Blog: Government’s Guest Lists Hinder ‘Gainful Employment’ Argument

By Kevin Kuzma, Editor

Our government’s inability to compose suitable guest lists has been a major hindrance throughout the negotiated rulemaking process.

First, the Senate’s Health, Education, Labor and Pensions (HELP) committee began its investigation into "for-profit" schools in June by inviting the well-known short seller Steve Eisman to the proceedings. Eisman of FrontPoint Financial Services emerged to be one of three key witnesses in the hearings led by Senator Tom Harkin (D – Iowa).

Earlier this year, Eisman published "Subprime Goes to College" in The New York Post, which was among the most damaging editorials in the parade of negative news pieces to rock career education. The piece predicted the for-profit education sector would be the next industry to experience an implosion the likes of the subprime mortgage meltdown.

His presence at the witness table caused confusion among the career education crowd. Why would Eisman be invited to testify before the committee before the likes of Harris Miller, President of the Association of Private Sector Colleges and Universities (APSCU) or other executives affiliated with the larger school conglomerates? The confusion turned to suspicion. How and why would Eisman be allowed to participate in a formal hearing process where the intent was to look at the allotment of financial aid dollars and the marketing and recruitment practices of for-profits? His presence at the hearings is still confusing to some.

Then, last week, Lanny Davis noted in his Huffington Post blog that “the panel of negotiators involved in developing the ‘gainful employment’ regulations with the Department, included only one representative” from for-profit schools “out of 14 members — a panel that the law empowers to write the regulation if there is ‘consensus.’”

Surely the way to create the fairest education rule possible wouldn’t be to exclude representatives from the sector of education it stands to implicate. From the start, the department was on track to create one of the most biased and controversial rules in the history of the rulemaking process. The result was a rule targeting only for-profit education. The 90,000 letters they received during the open comment period was confirmation that they’d achieved their goal.

While some skeptics might question the intelligence of department officials, I don’t. This is a highly educated group. Secretary Arne Duncan appears to be a sharp guy. And, it takes a sharp and intelligent group to carry out such a well-orchestrated movement against for-profit education like we’ve seen come to fruition over the last year.

Clearly the perceptions of the for-profit sector are being shaped by people who know little about the schools or what they do. This imbalance puts the DOE front and center in perpetuating the double standard that’s long existed in the career education realm in the difference between career education schools and their competitors are perceived.

For-profit schools and traditional colleges serve vastly different missions. As I noted in my letter to the DOE, the objective is to offer career-specific training and the hope of a job. Community colleges and four-year schools offer education. They don’t extend their promise beyond that, and therefore they aren’t regulated to show what impact, if any, their education has on someone’s life. The education is simply thought to be enough, and that’s the product that’s bought in their classrooms.

What would make the traditional colleges think they could determine how this rule should be applied to for-profits? I don’t think that would be their stance. Given their negative perception of career training-oriented colleges, they wouldn’t want to stoop to our level to figure it out. And therein lies the problem.

Traditional colleges and universities were late in embracing online education and adapting to today’s student lifestyles. They’re opposed to change. Their processes are outdated, and their thinking isn’t innovative. Administrators aren’t willing to turn the focus inward to understand why our schools thrived and theirs have struggled with our country facing its worst recession since the Great Depression.

Here’s something to consider: In trying to formulate the gainful employment rule, the Department of Education excluded representatives from the most innovative and efficient sector of higher education. Does that make any sense to anyone? The career college sector is filled with people who think for themselves, who respond to challenges, who care about helping other people. If you look at the department’s or the Senate’s guest list capacity, it suggests a different mentality, doesn’t it?

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