Department of Education Announces Negotiated Rulemaking Committee on Gainful Employment
On June 12, 2013, the Department published a notice in the Federal Register announcing its intention to establish a negotiated rulemaking committee to prepare proposed regulations to establish standards for programs that prepare students for gainful employment in a recognized occupation. The notice set a schedule for the committee meetings and requested nominations for individual negotiators to serve on the negotiating committee. The committee was announced in August and can be found here. The first negotiated rulemaking session was September 9 – 11, 2013. The second was November 18-20, 2013, and a third session is scheduled for December 13, 2013.
Information about the negotiated rulemaking committee and its work can be found here.
Coalition Letter in Opposition to the Academic Freedom through Regulatory Relief Act
A broad coalition of more than 40 organizations that work on behalf of students, consumers, veterans, faculty and staff, civil rights and college access and affordability sent a letter to the Chairs and Ranking Members of the House Education and Workforce Committee and its subcommittee on Higher Education and Workforce Training voicing strong opposition to the “Academic Freedom through Regulatory Relief Act” (H.R. 2637). The legislation would do nothing to reduce the cost of higher education, would halt collaborative work underway to develop common-sense solutions to protect students and taxpayers from waste, fraud and abuse in higher education, and reward institutions that deceive prospective students and provide low-quality, overpriced educational services.
Public Hearings and Comments on Upcoming Rulemaking Sessions
In May and early June, the Department of Education held four public hearings to accept input on topics to consider in upcoming negotiated rulemaking sessions, and it also accepted written comments. Many organizations and elected officials spoke or submitted comments, in particular encouraging the Department to effectively enforce the statutory “gainful employment” requirement for all career education programs.
Information on the hearings, including lists of presenters and hearing transcripts, can be found here.
Gainful Employment Litigation
In June 2012, a federal judge upheld the Department of Education’s authority to issue regulations to enforce the statutory requirement that career education programs receiving federal funding, whether at for-profit, public or nonprofit colleges, “prepare students for gainful employment in a recognized occupation,” but it also invalidated parts of the gainful employment regulations because the judge concluded that the Department had not offered a sufficient rationale for the rule’s loan repayment rate threshold. The Department petitioned the judge to uphold the rule’s reporting requirements, which support the rule’s disclosure requirements. The judge issued his ruling in March 2013, denying the Department’s motion to uphold the Gainful Employment reporting requirements, which means only the rule’s disclosure requirements remain in effect. You can read articles about the ruling here and here.
Senate HELP Committee Report on the For-Profit Education Industry
On July 30, 2012, Senator Harkin unveiled a HELP Committee report on the for-profit education industry and the 30 companies that have been the focus of a two-year Committee investigation. The report provides a comprehensive analysis of how the $32 billion annual investment in the sector is serving taxpayers and the students enrolling in the schools. The report draws on data and documents not previously released including new student outcome data for each of the companies reviewed. Joining Senator Harkin at the press conference were Senator Blumenthal, Congressman Cummings, Amy Wilkins from The Education Trust, Tom Tarantino from Iraq and Afghanistan Veterans of America, and Laura Brozek, a former Director of Recruitment for ITT Technical Institute.
The entire report, For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success, can be found here.
Gainful Employment Informational Data
On June 26, 2012, the Department of Education released data for career education programs at public, for-profit and non-profit schools subject to the Gainful Employment regulation. The data show that five percent of the programs—all located at for-profit colleges—do not meet any of the three debt measures in the Department’s Gainful Employment regulation. Only 35 percent of programs meet the minimum standard for all three metrics. The data are informational only and do not have any consequences associated with them. And now, with the federal judge’s June 30 decision on the Gainful Employment Regulation, the problems revealed in this informational data are left with no regulation to address them.
On a visit to Fort Stewart in Georgia on April 27, the President signed an Executive Order designed to protect veterans and servicemembers and their families from colleges that seek to mislead them. In his speech, the president said:
“I’m not talking about all schools. Many of them — for-profit and non-profit — provide quality education to our servicemembers and our veterans and their families. But there are some bad actors out there. They’ll say you don’t have to pay a dime for your degree but once you register, they’ll suddenly make you sign up for a high interest student loan. They’ll say that if you transfer schools, you can transfer credits. But when you try to actually do that, you suddenly find out that you can’t. They’ll say they’ve got a job placement program when, in fact, they don’t. It’s not right. They’re trying to swindle and hoodwink you. And today, here at Fort Stewart, we’re going to put an end to it.”
The goal of the Executive Order is to:
• Create a centralized complaint system for students receiving Federal military and veterans educational benefits to register complaints that can be tracked and responded to by the Departments of Defense, Veterans Affairs, Justice, and Education, the CFPB, and other relevant agencies.
• Provide students with educational and financial information to make informed decisions.
• End fraudulent and aggressive recruiting techniques on and off military installations.
• Ensure support services for service-members and veterans.
• Develop and collect service member- and veteran-specific student outcome data.
• Begin the process to trademark the term “GI Bill.”
The full text of the Executive Order is here; the White House news release is here; background on the visit and event is here; a video of the President’s speech is here; the text of the President’s Fort Stewart speech is here, and President’s weekly radio address, which was also on this topic, is here. Veterans organizations that have been working on this issue came out in strong support of the Executive Order. Statements were issued by many groups, including the American Legion, Military
GAO Reports on For-Profit Colleges
The GAO recently issued two reports dealing with for-profit colleges. For the first, For-Profit Schools: Experiences of Undercover Students Enrolled in Online Classes at Selected Colleges (October 2011), the GAO was asked to conduct undercover testing by enrolling in online classes under degree-granting programs. It reported that, “during the course of undercover testing, GAO documented its observations related to enrollment, cost, financial aid, course structure, substandard student performance, withdrawal, and exit counseling. Overall, GAO observed that 8 of the 15 colleges appeared to follow existing policies related to academic dishonesty, exit counseling, and course grading standards. At the 7 remaining colleges, GAO found mixed results. For example, one or more staff at these colleges appeared to act in conflict with school policies regarding academic dishonesty or course grading standards, or federal regulations pertaining to exit counseling for student loans, while other staff acted consistent with such policies.”
The second GAO report, Student Outcomes Vary at For-Profit, Nonprofit, and Public Schools (December 2011), reviewed available studies to look at student outcomes according to student characteristics at higher education institutions. As reported in The Chronicle of Higher Education,” For-profit institutions perform worse than public and private colleges on most measures of quality, even when student demographics are taken into account.”
On July 21, 2011, the U.S. Senate Health, Education, Labor & Pensions Committee chaired by Senator Tom Harkin held a full committee hearing entitled: Improving For-Profit Higher Education: A Roundtable Discussion of Policy Solutions. The discussion was focused on finding policy solutions to the problems in the for-profit highed education industry. In a news release announcing the hearing, Senator Harkin said, “Over the past year, my Committee has documented serious problems at some for-profit schools including deceptive and misleading recruiting tactics, disturbingly high drop-out rates, and large numbers of students left with debt but little else to show for their attendance” said Harkin. “Given the annual $30 billion taxpayer investment in these schools, it is incumbent on both the industry itself and Congress to ensure this investment is being used wisely. I am looking forward to a thoughtful discussion with school leaders, student and consumer advocates, and my colleagues to discuss how best to address the problems we’ve uncovered and ensure our taxpayer dollars are being used to provide Americans with education and opportunity.”
Frontline: Educating Sergeant Pantzke
Tuesday, June 28: American public television’s public affairs series, FRONTLINE, began airing Educating Sergeant Pantzke.
FRONTLINE writes: As troops return from Iraq and Afghanistan, U.S. government spending on veterans’ education will more than double to $9.5 billion this year, and a growing percentage of this money has been ending up in the pockets of for-profit colleges. In a follow-up to FRONTLINE’s College, Inc., correspondent Martin Smith investigates how the for-profit schools are aggressively recruiting huge numbers of new veterans with educational promises that many now question whether they can keep.
You can find additional media coverage here.