Change in Direction for Career Colleges

In new leader, lobbying group for for-profit institutions likely to choose someone who can work well with nonprofit sector.
January 16, 2007

In times of transition, when organizations change leaders, it’s not uncommon for them to shift course radically. An institution that has experienced a period of turbulence, say, may turn to a calming force (which is why Harvard might be expected to choose a fence mender rather than another combative force to succeed Larry Summers). And a college or university that has focused for a time on burnishing its image and expanding its endowment, more often than not, might turn to a big-time scholar (think Steven Knapp of Johns Hopkins replacing the empire-building Stephen Joel Trachtenberg as president of George Washington University).

The Career College Association, the main trade and lobbying group for for-profit colleges, is at such a crossroads. In October, the association announced the resignation of its president of seven years, Nicholas Glakas, after a period in which the association forcefully, if not ferociously, promoted the for-profit sector's national visibility and its agenda among lawmakers and government officials in Washington.

Leaders inside and outside the career college world tend to agree that Glakas and CCA generally succeeded in that quest, and that the visibility and the political might of the for-profit sector have grown enormously.

But most also believe that those gains, particularly in the CCA's aggressive pursuit of favorable policies for for-profit colleges in the renewal of the Higher Education Act, has come at a not-insignificant price: increased fraying of the sector’s ties to the rest of higher education, where many officials already viewed for-profit colleges with suspicion if not loathing.

"They’ve planted the flag really, really solidly, in a way that says, 'We’re here to stay, we provide a valuable service, and you’d better understand that,' " says Michael B. Goldstein, a leading higher education lawyer who moves comfortably between the for-profit and nonprofit sectors. "But the reality is that when you firmly plant the flag, you sometimes put it through other people's feet."

Whether the Glakas-led CCA pushed too hard in pursuing its goals is a matter of debate among officials within the for-profit sector and outside it; also unclear is whether Glakas left of his own accord or got a gentle push out. Glakas declined to be interviewed for this article.

But there is widespread agreement that in the search for the group’s next president, who could be chosen by month's end, the Career College Association should look, and is looking, for someone who is respected by traditional colleges and can work more collaboratively than combatively, particularly at a time of national political change in which the Republican Party, which has been seen as particularly friendly to the for-profit sector, is no longer in control of Congress.

“It’s fair to say that being a consensus builder is important,” says William Clohan, a CCA board member who is leading the committee searching for a new president. “That doesn’t mean that they’re not going to be an aggressive and strong advocate” for our colleges. “But you can disagree without being disagreeable, and one of the characteristics we’re looking for is someone who can reach and can bridge and can try to put together partnerships to reach consensus.”

Growth and Conflict

Although one might read implicit criticism of Glakas into that statement, neither Clohan, founder and chairman of U.S. Education Corp., nor Jim Tolbert, the chairman of the CCA’s board, have anything but praise for Glakas.

This has been a time of explosive growth for the for-profit sector of higher education, in enrollments but perhaps even more so in terms of its visibility and perceived power. The University of Phoenix, with 200,000 students enrolled both at scores of campus centers and online, has grown into the largest university in the United States, and its growth and that of other higher education companies has created an aura of momentum for the industry, and for CCA.

Clohan and Tolbert cite Glakas's achievements in building the association’s foundation and membership and in solidifying the extent to which CCA represents the entire for-profit sector, a difficult task given that it includes publicly traded behemoths like Phoenix and Career Education Corp. as well as mom-and-pop beauty and trucking schools).

“Nick did an absolutely phenomenal job of leading the organization through a period of rapid growth,” Tolbert says.

They also credit Glakas, a lawyer, former lobbyist for ITT Corp., and one-time Senate aide, for helping to shape and pursue a forceful agenda for career colleges in Congress’s review of the Higher Education Act over the last two years. As Republican leaders in the House and Senate framed their bills to renew the law that governs most federal student aid and other college programs, the interests of for-profit institutions – expanded access to federal programs, eased regulation of online and for-profit programs -- were front and center.

“We were very pleased with how the Higher Education Act got drafted,” says Tolbert. “We were pushing like heck” for the things for-profit colleges wanted.

And they got most of them, in one form or another, in the bills that the House and Senate drafted. But the provisions that the for-profit sector pushed -- particularly one that would have enabled commercial institutions to tap into a wider range of federal programs, by eliminating a legislative definition that currently treats for-profit differently from nonprofit colleges -- were enormously controversial with nonprofit colleges, and widened a rift between the Career College Association and the groups that represent traditional higher education in Washington.

In one particularly significant development, the Career College Association withdrew as a member of the American Council on Education, the umbrella group for other higher education associations. The career college group had in recent years been included in some but not all of the weekly and monthly meetings that the council holds for leaders of Washington higher education associations at its One Dupont Circle headquarters, and Glakas reportedly pushed for the right for his group to participate in more of them. Because the interests of for-profit and nonprofit institutions sometimes clash – with strategy over the Higher Education Act renewal as a prime example – ACE officials demurred. So CCA quit.

That breach was a mistake, one that may ultimately have hurt the Career College Association itself, argues Richard T. Jerue, the former vice president for government relation for Education Management Corp., a prominent CCA member. With relations between for-profit and nonprofit lobbyists chilly during consideration of the Higher Education Act, Jerue says, deliberations over proposed changes to the law tended toward conflict rather than compromise. And in the end, Jerue argues, the inability of for-profit and nonprofit colleges to find middle ground played a role in Congress’s failure to pass the law.

“One of many reasons reauthorization did not occur was because of the contention and disunity in the higher education community,” says Jerue, president of the new Art Institute of Charleston. “To me, CCA could have defused an awful lot of contentious issues if it had been at the table with the folks from One Dupont Circle when a lot of these issues were being discussed. Because you’re not there, they think you’re a three-headed monster.”

The failure of the Republican-led 109th Congress to pass the Higher Education Act means that the legislation is now in the hands of a 110th Congress that is led by Democrats who, on balance, are less friendly to the for-profit sector. That political shift is one of several changes -- including a general slowing of growth in the for-profit sector and a series of state and federal investigations into business and admissions practices by leading for-profit higher education companies in the past year and a half -- that have created a new, and arguably more challenging, political climate for the Career College Association.

That makes it a logical time for a new leader, says Tolbert of the CCA. “It’s just a different environment, so it’s time for new direction.”

He and Clohan are noncommittal about who the association might be looking at, but some of the traits they say they're looking for offer some clues about the general direction. The person won't necessarily come from higher education, but is likely to be Washington-based, comfortable in the capital city's political environment, and able to "work across the aisle," with the Democrats who control Congress as well as the Republican-led Bush administration, says Clohan.

The ability to work collaboratively applies not just to the political parties in Washington but to the rest of higher education, CCA officials say, and other observers agree. While the new career college president must, of course, "have a knowledge of and an appreciation for what private, for-profit higher education does and what it means to the economy," Clohan says, it is also essential, he and others believe, that the new president be respected in and comfortable working with the nonprofit sector.

"I think they need somebody who can be a much more conciliatory figure, someone who has the ability to reach out to the traditional sector and form some alliances," says Jerue, of Education Management. He is not alone in noting that the Career College Association moved in this direction once before, when it hired, as Glakas's predecessor, Omer Waddles, who had earned the respect of traditional college officials as a top aide to Congressional committee and in the U.S. Education Department.

Goldstein, the higher education lawyer, argues that the career colleges need more than before to work with rather than against the rest of higher education, because of the turnover in Congress. "In the last few years, there was the opportunity for the career schools to break away and take control of the political dynamic" because their Republican friends were in charge, he says.

But it is not only in the for-profit sector's interests to seek a better working relationship with nonprofit colleges and universities, Goldstein says.

"From a political perspective, yes, CCA needs the common support on issues that are important, but so do the traditional schools," he argues. "They took a beating in the last Congress, and the Spellings Commission is not exactly warm and fuzzy about where higher education is generally. There are some common enemies now -- lack of resources for students, pressure to really turn higher education into a consumer-driven industry.

"For a while, the traditional organizations and CCA worked together pretty well. It'd be nice to see them get back to that."


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