Potentially bumpy regulatory road ahead for Purdue-Kaplan deal

The proposed arrangement between the public research university and the adult-serving for-profit institution could reshape online learning and public higher education -- but regulatory hurdles await.

For-profit online enrollments falling

As reported in Inside Higher Ed, the National Student Clearinghouse Research Center found that college enrollments continue to decline, with most of the dip occurring among older undergraduates at for-profit institutions and community colleges. For-profit colleges were hit the hardest, with a 10.1 percent decline in the spring of 2017, following a dip of 9.3 percent last spring.

For-Profits' Suit Challenges Borrower-Defense Rules

A group of California for-profit colleges filed a lawsuit in federal court this week seeking to block the implementation of borrower-defense rules finalized last fall.

The regulations, which would go into effect July 1, expand on and clarify existing federal statute to spell out how borrowers who were the victims of fraud or misrepresentation by their institution can have their student loans discharged.

Many expected that GOP lawmakers would kill the Obama era rules using the Congressional Review Act. But Congress took no action and the Trump administration has yet to indicate what approach it will take toward implementation. Education Secretary Betsy DeVos told a House appropriations subcommittee Wednesday that the department would have "something further to say" on borrower defense in the next few weeks.

The for-profits' lawsuit, which names DeVos and the department as defendants, argues that the borrower-defense provision in federal statute was never intended to be used to make an affirmative case for debt relief by student borrowers.

The regulations, the suit argues, "turn a defense into a novel affirmative cause of action that will expose schools to massive liability."

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DeVos says Education Dept. will provide relief to students promised loan discharge

Education secretary finally responds, without detail, to Democratic lawmakers who sought answers on status of promised student loan discharge claims for defrauded borrowers.

Enrollments Continue to Slide at For-Profits and Community Colleges

National college enrollments have continued their multiyear decline, with most of the dip occurring among older undergraduates at for-profit institutions and community colleges.

The National Student Clearinghouse Research Center, which tracks 97 percent of students at federal aid-eligible institutions, found an overall national decline of 1.5 percent for this spring semester compared to a year ago. (Last year's decline was 1.3 percent.) That means 272,000 fewer students were enrolled, with 244,000 fewer over the age of 24. Undergraduate enrollments were down by roughly 300,000 students, the center found, with graduate and professional student enrollments up by 27,000.

For-profit colleges were hit the hardest, with a 10.1 percent decline, following a dip of 9.3 percent last year. The center found a drop of 2.5 percent at community colleges, which was slightly less than the 2.8 percent decline last year. Enrollments were largely flat at four-year public institutions (up 0.2 percent) and four-year private institutions (down 0.2 percent).

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Update Sought on Relief for Defrauded Students

Massachusetts Attorney General Maura Healey in a letter Friday sought a commitment from the Department of Education that it would follow through on providing debt relief for students who attended the now-defunct for-profit American Career Institute.

In January, just before the transition to the Trump administration, the department announced that all 4,500 student borrowers with outstanding loans from attending the Massachusetts-based for-profit chain would have their debt discharged. It was the first time the department had granted automatic relief to all students who attended an institution without requiring individual applications.

But in her letter to Acting Undersecretary of Education Jim Manning, Healey said her office has been contacted by hundreds of former ACI students in recent weeks regarding the status of their federal loans.

"These communications revealed that no ACI borrowers appear to have received a discharge of their federal loans pursuant to the borrower defense to repayment rule," Healey wrote.

She noted that previous informal attempts by her office to receive an update on the status of those loans from the department had gone unanswered. Healey sought from Manning an explicit statement affirming that the department would inform those borrowers' servicers of the status of their loans as well as a date by which those borrowers could expect resolution of the issue.

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Critics raise concern over Charlotte School of Law's continued operations

Former officials raise concerns over whether for-profit law school's response to loss of federal aid funds denies students options while protecting parent institution from liability.

Trump Casts Himself as Outsider in Liberty U Address

President Trump likened his outsider path to the presidency to the position of evangelical Christians in academe in his commencement address at Liberty University Saturday.

In his address, he played up Liberty's underdog story -- and his own. "Be unafraid to challenge entrenched interests and failed power structures -- does that sound familiar, by the way?" Trump told graduating Liberty seniors. "The more people tell you that it's not possible, that it can't be done, the more you should be absolutely determined to prove them wrong. Treat the word 'impossible' as nothing more than motivation."

The president took several minutes to discuss the Liberty football team's move to join Division I's top subdivision. He named several upcoming Liberty opponents -- among them, Army and Auburn University -- in an extended tangent.

Trump also used the speech to take several not-so-subtle swipes at the critics of his administration. "The fact is no one has ever achieved anything significant without a chorus of critics standing on the sidelines explaining why it can't be done," Trump said. "Nothing is easier or more pathetic than being a critic."

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Letter Urges DeVos to Set Conditions on EDMC Sale

Thirty student, consumer and veterans' groups called on Education Secretary Betsy DeVos Thursday to seek public comment and impose conditions on the sale of several Education Management Corporation properties to a Los Angeles nonprofit.

EDMC agreed in March to sell Argosy University, South University and the Art Institutes to Dream Center Education Holdings LLC. The Dream Center is a Christian missionary organization that says it will convert the for-profit colleges into nonprofit enterprises.

The sale requires approval from accreditors as well as the Department of Education. The groups wrote to DeVos saying her approval should be contingent on several conditions:

  • Whether the operations of the EDMC institutions are likely to avoid the predatory practices identified by federal prosecutors
  • Whether the structure of the colleges going forward will actually meet claims of nonprofit status
  • Whether taxpayers are protected against insolvency

"A transfer of ownership could, theoretically, shift the schools’ focus to become positive forces in their communities," the letter reads. "Inexplicably, however, the purchaser seems unaware of the need for change, declaring that 'the Dream Center will continue to operate these institutions as they have operated.' That is alarming and unacceptable."

The groups also argue that a change of ownership should only be approved on a provisional basis and with several conditions involving continued monitoring of the former EDMC entities.

It's the second time in recent weeks that DeVos has been challenged to exercise her authority to approve a major transaction involving a higher ed institution. Last month, a former Education Department official and the Illinois attorney general said DeVos should block a proposed purchase by Navient Corp. of the $3.7 billion federal student loan portfolio held by JP Morgan Chase & Co.

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Study finds former for-profit students go to two-year colleges

A new paper finds students don’t leave postsecondary education when the for-profit institution they attend is sanctioned by federal agencies. They move into the public sector.


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