Higher Education Reform: We Need a New Regulatory Vision

President Obama is laser-focused on economic growth. In a Wall Street Journal opinion piece last month, he advocated reviewing federal regulations to root out those "that stifle job creation and make our economy less competitive."

Last week, by defunding a controversial new regulation called "Gainful Employment" — a rule advocates say would prevent students from attending programs that burden them with "too much debt" — the House of Representatives, in a bipartisan vote, decided that a great place to start would be higher education.

The House is right.

To date, the debate over federal higher education policy has been the poster child for dysfunctional processes.

Driven largely by biases, ideologies, anecdotes, and vested interests, recent regulatory initiatives and congressional hearings have been so singularly focused on attacking private-sector, for-profit institutions that their integrity is suspect. A watchdog group, CREW, has raised ethical concerns about the regulatory process. The Government Accountability Office (GAO) issued a key report full of admitted inaccuracies against for-profits. The House Oversight Committee has issued several letters to the GAO, each more pointed than the previous one. At least one media outlet has been pulled into the vortex of questionable behavior. An Associated Press investigation revealed that a Village Voice article critical of the industry centered on a reporter’s wholly fabricated account.

Public colleges and traditional universities have been granted a pass on the controversial Gainful Employment rule. Absent exposure to it, too many are sitting on the sidelines. And some are actively trying to ensure that the rules are onerous — perhaps hoping for a government-provided stick to beat down the “competition.”

Student and consumer advocacy groups appear to be working in parallel with some in power and some public colleges, all claiming to believe the Gainful Employment rule works as billed — protecting students from incurring excessive debt for programs of dubious value. If so, they should be insisting that it be applied uniformly to all institutions to protect all students — but are silent in that regard.

This cynical process has created a rule promoted as something it’s not, and a chilled atmosphere that has impeded the productive dialogue the president calls for between regulators and “…experts, businesses and ordinary citizens.”

But, with the bipartisan decision to defund Gainful Employment, perhaps we can change direction.

We should turn toward passing legislation and implementing regulations that establish equally applied performance and consumer protection standards at all schools, create outcomes and cost/benefit transparency for all stakeholders at all institutions, leverage all of our college resources and increasing innovation to increase college access and choice and decrease taxpayer costs, and of crucial importance, restructure financing to lower costs for both students and taxpayers.

Private-sector schools welcome effective regulatory reform. Change that allows us to offer a better product and improve opportunities for millions of Americans is needed and good. We support regulations that increase student outcomes and taxpayer cost transparency and consumer information disclosure, provided they apply to all schools and enable prospective students to make like-for-like comparisons.

To attempt to create full transparency for prospective students, some private-sector schools have even implemented “try before you buy” policies affording a few weeks or more of instruction at no obligation — practically unheard of at public institutions.

This kind of willingness to innovate and absorb risk should prompt the administration to look to private-sector schools as partners, not targets.

Private-sector schools cost taxpayers significantly less than their public higher education peers, providing tax-efficient educational capacity and growth capital that tax revenues can’t. And, they contribute to the country’s economic success. For example, about one-third of the supply of all health care workers, a group whose importance will rise dramatically with aging baby boomers, are private-sector graduates.

Administration officials acknowledge that we need a thriving, working, responsible landscape of private-sector career colleges and universities to meet our nation’s higher education needs. But these schools will not be seen by many in power as valuable until the president begins including “career colleges” in the list of institutions he describes as necessary “to prepare workers for good jobs in high-growth industries.”

There will always be ambitious Americans who yearn for higher education but don’t exactly fit the traditional mold; who perhaps have a more difficult path than others. About 75% of the private sector’s 3.2 million enrollees are independent adults who choose these for-profit schools because, unlike traditional colleges, they cater to adults’ needs. Those adults deserve an end to the broad-brush toxic rhetoric that devalues their accomplishments and their choices.

We all want to help students avoid excessive debt. Students and taxpayers deserve our clear and unbiased thinking as we attempt to do so.

Randy Proto is the President and CEO of the American Institutes school group, which specializes in health care career education. It includes the American Institute College of Health Professions, and other American Institute schools located in Florida, Connecticut, New Jersey and Colorado.


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