Tangling Over Accountability

At the annual conference of private college group, presidents accuse Congress and the administration of imposing too few regulations on for-profit colleges and too many on everyone else.

February 5, 2013

WASHINGTON -- Private college presidents head to Capitol Hill today to make the case for private higher education, hoping to maintain funding for federal student aid programs while slowing down what they see as an encroaching tide of new federal regulations.

If a question-and-answer session Monday at the National Association of Independent Colleges and Universities’ annual conference is any guide, they’ll find plenty to disagree on with lawmakers from both parties.

In recent years, discussions on federal regulations at higher education conferences have grown testy, as college presidents criticize Congress and the Obama administration for both new regulations and rhetoric that seems to indicate more are on the horizon. Monday’s discussion was no different, as presidents tangled with Congressional and Education Department staff over for-profit colleges, regulation, consumer disclosures and the return on investment of a college degree.

After a panel discussion that demonstrated again how little agreement there is between the two parties as the reauthorization of the Higher Education Act looms on the horizon -- with Democrats generally favoring more regulation, on both for-profit and nonprofit colleges, while Republicans oppose it -- the question-and-answer session brought out plenty of complaints about Congress and the administration.

College presidents praised the Obama administration’s commitment to federal financial aid programs, particularly the Pell Grant, which has survived several rounds of federal budget-cutting with the maximum grant intact. (Eligibility changes have shrunk the ranks of grant recipients, but those changes have hit hardest at community colleges, not the four-year private nonprofit colleges that make up the association.) But they criticized the administration and Congress for increasingly describing higher education as a consumer good, with students as consumers who should be picking colleges based on statistics, such as the average salary after graduation.

So remarks from Democratic staffers on efforts like the financial aid “shopping sheet” -- a one-page summary intended to make financial aid offers easier to compare, but criticized by colleges as too “one-size-fits-all” -- drew some grumbling. Some of the sharpest exchanges, though, were with Republican staffers about for-profit colleges.

Panelists cited growing student debt and defaults as a reason for increased regulation, and some in the audience argued that private nonprofit colleges were not the source of the problem. One questioner said there was frustration that the Obama administration had done too little to regulate for-profit colleges (despite the “gainful employment” rule, meant to deny student aid to vocational programs with high default rates, an approach that some at the meeting also fear will eventually spread to other degree programs and to public and private nonprofit colleges, beyond the purely vocational programs targeted so far).

“If you look at where the defaults are, the significant numbers of students accumulating debt and not graduating -- they’re not in this sector, and they’re not in the public sector,” said Todd Jones, president of the Association of Independent Colleges and Universities of Ohio, in a comment that drew applause from other audience members. “They’re overwhelmingly in the for-profit sector.”

“We’re supportive of the for-profit sector,” said Brian Melnyk, a Republican staffer for the House Committee on Education and the Workforce, in response to Jones’s comment. There are some “bad actors” among for-profits, he said, but bad actors can be found in every sector of higher education.

As Melnyk spoke, several audience members shouted at him to name some of those bad actors among the private nonprofits, which he declined to do.

While Melnyk said he wasn’t in favor of additional regulations (for either nonprofit or for-profit colleges), he and other panelists agreed that the next reauthorization of the Higher Education Act would probably focus more on student outcomes.

“The return on investment doesn’t have to be purely earnings” or rely strictly on any other metric alone, said Ajita Talwalker, special assistant to the under secretary at the U.S. Education Department. “But for those students for whom that angle did not play out, we’re seeing some very high stakes.”

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Libby A. Nelson

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