State must maintain close college oversight

This state’s highest priority in regulating for-profit colleges has to be the quality of the education students will receive from those schools.

Proper oversight, including keeping close tabs on graduation rates and job placement data from the schools, is extremely important. Whatever it takes to fully fund that oversight needs to be found. Currently, the Tennessee Higher Education Commission funds the cost of that oversight through fees from the private schools. THEC has also recently added staff to help handle those duties.

But in doing its job, THEC has had to go into reserve funds to cover costs. The commission has a budget of about $1.6 million, and it has dipped into reserves for almost $1.1 million in the past three years, including $700,000 for the current fiscal year. Clearly, THEC needs to make a change to cover its responsibilities. It has decided to raise fees it charges the for-profit schools.

The for-profit institutions say the increase is too high, to the point it could force them to look elsewhere to locate. Just as the state should keep watch over how schools perform, it should keep watch over the overall presence and stability of the schools.

The fees THEC is implementing would raise start-up costs, and it would raise annual reauthorization fees. The annual fee would go from $350 to $750 for every $100,000 the school collects in tuition, up to $4 million. After that, schools would pay an additional $750 for every $1 million taken in, up to $50 million.

The schools are crying foul. They say the fees are too high, that the fees are out of line with other states and that they would be forced to pass that expense on to students. The first point that needs to be made about their concern is that making students look like the victims implies the schools are not already passing expenses on to students. They are. So that complaint is rather disingenuous. But when schools make the point, for example, that oversight fees in Georgia are $2,881 while the cost in Tennessee is $4,765, they appear to be making valid points about comparisons. THEC says the difference in such comparisons is because other states use state dollars as part of covering the expense. Since THEC is operating its oversight solely through fees, it’s easy to see why fee increases are necessary.

This state may want to revisit the way it handles those expenses. But given the current economic climate, and especially given what the state is doing in reducing costs in its public colleges and universities, any change in the system for oversight of for-profit schools looks highly unrealistic. The state’s most immediate priorities for higher education funding must be the public schools, not the for-profit schools.

Each day, thousands of students in Tennessee attend for-profit institutions to learn trades and gain skills to prepare them for the work force. The proprietary schools are positioned to meet a high demand. But history has shown that the motives of those schools can sometimes have much more to do with profits than educating students.

The best for-profit schools should welcome close oversight, since it can identify fly-by-night schools that don’t deliver on their promises. The method of funding for that oversight can be open to debate, but the level of scrutiny should not be compromised. Any student who attends a for-profit school needs to know that the money going into the school is well spent and that the skills obtained there will be worth the expense. (

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