forprofit

For-Profit Groups Sue to Block Gainful Employment Rules

The for-profit sector's primary trade group on Thursday filed suit in federal court to block gainful employment regulations, which the U.S. Department of Education unveiled last week. A federal judge in 2012 halted a previous attempt by the Obama administration to enact rules for vocational programs at for-profits, community colleges and other institutions. The judge said the department failed to establish its reasoning behind one of the metrics. However, the judge also ruled that the department was within its rights with the overarching thrust of the regulations.

The new lawsuit from the Association of Private Sector Colleges and Universities (APSCU) alleges that gainful employment "repeats and exacerbates" problems that led to its previous version being held up in court, calling the rules arbitrary. In a written statement, the department said it is confident that it is "within its legal authority in issuing gainful employment regulations that will protect students and taxpayers’ investments by bringing more accountability and transparency to career training programs."

Separately, a trade association representing for-profit colleges in New York filed its own federal lawsuit Thursday over the gainful employment regulations. That complaint by the Association of Proprietary Colleges echoes some of the arguments in the APSCU lawsuit: that the rule sets arbitrary standards and goes beyond the bounds of federal law. 

But the New York lawsuit also raises issues about the rule that have not yet been litigated. For example, the group argues that the Obama administration's regulation conflicts with the standards for for-profit colleges set by New York state regulators. In addition, the group claims the rule violates its due process rights because its members could be stripped of federal aid on the basis of graduate earnings data that it would not be allowed to challenge. The group says that there are serious flaws in how the Education Department plans to obtain graduate earnings data from Social Security Administration. 

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"This Week": Gainful Employment and the Future of For-Profit Colleges

On the latest "This Week," Inside Higher Ed's free weekly news podcast, Ben Miller of the New America Foundation and Vickie Schray of Bridgepoint Education join Inside Higher Ed's Doug Lederman to discuss the new gainful employment regulations. Sign up here for notification of new editions of "This Week."

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Wisconsin Sues Corinthian

Wisconsin's attorney general, J.B. Van Hollen, this week sued Corinthian Colleges over allegations that the for-profit chain engaged in "unfair, false, misleading and deceptive trade practices." The struggling Corinthian, which is trying to sell or close its 107 campuses, briefly operated an Everest College campus in Milwaukee. The lawsuit alleges that the campus, which closed after just two years, made false claims about job-placement rates.

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For-profit chain leaves the stock market to save money on public disclosures

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Education Management Corp. goes private as its enrollment and revenue slump, raising questions about the end of an era for publicly traded chains with disparate holdings.

Federal Policy and the Skills Gap

The relationship between federal policy and the skills gap is misunderstood, according to a new report from the New America Foundation. The paper looks at five "policy gaps" in the Higher Education Act, the law governing federal student aid programs, that could be closed to build stronger connections between learning and work. Those gaps include an excessive focus on institutional and internal indicators of quality; a lack of attention to student employment outcomes; and aid eligibility requirements that fall short of the needs of adult learners, according to the report, which was authored by Mary Alice McCarthy, a senior policy analyst at the foundation who previously worked for the U.S. Department of Labor and the Education Department.

More for-profit colleges would fail 90/10 rule if veterans benefits are included, analysis shows

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As lawmakers contemplate change to the federal rule that caps for-profit colleges' receipt of student aid to include veterans benefits, analysis shows that many would have trouble complying. 

Kaplan U. Starts 'Open College' to Serve Adult Students

Kaplan University is today unveiling a new "Open College" that is designed to let adult students earn a bachelor of science in professional studies by combining credits they've previously accumulated through prior learning with academic credit they earn taking open courses offered by Kaplan and other providers. OC@KU, as the fledgling institution is called, is the newest entrant in the hunt to create a $10,000 bachelor's degree. In Open College's case, such a goal could be attainable through its mix of prior learning, open courses, and Kaplan-provided assessments to help fill in gaps in learners' accumulated credits.

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Leaders of For-Profit Florida Chain Indicted

The CEO and others officials of Fast Train College, a for-profit chain in Florida that closed in 2012, have been indicted on charges of conspiracy and theft of government funds, The Miami Herald reported. The alleged conspiracy involved recruiting students without high school diplomas, enrolling them, and coaching them on how to obtain federal student aid for which they were ineligible. According to the indictment, the college received more than $6 million in this way. Those indicted could not be reached for comment.

 

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Study Examines How Employers Judge Degrees

A study released Monday by the National Bureau of Economic Research suggests that the type of college one attends can have an impact on employment odds. The study used fictional résumés to measure the odds of getting a call-back for various jobs, enabling comparison of people with identical backgrounds except for the institutions they attended. Those with a bachelor's degree in business from a for-profit online institution were 22 percent less likely to receive a callback from a potential employer than those who had attended non-selective public institutions. The gap disappears, however, for for-profit institutions that have a physical campus and a strong local presence. An abstract of the study is available here.

 

 

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Corinthian Facing Another Federal Investigation

Corinthian Colleges said Friday that the U.S. Department of Justice is investigating whether the company defrauded the federal government.

The investigation, under the False Claims Act, concerns “allegations related to student attendance and grade record manipulation, graduate job placement rate inflation and non-Title IV funding source misrepresentations,” the company told investors. The disclosure comes as Corinthian is also facing three criminal probes by the Department of Justice. Federal prosecutors in California, Florida, and Georgia have all issued grand jury subpoenas to the company. Corinthian is also in search of sources of liquidity as it seeks to sell off and close its campuses as part of an agreement with the U.S. Department of Education. 

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