By Rep. Edolphus "Ed" Towns (D-N.Y.)
Career colleges or private for-profit schools of higher learning are often the choice of students looking to enhance specific skills that will improve their marketability for employment. Students attending career colleges are generally low-income working people looking to boost their human capital so that they might earn more to better care for themselves and their families.
More than three-quarters of students enrolled in career colleges live independently without parental support, 43 percent are minorities and 47 percent have dependent children. Career colleges offer customization and flexibility to students who are single parents or work full-time jobs while pursuing an education. Half of these students are the first generation of their family to attend college.
Yet, for all the good these schools do, career colleges have come under intense scrutiny in recent months since the U. S. Department of Education announced its intentions to impose a broad range of new rules designed to enhance regulation of federal student aid programs at these for-profit institutions. Most notable among the proposed rules was a controversial requirement known as the “gainful employment rule” that would require former students of for-profit colleges to repay their federal student loans at a sufficient rate and not spend a disproportionate portion of their earnings in paying off their loans.
Specifically, the rule would require that for-profit colleges have at least 45 percent of their former students paying back their federal student loans or their former students must be paying less than 20 percent of their discretionary income or less than 8 percent of their gross pay. This rule was developed because a greater percentage of former students of career colleges were defaulting on their loans and there were accusations that many of these students were not getting an adequate level of education for their investment.
I agreed with this line of reasoning early on and initially supported the rule. However, after visiting several career college campuses and hearing stories of young people who believed these colleges afforded them their only chance to improve their knowledge and skills and get a better job, I decided we needed to take another look at the gainful employment rule. Many of these students are at a greater risk financially, and it should not be surprising that default rates are higher.
While I continue to support the department in its efforts to rein in bad actors in the for-profit college industry, as I have indicated to Education Secretary Arne Duncan during the public comment period for the proposed rule, I believe the rule might dramatically limit programs available to minority and other at-risk students based on goals that are inconsistent with loan-default standards set forth in the Title IV statute. Furthermore, I have also indicated that more data are needed before the department implements broad-sweeping regulations that could potentially have a devastating impact on these schools.
Career colleges have moved quickly to meet the growing number of new applicants that has exploded as the labor market has shifted to a more technology intense environment. They have proven to be more nimble than traditional schools in creating job training programs necessary to boost local economies. The number of these colleges has grown enormously in the last several years with enrollment growing from about 365,000 in 2000 to nearly 2 million in recent years and is expected to double by 2015.
I have spoken with many of my colleagues, and we agree that Education Secretary Arne Duncan is faced with a very difficult job of expanding educational opportunities while balancing concerns about the appropriate use of limited taxpayer dollars. We hope that he will be sensitive to the fact that so many students would not have the opportunity to improve the quality of their lives without career colleges.
Career colleges will be a critical component in reaching President Obama’s goal of the United States having the highest proportion of college graduates in the world by 2020. The U.S. was number one in 2000 but in the last decade slipped to sixth place. If we are to be on top again, career colleges will play a vital role in this effort.
Rep. Towns is a member of the Oversight and Government Reform Committee.