The U.S. Department of Education used a misleading statistic in its rollout last month of proposed "gainful employment" regulations aimed at for-profit institutions, The Washington Postreported. Advocates for the sector had pushed back on the validity of the department's prominently featured assertion that graduates of 72 percent of programs at for-profits make less than high school dropouts. The Post looked into the argument on its "Fact Checker" blog, and sided with for-profits.
For starters, the baseline earnings calculation for high-school dropouts was not up to snuff, the newspaper found. The feds used a relatively high figure, relative to other data. And then the department, in both a White House briefing and in written material, used the figure in comparison to for-profit programs. That was an "apples to oranges" comparison, the Post said. One key reason is that the median salary for high-school dropouts did not include data for unemployed workers. It also factored in people who were many years into their careers, while using only recent graduates for the for-profit graduate figure.
The department defended the statistic, which the Post called "bogus." An official said the figure was merely a benchmark, and that problems with for-profits are serious. "However you cut it, one statement remains true: Graduates of a significant number of for-profit career college programs wind up getting jobs with very low earnings -- a fact that should cause concern for any consumer who’s considering those programs as a post-secondary option intended to prepare them for a job.”
Massachusetts sued Corinthian Colleges Thursday, charging that it engaged in illegally deceptive marketing, including the use of inflated job placement statistics and high pressure tactics on prospective students. The suit by the state attorney general charges that the for profit system's campuses in the state told prospective students that various programs had placement rates ranging from 70 to 99 percent, when the rates in these programs were actually between 20 and 30 percent.
Kent Jenkins, a Corinthian spokesman, told The Boston Globe that Corinthian has "a strong record of offering students a quality education and treating them honestly and fairly." Jenkins said that the attorney general didn't even one complaint from a student at a Massachusetts campus.
The announcement of the suit, however, does quote such a student. The student says that a Corinthian recruiter "called me every day at any time during the day or night to tell me that car[eer] will change my life. Guess what? It didn’t! I’m working at my city grocery store.”
Three Congressional lawmakers are pushing for a new federal committee that would coordinate the government’s oversight of for-profit colleges. Senators Dick Durbin of Illinois and Tom Harkin of Iowa, both Democrats, plan to introduce legislation Thursday that would create a committee comprising representatives from nine federal agencies that oversee for-profit colleges.
The committee would be tasked with improving the coordination among the various federal and state regulators that are investigating for-profit institutions. It would also publish an annual “warning list” of colleges that have been found guilty of illegal activity or institutions for which the committee otherwise has “sufficient evidence” of widespread abuses. Representative Elijah Cummings, a Maryland Democrat, plans to introduce an identical proposal in the House, but both bills are likely to face fierce opposition from Republicans, who have been critical of the Obama administration’s efforts to more tightly regulate the for-profit industry.
The U.S. Senate's Committee on Health, Education, Labor and Pensions (HELP) on Wednesday announced that it had approved Portia Wu as assistant secretary of labor for employment and training. Wu is a lawyer who previously worked for the committee. She replaces Jane Oates, who left the Labor Department last year and is now vice president for external affairs at the Apollo Education Group, which owns the University of Phoenix.
Timothy P. Slottow is the next president of the University of Phoenix, the large for-profit institution announced on Tuesday. Slottow is currently executive vice president and chief financial officer for the University of Michigan. Phoenix has hired a leader from traditional higher education in the past. Even so, Slottow's jump across sectors is certain to raise eyebrows.
Also on Tuesday, the Apollo Education Group, which owns Phoenix, announced it had received a subpoena from the U.S. Department of Education's Office of Inspector General about "information relating to marketing, recruitment, enrollment, financial aid processing" and other activities conducted by one of the university's regional offices.
The U.S. Education Department this morning formally published its proposed regulations requiring vocational programs at for-profit institutions and community colleges to show that they are preparing graduates for "gainful employment." The department previewed the rules this month, drawing criticism from those who thought they were unfairly tough and too weak alike.
California's Bureau for Private Postsecondary Education has "consistently failed to meet its responsibility to protect the public's interests," a state audit released Wednesday said. The report from the California State Auditor cited a list of agency's shortcomings, including long backlogs of applications for licenses and delays in processing applications, failing to "identify proactively and sanction effectively unlicensed institutions," and conducting far too few inspections of institutions. The bureau, which the legislature created in 2009 after the state's previous regulatory body was killed, challenged the audit's negative conclusion but agreed with its recommendations for improving the agency's performance going forward.
A newly released study found that four states would need to spend $8.4 billion over five years to educate the 1.4 million students who attend for-profits in those states. The report, which was prepared by the Nexus Research and Policy Center, calculated that number by looking at state and local expenditures necessary to serve those 1.4 million students in public institutions. Nexus is funded by the Apollo Group, which owns the University of Phoenix, and the John G. Sperling Foundation. Sperling is Phoenix's founder.