Career Colleges Tangle with Duncan

Career colleges and some minority lawmakers are charging that a proposal by Education Secretary Arne Duncan to restrict federal aid to for-profit career schools amounts to discrimination, harming blacks and Latinos who disproportionately use those schools to get ahead.

Members of the Congressional Black Caucus and Congressional Hispanic Caucus have sent several letters telling Duncan his plan would hamstring low-income, minority students who rely on the federal loans and need the flexibility of vocational programs.

Duncan, however, says students, egged on by these schools, take on too much debt and graduate ill-equipped to land a well-paying job. The colleges – schools with on-line campuses, such as Strayer University, and the University of Phoenix, as well as programs that train in forensics, truck driving or computer repair – have recruited African American leaders like Jesse Jackson, hired lobbying firms, and set up an aggressive letter-writing campaign to make their case

“If you have a school whose clientele is basically low-income minority – first generation going to college – the economic reality is that their opportunities after college are not going to be as good as someone who comes from upper-income family with a lot of social contacts and not subject to discrimination as a minority,” said Rep. Bobby Scott (D-Va.), who signed one of the letters. If Duncan’s proposal goes through, they will be less likely to enroll students from disadvantaged backgrounds, said Scott, who questioned why other nonprofit and state colleges aren’t held to the same standard.

Opponents plan to dial up the pressure on Duncan to drop the proposed rule, which is expected be finalized early next year. The department delayed its publication after receiving 90,000 comments and letters, taking additional time to review public comments and gather additional information. Milton Anderson, president of Virginia College’s branch in Jackson, Miss., has argued that since black unemployment is nearly twice as high as whites, the government should not “close the door to opportunities for people willing to learn additional skills and training that will help them better provide for themselves and their families.”

But the so-called “gainful employment regulations” will likely happen in some form. While most career colleges do a good job training their students, he said, “some bad actors are saddling students with debt they cannot afford in exchange for degrees and certificates they cannot use” cheating taxpayers in the bargain.

Consumer advocates and education groups say that the rule would protect students – and taxpayers – from programs that prey on students to get government money.

Last fiscal year, the loan repayment rate at these for-profit schools was only 36 percent, according to the Institute for College Access and Success. By comparison, the rate at private nonprofit schools was 56 percent, and at public state colleges and universities, 54 percent. “Students and taxpayers urgently need protection,” Pauline Abernathy, vice president of the student-advocacy group.

Meanwhile, a Government Accountability Office investigation released in August found that some schools manipulate students into applying for federal money – and pressured some into falsifying documents. Others misinformed students about how long it would take for a diploma, or encouraged unrealistic expectations about job prospects after graduation.

Last year alone, according to the GAO, the for-profit colleges and trade schools took in $4 billion in federal Pell grants and $20 billion in taxpayer-funded student loans. Enrollment in for-profit programs has soared, jumping from 673,000 students nationwide in 2000 to 1.8 million in 2008.
The debate has become a battle of statistics. If schools don’t change their ways, the department estimates, just 5 percent of for-profit programs – covering 8 percent of all students in the for-profit sector — would be ineligible for aid in 2012. For-profit colleges say that’s an underestimate, pointing to one industry-funded study that says the proposed rule will eliminate programs serving 32 percent of all students in for-profit institutions.

The for-profit sector answered with a lobbying blitz: Education Management Corp., the second-largest for-profit college company, hired the public relations firm DCI Group to help craft personalized letters to the Education Department. John G. Sperling, the founder of the University of Phoenix, the nation’s largest for-profit college, sent e-mails around Capitol Hill arguing the rule would make it impossible for the sector to offer many programs preparing students to be teachers and nurses.

But there has been a concerted effort to target minority lawmakers and groups. Notably, the colleges have hired Paul Brathwaite, a former executive director for the Congressional Black Caucus.

The Career College Association, representing 1,400 schools, has repeatedly reached out to the “tri-caucus” – the Congressional Black Caucus, Congressional Hispanic Caucus and Congressional Asian Pacific American Caucus – holding a briefing for aides and talking to members.

“Many members understand we really are an extremely valuable option for many of their constituents,” said Harris Miller, the association’s president and CEO. “Many minority students find it extremely difficult if not impossible to access the traditional higher education system.”

The association encouraged hundreds of students to attend a rally on Capitol Hill last week.

“Frankly the students are upset about it,” said Miller. “It is denigrating their education, denigrating their work.”

In a new national campaign, running full-page ads in newspapers around the country, Corinthian Colleges added to the pressure with a multi-million dollar ad campaign. “I don’t count?” asks Pamela, a licensed vocational nurse, who is black, in one ad. “Some in Washington think I don’t.”

“Student voices need to be heard,” said Peter Waller, chief executive of Corinthian Colleges.

Long-time education activists say the PR campaign is a bit of deja vu.

Faced with plans to reform the sector twice before, colleges responded with a similar argument — any new rules would limit student choice, shrink the sector and hurt minority students who are struggling to get ahead. According to an Education Department analysis, the new regulations enacted in the late 80’s and early 90’s actually helped reduce loan defaults, stimulated growth among for-profit schools and boosted in the number of black and Hispanic students in their programs.

Sen. Tom Harkin (D-Iowa), whose Health, Education, Labor and Pensions Committee is holding hearings on the for-profit colleges, questioned the industry’s sincerity in framing it as an issue that would disproportionately hurt minorities, and argued they must be “committed” to helping students succeed.

“It is wrong to pretend that for-profit colleges with student rates of high debt but low success are offering real college access to underserved student populations,” he said. Some “poor-performing” schools, Harkin said, are “no different than subprime mortgage lenders pretending to help working families find a place to live.”


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