By Kevin Kuzma, Editor
The lame duck feeling in Congress has spilled over on our nation’s capital.
The end of the year can be a slow time for businesses, so imagine it in Washington — after an election where there’s been a significant change of power. The bars and restaurants are packed here late on weeknights and there’s a Christmas party atmosphere around. Everyone seems to be waiting for something more serious to come along, but they know it won’t arrive for some time.
This has contributed to the frustration for-profit school leaders are feeling this week as they gather for the Association of Private Sector Colleges and Universities’ Symposium 2010 in Washington, D.C. The longer the regulation process drags on, the more sector leaders are finding government manipulation and possible conspiracy lie behind the push to crack down on for-profit schools.
The Career College Association used to host its annual investment conference each winter when the city is hung with wreaths and the short-storied buildings near the Capitol are strung with lights. The for-profit sector has undergone some considerable changes since this event’s last gathering, not necessarily by its own doing. Now hosted under the APSCU banner, the organization as usual has invited some prominent speakers to the Fairmont Hotel this week to shed some light on the future of for-profit education from multiple perspectives.
In years past, sector leaders converged to discuss the sort of trends that executives consider in most industries. They came together to share thoughts on the costs of doing business in the coming year or maybe to discover new tactics or technologies for attracting and retaining serious students to their schools. So far this year, the tumultuous state of for-profit education and new regulation has prevented panelists from sharing any definitives for the year ahead.
Lately, the prospects have dimmed for 2011. The University of Phoenix announced more than 700 system-wide layoffs. Kaplan another 700. The feeling among the leaders I’ve spoken to is that this is just the beginning. With the Department of Education’s gainful employment rule to come in January, the impacts could lead to the elimination of programs and thousands more lost jobs.
This year, executives are sharing their strategies about how to handle new and proposed regulations. They want to know how other organizations are reacting to the change. In that sense, the symposium is functioning as it usually does, but these discussions are taking place with strange political overtones.
Yesterday morning, the hot topic was a story in The Washington Post about the Government Accountability Office redrafting several passages in its report citing secret shopper evidence at for-profit schools. The Senate’s Health, Education, Labor and Pensions Committee used this evidence as a center piece in its second hearing about marketing and recruitment practices at for-profit schools. Now, after the sector’s reputation that hasn’t always been stellar in the media has been further darkened by the findings, education stocks have tanked. As a result, a few thousand people already are out of work. Now we see that the government office in charge of accountability was anything but accountable.
The word "conspiracy" is being used here as frequently as it would be at a UFO convention. At dinner last night, a conversation about the GAO’s backtracking led to a discussion about the Kennedy assassination and wikileaks. Why would the Department of Education pursue relationships with short sellers? Who was involved within the department and what did they stand to gain? Why did the GAO make so many oversights? What about the students who were made to feel as though their education was inferior by the GAO report?
While they might have seemed outlandish a year ago, the theories being raised now about what’s happening in the for-profit education sector aren’t theories anymore. There is real reaction to them. Nearly everyone I’ve spoken with feels duped by a plan orchestrated by the current administration. They feel the investment community — namely short sellers — conspired with the Department of Education to drive stock prices down.
One source told me he’d seen this process put in place a few years ago in the student loan industry. The strategy, he said, begins with an onslaught of one-sided negative news articles followed by a government committee review. Some of the elected officials involved in the for-profit school version of this plot are the same, he said.
What’s happened in the for-profit sector was so well executed and effective, its possible that it has been rehearsed. I could believe the current administration is out to up-end an entire sector of education, too. I’ve always thought of myself as a relatively rational person and I’ve always thought the same of the people I’ve met in for-profit education. To hear all the arguing over negotiated rulemaking and gainful employment come down to conspiracy talk is very strange indeed. Strange, but accurate.
The frustration sector leaders feel will continue through the holidays. Then gainful employment will arrive — without any ribbons or bows.