Top Chef All Star Gets For-Profit College Issue Wrong

(Flickr/Rep. Virginia Foxx)

Tiffany Derry, of Top Chef All-Stars, has written an opinion piece for The Hill this week publicly fighting the “gainful employment” regulation proposed by the Department of Education. Derry says this proposed rule is bad because, “The proposed regulation is going to hurt students who need help the most: students who are considered at-risk, minority and low-income or older students who may be raising a family by themselves.”

Her op-ed was accompanied by lobby visits to Rep. Edolphus Towns (D-N.Y.) and other members of the Congressional Black Caucus this week about the regulation.

The proposed regulation will look at default rates and debt-to-earnings ratios, but her conclusion that the regulation would “limit federal aid to students” is flat-out wrong. Under this regulation, it isn’t the student who won’t get funding; it is specific programs at schools that risk getting their funding pulled because too many of their students end up with overwhelming debt. Students are welcome to get financial aid for programs that provide better educational value.

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What Daymar College Tells Us About the Gainful Employment Rule

I have a piece up on Campus Progress on a school called Daymar College, which shows some of what's wrong with the for-profit education industry. Check it out:

Welcome to Daymar College, located in Owensboro, Ky. Students at Daymar pay $36,979 per year to attend the institution, and 97 percent of its students receive some type of financial aid. Pell grants, which go to low-income U.S. students, are distributed to 73 percent of those attending Daymar.

The most popular program at Daymar is its 12-18 month program to train pharmacy technicians/assistants, a job that, according to data from the Bureau of Labor Statistics, pays a median salary of $13.32 an hour. At that rate, assuming a graduate of the program can get full-time employment as a pharmacy technician and work 40 hours a week, he or she will make $27,705 a year.

But that’s just for students who actually graduate. Daymar College’s overall graduation rate is just 38 percent, according to its own self-reported data provided to the Department of Education. That means that means that just four in ten students have completed a one-year program in 18 months.

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Libertarian Bob Barr Pushes to Keep Higher Education Subsidies

Last week Politico published an op-ed from 2008 Libertarian Party presidential candidate and former congressman Bob Barr on the proposed gainful employment regulations proposed by the Department of Education. But Barr’s support of subsidies to for-profit schools is less surprising in light of reporting by Salon’s Justin Elliott, which noted that Barr is a law professor at John Marshall Law School in Atlanta, a for-profit educational institution. The connection is something Barr has neglected to disclose in his writings in support of the industry.

In lockstep with other opponents of the proposed regulations in recent days, Barr criticized attacked Campus Progress’ advocacy work to support greater accountability of for-profit schools.

In the Politico op-ed, Barr also attacks a report released by the Government Accountability Office last year that found some for-profit schools were deceiving students in their recruitment process. Barr zeros in on the fact that GAO released “revisions” to the report. But while GAO made revisions to the report, a spokesperson also insists they don’t change the overall findings of the report.

GAO spokesman Chuck Young wrote in an e-mail that the office issues revisions when "additional information comes to light and provides additional context to our already published work." Of the roughly 1,000 reports issued in the last fiscal year, about 12 received later revisions, he said. He added that the office reviewed more than 80 hours of audio from the investigation before it released the revision on the for-profit college report.

"Nothing changed with the overall message of the report, and nothing changed with any of our findings," Young wrote.

But because the GAO made revisions, many for-profit lobbyists are seizing upon this as means of discrediting the entire report.

At its base, the “gainful employment” regulations issue is about curbing wasteful spending – the regulations promise to cut federal funding from programs that leave students with high default rates or too much debt compared with their earnings. While Campus Progress has been focused on eliminating spending for bad programs to ensure more aid to successful programs, curbing government subsidies more generally is something libertarians normally get behind. In fact, in 2005 the libertarian think tank Cato Institute released a study in which they argue, “Rather than expand the current system, Congress should consider a phase-out of federal assistance to higher education over a 12-year time frame.”

Barr seems to have abandoned his libertarian ideas in this case, where the interests of his employer are at stake.

Cross posted.

Do For-Profit Schools Help in the Health Care Industry?

(Flickr/cheesepuppet)

Today Campus Progress’ parent organization, the Center for American Progress, released a report (PDF) and held a panel discussion that examined the needs of the job market in the growing health care industry and its relationship to for-profit schools that offer programs to train students for this industry. The report carefully examined some of the needs of the health care industry and how for-profit schools could help fill that need. But the report found that the for-profit industry falls short of fulfilling the greatest needs in health care.

Most notably, nursing is an extremely high-demand industry. According to Bureau of Labor Statistics projections of job openings in the health care industry, registered nurses will have the highest demand in the next ten years, with a need for more than 1 million new registered nurses projected. Two factors contribute to the increase in the number of jobs needed in the nursing industry: the Affordable Care Act will increase coverage for an estimated 30 million Americans, requiring more medical professionals overall; and aging baby boomers who need more medical care will require more labor-intensive nursing care over time.

“But for-profit schools contribute relatively few nursing graduates to the field,” the report says. For profits graduated roughly 150,000 students in registered nursing (RN), but this supply is still only 7 percent of the total number of degrees awarded in nursing. A licensed practical nurse or (LPN) or nursing aid might be a good candidate for advancing through an RN program, but for-profits also only graduate a small proportion of LPN students. Non-profit schools still supply the vast majority of both LPN (80 percent) and nursing aid (89 percent) students.

This could be because nursing is a highly intensive and expensive training program and many for-profit schools, with an eye on the bottom line, target more online-only and less labor intensive programs. In fact, in the medical industry, for-profit schools graduate the highest number of students in the medical assistant field, training nearly 88 percent of medical assistants in this country. These are entry-level administrative jobs that have a relatively low demand in health care job projections when compared with high-need fields of nursing and home health care.

The second highest number of health related for-profit students, 10 percent, participate in massage therapy programs, a low demand profession.

But the bigger issue with for-profit schools isn’t just a mismatch between the programs for-profits offer and the demands of the growing health care industry. There’s some evidence to suggest that some schools advertise their programs with promises of high salary, career advancement, and flexible training schedules.

But while some for-profit schools do a good job of helping graduates advance professionally, students sometimes discover only after completing a program that their training wasn’t properly accredited and they are therefore unable to sit for the required licensing exam. Other students take on far more debt than they can realistically pay back on a medical assistant salary, which is typically in the neighborhood of $30,000 to $35,000. Job advancement is less certain, usually based more on on-the-job experience and willingness to pursue more higher education. Furthermore, some training programs require clinical training, which is less flexible and doesn’t lend itself to distance learning. [Full disclosure: Campus Progress’ advocacy arm supports regulations that would increase accountability of for-profit programs. In addition, this author has written pieces critical of the for-profit education industry in the past.]

The CAP report offers several recommendations, including offering more incentives to for-profit schools to offer high-demand career training. Federal grants intended to incentivize training in science and technology should also include incentives for training high-need health care fields, the report recommends.

The report also advises for-profit schools to offer better career counseling so students are aware of which industries are in highest demand; as well as to provide students with statistical information about the quality of the program (like default rates on loans and job placement) at least 10 days before a student enrolls in classes. But providing good information so students can make better choices may not be enough.

“I always get wary when we talk about student choice,” said Kevin Kinser, a professor at the University of Albany who studies for-profit and career college programs, at the CAP event. “For most students there isn’t much of a choice.” He mentioned that students are often choosing between one or two schools in the geographic area that offer programs they are interested in.

There are, of course, ways that for-profit schools are in a good position to provide needs in the health care industry. Jeff Strohl, director of research at the Georgetown Center for Education and the Workforce, pointed out that for-profits might have the flexibility to offer re-training and on-the-job credentialing instruction. As the health care industry becomes more regulated, he says, there will be a greater need for employees keeping licenses up to date. “People need to take certification tests again and again,” Strohl said. For profit schools could help fill that need.

Still, the report makes clear that there are challenges that the for-profit industry and the regulators at the Department of Education need to meet to align students more closely with the demands of a growing industry. Students need not just good information, but good programs to make appropriate choices about higher education.

Cross posted.

Kentucky Steps Up Scrutiny of For-Profit Schools

Kentucky has been stepping up its scrutiny of for-profit schools in the state. Now, state legislators are proposing legislation that would increase accountability and oversight of for profit schools, and the state’s attorney general, Jack Conway, is opening up an investigation into the practices of the industry.

A joint education committee meeting between the state’s house and senate convened last fall to hear from students of for-profit schools. In an interview with Campus Progress, Rep. Reginald Meeks (D), the sponsor of the proposed legislation, described the testimony of students at the hearing. Students testified said that some of the state’s for-profit colleges were leaving them with high loads of debt and sometimes unemployable. Some students testified that they didn’t realize their schools weren’t accredited and some schools were dishonest in the claims they made when students were recruited, Meeks says.

Unfortunately, such stories aren’t uncommon. Last year the Government Accountability Office released an undercover video and report that documented for-profit recruiters making false claims about the school’s programs and encouraging students to lie on Federal Aid applications. A Bloomberg investigation reported last year that some for-profits were recruiting students from homeless shelters. (This video from Campus Progress summarizes abuses found in those and other investigations.)

Currently for-profit students account for about just 10 percent of all students, yet they account for about a quarter of federally subsidized student aid and nearly half of all loan defaults. Some for-profit schools have alarmingly high default rates for their students; a recent Senate committee report found 12 for-profit schools they examined had default rates higher than 50 percent.

After hearing testimony from students, Kentucky legislators asked to hear from the then-chairman of the State Board of Proprietary Education (SBPE), Mark Gabis. (Kentucky is one of few states that has such an oversight board.). But Meeks said Gabis’ testimony “raised more questions and concerns than it answered.”

Gabis is also the president of Owensboro-based Daymar College, a college that is currently the defendant in a lawsuit brought forth by former students that alleges that the school left them unprepared for the job market. Gabis has since stepped down as chairman of the SBPE.

Meeks noted that Gabis admitted the board hadn’t done an internal audit and hadn’t responded to students’ requests for help from the state’s $500,000 Student Protection Fund.

Kentucky’s Attorney General Jack Conway (D) announced an investigation into industry practices on Dec. 15 for potentially violating the state’s consumer protection law. Conway issued six subpoenas to for-profit schools, but declined to list the schools that are under investigation. Rep. Meeks also requested an audit of the SBPE from Kentucky’s state auditor, Crit Luallen, on Dec. 29.

Meeks is proposing legislation that aims to provide greater oversight to these for-profit schools. It would place them under the authority of the state’s council on postsecondary education, bringing the schools under scrutiny similar to that of other state-funded institutions. Right now, the State Board of Proprietary Education is dominated by individuals with financial or other ties to proprietary schools.

“There’s a sense that the fox is guarding the henhouse,” Meeks says. “The decisions [the board] have made protect the schools more than the citizens of the commonwealth of Kentucky.”

The groups that work on behalf of the for-profit schools in Kentucky say they are reserving their judgment on the legislation. "We are still processing the substantive provisions of Rep. Meeks' bill, but we will be happy to work with him and his colleagues toward a mutually acceptable solution," says Brenda L. Gargano, Executive Director of Kentucky Association of Career Colleges & Schools.

Still, Meeks says he recognizes that for-profit schools serve a purpose, and there are some that have close affiliations with other non-profit institutions or with industries that are doing a good job of preparing students. But others he says “may not offer the panacea that they claim they do.”

Cross posted.

Black Leaders and For-Profit Schools

Recently the Atlanta Post ran an excellent piece criticizing some African-American leaders for opposing new regulations proposed by the Department of Education that would improve accountability of for-profit schools. The idea behind the proposed regulations, which Campus Progress supports, is to removefederal financial aid from college-level training programs if a large percentage of their students fail to find work or end up with high levels of debt. Seems like a good idea for all students—including students of color, right? But according to the editorial:

Interestingly enough, Black leaders like Jesse Jackson and members of the Black Caucus are opposed to these new regulations. William Gray, a Pennsylvania Democrat and former Black Caucus member, has been tapped to lobby on the behalf of the for-profit schools.

Why some black leaders are suddenly on the for-profits’ side of the debate is unclear, but he Post piece raises some questions:

… it’s questionable whether the black leaders challenging the Department of Education’s attempts are inspired by lobbying duties or genuine conviction. The for-profit industry is spending a lot of money to fight these proposed regulations and lobbying politicians constitutes a legal way of buying favors. According to Bloomberg, ten education companies have increased their spending on lobbying by $1.3 million over the last year. All that influx of money makes it difficult to discern why William Gray and Jesse Jackson are defending these schools[.]

Jackson and Gray might be on the side of the for-profit schools, but not all prominent black leaders are on board. Inside Higher Ed recently reported that for-profit lobbyist Lanny Davis asked to include prominent black leader Al Sharpton on an ad campaign to oppose the regulations, but Sharpton objected. In an email he reportedly sent to Davis, Sharpton said:

Though I agree that there is a need for the services the schools provide, especially in communities of color, we should weed out the abusers of this service. … To attack the Department rather than engage them is a bad strategy in my opinion. I think the President and Sec Duncan are not the enemies here. In fact I think they have done more for closing the education achievement gap than they have been given credit.

Furthermore, Julianne Hing’s reporting in Colorlines points out that minority leaders taking a stand against regulations that cut off funds from bad programs doesn’t make sense:

According to the Career College Association, which represents for-profit schools, 43 percent of students are people of color; in the United States, 23 percent of blacks and 18 percent of Latinos with associate degrees went to for-profit schools.

Most notably, for-profit schools teach 12 percent of the nation’s post-secondary students—and counting—but receive 23 percent of the nation’s federal student aid money. This alone is not a bad thing—students deserve an education and help to make their education affordable. But 40 percent of students from for-profit schools eventually default on their loans; the national average for all higher education institutions is 20 percent. And the dropout rate from for-profit schools is also alarmingly high—a whopping 57 percent never graduate.

Those are some pretty startling figures. If anything, black and other minority leaders should be calling for stronger regulations so that students of color aren’t left with huge piles of debt and dismal job prospects.

Cross posted.

Lanny Davis and the Left

(AP / Manuel Balce Ceneta)

Many people may have taken the holiday off, but Lanny Davis, lobbyist for many special interests in Washington, including for-profit colleges in their quest to avoid accountability, did not. It turns out he was very busy at the end of 2010. Here’s a roundup of all things Lanny Davis from the last couple weeks:

1. In addition to having represented Equatorial Guinea President Teodoro Obiang Nguema Mbasogo, who has been accused of egregious human rights violations in his 30-year tenure, Davis told Salon on Dec. 21 that he would be representing Ivory Coast President Laurent Gbagbo, who has also been accused of horrendous human rights violations in his tenure as the country’s leader.
2. Davis quit his gig with Gbagbo just a few days later, as Salon’s Justin Elliot reported on Dec. 30. Davis reportedly had entered into an agreement to represent Gbagbo for $100,000 a month.
3. The New York Times published a front-page story on Dec. 30, concluding that Davis, who has long trumpeted his credentials as a “liberal Democrat,” is now “scrambling to defend himself” and has “come under unusually vociferous attacks in recent months, from a diverse array of advocates representing everyone from college students and mothers of poor children, to diplomats and international human rights advocates.” Campus Progress, it should be noted, is one of those organizations, since Davis lobbies to oppose common-sense requirements on for-profit schools.
4. In The Hill on Dec. 29, Davis reflected on 2010, saying that he was a “liberal Democrat and a supporter of President Obama and all his policies.” Davis is either unaware of the fact that the Obama administration runs the Department of Education, which proposed tightened regulations on the for-profit industry, or he is not actually a defender of all of Obama’s policies.

Cross posted.