Different Interests, Same Argument

For-profit and 2-year colleges join to oppose Pataki plan to fight abuses by limiting access to state financial aid.
February 9, 2006

Though their motives and interests do not fully align, community college officials, for-profit colleges and New York legislators are coalescing in opposition to a plan by Gov. George F. Pataki to fight perceived abuses by commercial institutions by restricting access for some low-income students to the state’s need-based financial aid program.

On Wednesday, Democratic leaders in the New York Assembly put forward their higher education plan that rejects Pataki’s proposed reductions to the Tuition Assistance Program. Last month, when the Republican governor released his 2007 budget proposal, he unveiled a plan to cut the need-based aid program by $119.4 million. Some of the savings would come from requiring institutions to “pre-finance” awards for first-time applicants who are admitted to postsecondary institutions without having a high school diploma, including those who have achieved a passing score on “ability to benefit” tests. The pre-financing costs would have to be paid, without reimbursement by the state, until students completed 24 credit hours or the equivalent.  

New York officials said the changes were largely designed in response to a set of recent controversies in which for-profit institutions in the state have been accused of fraudulently enrolling students to capture federal and state financial aid funds. But now for-profit institutions, which received $159.6 million in TAP assistance in 2004-5, are fighting back, and they are joined by advocates for low-income students who argue that the governor has chosen an ill-advised way to fight for-profit abuses.

The commercial college that was said to be most on Pataki’s mind when drafting his proposal, the Interboro Institute, came out swinging this week, not only to decry the governor's budget proposal, but to clear the institution’s name.

“The charges of fraud and cheating at Interboro, as a rationale for withholding grants for non-high school graduates seeking higher education, are an outrage,” John J. McGrath, chief executive officer at Interboro, wrote in a letter to Inside Higher Ed this week. “Intended or not, the governor’s proposed budget discriminates against the poor. Isn’t it smarter to invest in higher education for minorities, affording them the opportunity to break the cycle of poverty and to become productive contributors to the economy?”

McGraff noted that a month-long review of admissions practices at Interboro by an independent law firm confirmed “irregularities” but concluded that they were not “systemic.” The investigation revealed that one test administrator helped seven academically unqualified students gain admission to Interboro. Under TAP, the college was reimbursed up to $5,000 per school year for these students. In addition, investigators found it likely that a financial aid representative at Interboro’s Yonkers site participated in an improper or inappropriate discussion with what he believed to be a prospective student. Interboro fired both employees, McGraff said.

Regarding the success rates of Interboro students -- another reason that sources have said could have been behind Pataki’s TAP crackdown -- McGraff said that the three-year graduation rates of the institution’s students, approximately 90 percent of whom are members of minority groups, is better than the New York State Education Department’s published statistics for those students who entered two-year college programs in the fall of 2001.

“The governor’s proposal to withhold TAP grants from non-high school graduates until they have completed 24 college credits seems based on the questionable thesis that those without a high school diploma (most of whom in New York City are minorities), have lower graduation rates than minorities with a high school diploma,” said McGraff. “Interboro’s graduation rates over three years are in fact higher than the average minority graduation rates at associate degree colleges throughout New York State. Indeed, Interboro’s graduation rates are higher than the average minority graduation rate at associate degree colleges throughout the nation.”

Community colleges have their own concerns about the governor’s proposed changes in the Tuition Assistance Program. Several community college educators have said that Pataki’s desire to redefine full-time study to be 15 credits per semester (up from the current 12 credits) for receipt of a full award would make it especially difficult for a student who is holding down a full-time job or raising a family to receive full TAP assistance, which now amounts to $5,000 per school year.

“If the requirement were to move to 15 credit hours, I could see many students at my school facing access barriers due to a lack of finances,” said Andrew J. Matonak, president of Hudson Valley Community College. “They’d be working the same amount of time, but having to take more classes to receive desperately needed money. I think this financial aid barrier would ultimately harm them academically.”

That argument makes sense to Sheldon Silver, speaker of the New York Assembly. “I’m sure that everyone in this room knows someone who is holding down a full-time job, who needs to go back to school in order to move up the career ladder, and who cannot afford the tuition,” he said at a news conference Wednesday where he critiqued Pataki’s proposal. “We propose to provide them with the tuition assistance they need to upgrade their knowledge and their skills.”

Silver also said that the Assembly’s proposal would provide increased TAP support to part-time students at the State and City Universities of New York. Currently, part-time students at these institutions must have already earned 24 degree credits and have at least a 2.0 GPA.

Matonak said he was dismayed that Pataki would try to cut TAP assistance in response to possible abuses at for-profit institutions. “If there is a concern regarding any sector of the education community, then focus on that sector,” he said. “But Pataki’s plan would impact students in all of higher education.”

Still, among those who hope that Pataki will change his mind during a 30-day amendment period, which ends later this month, there is some reluctance to rely on Interboro officials to argue this case, for fear that they may be perceived as having their own interests in mind.  

“Yes, right now they are kind of seen as a bad apple,” said Miriam Kramer, director of the New York Public Interest Research Group. “But whatever issues of fraud that may exist or have existed [at Interboro] should be taken care of without harming poor students in the process.”

In announcing their opposition to Pataki’s TAP plans, the Assembly offered up several other critiques, including:

  • Rejecting the governor’s proposed tuition hikes at CUNY and SUNY.
  • Providing an additional $131 million for SUNY and CUNY operating aid.
  • Increasing funding for the state’s community colleges.
  • Increasing funding for full-time faculty at SUNY and CUNY.


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