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For-profits say Obama administration data error undermines borrower defense and gainful employment

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For-profit-college advocates cite Obama administration data goof on loan repayment rates as justification for revisiting borrower-defense and gainful-employment rules.

Faculty Layoffs at University of Phoenix

About 170 full-time faculty members at the University of Phoenix are losing their jobs, Phoenix Business Journal reported. Some of those faculty members, however, may be hired back as part-timers. The layoffs follow enrollment declines. A university statement said that in 2013, the university converted many part-time positions to full-time slots, hoping to improve retention rates, but that studies have not found a difference in retention rates in courses taught by full-time or part-time faculty members.

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Cosmetology Group Sues Education Department

The American Association of Cosmetology Schools filed a lawsuit against the U.S. Department of Education Friday over its gainful employment rule. The organization, which represents about 750 institutions, is seeking relief from the regulations.

The organization argues that gainful employment undercounts cosmetology graduates' income because many self-employed workers rely on gratuities and are paid in cash. Many cosmetologists simply underreport their incomes, according to the organization.

"A provision that is supposed to protect our students, in fact, hurts them badly," said Adam Nelson, executive director of AACS, in a news release. "We are proud that our graduates, many of whom were the first in their families to attend any kind of post-high school education, are quite often joining the middle class, establishing themselves in new beauty businesses and raising families and supporting themselves at a very good income level over long-lasting careers."

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Wis. Governor Pushes to Eliminate For-Profit Oversight Board

Wisconsin Governor Scott Walker is once again calling for the elimination of the Educational Approval Board by next year, according to the Minneapolis Star Tribune.

Walker's budget unveiled Wednesday would eliminate the board that regulates the state's for-profit colleges and transfer its duties to the Department of Safety and Professional Services. The governor originally made the proposal four years ago, saying that eliminating the board would remove unnecessary financial and regulatory burdens on for-profit institutions. His opponents, however, find that the board plays an important role in the state's higher education system.

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Laureate becomes largest college to become a benefit corporation

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For-profit Laureate Education becomes a publicly held company and the first such company to adopt benefit status, signaling its intent to focus on mission as well as money.

Apollo Group Finalizes Sale for $1.14 Billion

As expected, a group of private investors have completed their $1.14 billion purchase of Apollo Education Group, the company announced Wednesday. The now-private Apollo, which had been publicly traded, owns the University of Phoenix. The U.S. Department of Education and Phoenix's regional accreditor, the Higher Learning Commission, previously signed off on the sale.

Tony Miller was an Education Department official during the Obama administration. He is the COO and a partner of the Vistria Group, one of Apollo's new owners, and now the chairman of Apollo's board.

"We believe we are uniquely positioned to enhance efforts by University of Phoenix and the other Apollo Education Group schools to improve student outcomes," Miller said in a written statement. "We are excited about that opportunity, and we look forward to sharing more about our vision for the future in the weeks and months ahead."

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200 Colleges to Appeal Gainful Employment Ratings

More than 200 colleges have given the U.S. Department of Education notice that they will appeal gainful employment ratings that found their programs to be failing or close to failing. The colleges filed a required notice of intent to appeal within 14 days of the release of ratings for 536 individual programs, according to data posted by the Office of Federal Student Aid Monday.

Institutions appearing on the list include Vatterott College, Kaplan University and Full Sail University.

Ratings released by the department last month showed that nearly a tenth of vocational programs evaluated -- mostly at for-profit institutions -- failed to meet new criteria measuring whether graduates were able to repay their student loan debt. That puts those programs at risk of being cut off from access to Title IV federal aid.

The gainful employment rule was heavily criticized by Republicans in Congress, and GOP leaders have listed it among a number of Obama administration regulations they plan to eliminate or scale back.

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Falwell Says He Will Lead Presidential Commission

Jerry Falwell Jr. announced Tuesday that he will lead a presidential task force on higher education, a Liberty University spokesman said, confirming news reports.

Falwell, Liberty's president and an early Trump supporter, said at the inauguration that he would work with the president in an "official capacity," with a focus on limiting micromanagement of colleges and accreditors by the U.S. Department of Education. The task force apparently will seek to address those issues, although Falwell said the details are still being determined.

President Trump is scheduled to meet with him Wednesday to discuss the task force, Falwell said.

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N.Y. Attorney General Settles Lawsuit With DeVry

New York Attorney General Eric Schneiderman's office announced a more than $2.25 million settlement with DeVry Education Group. 

The state sued the for-profit institution after an investigation revealed Devry lured students with ads that exaggerated graduates' success in finding employment at graduation and contained inadequately substantiated claims about graduates' salary success. As part of the settlement, DeVry has agreed to pay $2.25 million in consumer restitution and $500,000 in penalties, fees and costs. 

"DeVry used misleading claims to lure in students who were simply seeking a college degree, greatly exaggerating job and salary prospects for graduates," Schneiderman said, in a news release. "I'm pleased that this settlement provides much-desired restitution to students who were misled and requires DeVry to stop its false advertising." 

DeVry reached a similar settlement with the U.S. Federal Trade commission regarding advertising practices in December. 

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Food Drive for Students at For-Profit Law School

Many students at the Charlotte School of Law have been struggling financially, with some unable to buy enough food, since the U.S. Education Department in December stopped the flow of federal aid to the institution, The Charlotte Observer reported. As a result, some professors have organized a food drive for students. Student said that they need the help. “How can we be prepared for class when we can’t feed ourselves?” said Margaret Kocaj, one student. “How can we study when we have headaches because we can’t afford to eat? This is our reality now. There are no words.”

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