Flawed NCLC Report Paints Inaccurate Picture

Flawed NCLC Report Paints Inaccurate Picture — Why the NCLC Report Simply Doesn’t Add Up

The newly-published report by the National Consumer Law Center (NCLC) purports to be an impartial review of the accuracy and use of completion and placement data in the for-profit sector of higher education. However, the report is so riddled with inaccuracies, omissions, and failures to understand basic concepts relating to federal higher education law and regulations that it is apparent that NCLC reached unjustified conclusions before understanding the data. Some of the major flaws include: •Placement Rates: NCLC criticizes the five named public education company campuses for failing to use a federal methodology to calculate a placement rate and disclose that rate to prospective students. However, except for a small number of very short-term programs (which none of the campuses examined in the report provide), there is no requirement in federal law or regulation to calculate a placement rate. Calculating an accurate placement rate can be very difficult, especially considering that nearly three-quarters of students who enroll in for-profit colleges are employed while attending classes. This is most likely why the admissions representatives at the colleges visited by NCLC did not make representations about placement rates. Accrediting agencies do assess student outcomes as appropriate considering the mission of each college, and they have mechanisms in place to verify the accuracy of such information. •Graduation Rates: NCLC presents the NCES data for graduation rates for the five selected for-profit colleges in Massachusetts, and characterizes the rates as “strikingly low.” The failure to place these rates in context unfairly implies that for-profit institutions have low rates compared to the other sectors of higher education. As shown in the following chart based on six randomly chosen Massachusetts colleges, this is simply not true. COLLEGE SECTOR GRADUATION RATE Bunker Hill Comm. College Public, 2-yr 11.3% U. of Mass. – Boston Public, 4-yr 12.2% North Shore Comm. College Public, 2-yr 16.2% (28.4% transfer) Fisher College NFP, 4-yr 36.8% Framingham State College Public, 4-yr 42.0% Becker College NFP, 4-yr 46.6% Many for-profit colleges would agree with NCLC in its criticisms of the methodology used to calculate the official graduation rates. However, the calculation method is required by regulation, and applies equally to all sectors of higher education. •Recent Investigations: NCLC discusses a number of recent investigations and lawsuits against the for-profit companies, but fails to note that many of them have been concluded with no findings of wrongdoing by the companies. For example, the 18 month-old Department of Justice (DOJ) investigation of ITT is detailed, with no mention that the DOJ recently concluded that there was no evidence of improper activity by the corporation or its officers. Similarly, while NCLC notes that the whistleblower suit against University of Phoenix (UoP) was dismissed, the report states that the DOJ asked the court to reverse the dismissal, mentioning only in a footnote that the request was based on procedural issues and that DOJ specifically praised UoP in its filing. Similarly, of the actions specified relating to Career Education, several have been dismissed and another was denied class certification. •NCLC recommendations: The NCLC recommendations demonstrate a complete lack of understanding of the federal student aid programs. For example, NCLC suggests that any company with fewer than 75% of total eligible campuses reporting their completion rates should be placed on probation. However, the reason that many of the campuses criticized by NCLC did not report data to NCES is that they have not been in business long enough for their first cohort of students to have yet reached the 150% point in time at which rates are calculated. The idea of penalizing schools for not being in business long enough is ludicrous. The suggestion to include part-time students in graduation rate calculations omits any discussion of the operational difficulties in following a cohort that includes students who will reach the 150% point in time at different points. Similarly, the concept of requiring colleges to track the employment and tax records of all of their graduates would be an administrative nightmare, not to mention a potential invasion of privacy. Finally, the suggestion that any college that reports a graduation rate of under 35% should be automatically audited by the Department of Education would require a huge staffing increase at ED just to audit the many community colleges whose graduation rates are below 35%.Summary: The NCLC report could have provided helpful public policy suggestions if it had produced a fair, accurate, and balanced analysis of the consumer information available to students and parents. However, as shown by the examples above, NCLC lets its preconceived notions determine the outcome of its report. It is particularly ironic that NCLC aims its criticism solely at the for-profit sector, as only our sector has supported increasing the consumer information disclosures in HEA reauthorization through our proposed Institutional Report Card.

Career College Association, at 6:32 pm EDT on June 30, 2005