Wall Street Journal: For-Profit Colleges Being Used for "Scapegoating"

From today's issue:

We'd prefer no taxpayer loan subsidies for any colleges, profit or nonprofit, but the Obama Administration's policy has heretofore been to increase subsidies so that college education becomes a de facto entitlement. At least for-profits repay those subsidies with income tax payments.

The Apollo Group, the parent company of the University of Phoenix, paid $445 million in income taxes last year. "That's $445 million in income taxes more than every nonprofit college in America combined," reports Forbes magazine. "The notion that it's mainly the for-profits that are a giant drain on taxpayer resources is ludicrous."

If the concern is that career colleges are duping customers into taking on too much debt, then simpler application forms and greater transparency could be required with respect to costs, the amount being borrowed, future monthly payments and likely earnings in a given occupation. By contrast, Mr. Duncan's proposals are more likely to result in fewer good programs, not more student protections. For-profit schools are obviously filling a need, given that enrollment has tripled to around 1.8 million in the past decade, a rate that far outpaces nonprofit rivals.

It's hard not to conclude that the real driving political force here is hostility to private education companies. This is consistent with the Administration's decision to bar private companies from delivering student loans, its near-takeover of the health-care industry, and its denunciations of high business pay and profits. By punishing for-profit colleges, the Administration will push more students into their nonprofit competitors, which satisfies its preference for equality of outcomes and more government control.

No wonder the U.S. economy isn't creating jobs when anyone who makes money and creates more jobs immediately becomes a political target.

The entire piece is worth a read if for no other reason than it tackles topics not included in the above selection. Be sure to Tweet or Facebook this if you agree.

Positive Media Round-Up of For-Profit Colleges

From today's CCA newsletter:

Here is a list and links to all of the media articles this week that supported our sector during these challenging times:

- The Washington Times criticized the existing Gainful Employment proposals from the Department of Education

- The Washington Post published an editorial praising the mission and value of career colleges

- iStockAnalyst.com argued that when it comes to repayment, low income demographics matter a lot 

- The Wall Street Journal argued career colleges are necessary to meet the President’s 2020 goal of making America number one in terms of citizens with a college degree

- Joe Albers, President of Kaplan University campus in Mason City, Iowa, authored an op-ed arguing the Gainful Employment proposal would keep many students who could benefit from attending a career school from obtaining the education they need

- Harry C. Alford, President and CEO of the National Black Chamber of Commernce, argued in The Hill that the Gainful Employment proposal would prevent many minorities from obtaining higher education training

- The National Association of Student Financial Aid Administrators authored a piece that argues the Gainful Employment metric may not be counting graduates who are repaying their loans

The Washington Times Defends For-Profit Colleges, Criticizes "Gainful Employment" Proposal

Their words are unequivocal and timely about the Gainful Employment proposal:

Especially in a down economy, and with less-privileged students of the sort for-profit colleges serve, this rule would disqualify about 307,000 students, according to the Department of Education's own estimates. Even worse, the government would change the rules for what qualifies as a "default." Students still current on paying off their loan interest - with Education Department encouragement for that arrangement - would be considered in default if they have not yet paid off any principal. In short, the new rule would punish students and colleges for abiding by the old rules.

The scheme would make for-profit colleges less attractive and probably would lead to many of the 307,000 affected students being dumped into state-sponsored universities and community colleges. Advocates for for-profit schools offer convincing arguments why this is bad social policy. First, they say loan defaults at these colleges aren't all that high: about $1 billion annually out of more than $600 billion in outstanding loans. The rate of default is almost exactly the same as for students from the same socioeconomic strata at state colleges.

Second, state-sponsored colleges often can't serve the educational needs of students who choose for-profit schools. For out-of-state students, they cost more by an average of $4,374. In-state, the taxpayer subsidies for state-sponsored colleges are about $4,500 higher per student than at for-profits, even after accounting for loan defaults. Moreover, the for-profits uniquely offer flexible class scheduling that "regular" colleges rarely match. For poor and minority students often fitting classes around full-time jobs or other hurdles, these flexible schedules can mean the difference between getting a college degree or not.

Apollo Group Defends For-Profit Higher Education With Massive Report

The Chronicle of Higher Education has the details:

Their latest move came on Monday, when the nation's largest for-profit higher-education company, the Apollo Group, parent of the University of Phoenix, released a report on "the current state of higher education in America and the vital role of proprietary colleges and universities," and held a briefing for education reporters here.

The 36-page report, titled "Higher Education at a Crossroads," argues that for-profit colleges will be critical to meeting President Obama's goal of leading the world in college completion rates, and estimates that meeting the goal without proprietary colleges would cost taxpayers more than $800-billion over the next 10 years.

While the statistics-heavy report does not specifically mention the Education Department's "gainful employment" proposal—which would cut off aid to programs that saddle their students with unmanageable debt—its message is clear: Program closures at for-profit colleges would jeopardize the president's college-completion goals.

During the press briefing, the company's president and co-chief executives fielded questions from reporters about Apollo's recruiting practices, its spending on marketing, and the proposed "gainful employment" rule. Gregory W. Cappelli, a co-CEO, said the company would no longer compensate recruiters based on their success in securing enrollments, reiterating an announcement Apollo made this month after a government investigation uncovered recruiting abuses at several for-profit colleges.

The Washington Post Supports Mission, Value of For-Profit Schools

From an editorial that ran on Sunday:

Government data released last week suggested that only 36 percent of for-profit students are paying back their government loans on time. The figure was on a par with other institutions that educate a high proportion of low-income students; the University of the District of Columbia, for example, was said to have a 33 percent repayment rate, and Bowie State University, 22 percent. Yet the new regulations would limit federal loans only to students attending for-profit schools whose repayment average falls below a given threshold.

The truth, though, is that for all schools the numbers are misleading. They count as deadbeats students who have restructured their loans, with government approval, to pay only interest for the first few years, until their earnings can be expected to grow, and who remain up to date on their restructured payment schedules. It makes no sense to retroactively punish schools, and their potential students, for practices that the Education Department has encouraged until now.

If the data released Friday are used without further refinement, the effect will be to deprive many working students of their best option for higher education -- and to worsen the national problem that Mr. Obama has dedicated himself to solving.

Read the entire piece here. And yes, issues of any conflict of interest regarding the Washington Post's ownership are addressed.

Harris Miller of CCA Talks For-Profit Colleges on Bloomberg News

Click here for the full video.

CCA and FAPSC Host "The Future of the Health IT Workforce" Roundtable With TechAmerica

The details are as follows:

Partnership II Building3100 Technology Pkwy, Room 208, Orlando, FL 32826

TechAmerica and the Career College Association invite you to attend a public policy roundtable seminar on building the Health IT workforce of the 21st Century.

Confirmed Speakers Include:

Opening Remarks by Senator Mike Haridopolos

Phillip J. Bond, President & CEO TechAmerica

Duane Steward, DVM, MSIE, PhD, Chief Computer Scientist for Health Informatics, Nemours

Khalid Moidu, M.D., Ph.D., Medical Informatics Advisor, Information Services Administration, Orlando Health

Gary J Earl, President/CEO, Workforce Central Florida

Harris N. Miller, CEO / President, Career College Association

Curtis Austin, Director of State Government Relations, Keiser University

Farimah Fleschute, Ph.D., Faculty, Division of Information Technology College of Technology & Innovation University of South Florida Polytechnic

Moderated by Dr. Richard Foglesong, George and Harriet Cornell Professor of Politics at Rollins College and the author of Married to the Mouse: Walt Disney World and Orlando.

President Obama has set aside nearly $19 billion for Health Information Technology in government spending plans, with $17 billion through Medicare and Medicaid and $2 billion in direct funding. With this action, combined with the passage earlier this year of the Health Information Technology for Economic and Clinical Health (HITECH) Act, America has the tools to begin a major transformation in high quality, affordable American health care. The change is made possible through the creation of a secure, interoperable nationwide health information network, upgraded hospital and clinical information systems, and millions of intelligent devices, on the edge of the network and at the heart of care delivery.

The event is September 23rd. Register here.

Harris Miller Talks For-Profit Colleges, GAO Report on C-SPAN's "Washington Journal"

Click on the picture above to watch the video.

Career College Association Pledges to Work With Department of Education

The Career College Association said steps announced today by Secretary of Education Arne Duncan to beef up oversight of institutions and enforcement of regulations makes perfect sense, advancing higher education by putting students first. In a letter to Sen. Tom Harkin, Chairman of the Senate Health, Education, Labor and Pensions Committee, Secretary Duncan announced plans to add 60 additional staff, conduct 50 percent more program reviews, appoint a Chief Customer Experience Officer, and to take other steps to expand compliance efforts.

“We have said consistently that the current laws are clear and the rules exist to provide the necessary oversight,” said CCA President Harris N. Miller. “If institutions or individuals are not playing by the rules, and that is established after careful review of the facts, they need to be held accountable. To that end, we agree that the Department should add resources to carry out its functions properly and to help assure quality education for students. We support activities that improve education quality while at the same time not denying access to millions of non-traditional students, those with the fewest opportunities in life to obtain postsecondary education. We look forward to working with the Department to achieve these goals.”

CCA President Harris Miller Talks For-Profit Colleges on CNN

Harris Miller in AOL News: CCA "Has Zero Tolerance for the Practices Reported" by GAO on For-Profit Colleges

While we encourage to read the entire piece, CCA's President and CEO Harris Miller has authored an op-ed in today's AOL News making it unequivocally clear CCA is committed to regulatory compliance and serving the interests of career college students, taxpayers and higher education stakeholders everywhere. To wit:

The Career College Association has zero tolerance for the practices reported by the GAO's mystery shoppers.

With more than 200,000 employees in our schools dealing with millions of potential applicants and a myriad of rules, a few honest mistakes will be made. But we must do better than the GAO report indicates. Our approach is to put the student first, whether in admissions, financial aid, classroom instruction, support services, or career placement. Our expectation is that every CCA member institution and institution employee will follow our lead.

We are chagrined by what the government investigators uncovered, and frustrated by the enormous amount of good our schools perform that such episodes overshadow. Most of all, we are pained by the cloud that such unfortunate behavior casts over the honest accomplishments and incredible striving of our hardworking students, and the vast majority of the faculty and administrators at our schools.

So today we are announcing a plan to fix the problem. Elements of our strategy include:

Strengthening the CCA Code of Conduct to ensure it addresses the major compliance problems identified by GAO and others who have objectively studied the sector;

Expanding substantially CCA's existing compliance training program;

Creating a summit to bring together stakeholders from government, academia, accreditation agencies, student advocates and other areas to review and provide input on compliance best practices;

Developing a recommended "zero tolerance" company standard for misbehaving employees, regardless of position or assignment;

Developing an ongoing, sector-wide mystery shopping program to assess the state of practice in recruitment, admissions, financial advising and other critical compliance areas;

Encouraging existing oversight by federal and state governments and accrediting bodies to be increased to ensure that the myriad existing laws, regulations and accreditor requirements are being observed.

If these steps aren't sufficient, we will take more. CCA member schools already have compliance programs in place, but many will need to be strengthened and upgraded. The rules exist to protect students and the taxpayers who help pay for their education.

Career College Association Finds GAO Report Deeply Troubling: Increased Emphasis on Compliance Being Implemented Immediately

The Career College Association (CCA) said the recent findings of a Government Accountability Office (GAO) report on admissions and financial aid practices at several private sector colleges and universities is deeply troubling and, notwithstanding multiple safeguards that schools already take, and the oversight provided by the “triad” of federal and state regulators and accrediting bodies, it will institute a series of immediate steps to help its members assure full compliance with regulations and accreditation requirements in all areas.

“Even if the problems cited in the GAO report are limited to a few individuals at a few institutions, we can have zero tolerance for bad behavior,” said CCA President and CEO Harris N. Miller. “As educators, our commitment must always be to put students first, even if that means taking action against individual employees or institutions that color outside the lines. We understand that employees can make mistakes, but it is up to employers to take the set of comprehensive and multifaceted preventative and corrective actions that minimize the risk of such problems and correct those that occur.

“We will expand our existing compliance program to help CCA member institutions achieve the highest standards,” Miller continued. “The rules exist to protect students and taxpayers, and must be observed.”

Steps CCA will immediately implement in response to the GAO report:

· Strengthening the CCA Code of Conduct to ensure it addresses the major compliance problems identified by GAO and others who have objectively studied the sector;


· Expanding substantially CCA’s existing compliance training program, including an increased focus on compliance from the top down in the organization, testing, risk management, and adherence to standards and guidelines throughout the educational institution, starting with a series of webinars on compliance best practices and risk management;


· Creating a summit to bring together stakeholders from government, academia, accreditation agencies, student advocates and other areas to review and provide input on compliance best practices;



· Developing a recommended “zero tolerance” company standard for misbehaving employees, regardless of position or assignment;



· Developing an on-going, sector wide mystery shopping program to assess the state of practice in recruitment, admissions, financial advising and other critical compliance areas;



· Encouraging existing oversight by federal and state governments and accrediting bodies to be increased to ensure that the myriad existing laws, regulations, and accreditor requirements are being observed.


“Our resolve is to answer any questions about the quality, suitability and value of career education for our students. We are moving as one community to address the issues raised in the GAO report. We will continue to add to this ‘zero tolerance’ program until all such doubts about our sector are removed,” Miller concluded.

About CCA: The Career College Association (CCA) is a voluntary membership organization of accredited, private postsecondary schools, institutes, colleges and universities that provide career-specific educational programs. CCA has more than 1,800 members that educate and support over one million students each year for employment in over 200 occupational fields. CCA member institutions provide the full range of higher education programs: masters and doctoral degree programs, two- and four-year associate and baccalaureate degree programs, and short-term certificate and diploma programs. Visit CCA at www.career.org or follow us on Twitter: ccanow.

Harris Miller Pens Defends For-Profit Colleges in USA TODAY

CCA President and CEO Harris Miller penned an op-ed in America’s largest newspaper, USA TODAY, on Sunday, August 1st. Miller addressed several hot button issues related to career higher education, most notably the amount of federal aid that currently go to students of career colleges. In the op-ed Miller writes:

Career colleges do not receive a "disproportionate" share of student aid. Eligible students receive aid and determine where to spend it. Many choose focused, flexible and student-centric career focused institutions. Aid percentage distributions reflect that career colleges educate a larger percentage of federal aid eligible students.

Taxpayer subsidies for traditional colleges and universities constitute far higher levels of support than for private sector schools. The difference is more than 13-to-1 for public colleges and universities, and 7-to-1 for private non-profit colleges and universities.

Higher education is regulated so that student outcomes trump the bottom line. Some areas require tightening, such as ending high school diploma mills. Transparency for prospective students about educational outcomes and the consequences of borrowing must be paramount. Misleading promises or recruiting practices are unacceptable.

Miller goes on to make the case that for-profit, private sector colleges are the “change agent” higher education needs to shorten the skills gap affecting the American workforce.