WASHINGTON -- The subject of a House of Representatives hearing Thursday seemed  like an unusually obscure, in-the-weeds topic for a Congressional committee to spend its time on: an accrediting agency's standards for assessing a college's policies on academic credit hours. But as he questioned witnesses, the chairman of the House panel, in explaining why the issue concerned him, wound up enunciating in unusually stark terms why Democratic lawmakers (and their ideological counterparts in the Obama administration) have sharply stepped up their scrutiny of for-profit colleges in the last year.
"As much as we talk about the Carnegie units changing ... what has also changed is that institutions now have requirements to shareholders, to profit margins, to the stock market and to others,” said Rep. George Miller (D-Calif), chair of the House Committee on Education and Labor. “This is a matter of serious concern.”
Ostensibly about an investigation by the U.S. Department of Education's Office of the Inspector General that  called on the department to consider pulling the accrediting authority of the nation's largest regional agency, the Higher Learning Commission of the North Central Association of Colleges and Schools, Miller used the hearing as an opportunity to express his concerns about the growth of federal financial aid spending in higher education, and the expanding piece of the pie going into the coffers of for-profit colleges and universities.
The combination of federal budget deficits and growing demand for higher education is likely to make it hard for the government to meet the financial aid needs of students in the years to come. Miller's statements at Thursday's hearing gave public voice to the view that federal officials may be looking for ways to redirect financial aid money flowing to students at for-profit colleges so that it goes further at less-expensive two-year institutions.
The hearing did not seem headed toward being a critique of for-profit colleges at the start. In his opening statement, Miller tried to make clear that his scrutiny of higher education funding was “not bound by whether an institution is for-profit or nonprofit, private or public.” But his comments and questions later in the hearing pointed to his “serious concern” about for-profit colleges' attempting to maximize the profits they squeeze out of the Title IV aid that students bring to them.
He stressed that he was not a foe of the for-profits. “I think there’s a tendency for people to say ‘Well, you don’t like for-profits, you like the old traditional way, you don’t understand the future, you don’t understand inputs versus outcomes, seat-time versus this,’ ” he said. “I think this committee does. But I think at the end of the day what we know is that the system has to resolve itself in how we allocate federal taxpayer dollars and when students and families are borrowing money. The system has to resolve itself in favor of accountability and integrity.”
Coming just as the Education Department issued a notice of proposed rule making  aimed at guarding against abuse of the Title IV federal financial aid program, and a week before the Senate’s Health, Education, Labor and Pensions Committee holds the first of a series of oversight hearings on for-profit colleges , it was almost inevitable that Thursday’s hearing would end up homing in on the sector. The inspector general's report made its recommendations about the HLC based on its decision to accredit American InterContinental University, despite the discovery of some undergraduate and graduate courses at the university for which the accreditor concluded too many credits were being awarded.
Rep. Rob Andrews (D-N.J.), who has been seen as a friend of the for-profits and has been preparing to offer up his own proposal on the controversial issue of “gainful employment” that is part of the new round of regulations, framed the hearing as part of “a broader effort this committee is embarking upon to try to find quality measurements for higher education in the country.”
The issue at the center of the hearing was the credit hour, which in the Education Department’s proposed rule is defined as “one hour of classroom or direct faculty instruction and a minimum of two hours of out of class student work each week for approximately fifteen weeks for one semester or trimester hour of credit," or equivalent amounts of instruction for other calendar plans. Essentially, the Carnegie unit.
But it also includes an alternative for "[i]nstitutionally established reasonable equivalencies for the amount of work required in [the previous definition] for the credit hours awarded, including as represented in intended learning outcomes and verified by evidence of student achievement." For online and career-preparation programs, the latter definition is much more likely to be appropriate, but also bound to cause confusion and leave room for interpretation.
The absence of a definition of a credit hour in the policies of many accrediting agencies was “alarming and could result in serious implications both for students and the future of this country,” Miller said. (The inspector general issued similar, though less strongly worded,  critiques of the credit hour policies of two other regional accreditors  in the last year.)
Rep. Brett Guthrie (R-Ky.), who delivered his party’s opening statement, warned that “efforts to create a federal definition of a credit hour” -- as was done in the notice of proposed rule making, which was formally released  Thursday -- “or to establish strict federal parameters for program length have the potential to place us on a slippery slope, one that will limit creativity and innovation in the delivery of postsecondary education.”
In testimony, three witnesses -- Kathleen Tighe, the Education Department’s inspector general; Sylvia Manning, president of the HLC; and Michale S. McComis, executive director and CEO of the Accrediting Commission on Career Schools and Colleges -- discussed their takes on the role and definition of the credit hour. Both Manning and McComis argued for flexibility, preferring an understanding of what a credit hour ought to be to a formal federal definition.
Pointing to an investigation of three of the seven regional accreditors  conducted by her office in the second half of 2009, Tighe said that the absence of a definition of a credit hour prescribed by the federal government or developed by any of the accreditors “could result in inflated credit hours, the improper designation of full-time student status, the over-awarding of federal student aid funds and excessive borrowing by students.”
One of the agencies that Tighe’s office examined was the HLC, and its accreditation of American InterContinental. During the HLC’s accreditation examination, the agency found that the Career Education Corp.-owned university was improperly awarding (and charging students for) nine credit hours -- the equivalent of full-time enrollment in a quarter-based program -- for courses with far less content than would possibly be worth nine credits. The courses were “egregious,” the agency said in its accreditation report, and needed to be altered and revalued quickly.
In questioning, Miller took on a persona far less amenable to for-profit higher education than his opening statement would have suggested. “What is the impact of an aggressive business plan on the needs of some for-profit institutions?” he asked, rhetorically.
By awarding more credits than appropriate for more than 100 courses, American InterContinental had effectively kept down its instructional costs while ensuring that all Title IV-eligible students enrolled in them would be granted full-time student aid, Miller said. “When for an institution that is in some cases publicly held, in some cases closely held, this question of how you assign credit, but also of a business plan,” is tough to answer, he said.
In its “alert memorandum” blasting HLC’s handling of the American InterContinental courses, the Office of the Inspector General noted (in a section that was redacted for public review but that Miller read aloud at the hearing) that Career Education’s lower-than-typical instructional costs were “likely related to the issue of credit equivalency.”
While the university charged $5,517 for a nine-credit course, it should have been offering a more robust curriculum or reduced the number of credits being awarded, the HLC had found. “All of a sudden that unit becomes very important and I think it becomes very important because we are now dealing with education for profit and that extra unit repeated 500 times throughout the year for 500 students taking that class is worth a lot of money,” Miller said. “And repeated a thousand times and 10,000 times throughout the year … it was worth real money.”