and two Major League Soccer teams, but it ditched the strategy a few years ago to redirect marketing dollars toward more national partnerships.

Aside from providing wide-ranging exposure, the deal with Minor League Baseball also may help prospective students look at DeVry in a new light, said Jim Andrews, senior vice president at Chicago-based sponsorship consulting firm IEG.

"There's always that issue of their reputation--people out there that rightly or wrongly see (for-profit education schools) as diploma mills," he said. "Tying in a very popular community activity with minor league teams—it's a good connection for them to make. It makes people like the brand a little bit more and feel a little bit more positive about them."

Minor League Baseball officials approached DeVry about the partnership this year after seeing its success with Team USA Olympic athletes.

A DeVry-USOC sponsorship signed before the 2012 Summer Olympics set up a similar program for athletes to earn degrees while training and competing full-time. The partnership started with six Olympic athletes and has grown to about 200 enrolled today, including American gold medalist bobsledder Steven Holcomb, who was featured in DeVry ads during the games.

Minor League Baseball Chief Marketing Officer Michael Hand said DeVry's education platforms met a need for many players, noting that it typically takes a player six or seven years to reach the major leagues--if they make it at all. Many now have the option to take classes online or at a local DeVry campus.

"Everyone in Minor League Baseball is trying to work to build themselves, and in many cases trying to get to the next level," Hand said. "We thought (a sponsor for) continuing education was a great complement to the lifestyle of the folks that work in the game."

DeVry is one of a handful of new partners that have signed on with the St. Petersburg, Fla.-based governing body of the MLB farm system, marking a shift in Hand's strategy toward leveraging its national reach through sponsorship deals that include all of its teams. Minor league team sponsorships historically have been local—like car dealerships and local banks—because of the community nature of the franchises.

But teaming with a higher education company that touts more than 48,000 students on 80 campuses across 25 U.S. states also helps the league reach a valuable database of potential new fans.
"We like the idea that DeVry, in a non-traditional education setting, doesn't have a school team to go root for," Hand said. "We're optimistic they'll embrace one of the teams in one of our markets."

Publicly traded DeVry is one of many for-profit education hubs that has been battling weak enrollment in recent years. Annual revenue fell by 2 percent in the year ended June 30 to $1.9 billion; its stock price surged by 40 percent since the start of 2014 to around $48 a share.

Direct link to article: http://www.chicagobusiness.com/article/20141208/BLOGS04/141209795/devry-looks-to-score-with-new-minor-league-baseball-deal

Courthouse News Service: For-Profit Colleges Oppose New Higher Ed Rule

Friday, November 07, 2014

By Rose Bouboushian

   (CN) - A new regulation that requires for-profit colleges to prepare students for "gainful employment" will "needlessly harm millions," a trade group alleges in Federal Court.
     The Association of Private Sector Colleges and Universities, a voluntary association of about 1,400 accredited, private postsecondary schools, filed suit Thursday in Washington, D.C., against the U.S. Department of Education, challenging the newly adopted, so-called "gainful employment" rule.
     For-profit schools that belong to the APSCU "support lawful, rational regulations governing financial aid, but the challenged regulations are neither lawful nor rational," the complaint states. "Rather, they are unconstitutional; contrary to Title IV of the Higher Education Act of 1985, as amended; arbitrary and capricious; and otherwise in violation of the" Administrative Procedure Act.
     Adopted on Oct. 31, the regulations "exceed the [Education] Department's statutory authority and depart from settled principles of agency rulemaking," the association claims.
     "The department has already tried and failed to construct a regulatory regime on the basis of the same statutory phrase it invokes now - 'prepare students for gainful employment in a recognized occupation' - in a set of rules it promulgated in 2010 and 2011," the complaint states. "That fruitless attempt spanned several years; left policymakers, schools, and their students facing uncertainty; and needlessly imposed costs on taxpayers."
     But a federal judge in Washington struck that attempt down in 2012 "because a central feature of those regulations - the loan repayment rate test - lacked any reasoned basis," the association claims.
     "Instead of correcting the flaws that rendered its 2011 rule invalid, the department's new rule only repeats and exacerbates them," the complaint continues. "The department has since conceded that there was no reasoned basis for its loan repayment rate test, admitting that it 'has found no expert studies or industry practice,' nor any other alternative support."
     The association says that, "for close to 50 years, Congress has required by statute that certain postsecondary educational programs must 'prepare students for gainful employment' in a recognized occupation or profession to be eligible to participate in Title IV financial aid programs."
     "But until the 2011 rulemaking, that phrase was never understood to mean that a program could only remain eligible for Title IV funding if its recent graduates who received Title IV aid have attained a particular level of earnings relative to the amount of debt that they incurred to attend the program," the complaint continues.
     As authority for "its far-reaching regulatory test," the APSCU "mistakenly relies" on a law that essentially says programs need only prepare students for "a job that pays," the association claims.
     "Indeed, the regulations impose massive disincentives on private sector schools that currently seek to educate low-income, minority, and other traditionally underserved student populations, because, as an historical matter, those demographics are widely recognized as most at risk of failing the department's arbitrary test," the complaint states. "Thus, instead of increasing the availability of higher education, the department's regulations will limit educational opportunities for traditionally underserved groups - leaving those students with diminished access to higher education and potentially causing them to forgo postsecondary education altogether."
     The association insists that "No single, one-size-fits-all statistical test can accurately measure whether all programs in all fields prepare students for gainful employment."
     It wants the court to declare the regulation unlawful and set it aside.
     Douglas Cox and Timothy Hatch with Gibson, Dunn & Crutcher represent the group.
     The regulation is "so unacceptable and in violation of federal law, that we were left with no choice but to file suit," Steve Gunderson, the group's president and CEO, said in a statement. "If successful, our suit will protect student access and opportunity to higher education at a time when the U.S. Department of Education seems interested in limiting choices for students by closing private sector programs."

APSCU Press Release: APSCU Files Suit Against Anti-Student Gainful Employment Regulation

Washington, D.C., November 6, 2014

Today, in the United States District Court for the District of Columbia, the Association of Private Sector Colleges and Universities (APSCU), representing over 1,400 institutions educating millions of students, filed suit challenging the U.S. Department of Education's new gainful employment regulation.

"This regulation, and the impact it will have on student access and opportunity, is so unacceptable and in violation of federal law, that we were left with no choice but to file suit. If successful, our suit will protect student access and opportunity to higher education at a time when the U.S. Department of Education seems interested in limiting choices for students by closing private sector programs," said Steve Gunderson, president and CEO of APSCU.

In the complaint, APSCU makes clear:

• "The final so-called 'gainful employment' rule […] is unlawful, arbitrary […] and will needlessly harm millions of students who attend private sector colleges and universities";
• The regulation is "unconstitutional […] arbitrary and capricious; and otherwise in violation of the [Administrative Procedure Act]";
• The Administration's previous regulatory attempt "spanned several years; left policymakers, schools, and their students facing uncertainty; and needlessly imposed costs on taxpayers.  The United States District Court for the District of Columbia struck down that previous attempt to regulate because a central feature of those regulations—the loan repayment rate test—lacked any reasoned basis";
• "Instead of correcting the flaws that rendered its 2011 rule invalid, the Department's new rule only repeats and exacerbates them";
• In the final regulation, the Department "jettisoned the [proposed] pCDR measure, leaving only a single test […] as the regulation's sole measure of whether programs prepare students for gainful employment.  […] The Department did so despite its admission in the previous litigation that it 'has found no perfect single test,' […] and the Department's conclusion that it is necessary to have multiple tests working together, to mitigate the errors and inaccuracies in any single test."
  

APSCU asks the Court to declare the regulation unlawful and set aside the regulation.

"While we seek relief from the United States District Court for the District of Columbia, we are hopeful that the Congress will stop the Department's regulation and consider the best interests of all students when they reauthorize the Higher Education Act and develop policies that apply to all students, in all programs, at all institutions," added Gunderson.

The case is the Association of Private Sector Colleges and Universities v. Arne Duncan.  APSCU is represented by Douglas Cox and Timothy Hatch of Gibson, Dunn & Crutcher LLP.

Background on the gainful employment regulation
The Department's gainful employment regulation prohibits students enrolled in programs at certain institutions of higher education—primarily private sector institutions—from receiving federal student aid under Title IV of the Higher Education Act of 1985 unless the program satisfies a biased and arbitrary earnings metric.

The debt-to-earnings metric is set at eight percent – a level that would disqualify a law degree from George Washington University Law School, a bachelor's in hospitality administration from Stephen F. Austin State University and a bachelor's in social work from University of Texas. Further, according to the Department's own data, 43 percent of graduates from public colleges and 56 percent from private non-profit colleges would fail the metric.

Although the Department states that its new debt-to-earnings metric evaluates whether programs "prepare students for gainful employment in a recognized occupation," the Department's metric does not in fact assess program quality.  Instead, the regulation measures factors that are unrelated to program quality and beyond institution control—including students' individual employment choices, local job-market conditions, and students' financial circumstances.  The regulation also imposes on institutions an array of new reporting and disclosure requirements.

Direct link to press release: http://www.career.org/news-and-media/press-releases/apscu-files-suit-against-anti-student-gainful-employment-reg.cfm

Inside Higher Ed: What a GOP-Led Congress Means for Higher Ed

November 4, 2014 

 

By:

Michael Stratford

 

With victories in several key Senate races last night, Republicans will take control of both chambers of Congress heading into the final two years of the Obama presidency -- a balance of power that sets up a much-changed dynamic for federal higher education policy-making in the coming months.

The change will likely be something of a double-edged sword for colleges and universities, higher education advocates said. On the one hand, colleges will find more help from Republicans in their longstanding efforts to roll back federal requirements they view as burdensome. At the same time, higher education may face tougher battles over federal funding for academic research and student aid programs, as GOP majorities embrace more austere budget caps.

Republican leadership of the Senate is also likely to complicate the Obama administration’s agenda for executive action, namely its regulations clamping down on the for-profit college industry as well as its desire to put into effect its full proposal for a college ratings system.

 

Policy priorities led by Senate Democrats that affect higher education are also expected to take a back seat under Republican leadership. Some of those proposals, such as allowing existing student loan borrowers to lower their interest rates, were featured prominently in Democratic campaign ads this year. Senate Democrats had also pushed new policies that sought to hold colleges more accountable for loan defaults and clamp down further on for-profit institutions.

The shift in power is likely to result in continued deadlock on higher education and other issues, especially since Republicans will not enjoy veto-proof margins in either chamber. As a result, they'll be unlikely to enact into law policies that the administration would reject (such as blocking of gainful employment).

New Committee Leadership

The next Congress will bring fairly significant changes to the lawmakers in charge of shepherding higher education legislation through the House and Senate; last night’s Republican victories are expected to catapult Senator Lamar Alexander to chairman of the Senate education committee from his current post as ranking member.

Alexander, a former U.S. education secretary and university president, has said that his higher education priority will be reducing federal regulation of college and universities. He has also pushed strongly a simplification of the Free Application for Federal Student Aid, known as the FAFSA, as well as some student loan and grant programs.

Alexander has said he wants to “start from scratch” on rewriting the Higher Education Act in an attempt to de-clutter the massive statute that governs federal student aid.

But beyond removing federal requirements viewed as burdensome and streamlining student aid programs, Alexander has not said publicly what else he wants to see in a new Higher Education Act.
One question for the next Congress will be the extent to which Alexander embraces some of the other “more imaginative” higher education policy ideas that have been offered in recent years by other Republicans, said Andrew Kelly, who directs higher education research at the American Enterprise Institute.

Several of those ideas, which have been put forward by Senators Mike Lee and Marco Rubio and Representative Paul Ryan, revolve around making it easier for nontraditional programs to get access to federal aid through new accreditation entities.

“Alexander doesn’t seem as skeptical of the accreditation system as some other Republican lawmakers, so I don’t know that those would be at the top of his list,” Kelly said. “But it’s a big question mark.”

Kelly said that he sees an opportunity for a Republican-led Congress to embrace “some of the more imaginative ideas out there” by those Republicans, “who see student debt and college affordability as a campaign issue that families, their constituents are going to care about for a long time coming.”
In the House, Representative John Kline, Republican of Minnesota, is expected to continue as the chairman of the education committee. Kline won his re-election bid last night in spite of a high-profile effort by the comedian Bill Maher to unseat the seven-term Congressman, in part, because of his support of for-profit colleges.

Democrats, meanwhile, are losing two longtime education policy makers to retirement, as Senator Tom Harkin of Iowa and Representative George Miller of California leave Congress.

Senator Patty Murray of Washington, who currently chairs the budget committee, is expected to become the top Democrat on the Senate education committee. In the House, Representative Bobby Scott of Virginia is in line to take Miller’s place as the top Democrat on that chamber’s education panel.

Several other Democrats who had played prominent roles on higher ed issues lost their re-election battles. In the House, Reps. Tim Bishop (N.Y.) and John Tierney (Mass.) were both aggressive advocates for colleges and students -- Tierney more of a partisan bulldog, Bishop having developed his expertise as a longtime college administrator, at Long Island's Southampton College.

Sen. Kay Hagan, a North Carolina Democrat, also lost her re-election bid; she has been a member of the Senate's education panel.

A New Budget Dynamic

Beyond changes to the make-up of the education committees, higher education advocates said that they’re concerned about what a completely Republican Congress would mean for funding to student aid and academic research.

While both research and financial aid have historically enjoyed relatively strong bipartisan support from both Democrats and Republicans, advocates said that the more austere budgetary conditions that Republicans are likely to create may not bode well for funding to those discretionary programs.

“We’ve got a number of conservative Republicans who have been pointing to the Budget Control Act and sequestration and the fact that that has contributed to deficit reduction,” said M. Matthew Owens, vice president for federal relations at the Association of American Universities. Those automatic budget cuts and limitations on the overall pool of money available to be allocated to domestic programs will “hamstring the ability of Congress to make investment in scientific research and student aid,” he said.

“We have a number of Democratic leaders who have made it clear that they would like to see some relief from the Budget Control Act caps,” he said. “In that environment it would be less difficult for scientific research and financial aid.”

Another round of automatic budget cuts, set to take effect in the 2016 fiscal year, is “less likely to be averted with Republican control of the Senate,” said David Baime, senior vice president for government relations and research at the American Association of Community Colleges. He noted, though, that there was bipartisan support to provide some relief from budget caps in last year’s agreement to fund the government after the shutdown.

“There is a lot of concern on our campuses about the implications of a sequester taking effect in 2016 and what that might mean for specific programs,” Baime said. “If the overall budget pie gets shrunk through sequestration, you could see it meaning a narrower slicer for many programs that benefit our students and our colleges.”

Justin Draeger, president of the National Association of Student Financial Aid Administrators, said that advocates for student aid may find themselves in the position of having to stave off reductions or fight for at least flat funding. Increased funding appears to be far out of reach, he said.

“We’re not going to see significant new investments either way, simply based on where we’ve seen Republican talking points and rhetoric on cutting spending,” he said.

Draeger also said that colleges would have concerns about Alexander’s efforts to simplify federal loan and grant programs if they were to lead to effective cuts to the money the federal government spends on student aid.

“We want to be sure that simplification doesn’t become a way for us to make cuts to students,” he said. “We would draw a pretty bright line in paying down the deficits on the backs of students.”
However, Draeger said, Alexander had been “willing to engage” on the issue, and there was likely common ground over making loan programs easier for students to access.

More Roadblocks to Obama Agenda

President Obama’s plan to develop a ratings system for higher education and then link colleges’ performance in the ratings to their federal aid has always faced long odds since it was announced in August 2013. The administration has, on its own, been putting together the ratings system, an outline of which is set to be publicly released in the coming weeks.

But the White House would need Congressional approval to tie the ratings to federal funding. That proposal has already received a cool reception among many Democrats on Capitol Hill, not to mention the Republicans who have actively sought to block the Education Department’s power to produce any type of ratings system.

Republican control of the Senate now means that the president’s goal of linking student aid to colleges’ performance in a ratings system has an even slimmer chance, if any, of becoming law.
“A united Republican Congress, I think, basically spells a death knell for any effort to tie college ratings to student aid,” said Kelly, the AEI scholar.

The Obama administration’s other higher education policy efforts are also likely to come under greater scrutiny by newly empowered Republicans in the Senate, especially its recently released “gainful employment” rule that targets mostly for-profit colleges.

Direct link to article: https://www.insidehighered.com/news/2014/11/04/what-republican-led-congress-means-higher-education-policy

Press Release: Representatives Matt Salmon (AZ-05) and Alcee L. Hastings (FL-20) Statement on the Obama Administration’s New Gainful Employment Regulation

Oct 31, 2014

Press Release 

Washington, D.C. — Today, Representatives Matt Salmon (AZ-05) and Alcee L. Hastings (FL-20) issued the following statement in response to the new gainful employment regulations the Obama Administration released yesterday.

“We are deeply disappointed in the administration’s announcement of a final rule on gainful employment without full knowledge of how it will affect our nation’s students.  Earlier this year, we introduced H.R. 4897, the Transparency in Education Act, that has strong bipartisan support and would require the Department of Education to study the effects on students prior to implementing their rule.  We are pleased that a companion bill has since been introduced in the Senate.  We will continue to work toward ensuring the Department does not hurt the same students it claims to help and we plan to reintroduce this legislation in the 114th Congress.”

Background: On October 30, 2014, the Department of Education released a 945-page final rule on gainful employment.  While they removed the cohort default rate requirement from the rule, they moved forward with their debt-to-income ratio requirement.  In an effort to prevent this rule from keeping thousands of students from achieving their educational goals, Reps. Salmon and Hastings introduced H.R. 4897 which has 27 cosponsors.  The full text of the Transparency in Education Act can be found here.

Direct link to Press Release: http://salmon.house.gov/media-center/press-releases/representatives-matt-salmon-az-05-and-alcee-l-hastings-fl-20-statement

APSCU Blog: GAINFUL EMPLOYMENT UPDATE: Questions Still Left Unanswered

With the gainful employment regulation finalized, there are still many questions left unanswered. Below are eight of the most egregious unanswered questions.
Question 1: What does this new regulation mean for students?
What ED is not telling you: Millions of students will lose access to the higher education career training program of their choice – limiting economic opportunities for them and their families.

Question 2: Why is the Department picking winners and loser based on politics and not results?
What ED is not telling you: The Department has carved community colleges from the GE regulation based on politics, not results.  Private sector institutions have lower default rates and higher graduation rates than Community Colleges, but, inexplicably, Community Colleges are the ones left unregulated by the Department.

Question 3: Does the gainful employment regulation help or hurt President Obama’s goal of having the most college graduates by 2020?
What ED is not telling you: The regulation hurts this worthy goal. Thousands of programs will be eliminated or shut down, denying millions of students access to higher education and economic opportunity.

Question 4: What does this mean for employers looking for job-ready employees?
What ED is not telling you: Employers continue to struggle finding qualified workers to meet their needs. This problem is worsened as a result of the regulation. Thousands of employers will be left without job ready employees because the training pipeline they rely on for qualified health care professionals, automotive techs, HVAC techs, and information technology professionals, among others, will be eliminated.

Question 5: What does this mean for states?
What ED is not telling you: This regulation will cost states billions of dollars over the next few years as they struggle to fill the gap left by private sector institutions that served students overlooked by traditional higher education.

Question 6: Is this about student protection?
What ED is not telling you: No, the regulation does not address the vast majority of programs or students. Instead, it singles out institutions that serve historically underserved students and cuts off new traditional student access to higher education.

Question 7: How does this regulation compare to the President’s proposed Ratings System?
What ED is not telling you: The regulation stands in stark contrast to what has been said by the Administration about the President’s Ratings System. While the Administration claims it wants a ratings system that “thoughtfully measure indicators like earnings, to avoid overemphasizing income or first jobs,” according to Deputy Under Secretary Jamienne S. Studley, the reality is that the Department is creating the exact opposite with the GE regulation.

• Early year earnings are a core component of the regulation’s metrics.
• The regulation ignores the fact that private sector institutions are significantly more likely to serve low-income, first generation, and minority students, and have much higher graduation rates than community colleges.
• The regulation evaluates programs that serve low-income students on measures of income and loan repayment, which could lead institutions to accept fewer of these students.

Question 8: Will the regulation close programs that provide a significant earnings gain for graduates?
What ED is not telling you: Yes. It is unclear why the Department wants to close programs that are providing graduates, their families and their communities with an economic advantage.

APSCU: U.S. Department of Education Regulation Denies Access to Millions of New Traditional Students

Washington, D.C., October 30, 2014 – Following the release of the final gainful employment regulation, Steve Gunderson, president and CEO of the Association of Private Sector Colleges and Universities, released the following statement:

“The gainful employment regulation is nothing more than a bad-faith attempt to cut off access to education for millions of students who have been historically underserved by higher education. Regulations created and issued based on bias against certain institutions have no place in our country. Furthermore, the debt-to-earnings metric is arbitrary and capricious.

“Once again the Department elected to arbitrarily change metrics and regulations to favor certain institutions over others. In this case, the Department favored public institutions that benefit from generous taxpayer operational subsidies, but have lower graduation rates and higher default rates, over programs at private sector institutions where graduates are achieving real earning gains and successfully repaying their loans.

“We are hopeful that the Congress will consider the best interests of all students when they reauthorize the Higher Education Act and develop policies that apply to all students, in all programs, at all institutions.

“While the Department made adjustments to the regulation, the fundamental issues remain unchanged, including:

• the regulation is targeted against institutions that serve the new traditional student instead of all of higher education;
• the regulation fails to consider a student’s finances or demographics; and
• the regulation uses very early-year earnings to measure the worth of education over a graduate’s lifetime.

“Students enrolled in programs preparing them for in-demand careers like medical and dental assisting, network systems administration, HVAC repair and pharmacy technician will lose access. If this regulation were applied evenly across all of higher education, students seeking a law degree from George Washington University Law School, a bachelor’s in Hospitality Administration from Stephen F. Austin State University and a bachelor’s in Social Work from University of Texas would lose access as well.

“We will vigorously contest all these issues to help ensure that students, employers and communities are not harmed by such an arbitrary and biased regulation.”

Direct link to press release: http://www.apscu.org/news-and-media/press-releases/us-department-of-education-regulation-denies-access-to-millions-of-new-traditional-students.cfm

APSCU Blog: Gainful Employment Update: What’s Next and Unanswered Questions

27 Oct 2014 /By APSCU Communications 

 

As the gainful employment regulatory process comes to an end, we wanted to give a short update on the status of what has taken place and what happens next.

On October 14, APSCU met with officials from the Office of Management and Budget (OMB), along with their colleagues at the Office of Information and Regulatory Affairs (OIRA), the Council of Economic Advisers and the U.S. Department of Education and presented our concerns on the regulation and the impact it will have on students, the economy and institutions. Other higher education stakeholders have also been meeting with OMB during this time.

During the meeting we presented very specific arguments and issues with the regulation (our full presentation is available online):

• The Administration’s rhetoric on the Rating System does not equal reality on gainful employment regulation (slide 4)
• Why each metric is arbitrary and capricious (slides 5&6)
• Results of new analysis showing earnings before education and earnings post-graduation – 100% earnings gain in some fields (slides 11-13)
• Private sector institutions have higher graduation rates and lower default rates than community colleges (slide 19)
• The negative impact on students and programs (slides 7&8)
• How others in higher education fail the regulation if it were applied to them (slide 17)

The regulation has now gone back from OMB to the Department and at some point before October 31, it is very likely the Department will publish the final regulation. Before they turn in their homework at the last minute, we wanted to pose some final questions for the Department to answer.
Below are nine questions that the Department should answer publicly before the regulation is released, but won’t. Instead, they will obfuscate and spin. While this is good politics, it is bad policy. Moreover, it will have a direct and negative impact on millions of Americans.

Question 1: What does this new regulation mean for students?

What ED is not telling you: Millions of students will lose access to the higher education career training program of their choice – limiting economic opportunity for them and their family.

Question 2: Does the gainful employment regulation help or hurt President Obama’s goal of having the most college graduates by 2020?

What ED is not telling you: The regulation will hurt this worthy goal. Thousands of programs will be eliminated or shut down, denying millions of students access to higher education and economic opportunity.

Question 3: What does this mean for employers looking for job-ready employees?

What ED is not telling you: Employers continue to struggle finding qualified workers to meet their needs. This problem will be worsened as a result of the regulation. Thousands of employers will be left without job ready employees because the training pipeline they rely on for qualified health care professionals, automotive techs, HVAC techs, and information technology professionals, among others, will be eliminated.

Question 4: What does this mean for states?

What ED is not telling you: This regulation will cost states billions of dollars over the next few years as they struggle to fill the gap left by private sector institutions that served students overlooked by traditional higher education.

Question 5: Are all institutions treated the same by the regulation? Will the regulation apply to programs at public and private nonprofit institutions?

What ED is not telling you: The Department is singling out private sector institutions and community colleges by applying the regulation to all their degree and non-degree programs.  Degree programs at public and private nonprofit institutions would not be held to the same standard. These programs get a free pass from the Department, despite the fact that millions of students attend them and they are responsible for the vast majority of dollars borrowed in higher education.

Question 6: Is this about student protection?

What ED is not telling you: No, the regulation does not address the vast majority of programs or students. Instead, it singles out institutions that serve historically underserved students and cuts off new traditional student access to higher education.

Question 7: How does this regulation compare to the President’s proposed Ratings System?
What ED is not telling you: The regulation stands in stark contrast to what has been said by the Administration about the President’s Ratings System. While the Administration claims it wants a ratings system that “thoughtfully measure indicators like earnings, to avoid overemphasizing income or first jobs,” according to Deputy Under Secretary Jamienne S. Studley, the reality is that the Department is creating the exact opposite with the GE regulation.

• Early year earnings are a core component of the regulation’s metrics.
• The regulation ignores the fact that private sector institutions are significantly more likely to serve low-income, first generation, and minority students, and have much higher graduation rates than community colleges.
• The regulation evaluates programs that serve low-income students on measures of income and loan repayment, which could lead institutions to accept fewer of these students.

Question 8: Will the regulation close programs that provide significant earnings gain for graduates?

What ED is not telling you: Yes. It is unclear why the Department wants to close programs that are providing graduates, their families and their communities with an economic advantage.

Question 9: What is the Department’s basis and rationale for the 8% debt-to-earnings metric?

What ED is not telling you: To date the Department has not provided one, despite setting the threshold at 12% in the 2011 version of the regulation.

Direct link to article: http://www.highereducationforall.com/gainful-employment-update-whats-next-unanswered-questions/

The Chronicle of Higher Education: Public-College Leaders Rail Against Education Dept.’s ‘Regulatory Culture’

October 20, 2014

By Eric Kelderman

Washington

Ted Mitchell, under secretary of education, began his speech to a roomful of higher-education leaders on Monday with a conciliatory tone, stressing that the U.S. Department of Education shared a goal with them of serving the public good.

After laying out some details of the department’s major policy proposals, Mr. Mitchell invited the audience to tell him how the federal government was impeding new and more-effective approaches in higher education.

He got an earful from the attendees, mostly college presidents from members of the American Association of State Colleges and Universities, which is holding its annual meeting here this week.
The Education Department’s own regulatory actions—its "regulatory culture"—are the principal impediments to innovation, said George A. Pruitt, president of Thomas Edison State College, in New Jersey.

Mr. Pruitt and others cited, in particular, several rules meant to crack down on perceived abuses by for-profit colleges that rely primarily on distance learning. Those regulations include one strictly tying the credit hour to time spent in class, another requiring colleges to be authorized in every state where they enroll students, and one that evaluates the earnings of a college’s graduates in proportion to their amount of student debt.

Those rules may have been meant primarily for proprietary colleges, but they are having a negative impact on all sectors of higher education, Mr. Pruitt argued, and they reflect a view that makes compliance a priority over quality assurance.

"I understand that you get upset if your dog soils the carpet," he said, "but you don't go out and shoot your horse for that."

Eduardo M. Ochoa, president of California State University-Monterey Bay, said the problem lay with the department’s Office of Inspector General, which has pushed the department to adopt such rules in the face of negative scrutiny for both colleges and accreditors.

"When will the department see fit to overrule the inspector general?," asked Mr. Ochoa, who served as assistant secretary for postsecondary education from 2010 to 2012.

Several college presidents also raised questions about the department's proposed ratings system for colleges.

Ricardo Azziz, president of Georgia Regents University, asked Mr. Mitchell how the department would prevent the ratings from being misused as a rankings system.

Mr. Mitchell said he couldn't answer "precisely," but he promised that the department was considering several ways to guard against that possibility.

A broader concern from college presidents at the meeting was that the metrics in the ratings system would put at a disadvantage colleges that enroll many low-income, minority, or first-generation students.

For his part, Mr. Mitchell tried to reassure the college leaders that the department was working to be more cooperative, citing experimental programs to test approaches like competency-based education and credit for prior learning.

"We're helping to create space for innovation," Mr. Mitchell said.

Direct link to article: http://chronicle.com/article/Public-College-Leaders-Rail/149535/?cid=pm&utm_source=pm&utm_medium=en

Federal Regulations Advisor: Monday Morning Regulatory Review – 10/20/14: Management by Executive Order; Gainful Employment Meetings; OMB Meetings; & Record Completion and Privilege Management by Executive Order; Gainful Employment Meetings; OMB Meetings; & Record Completion and Privilege

By Leland E. Beck on October 19th, 2014 Posted in Executive - OMB Review, Judicial Review & Remedies, Regulatory Process
 

A holiday-shortened workweek and a pre-midterm election pause provide the opportunity to review a few miscellaneous topics.  President Obama (POTUS) issued a new Executive Order seeking to improve the security of federal government credit and debit cards, and improve the anti-fraud environment, but with limited effect.  The Office of Management and Budget (OMB) Office of Information and Regulatory Affairs (OIRA) continued an extensive series of meetings with private parties on the Department of Education (ED)’s attempts to limit government student loan defaults in for-profit colleges and universities, and some key points about OMB meetings are worth reiterating.  Finally, the United States District Court for the District of Columbia granted in part and denied in part motions to supplement an agency administrative record, posing again a problem of when an agency will be called to account.


Management by Executive Order:  Several press sources noted the fact that President Obama signed an Executive Order mandating that government credit cards and benefit cards use a digital chip in addition to the standard magnetic strip (sometimes called “chip-and-PIN technology”) – a security feature that has been available for some time, but has not yet been widely adopted because of increased cost of card manufacture.  Some in the general press have overstated the potential effect of the executive order / management directive.  The key point may be leadership by example, with the increased cost apparently absorbed by the government (or perhaps the government employees).  Much of the order simply requires planning and communication.

►  The Executive Order certainly makes sense, but needs to be understood in context.  The new cards may have little effect outside government operations and protects federal employees and the government from loss more than anyone else, including the beneficiaries of Social Security and welfare benefits through a debit card (the potential amounts often are not substantial enough for a third party to divert).  The Executive Order is merely a management tool that does not directly affect private parties, though it may encourage some behavioral changes.

Gainful Employment Meetings:  Over the past several weeks, OMB has held more than a dozen meetings with interested organizations on the ED’s Gainful Employment final rule to better regulate for-profit colleges and universities to reduce federally-guaranteed loan default rates, a series of regulations that have been beset with difficulty, including multiple remands (and not enough vacatur) discussed previously from the United States Court of Appeals for the District of Columbia Circuit and from the district court.  OMB has been considering other economically significant final rule provisions for a month and everyone appears to have a view and be seeking an OMB audience.

►  The Gainful Employment regulations need a careful review before any further action is taken – sadly, OMB (from the executive review perspective) and the Department of Justice (DOJ) (from the litigation / compliance perspective) need to oversee and coordinate that review to end ED’s continued inability to comply with the Administrative Procedure Act (APA) and court interpretations.  Otherwise, the parties will continue to write new episodes (and we will continue to criticize them) in this wasteful epic.

OMB Meetings:  Last April, OMB revised the way they publicly report public meetings under Executive Order 12866 and has held 232 meetings since then, although this number reflects only the commonality of the process.  Some points should be reiterated about OMB meetings and the place those meetings fit within the regulatory process.

1. OMB meetings are “listening sessions”:  OMB attorneys, analysts, and examiners, agency officials, and even other Administration officials treat OMB meetings as a formal opportunity for interested parties to clarify issues and present data – requesters should not expect any response; OMB and the agency may ask questions but will rarely answer questions.  The key is presentation of persuasive data.
   
2. Data and substance are critical:  OMB looks for substantive analysis, whether refreshing prior public comments or providing new insight.  Professionals look for ways to make a decision and pressure does not add substance.
   
3. Some have decried these ex parte meetings, but such cries are more often a political statement meaning “Don’t listen to them, listen to us.”  Those complaining may not have substantive information to present.
   
4. An interested party must request a meeting:  although often freely permitted, OMB may refuse to meet if they do not perceive that the meeting will be productive.  Thus, a record of “us, not them” may result in OMB seeing a requested meeting as a waste of their time.

Record Completion and Privilege:  The United States District Court for the District of Columbia last week granted in part a motion to supplement the administrative record in judicial review of a Department of the Interior (DOI) decision, but then declined to require DOI to file an index of the documents that it claimed were privileged and, therefore, not part of the administrative record, in Stand Up for California v. U.S. Department of the Interior (DOI).  Although technically an adjudication rather than a rulemaking, the same principles apply and pose a continuing problem.  The district court granted in part and denied in part the plaintiffs’ motion to supplement (actually complete) the administrative record of the agency decision, finding that certain documents were in the possession of the agency and formed part of the agency’s consideration of the decision.  On the other hand, the district court denied the plaintiffs’ motion to compel the agency to produce an index of all privileged documents that were not included within the administrative record.  The court relied on the presumption of regularity – that the agency has properly constructed the administrative record – in denying the motion to compel DOI to produce a privilege index.

►  The decision on the motions is not particularly new or surprising, but together raise a question:  once the plaintiff has pierced the presumption of regularity to compel additions to the administrative record, why is the presumption still permitted to the agency to protect what may be other failures?  This issue has been raised in the past and will be raised again – and needs to be carefully considered on appellate review.

*  So that you are not surprised, there may not be a Monday Morning Regulatory Review next Monday.

Direct link to article: http://www.fedregsadvisor.com/2014/10/19/monday-morning-regulatory-review-102014-management-by-executive-order-gainful-employment-meetings-omb-meetings-record-completion-and-privilege/

Forbes:Obama Is Deploying 'Gainful Employment' Regulations To Threaten For-Profit Colleges

October 07, 2014 

Vicki E. Alger

Vicki E. Alger, Ph.D., is a research fellow at the Independent Institute in Oakland, California.

The Obama administration claims its latest college crusade will help students. On the contrary, its “gainful employment” regulations amount to a hostile takeover attempt by government of the fastest growing higher education sector in the country that will hurt students, taxpayers, and the economy.

Education Secretary Arne Duncan acknowledges that most career colleges make a vital contribution to American global competitiveness. The few that don’t leave students with crushing debt and no degree to show for it; however, that outcome is hardly unique to the private or for-profit sector.

Rather than hold bad actors accountable, both public and for-profit alike, through existing laws, since 2010 Duncan has singled out and tried to use his department to exert more control over the for-profit career college  sector, which has swelled from 200,000 students in the late 1980s to 2 million as of 2010.

Back in 2010 the U.S. Department of Education unveiled a set of proposed gainful employment rules requiring private for-profit colleges to meet mandated loan repayment rates and debt-to-earnings levels before their students could qualify for federal student aid.

The final regulations unveiled in 2011 deemed students’ employment “gainful” only if it was in an occupation recognized by the federal government. They further mandated student repayment and debt load ratios that a federal judge struck down the following year for being “arbitrary and capricious.”
Undeterred last year the Obama administration revived its crusade against what Duncan called “predatory” career colleges with proposed mandates that are no less arbitrary or capricious than their predecessors.

Under the new proposed regulations unveiled earlier this year, for students to qualify for federal aid for-profit career colleges must prove the estimated annual loan payments of graduates do not exceed 20 percent of their discretionary earnings, or 8 percent of their total earnings, and the default rate for former students does not exceed 30 percent.

Duncan justified the move insisting that 72 percent of for-profit career colleges graduated students who earned less than high school dropouts. That claim has since been roundly dismissed. And there’s ample reason to doubt other claims by his department.

Department of Education officials estimate that 90 percent of career college students losing federal financial aid because of gainful employment regulations will find suitable alternatives. Actual figures tell a very different story.

Should the Obama administration succeed and gainful employment regulations take effect next year, more than 4 out of 10 students currently enrolled at for-profit career colleges could lose access to federal financial aid, according to research by the Association of Private Sector Colleges and Universities. Over the next decade as many as 7.5 million students could lose access.
And who are these students?

Most for-profit career college students are older adults, including members of the military. They are also far more likely to be from traditionally underrepresented populations, including minorities and first-generation college-goers.

These students seek out private for-profit career schools precisely because the public and non-profit sectors aren’t the right options for them, including not offering the desired degree programs or flexible schedules that help them balance family and career responsibilities.

Forcing these students into schools and programs the Obama administration (and its union allies) prefer won’t help them or taxpayers.

The net taxpayer cost of a private for-profit college student is $183 compared to more than $13,000 per public college student. If private for-profit options aren’t available, many of these students would have to transfer to public colleges at cost taxpayers nationwide an additional $1.7 billion annually. In the long-run gainful employment regulations could cost students and taxpayers even more.

As many as 23 million skilled and educated workers are needed over the next decade, and private for-profit career colleges specialize in offering degree programs in the highest-growth occupational fields.

At a time when 90 million Americans are undereducated, 12 million are unemployed, and family incomes are down, gainful employment regulations are the last thing American students, taxpayers, or our economy needs.

Direct link to article:  http://www.forbes.com/sites/realspin/2014/10/06/obama-is-deploying-gainful-employment-regulations-to-threaten-for-profit-colleges/

APSCU Press Release: APSCU Comments on Release of Cohort Default Rates and Adjustment of Calculation

Washington, D.C., September 24, 2014—Following the U.S. Department of Education's release of the official three-year federal student loan cohort default rate (CDR), APSCU Vice President of Public Affairs Noah Black released the following statement:

"It is a positive sign for students and the economy that cohort default rates continue to decline across the board. We are hopeful that as the economy improves and more borrower friendly policies are put in place, defaults can become a thing of the past.

"A comparison of institutions serving similar students—private sector institutions and community colleges—shows our institutions have equal or lower default rates and higher graduation rates than our peers. This is a result of our sector's focus on graduate employment, financial literacy and credentials in high demand fields.

"It is notable and disappointing that the Department continues to be opaque on how three-year CDRs are calculated.

"Now on the cusp of students and institutions losing access to Title IV funds, the Department appears to be admitting to certain flaws in how information is collected and CDRs calculated. As a result, they are making an adjustment for institutions that would have been subject to potential loss of eligibility this year. APSCU, and its members, raised this concern with the Administration repeatedly prior to the change in policy.

"Since the Department now thinks this is such an extraordinary situation, the logical question is, why are they not making the adjustment for all institutions? Doing so would certainly result in a more accurate measure of three-year CDRs—a metric that is used to determine eligibility for state grants, special disbursement rules and serves as the underpinning for the programmatic CDR in the proposed gainful employment regulation."

Direct link to article: http://www.career.org/news-and-media/press-releases/apscu-comments-on-release-of-cohort-default-rates-and-adjustment.cfm

The Chronicle of Higher Education:In 11th-Hour Move, Education Dept. Spares the Rod on Loan Defaults

September 24, 2014

By Kelly Field

Washington

On the eve of the much-anticipated release of its annual roundup of student-loan default rates, the Education Department has announced that it will spare some colleges whose high rates would have cost them their ability to award federal student aid.

In a notice published quietly on Tuesday, the department told colleges it had "adjusted" the rates of institutions that fell short of the strict new standard that took full effect this year, excluding some defaulters from the colleges' totals.

Colleges, many of which depend on student aid for their survival, welcomed the news. College leaders have argued that recent growth in the share of borrowers defaulting on their federal student loans is due in large part to factors the institutions can’t control—a weak economy, for one, and inadequate loan servicing, for another.

But student and consumer advocates accused the department of letting underperforming colleges off the hook and of undermining lawmakers’ efforts to hold those institutions accountable. They questioned the department’s decision to offer relief to colleges, but not to the borrowers whose loans are in default.

As many as two to three dozen colleges had been at risk of losing their eligibility under the stricter standard, which holds colleges responsible for defaults that occur over three years, rather than two. The department did not say how many institutions would remain eligible as a result of its adjustments, though the secretary of education, Arne Duncan, told a gathering of leaders of historically black colleges and universities on Tuesday that none of their institutions would be penalized.

In a speech at the department's National HBCU Week Conference, Mr. Duncan credited the "tremendous effort we made together" with defusing the threat to colleges.

"The hard work of lowering default rates remains, and some institutions remain troublingly close to the line," he said. "But we will continue to work with you to address this critical issue with urgency."
If HBCU leaders knew the announcement was coming, community colleges were pleasantly surprised. Those institutions, which have seen their default rates rise from 13 percent to 21 percent over the past six years, had been anticipating this week’s default-rate release with anxiety and dread.

What About Borrowers?

Congress raised the default-rate standard five years ago, in part to make it harder for colleges to manipulate their rates. Before, some colleges would routinely use deferments and forbearances to push defaults beyond the government's two-year measurement window.

Under the new standard, penalties kick in when a college’s cohort default rate—the share of students who default on their loans in a given period—exceeds 30 percent for three years in a row or 40 percent in a single year.

With the shift to a three-year standard looming, colleges have been scrambling to bring down their default rates. A growing number have turned to third-party vendors for default-management and financial-literacy services.

But default rates have continued their steady climb. Last year the percentage of borrowers who defaulted within two years of entering repayment reached 10 percent—the highest rate in nearly two decades—while the percentage defaulting within three years reached almost 15 percent.
While the struggling economy explains some of the increase, colleges also blame legislative changes that have resulted in some borrowers’ having loans assigned to more than one servicer. They say borrowers with "split servicing" are more likely to default on their debt than are borrowers with a single point of contact.

"A 50-percent jump in rates is not explained by the recession alone," said David S. Baime, senior vice president for government relations and research at the American Association of Community Colleges. "It did have to do with the servicing environment."

In the Tuesday announcement, the department acknowledged the difficulties that split servicing had caused some borrowers, without providing evidence that such borrowers default at higher rates.
To account for such borrowers, the department removed from its calculations those who had defaulted on a loan but who had one or more loans in repayment, deferment, or forbearance for at least 60 consecutive days, explained Jeff Baker, policy director for the Office of Federal Student Aid.
"In some cases, these adjustments resulted in an institution not being subject to a potential loss of eligibility," he wrote. Then, almost as an afterthought, he noted that "the borrower’s defaulted loan remains in its current status."

Consumer advocates say that’s not fair. "If schools are not going to be held responsible for defaults presumed to be caused by split servicing, borrowers shouldn’t be either," said Debbie Cochrane, research director at the Institute for College Access and Success.

In a written statement, the top Democrat on the House education committee also raised concerns about the department's reprieve.

"Any changes in the student-loan system that reduce transparency and consistency may compromise our ability to hold poor-performing colleges accountable," said Rep. George Miller, of California.

Direct link to article: http://chronicle.com/article/In-11th-Hour-Move-Education/148971/

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

September 18, 2014

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

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

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

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

###

Permalink: http://www.flake.senate.gov/public/index.cfm/2014/9/flake-mccain-introduce-bill-to-increase-transparency-in-gainful-employment-regs

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

11 Sep 2014 

 

By APSCU Communications 

 

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

As the U.S. Department of Education data shows, two-year private sector institutions’ average graduation rate is nearly triple that of public community colleges – 62.7% at private sector institutions, compared to 21.9% at public community colleges.

This fact cannot be overlooked when discussing private sector institutions and the “gainful employment” regulation.

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

The simple fact that “gainful employment” regulation could potentially shutter programs that are graduating students at rates so much higher than the alternative again points out the flawed logic behind the gainful employment regulation.

Direct link to article: http://www.highereducationforall.com/private-sector-institutions-graduation-rates-head-shoulders-community-colleges-2/

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

September 9, 2014 
By Bre Payton

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

03 Sep 2014 /

By APSCU Communications 

 

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

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

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



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

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