Career College Central Blog: No Surprise The Department Of Education Can’t Answer Questions On Gainful Employment Rule

November 21, 2013

By Kevin Kuzma, Editor
 
Article Overview: 
Editor Kevin Kuzma shares the frustration of Rep. Virginia Foxx of North Carolina when it comes to the Department of Education's negotiated rulemaking committee's second round of discussions about the "gainful employment" rule.


“Oh, Virginia … don’t be so surprised. You know this is the way it works in Washington. Committees are formed, directives are given, decisions are made – and then, when questioned, no one can really explain what the impact is going to be. That’s just how it goes. The point is a committee was formed. We have serious business to address … regardless of how it impacts people.”
As smug as those words about the inner-workings of Washington might sound, it was not beyond reason to imagine a Department of Education representative speaking them to Rep. Virginia Foxx of North Carolina earlier this week at the department’s negotiated rulemaking committee’s second round of discussions about its “gainful employment” rule.
While it’s nothing new for leaders in our nation’s capital to pretend not to know the impact of decisions they’ve personally been involved in – think the government shutdown and Obamacare – it’s something else for a committee tasked with redrafting a rule that will impact so many not to know how to respond to basic questions.
  • How many programs would pass or fail under the latest proposal?
  • How can we move forward as a committee without the answer to that question?
  • When will the information be available? Soon? How soon?
The answers seem simple enough, and yet the department couldn’t provide any real numbers to the deliberators who need them most.

Rep. Foxx, a Republican and opponent of the rule in the past, sat in on a morning’s worth of the rulemaking committee’s deliberations. Comprised of 28 negotiators, 14 primary and 14 alternates, the committee represents a number of constituencies -- and none of them seem willing to come to any consensus on how the final rule should be drafted. The group has been drastically divided on the subject of whether or not a rule of this kind is even possible to install since its first meeting in Washington in September.

This time around, the draft of the rule before them would fail programs much faster (with one possibility being the immediate loss of eligibility) and easier. The current version now includes stipulations that would almost instantly take down programs that can’t provide gainful employment for lacking adequate approvals and accreditations. And in perhaps the department’s most unexpected move, this draft also includes penalties that would do more than revoke federal student aid. Failing programs might also be called on to pick up the tab on some outstanding loan dollars even before students bail out.

After about 90 minutes in the audience, Foxx left, expressing her frustration at the committee’s inability to answer questions about how its baby would affect hundreds of colleges and, in turn, thousands of students. She reportedly said on departure, “One of the things that I’m interested in is that the department is so ill-prepared in terms of answering questions.”

Foxx had listened to the committee’s career college representatives question the department about its reasoning for introducing a more stringent proposal than what was offered in the initial draft. The lack of information about how many colleges it impacts obviously proved to be a major sticking point.

The disappointment is widespread. The higher education community probably expected the Association of Private Sector Colleges and Universities (APSCU) to condemn the final rule, in whatever form it takes, but it’s quite another thing for APSCU to be forced to shoot down the rule because no one – including the committee – can explain what a toll it might take.
APSCU's official press release on this week's sessions condemns the department for making "bad public policy." Here’s APSCU President and CEO Steve Gunderson's comments in the release suggesting a different body handle this matter:

“If the Department continues with the current flawed regulation, they will deny millions of students access to postsecondary education, new skills, and good jobs. This will hamper the ability of our country to meet the President’s goal of closing the skills gap by increasing the number of Americans with postsecondary credentials – leaving employers without access to the skilled workforce they require.

“Student outcomes, program quality, eligibility, accountability and transparency are matters for Congress and the reauthorization of the Higher Education Act, a view that is supported by the higher education community.”

The department is going to a great deal of trouble just to run through the motions on this rule. Career college sector leaders have rightfully suggested all along that if the department cannot find consensus even among schools the rule would not impact, that means the rule is fundamentally flawed. But now it seems clear they are intent on pushing forward a rule even more stringent than before. And why not? What’s stopping them? No one is going to be willing to stand behind the work of this committee when its time runs out. This committee clearly exists for the sole purpose of existing.

CAREER COLLEGE CENTRAL
Sources: 
Career College Central

APSCU Press Release: Department Continues Bad Public Policy Negotiating Rulemaking

Will Displace Millions of Students Over the Next Decade; Inhibit Employer Needs for Job Ready Workforce

Washington, D.C., November 20, 2013—Today, the U.S. Department of Education was supposed to conclude its gainful employment negotiated rulemaking session. Instead, it announced additional negotiations for some point in December 2013.

The negotiated rulemaking process is taking place in parallel with a larger conversation on outcomes in higher education. In the last month, leaders in higher education have cautioned the Department to take into consideration an institution’s mission and students served before arbitrarily applying policies. Comments include:

Their concerns with rating institutions and programs based on earnings are well founded considering an October 2013 National Center for Education Statistics (NCES) report that found 26% of bachelor’s degree recipients at public four-year institutions, who were repaying their loans, faced monthly loan payments greater than 12% of their monthly income. At private non-profit institutions, 39% exceeded the 12% debt-to-earnings threshold and 35% at private sector institutions exceeded the threshold.

Steve Gunderson, president and CEO of the Association of Private Sector Colleges and Universities, released the following statement on the negotiated rulemaking session:

“If the Department continues with the current flawed regulation, they will deny millions of students access to postsecondary education, new skills, and good jobs. This will hamper the ability of our country to meet the President’s goal of closing the skills gap by increasing the number of Americans with postsecondary credentials – leaving employers without access to the skilled workforce they require.

“Student outcomes, program quality, eligibility, accountability and transparency are matters for Congress and the reauthorization of the Higher Education Act, a view that is supported by the higher education community.”

Inside Higher Education: Education Dept. Extends Talks on ‘Gainful Employment

November 21, 2013

The federally appointed committee tasked with rewriting the Obama administration’s “gainful employment” regulations will continue its deliberations in December, an Education Department official said on Wednesday. Negotiations over the rules were slated to end Wednesday, but members of the panel were not close to reaching an agreement after more than five full days of debate over the last several months. The committee is charged with rewriting rules that were blocked by a federal judge earlier this year.

The regulations would condition federal student aid to career-training programs at for-profit and community colleges on their ability to meet certain standards. The department is proposing metrics that would judge graduates’ earnings relative to their earnings, the rate at which former students default on their student loans and whether former students are paying down at least the interest on their loans.

Negotiators were still at odds Wednesday over how those standards should be set, which programs ought to be exempt, and what information schools should be required to disclose to students.
Representatives from for-profit and community colleges said the rules would unfairly harm their institutions, punishing them for enrolling low-income and otherwise disadvantaged students. Several members of the panel have also said they cannot effectively discuss the department’s latest proposal, which is more stringent than previous drafts, until the department releases an analysis of how the rules would impact institutions.

Department officials have said they are in the process of producing that data on how many programs would pass or fail under its proposal. John Kolotos, the department's representative on the committee, told negotiators Wednesday that the data would be available before the next meeting in December. That session has not yet been scheduled.  The department would be bound by a set of regulations that the panel unanimously supports but would be free to push ahead with its own proposal if negotiators failed to reach an agreement.

Inside Higher Ed

Inside Higher Education: FTC Joins For-Profit Fight

November 14, 2013
By:Paul Fain
 
The Federal Trade Commission is getting tougher with for-profit colleges, opening a new front in the latest Obama administration-led attempt to crack down on the sector.

The independent agency functions as the federal government's primary consumer cop. Last week it released stricter guidelines on deceptive marketing practices by for-profit colleges that feature vocational programs. The commission advised colleges against misrepresentations about their accreditation status, transferability of credits, job placements, graduation rates or salaries of graduates.

The new standards followed a tip sheet the commission put out last month to help veterans and members of the military better scrutinize for-profits before enrolling.
Both releases included strong language.

“Not every school has got your back. Some for-profit schools may care more about boosting their bottom line with your VA education benefits,” Carol Kando-Pineda, a lawyer with the commission, wrote in a blog entry. “Some may even stretch the truth to persuade you to enroll, either by pressuring you to sign up for courses that don’t suit your needs or to take out loans that will be a challenge to pay off."

The commission’s recent actions are the culmination of a process that began in 2009, with a request for public comments about its vocational school guidelines, which had not been updated in more than a decade. Several consumer groups responded by describing the fraudulent and deceptive marketing practices of some for-profit institutions.

Agency officials apparently heard the message, said Maura Dundon, senior policy counsel for the Center for Responsible Lending. She said the guidelines should serve as a warning to the entire industry.

“We’d really like to see the FTC actually go after some of these guys,” Dundon said. “The FTC has a much stronger enforcement capability than does the Education Department.”

Eight groups submitted comments to the commission. The Association of Private Sector Colleges and Universities, which is the primary for-profit trade group, was the sole commenter to argue that the guidelines are unnecessary and create additional burdens for institutions.

The revised guidelines cite “problematic practices by a range of for-profit colleges,” and mention the scathing report on the sector that Sen. Tom Harkin, an Iowa Democrat, released last year.
In addition, Kando-Pineda’s blog entry said 70 percent of the fraud investigations the U.S. Department of Education’s Office of Inspector General is currently pursuing focus on for-profits.
A spokesman for the association declined to comment on the new guidelines. But the group sent a letter to the commission about the blog post on veterans, arguing that the commission was wrong to suggest that for-profits are not supporting their military or veteran students.

"The eight questions listed are the exact questions all students should be asking when picking a college and I applaud your efforts to share this information with veteran and military students," wrote Steve Gunderson, the association's president and CEO. "However, it is unfortunate that you used an opportunity to share sound advice to also attack all private sector colleges and universities by accusing institutions of being more interested in the bottom line than our students."

The commission’s guidelines technically apply only to vocational programs at for-profits that do not offer degrees. That means mostly small, mom-and-pop institutions, like cosmetology schools.
However, the agency has a broad jurisdiction. It generally creates guidelines rather than legally binding rules, said Dundon. And those guidelines can be applied more broadly than the specific language suggests.

“Although the guides specifically address only for-profit institutions that provide vocational and distance education,” the commission said in its guidelines, “the commission believes that the guides can also provide useful guidance to any for-profit colleges that engage in similar practices.”
The commission said it has the authority to dial up law enforcement on deceptive or unfair practices, regardless of whether a college is covered under the language.

The guidelines are designed to address several specific forms of misrepresentations. Those broad categories include deception about licensing exams, availability of financial aid, transferability of credits and in the student recruiting process, such as with bogus depictions of graduation rates or job prospects.

For example, the commission said it is deceptive for a college to use any promotional materials that misrepresent the “availability of employment after graduation from a school or program of instruction.” That includes false descriptions of the type of employment available, graduates’ success in landing those jobs and their salary ranges.

Likewise, the commission spelled out eight questions for veterans and military students to ask about an academic program they may be considering at a for-profit. Those questions revolve around cost of attendance, average debt levels, accreditation status and transfer credits. The commission also provided links for students to find some of that information.

David Hawkins is director of public policy and research for the National Association for College Admission Counseling. His group submitted comments about the commission’s guidelines.
He said the revised language is a “substantial re-entry” for the commission in overseeing for-profits, and he hopes it will be a “positive force for compliance.”

(Note: This article has been updated from an earlier version to add new comments from the Association of Private Sector Colleges and Universities.)

Inside Higher Ed