June 22, 2006

To Report or Not to Report

How much information should for-profit colleges have to share with the public about their graduation and job-placement rates? Should for-profit colleges be subject to different requirements depending on who accredits them? These issues — which have been central to many federal debates over the years — are front and center this month in California.

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Many legislators and consumer activists have been pushing for increased reporting requirements to be imposed this year, since they and some state officials believe enforcement has been lax. But a bill that would have forced for-profit colleges to report graduation and job-placement data to the state was altered to merely form a working group to study the issues — and that measure won backing from an Assembly committee Wednesday.

Several years ago, laws were enacted to provide greater state oversight of institutions that were regionally accredited by any body other than the Western Association of Schools and Colleges, the regional accreditor for California. Many for-profit institutions do not use regional accreditation.

Under the Private Postsecondary and Educational Reform Act, non-WASC accredited institutions are required to report data from programs designed to train students for specific jobs to the state’s Bureau for Private Postsecondary and Vocational Education on things like enrollment and program completion rates, job placement, and salaries.

Some colleges complained, however, that the understaffed bureau impeded their ability to expand programs, because of slow program review. So in 2003, with much support from for-profit institutions, a law was passed that exempted regionally accredited institutions even if their accreditation wasn’t from WASC.

Critics of that law say that it opened the door for false advertising by for-profit institutions, and legislators have introduced multiple laws that would put in place more stringent reporting requirements. Of the two most recent, however, one died in the Senate and the other was amended beyond recognition, so that it will merely establish a working group to examine the issues, with legislative proposals coming next March.

On Wednesday, representatives from for-profits, including the University of Phoenix and Corinthian Colleges, showed up to object that stricter requirements that could slow the expansion of programs and campuses.

In an e-mail, Dianne Pusch, senior vice president of the University of Phoenix, which is accredited by the North Central Association of Colleges and Schools, said that Phoenix has “been active for many years in working with the bureau and legislators to help create a coherent and reasonable regulatory environment which provides consumer protection for students.”

Pusch said that most of the current reporting requirements do “not apply to the University of Phoenix” and only apply to vocational schools. Even many skeptics of for-profit colleges agree that Pusch is correct about the current law, since Phoenix is regionally accredited like many nonprofit colleges and offers a range of programs, not just those that prepare people for specific careers. But many of those skeptics say that’s precisely why the law should change.

Elena Ackel, a lawyer with the Legal Aid Foundation of Los Angeles, said that Phoenix “should be reporting, they’re just not doing it.” She called for tougher regulation that would require for-profit colleges to tell students when their credits will or will not transfer to other institutions. She also said that the lack of agreement on the 2003 law has created apparent exemptions because the bureau doesn’t enforce the rules.

The law says that institutions with “degree or diploma programs designed to prepare students for a particular vocational, trade, or career field” have to report data that includes job placement and salary information.

State officials who did not want to be identified said that many of Phoenix’s programs, particularly certificate and nondegree programs such as “call center management” and “Microsoft certified system administrator,” could fall under the reporting law, but are not currently forced to report comprehensively.

“Our office wants to ensure that the regulatory structure provides the strongest possible protections for consumers,” said Tom Dresslar, a spokesman for the California attorney general. “Obviously this is an important and growing access point for people who are trying to better themselves.”

Dresslar said that the office hopes the working group will lead to increased consumer protection. “We have seen consumer protection abuses, and we want to make sure the law and the regulatory regime in California prevents those abuses,” he said.

Ackel said that reporting by nonprofit, WASC-accredited institutions, is often much more accessible to consumers because, for instance, Stanford University reports to the Integrated Postsecondary Education Data System, and that data are compiled by the California Postsecondary Education Commission. The data for for-profits, however, which rapidly create new programs and campuses, are often not disaggregated by campus in the IPEDS system, and the Bureau for Private Postsecondary and Vocational Education, officials said, has done a poor job of keeping track of new programs.

The University of Phoenix is regionally accredited, unlike many for-profits, but Elizabeth M. Imholz, director of the West Coast Office of Consumers Union, said that “accreditation is not the panacea by a longshot. It’s the not same as state oversight.”

Bruce Hamlett, chief consultant with the California Assembly’s Higher Education Committee, said that Assembly Bill 2810, the one that resulted in the formation of a working group on Wednesday, in one of its previous incarnations would have clarified reporting requirements to make sure the appropriate information was making its way to the state. “Any reputable school should not have a problem with that,” he said.

The bill in its earlier form, like another bill that died in the state Senate, would also have clarified the fact that accredited for-profit institutions do not have to undergo review by the bureau before adding new programs and campuses. “Our basic point is that for-profit schools that are regionally accredited don’t need state review or oversight,” Hamlett said, “but they do need to give information.”

Establishment of the working group is not a sure thing, however. The bill will now go to the Senate Business and Professions Committee, and, officials said, anything could happen.

— David Epstein

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