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In Whose Interest?

In Whose Interest?
July 30, 2010

WASHINGTON – Just a few hours after the U.S. Department of Education released the full text of its proposed regulations to define “gainful employment” last Friday, two groups that rarely weigh in on education issues circulated news releases expressing concern that the rule would limit minority students’ access to postsecondary education.

In its statement, MANA: A National Latina Organization said that the proposed regulations would “adversely affect Hispanic students’ ability to borrow money and will limit Hispanic students’ access to higher education.” The National Black Chamber of Commerce said the rules would “disproportionately harm low-income and minority populations by discriminating against students who must borrow the needed tuition to attend college.”

On Monday, the day when the regulations were published in the Federal Register in a notice of proposed rule-making, two more groups that represent minority groups but usually don’t wade into higher education policy debates -- the National Organization of Black Elected Legislative Women and the National Hispanic Caucus of State Legislators -- made similar statements.

To proponents of the gainful employment regulations, minority advocacy groups and the for-profit colleges seem unlikely bedfellows. Advocates of the rules argue that they would not deny students access to higher education or to federal financial aid, but would instead redirect students to better programs, whether at nonprofit or for-profit institutions.

Maintaining the regulatory status quo on for-profit colleges, they say, would continue to leave students -- many of them minority and low-income students -- buried in debt and with meaningless credentials. While there are many aspects of the regulations that are debatable, they would not bar any student from receiving federal aid to pursue postsecondary education. Rather, they would restrict programs that purport to prepare students for jobs and that fail to lead students to jobs that pay well enough for them to repay their loans -- based on repayment rates and two debt service-to-income ratios -- from accepting federal financial aid dollars.

“In some instances individuals may very much benefit from these schools,” said Arnold Mitchem, president of the Council for Opportunity in Education, which works to help low-income and first-generation college students gain access to higher education. “Even so, there are a lot of sharks in the water and that’s what these regulations are addressing.” He doubts that the groups independently became concerned about these issues -- and he’s right.

Though the statements may not have all been written by the same person, the views expressed in them can in large part be traced to one prominent Washington lobbying firm, the Podesta Group. A Podesta staffer confirmed that the firm has performed “outreach” to black and Hispanic groups concerned about civil rights issues, including those that became interested in for-profit higher education in recent weeks.

“It’s not a policy discussion for them, it’s something they can really see the impact of -- the millions of students in thousands of programs that could lose their financial aid,” the aide said. (Some of the same groups wrote letters to the Education Department this spring while the rules were being drafted.)

According to lobbying disclosure forms, the Career College Association, the trade organization that represents most of for-profit higher education, paid Podesta Group $50,000 in the first quarter of 2010 and $80,000 in the second quarter to lobby Congress and the Obama administration. In the first half of the year, Podesta Group reported $210,000 in lobbying fees from Career Education Corporation, the company that runs American InterContinental University, Sanford-Brown Institutes and Le Cordon Bleu North America, among other institutions.

Harris N. Miller, CCA’s president, confirmed that the groups that have spoken out on gainful employment “were approached by our schools and by other people who deal with minority organizations,” informed of the issues at play, and asked to speak out against the proposals.

"These organizations realize on balance that the net contribution to the country and in particular to low-income and minority students is positive," Miller said. "The regulations the department has proposed would disproportionately affect lower-income working adults -- many of whom are minorities -- who are not served by traditional higher education."

To Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers, the involvement of CCA, for-profit colleges and lobbyists in getting groups with minority affiliations “is not at all surprising.”

The notice of proposed rule-making, he said, “is a fairly complicated thing and takes some time to weed through.” That groups that haven’t closely monitored the negotiated rule-making process that contributed to the drafting of the regulations could comment on it within a few hours of release suggested to him that someone else was pulling strings behind the scenes. "It's pure astroturf," he said, using a term that's come to symbolize lobbyist-stimulated "grassroots" campaigns

Alma Morales Rioja, president and CEO of MANA, said she tries “to be very, very careful and very introspective” before taking official policy positions, and that she has been “paying a lot of attention” to the growing scrutiny of for-profit colleges. “I am really suspect of any school that is not accredited, that is not certified,” she said. “I see all these fly-by-night operations and would have nothing to do with them. We’re trying to allow the additional opportunity that comes with career education.”

Nonetheless, her group’s July 23 press release appears to be the first instance in which MANA has expressed an opinion. When asked if she had discussed gainful employment with anyone advocating for CCA, Rioja avoided answering the question.

Pauline Abernathy, vice president of the Institute for College Access and Success, said that holding vocational programs accountable for preparing students for gainful employment "is one of the best ways to increase access to quality, affordable education and training." Further, she noted that three prominent civil rights groups that do weigh in with regularity on higher education issues -- the NAACP, Rainbow Push Coalition and National Council of La Raza -- "have all called for a strong definition of gainful employment to prevent unscrupulous career education programs from exploiting students of color."

She added: "Publicly traded for-profit colleges are legally obligated to make profitability for shareholders their overriding objective and their claims should be evaluated with that in mind."

As the federal government’s investment in student aid has grown, said Mitchem, of the Council for Opportunity in Education, “there’s been a lot of business buzz that this is a new frontier, and people are thinking, ‘How can I put something together so I can take advantage of this for my own financial interests?’ ” But those financial gains, he said, come on the backs of “a population who are vulnerable and uninformed who are looking for opportunities, who are looking for success.”

The National Black Chamber of Commerce and the National Hispanic Caucus of State Legislators were both unresponsive to multiple phone calls and e-mail messages. The headquarters of National Organization of Black Elected Legislative Women directed inquiries to its president, Sharon Weston Broome, a Louisiana state senator, who did not respond to an interview request.

The National Hispanic Caucus of State Legislators’ ties to the for-profit sector are most obvious. Catherine A. Caponi, vice president of government relations at Education Management Corporation, is listed as an “associate business member” on the group’s Business Board of Advisors. So far this year, Education Management has spent at least $160,000 on Washington lobbying by Gray Loeffler, Jolly/Rissler and Heather Podesta and Associates, which is run by the wife of Podesta Group’s chairman.

Lobbying efforts are a "battle for the minds and souls of certain people in Washington," Miller said, "to show them that we offer students that path to the American dream."

Mitchem is more cynical. “The more oars you can put in the water, the easier it is to get to your goal," he said. "But it doesn't mean it's going to happen."

 

 

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