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U.S. Eyes For-Profit Colleges in New Round of Rule Making

U.S. Eyes For-Profit Colleges in New Round of Rule Making
May 27, 2009

Having just brought the curtain down on a series of negotiations over possible changes to federal rules governing higher education, the U.S. Education Department is starting a new round of deliberations -- and this time, the Obama administration is putting its stamp on the process by exploring several accountability issues related to for-profit higher education. In a notice published in the Federal Register Tuesday, the department said its officials expected one rule making panel to examine possible rules to carry out changes Congress made to the Higher Education Act last summer related to the eligibility of foreign medical and nursing schools to participate in U.S. financial aid programs. But in addition to that set of issues, on which the department is required to regulate, said Daniel Madzelan, acting assistant secretary for postsecondary education, it will also explore a set of priorities that the "new team in town" -- the Obama administration -- is interested in pursuing. Several of those, Madzelan said, are "accountability measures to ensure that the institutions that are participating in our Title IV programs are complying with basic statutory requirements." Foremost among them is whether the federal government's current approach to regulating incentive compensation for college recruiters (which provides a series of "safe harbors" that protect colleges that meet them) is sufficiently rigorous; federal reviews of the compensation plans at several institutions since the safe harbor approach took effect early this decade, Madzelan said, have found that they comply with federal rules but led department officials to ask, "Is this really the kind of thing we want to have happen?" The department might also consider fleshing out regulations that require for-profit institutions to show that they are providing students with "gainful employment," Madzelan said. "We've never put any meat on those bones." Harris Miller, president of the Career College Association, said he could not tell if department officials seemed to be planning to toughen their scrutiny of his member colleges. "There have been no changes in the law" that would invite the department's examination, Miller said. "We know what the rules are, and our schools are supposed to be following them. We preach to our schools all the time the importance of following the regulations, and we look forward to participating in the department's process."

 

 

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