The Hill: The real issue is still real jobs

July 08, 2015

By Steve Gunderson

In a recent commentary, Education Secretary Arne Duncan painted the U.S. Department of Education’s closing of Corinthian Colleges as “the right thing to do.” The Department’s clumsy response left tens of thousands of students halfway through their programs with nowhere to go. Even if one believes the Department’s actions were appropriate, no fair-minded person would suggest that a "bad institution” defines an entire sector of higher education, but this is what the Secretary does. As the Department continues to defend its actions, the Secretary overlooks clear evidence that private sector institutions do a far better job of preparing tomorrow's workforce than their public sector peers.

Compared to public and private non-profit institutions, private sector institutions educate far more new traditional students. Eighty percent of students at private sector institutions are on their own financially, compared to 49 and 34 percent at public and private non-profits, respectively. Similarly, 63 percent are over the age of 25, 50 percent have children, and 35 percent are working full time. Public and private non-profit schools don't come close to serving these students who are often struggling to juggle family, work, and school.

Private sector institutions also outperform other sectors in terms of outcomes. Two-year private sector institutions have graduation rates three times higher than community colleges, while borrowers default at lower rates. Even when the community colleges' performance is rated generously, they fall drastically short of the private sector. Additionally, private sector institutions offer credentials in high demand fields, such as business, technology, and healthcare, at a rate that far outpaces public institutions – 66 to 39 percent. Graduates of private sector institutions also experience significant earnings boosts. For some programs, these gains can approach a 100 percent increase in earnings for graduates. For students, that is the difference between welfare and a path to the middle class.

The Department continues to attempt to distract from the mistakes it made in the actions that resulted in the forced shutdown of Corinthian by lobbing accusations and fines. But there is no distracting from the fact that their approach has left tens of thousands of students' degrees in jeopardy and may have even discounted the degrees of students who had already gone on to graduate and seek employment.

In 1992, then candidate Bill Clinton coined and campaigned around a phrase now registered in the lexicon of political history: "It's the economy, stupid!"

The words resonate today as the current Administration pursues its attack on our nation’s career colleges through the gainful employment regulation, which will shut-off access to over a thousand programs at private sector institutions and deny over three million students access to higher education. Secretary Duncan is actively lobbying against bipartisan legislation that would stop a series of overreaching and destructive regulations. In doing so, the Administration is attempting to block Americans from an education and job opportunity.

During the recession, America lost 9.3 percent of its middle-skills jobs, but in the first four years after the recession, only 1.9 percent of these jobs were recovered. This is due, in part, to the lack of career-oriented opportunities that traditional colleges and universities offer to new traditional students and also the lackluster economic recovery since the recession. In this respect, the administration's attacks on private sector institutions are troublesome in two regards. First, private sector institutions are specifically geared toward career-oriented and middle skills education – seeking to shut them down will only exacerbate the shortfall in skilled workers. Second, the Administration seems to be ignoring the role it has played in the sluggish economy.

Right now, America is losing the battle for real and sustained job growth, especially middle-skills jobs that are essential for the development of a new middle class. The key to winning this battle is providing the opportunity of higher education for all. Private sector institutions and career colleges provide that opportunity. These institutions serve the students left behind by traditional higher education. New traditional students are the new normal, and as a nation we must stop discounting the value they can bring to our economy if given access to higher education.

The current efforts in Congress to suspend this regulation are actually far more thoughtful than the ideological attacks and “reauthorization by regulation” approach that the administration is currently undertaking.

Leaders in Congress have made clear their intent to address the Department’s regulatory overreach, as well as create a better system of student disclosures and protection, as part of reauthorize the Higher Education Act in this session of Congress.  Therefore, it makes little sense for the Department to begin implementing rules and reporting requirements for a few months prior to reauthorization being completed.

To that end, the Department should engage with Congress and other higher education stakeholders on the reauthorization of the Higher Education Act in a way that creates a path to real skills for real jobs and a real chance for a place in America’s middle class.

Gunderson is president and CEO of the Association of Private Sector Colleges and Universities.

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