Letter to the Editors of the St. Louis Post-Dispatch

To the Editors:

Your recent editorial questioning the value of private sector colleges and universities (Predatory U? For-profit colleges and universities have a lot of explaining to do, February 20, 2011), is wrong on a number of levels.

First, private sector colleges and universities primarily educate working adults and lower-income students. Traditional higher education does not. Our students range from single moms and working students to returning veterans and the unemployed, who need new skills to find work. Frankly, without our schools millions of Americans risk being left behind in gaining the new skills they need for better jobs.

Second, the Education Trust report you cite unfairly criticizes for profit colleges and devalues the commitment of our students. Comparing private sector colleges and universities to other types of institutions does not consider the large percentages of high-risk students we serve. When the graduation rates of similarly situated students are compared, the results favor private sector colleges and universities. The Education Trust also concedes that graduation rates at two-year career colleges are better than those of community colleges.

And last, our programs work. At two-year private sector colleges and universities, the graduation rate for African-Americans students is nearly 49 percent and for Hispanic/Latino students, nearly 64 percent, much higher than graduation rates of 15 and 17 percent respectively at community colleges. On a percentage basis, our schools award twice as many bachelor’s degrees to minority students as do traditional four-year colleges. And last year alone, 11 percent of all nursing awards and 58 percent of awards in allied health programs were earned at private sector colleges and universities. Of course, we want our students to succeed, and we are concerned about rising default rates. But the so-called “gainful employment” regulations target for-profit schools only, rather than considering the entire higher education sector. With appropriate regulatory oversight that treats all higher education institutions equally, our schools will continue to provide opportunities to millions of students across the country.

Harris N. Miller
President and CEO
Association of Private Sector Colleges and Universities

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Regarding The St. Louis Post-Dispatch Predatory U? For-profit colleges and universities have a lot of explaining to do By The Editorial Board; Posted: February 20, 2011

APSCU Responds to a Posting on The Sacramento Bee

Pia Lopez needs to visit a private sector college or university (PSCU). Or several. If she did, Pia would know that the PSCU sector, which educates roughly 350,000 students in California and 20,000 in the Sacramento Valley alone, is not composed of just a few "good actors." Sixty-nine percent of PSCU students in the area graduate. By doing so, they build a foundation for better jobs, more secure families, and a brighter employment picture all around.

Whether or not Cal Grants funding levels for PSCU students should be limited to the same amounts as those students receive at public community colleges is an interesting public policy question. Why answer it by throwing stones? The question is interesting because public community colleges cost taxpayers, if not students, substantially more to attend-over $25,000 per graduate more in public subsidies. Plus, the outcomes in terms of graduation at community colleges are simply not as good as those at two-year PSCUs.

Using Pia's numbers, it costs a student $14,280 to attend a two year PSCU versus $2,970 to attend a community college. The chances of graduating are three times higher at the PSCU. Those improved odds are worth a lot. The average annual salary difference between an individual with a college certificate or associate’s degree and a person with just a high school degree is over $6,000. Not adjusting for cost of living increases or salary based promotions, the college credential holder will earn over $200,000 more over a 35 year working life than his or her high school graduate counterpart. Is the difference between the PSCU and community college tuition worth an additional investment to the student? The numbers speak for themselves.

So do the numbers that compare "apples and apples" on graduation rates. PSCUs educate a less affluent student body. A majority of PSCU students fall within 150 percent of the poverty line. These are non-traditional students: more dependent on Pell grants, more likely to be a minority, more likely to be a single parent. And more likely to be knocked off course during a recession or other perturbation in life. When graduating non-traditional students, PSCUs do significantly better than other types of institutions, regardless of degree level.

On borrowing and defaults, economic status is a variable impacting PSCU students more heavily than those attending public and private not-for-profit schools. Again, an apples and apples comparison of similarly situated students at institutions regardless of type shows that default rates are about the same. No surprise: poor people have a harder time repaying loans, no matter where they go to school. While loan default rates need to be managed by all parties involved and brought down to the lowest levels possible, let’s not lose perspective: using current two-year rates, seven percent of all federal student loans go into default. Of all student loans that go into default, PSCU borrowers represent just three percent.

So what about those Cal Grants? Arguably, the California taxpayer is better served by having the student assume a greater percentage of tuition and fees. Enhanced grant funding would provide wider access to more students. The situation is brought into sharper relief by the current cuts taking place in California higher education and the resulting waiting lists for the most in-demand programs. The lost opportunity costs that this situation entails for individuals, families, communities, employers and the tax base overall, combined with an anticipated spike in demand by unemployed and under-skilled workers for social services, is daunting.

Harris N. Miller,
President and CEO
Association of Private Sector Colleges and Universities

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Regarding The Sacramento Bee article Head to Head: Should the state cut Cal Grants to students attending for-profit colleges? By Ben Boychuk and Pia Lopez; Posted: Feb. 23, 2011

 

APSCU Responds to a Posting on The Huffington Post

Has the Education Trust’s Jose Cruz ever stepped foot in a private sector college or university? Has he sat in a class? Or talked to students there? Or graduates or the employers who hire them? He calls the education offered by these institutions "dubious" but offers nothing to suggest his first hand experience with the sector or its students. Meanwhile, the graduation rates of two-year PSCUs far outshine those of community colleges. And nationally accredited PSCUs place on average 70 percent of students, while community colleges and other traditional colleges and universities have no such requirement and make little effort to assist their students land jobs.

Mr. Cruz works for a "think tank," but offers opinions rather than facts, opinions that are countered by easily obtainable facts. Perhaps most importantly, the fact that millions of PSCU students acquire valuable skills and meaningful employment afterwards goes unrecognized and unreported. As a result, paid space media campaigns become the only real alternative for getting out the word out about PSCU education. A couple of points as a reality check:

• On enrollment growth: PSCUs enrollment rates have grown in the double digits because the economy has changed, Americans need new skills, and they need them quickly. Often these are "non-traditional" students, individuals who were not on the high school college track but need a college credential to move up in life. Within the PSCU sector, 20 percent of all college awards are conferred on African Americans and 20 percent to Hispanics. Of all awards given to all African American students, regardless of the type of institution attended, PSCUs confer 28 percent. Similarly, PSCUs award 30 percent of all awards to Hispanics.
• And he fails to mention that many community colleges also started to grow by double digit rates when the recession hit and unemployment skyrocketed. But now many community colleges are turning away students in the face of state budget cuts while PSCUs continue to have the ability to expand capacity.  PSCUs are the best alternative and often the only alternative for many working adults. Unless Mr. Cruz intends to open his own school to educate 3.2 million working adults.
• On costs: PSCU students do graduate with more debt than do public school students. Public colleges and universities receive generous public subsidies. The cost to taxpayers for educating public school students is much higher on a per capita basis. And the cost comparison favors PSCUs even more when one factors in the higher completion rate for PSCU students. PSCU students choose to accept the debt because they see the education as more tailored to their needs, more responsive to the job market, more streamlined and flexible to fit their schedules, and more likely to get them into a good job faster, saving the cost of lengthy delays. Assuming they can even find an opening at a traditional school or community college, they find long waits for the most popular programs. One recent report shows that students at community colleges are finding they cannot access required courses because of over-demand.
• On graduation rates: In terms of graduation rates, when comparing institutions with similar students, PSCU graduation rates actually exceed those of other types of institutions. PSCUs are glad to go head to head with traditional schools on outcomes, taking into account student demographics. We win every time.
• On borrowing and default: PSCU students are simply less affluent, older and more independent than traditional college students. More than half (51 percent) of independent private sector undergraduates had an annual family income of less than $20,000. Private sector colleges and university students receive 23 percent of federal aid, but PSCUs also educate 25 percent of all students eligible for needs-based federal grants. There is no mystery and certainly no attempt to manipulate the system; PSCUs simply educate a higher percentage of needs-based students than do other sectors. In terms of cohort default rates, institutions of all types with over 60 percent of students receiving Pell grants have an average CDR of 24 percent. Similarly, institutions of all types with a  minority student population over 60 percent have a CDR rate of over 24 percent. The statistics Mr. Cruz touts lump institutions together, regardless of the affluence of their student body. Using such skewed numbers enflames the rhetoric surrounding this issue, but hardly serves in the public trust. Toxic rhetoric indeed.
• On the Department of Education's "tepid" gainful employment proposal: An independent analysis shows it would put over two million students out of higher education over the next ten years. The Department’s cure to excessive borrowing will be cold comfort to millions of students, families, communities and employers dealing with the results of less education and opportunity all around.

Harris N. Miller,
President and CEO
Association of Private Sector Colleges and Universities

Regarding The Huffington Post article The Toxic Rhetoric of For-Profit College Companies by José Cruz, Vice President for Higher Education Policy and Practice, The Education Trust; Posted: February 17, 2011

APSCU APPLAUDS BIPARTISAN HOUSE PASSAGE OF AMENDMENT TO EXPAND HIGHER EDUCATION OPPORTUNITIES

The Association of Private Sector Colleges and Universities (APSCU) today applauded the U.S. House of Representatives for passing a bipartisan amendment to prevent the U.S. Department of Education from bypassing Congress to implement the "gainful employment" regulation, which would restrict access to federal aid for over two million students at private sector colleges and universities in the next ten years. The Association and its 1,500 member schools across the country, institutions educating approximately two million students, urged Congress to include the amendment as part of the final Fiscal Year 2011 Continuing Resolution legislation.

The Kline-Foxx-Hastings-McCarthy-Payne amendment prevents the Department of Education from using federal funds through September 30, 2011 to implement the highly controversial "gainful employment" regulation. The measure passed on a vote of 289 to 136.

"The bipartisan coalition supporting this bill, led by Chairman Kline, Chairwoman Foxx, Rep. Hastings, Rep. McCarthy and Rep. Payne, gives millions of students hope that they too can pursue a higher education degree, rather than seeing a "Closed by Washington DC Bureaucrats" sign on the school house door," said APSCU President Harris N. Miller. "Let's keep the door to opportunity open to the millions of non-traditional students who want options in higher education. Policy ideas exist for reducing student over-borrowing and lowering default rates, such as allowing financial aid officers to tell students 'no' when they are over-borrowing, an action not permitted under current law. But any changes of this significance should come out of the legislative process, should cover all colleges and universities, should be focused on real outcomes, such as completion rates, and be subject to vigorous debate and public scrutiny."

Miller continued, "The vote today is for maintaining student choice. This critically important amendment, with its bipartisan support, prevents the Department from singling out our schools and the non-traditional students they serve, and allows Congress to determine what measures are appropriate for all postsecondary education institutions. The Department's regulatory proposal, which fails the criteria President Obama recently outlined for what is a good regulatory approach, generated over 90,000 comments, indicating it is not ready for prime time."

Miller concluded, "We are in active conversations with Congressional higher education leaders, Administration officials, and other stakeholders about the most constructive ways to ensure that students and taxpayers get the best return on their investments, and that will continue. We need to find areas of consensus, not division, because we all have the same objective-having the best higher education system in the world available to all who want to use it."

APSCU Urges Support for Bipartisan Amendment to Block Federal Funding of So-called "Gainful Employment" Implementation

Hundreds of colleges and universities ask local members of congress to vote yes

The Association of Private Sector Colleges and Universities (APSCU) today called for support of a bipartisan amendment to prevent the U.S. Department of Education from bypassing Congress to implement the "gainful employment" regulation, which would restrict access to federal aid for over 2 million students at private sector colleges and universities in the next ten years.

Chairman John Kline (R-MN) of the House Education and Workforce Committee, Chairwoman Virginia Foxx (R-NC) of the Subcommittee on Higher Education, and Representatives Alcee Hastings (D-FL) and Carolyn McCarthy (D-NY) offered an amendment this week to the Fiscal Year 2011 Continuing Resolution ("CR") that would prevent the Department of Education from using federal funds through September 30, 2011 to implement a "gainful employment" regulation. If Congress passes the amendment and it is signed into law, the Department will have to stop work, at least for now, on the proposed rule.

"For every problem, there is a solution which is neat, plausible and wrong, said H. L. Mencken.  The gainful employment proposal is such a solution.  We applaud the amendment's sponsors for urging Congress to push the 'pause" button on gainful employment so we can restart the dialogue on the most effective ways to deal with student debt and loan defaults," said APSCU President Harris Miller.  "Many good policy ideas exist, such as allowing financial aid officers to tell students 'no' when they are over-borrowing, an action not permitted under current law. But any changes should come out of the legislative process, should cover all colleges and universities, should be focused on real outcomes, such as completion rates, and be subject to vigorous debate and public scrutiny."

Miller continued, "This critical amendment, with its bipartisan support, prevents the Department from singling out our schools and the non-traditional students they serve by doing an end-run around the legislative process, and allows Congress to determine what measures are appropriate for all postsecondary education institutions. This regulatory proposal, which fails the criteria President Obama recently outlined for what is a good regulatory approach, generated over 90,000 comments, indicating it is not ready for prime time."

"Gainful employment should really be called 'gainful unemployment,' because it threatens higher education for millions of Americans, and impedes our economic recovery by blocking access to jobs and career education," concluded Miller. "The Department should be doing everything possible to foster a more competitive workforce and job creation, not limit choice in educational opportunities. Critics of private sector colleges and universities have lost sight of the real priority here—the hardworking students who choose to improve their lives by pursuing career education. The Kline-Foxx-Hastings-McCarthy amendment is an important step toward putting those students first."

APSCU said it is calling on its over 1,500 member institutions throughout the United States to have them contact their Members of Congress and urge support for the Kline-Foxx-Hastings-McCarthy amendment.

APSCU White Paper Shows Cohort Default Rate Performance Is About Student Socio-Economics, Not Institution Tax Status

A new white paper from the Association of Private Sector Colleges and Universities (APSCU) describes how high risk postsecondary students produce substantially similar cohort default rates (CDR), regardless of the type of institution they attend. Based on an analysis of the forecast three-year default rates recently released by the Department of Education, the APSCU analysis determines that the financial circumstance of the student appears to be a very significant contributor to loan default.

PSCUs educate a high percentage of non-traditional students. Often these are individuals coming from far more modest economic circumstances than do students attending traditional colleges and universities. More than three-fourths (76 percent) of undergraduates attending private sector schools are defined as independent or "self-supporting." More than half (51 percent) of independent private sector undergraduates had an annual family income of less than $20,000.

The trial three-year cohort default rate for PSCUs is substantially higher (25 percent) than for either public colleges and universities (10.8 percent) or private not-for-profit colleges and universities (7.6 percent). Merely comparing CDR by institution type presents a distorted view of reality, however, as most traditional schools have a high proportion of upper income and upper middle income students.

Looking at institutions based on student demographics yields a much different result, demonstrating that CDRs reflect mostly the student population and the students’ socio-economic circumstances play a significant role, whether an institution is for profit or not for profit.  Institutions of all types with over 60 percent of students receiving Pell grants have an average CDR of 24 percent. Similarly, institutions of all types with a minority student population over 60 percent have a CDR rate of over 24 percent.


"Because the Department of Education chooses not to release its CDR data grouped around student demographics or Pell eligibility, its summary tables present a distorted picture making it seem on first blush that institutional type is a major factor in default rates, when it is not," said APSCU President Harris N. Miller. "As groups, schools willing to accept less affluent students have higher default rates, period, regardless of their tax status. Increasing cohort default rates are a concern, especially as a jobless economic recovery wears on, and APSCU and its members remain focused on working to lower them. One very helpful step would be for Congress to enact legislation that would permit financial aid officers to stop students from over borrowing, which they are not permitted to do now."

Miller continued, "APSCU and its members, through our longstanding Default Prevention Initiative, have strived continuously to help students be in a position to repay their loans. We saw a consistent drop in CDRs through most of the 1990s and the early part of this century, until the recession started and the trend reversed. Schools are now increasing their already substantial efforts in financial aid counseling. We are also trying to work more closely with the loan servicers, especially to address the particular problem we are seeing now of students ending up in default as the various collection systems have been undergoing substantial changes. We would also expect to see cohort default rates drop when the economy improves and unemployment rates decline. We also think reforms like income based repayment will improve the situation in the years to come."

Miller concluded, "The bottom line is that those knowledgeable about higher education have to look at the facts and realize that cohort default rates need to be considered in context. We should resist the temptation to assign blame for rising CDR rates to any one sector or any one group of students. No one chooses to be poor, and those willing to improve themselves through education deserve our respect and support."


A copy of the APSCU white paper is available here.

APSCU's Response to Sen. Richard Durbin on For-Profit Colleges

Assistant Senate Majority Leader Richard Durbin (D-IL) spoke yesterday at the annual meeting of the National Association of Independent Colleges and Universities about the critical need for all sectors of higher education that receive taxpayer funding to be held to high quality and outcome standards. The Association of Private Sector Colleges and Universities (APSCU) shares Durbin’s belief that there must be clearer measures of outcomes in higher education, including traditional higher education, especially for programs funded by taxpayers, whether that funding be through direct subsidies to the institutions themselves, such as those received by state colleges, universities, and community colleges and not-for-profit private institutions that receive federal and state grants and earmarks, or through financial assistance to students who can choose which institution to attend.

“We want a level playing field that measures institutional quality primarily on student outcomes, taking into account the educational and economic backgrounds of students,” said Harris N. Miller, APSCU President. “What I hear Senator Durbin and many other Members of Congress saying in these times of scarce resources is they want to get the most bang for the higher education buck, especially as this country expands its efforts to include non-traditional students in the postsecondary system. The tax status of the institution should be irrelevant, as long as the results are there. Because our sector is a leader in educating non-traditional students who are primarily in school to improve their lots in life, our schools are very focused on student outcomes.”

Miller continued, “At a time of persistent high unemployment, private sector colleges and universities are training workers for jobs in growth areas. Without a vibrant and growing set of private sector colleges and universities, our nation’s unemployment will increase, federal and state deficits will grow, skilled worker shortages in key areas such as healthcare will continue, and the gap between the rich and poor will widen.”

Miller urged higher education policy leaders to reject proposals, such as the Department of Education “gainful employment” rule, that singles out private sector colleges and universities, would not eliminate bad programs, but would produce unintended consequences that are contrary to Senator Durbin’s stated goals, and undermine President Obama’s call for the United States by 2020 to lead the world again in the percentage of adults with a college credential. The regulations would cut necessary jobs and deny the opportunity for 2 million students by the end of this decade to obtain a postsecondary credential. “We share the President’s 2020 objective, but it is simply not possible to achieve without vibrant private sector colleges and universities,” added Miller.

In a recent editorial, Durbin’s hometown newspaper, The Chicago Sun-Times agreed with this sentiment and stressed that the United States must harness the capabilities of all schools and understand that career colleges are providing paths towards jobs for thousands of students who otherwise wouldn’t have the opportunity to obtain degrees.

“Standards are necessary, and common ground between Senator Durbin and APSCU exists. We look forward to working with the Senator to craft policies--based on agreed-upon facts rather than embellished anecdotes—and see that they are effectively enforced that incentivize all colleges and universities to produce positive results for student, taxpayers, and the country,” Miller concluded. “Proposals that target students in only one sector of higher education, such as ‘gainful employment,’ run directly contrary to that objective, as well as against President Obama’s recently announced regulatory reform approach.”