For-profit colleges

For-Profit Seal of Approval

Smart Title: 
A trade group has created standards of conduct for the industry, and a foundation to enforce them. But will enough key players sign on?

For-Profits and the False Claims Act

Smart Title: 
Developments in two whistleblower lawsuits raise prospect that commercial colleges could face more U.S. pressure in the courts.

For-Profit Debate Redux

Smart Title: 
Senate roundtable features continued criticism of the sector -- and continued pushback against more regulation.

Stepping Out

Smart Title: 
With sector under continued attack, 20 for-profit colleges -- all regionally accredited -- seek to distinguish themselves with increased transparency.

Going After 'Gainful'

Smart Title: 

WASHINGTON -- Weeks after the U.S. Education Department issued softened regulations designed to ensure that vocational programs prepare graduates for "gainful employment," House Republicans made abundantly clear Friday that, in their view, the rules had not been eased nearly enough, and that they would continue to oppose them.

Targeting, or Serving, Needy Students?

Can we agree on this much?

That a large number of academically gifted and economically affluent students (or their parents) have become savvy consumers, getting their first two years of general education courses out of the way at low-cost community colleges rather than pricier state schools and liberal arts colleges?

That by doing so, these would-be competitive admissions students are taking up a large number of slots at community colleges that would otherwise be filled by less academically gifted or less economically affluent students?

That private nonprofit schools, meanwhile, are maintaining their competitive admissions edge by providing more merit-based tuition discounts rather than need-based tuition discounts? That by doing so, these schools become less and less of an option for those less fortunate?

And that, as the number of well-paying blue collar jobs shrinks in response to the changing nature of the economy, the American middle class must either contract, or the skills needed to gain and retain a well-paying job must somehow expand?

I hope we can find consensus around those points. Most people can at least agree on the connection between college education and well-paying jobs, and the need to up-skill the American workforce in order to defend a society in which the benefits of middle class living are widely shared and enjoyed. Most can also agree that higher education access is shrinking in response to a variety of external pressures, including state budget cuts to higher education and a more consumer-savvy insistence on tuition dollar value.

Now we reach the question where many people disagree. Do less well academically prepared, less affluent individuals deserve an opportunity to receive a higher education? And, if so, should they attend institutions best situated to respond to their particular academic, social and emotional needs, or should they be forced to accept whatever public school option may be available -- regardless of the institution’s track record in retaining and graduating students?

These are the questions at the heart of the current debate surrounding private sector colleges and universities (PSCUs). These institutions cost the student more to attend than a public school does, but, through generous subsidies, taxpayers pay the bulk of education costs at community colleges, not students. As a result, the absolute cost of postsecondary attendance is actually less at the private sector alternative. The Institute for Higher Education Policy recently issued a report about low-income adults in postsecondary education, noting -- as many in higher education have long been aware -- that a significant percentage of low income and minority students attend PSCUs and community colleges. From the perspective of our critics, PSCUs “target” these students while community colleges “serve” them.

Both types of institutions operate in what is largely an open admissions environment (although my own institution does not). Both serve the adult student, who is often financially independent. Both strive to provide students with an education that facilitates career-focused employment (although community colleges wear many other postsecondary hats as well). Both use advertising as well as word of mouth referrals to attract students. But many PSCU students have already attended a community college and opted out for various reasons, including the long waits to enter the most popular programs, large class sizes and inflexible schedules. These problems are all made worse by state budget cuts to higher education.

PSCU students do pay more out of their own pockets than do community college students, but PSCU students see the cost justified by what they receive in return. This value expresses itself in greater individual attention and support … in having confidence in academic skills restored where they may be flagging … in gaining new motivation to succeed and seeing that motivation reinforced through success itself ... and in making the connection between classroom learning and employable skills real and direct.

Two-year PSCU institutions graduate students at three times the rate of community colleges. Placement rates are the bottom line on career-focused education, however, and while community colleges offer lower-cost career programs without outcome metrics, PSCUs must match their career education offerings with real placement of students in relevant jobs. Again, PSCU students see this outcomes-based approach as a difference worth paying for.

In this broader context, the irony of PSCUs being accused of “targeting” students becomes clear. Apparently where some see targeting of low income and minority students unable to make informed decisions about their futures, we see tailoring of postsecondary education to suit a nontraditional student population -- and a better fit all around.

Author/s: 
Arthur Keiser
Author's email: 
newsroom@insidehighered.com

Arthur Keiser is chairman of the Association of Private Sector Colleges and Universities and chancellor of Keiser University.

A Better Way on Transfer of Credit

The higher education community has been engaged in a vigorous contest with policy makers (both in Congress and in the U.S. Department of Education) over whether universities should use accreditation status to determine decisions about whether to accept the academic credits of transferring students. Arrayed on the side of restrictive regulations are individuals in the U.S. Department of Education, select members of Congress, and the Career College Association, which represents proprietary schools -- all favoring new legislation and/or regulations prohibiting individual credit transfer decisions being determined “solely on the basis of accreditation.”

The institutions targeted by these proposed restrictions are those that deny credit transfer from postsecondary institutions accredited by entities other than the six recognized regional accreditors (e.g., Middle States Association of Colleges and Schools, Western Association of Schools and Colleges).

Opponents of the proposed legislation and regulations argue that the federal government should have no role in determining credit transfer decisions that historically -- and appropriately -- have been the responsibility of the faculty and, in some instances, states and their governing systems. The debate is fueled by heated monologues, anecdotal testimonials and campaign contributions.

At the core of this policy debate is the assumption that the type of accreditation held by the institution where a student was enrolled should not be the controlling influence on the decision to award credit by the receiving institution. I believe that assumption needs to be revisited.

It must be remembered that one of the reasons for the establishment of accreditation by geographical regions was precisely to provide assurance to accepting institutions that the credits earned at the “sending” institution were in fact “earned and comparable.” Within regions virtually all institutions offering academic coursework were known and a network of college officials worked together to make practical and usually fair transfer decisions.

The higher education world has changed dramatically in the past few decades. There has been a massive growth in student enrollments, with an increasing number transferring credits from several institutions. Whereas a quarter of a century ago a typical institution might have 200 credit transfer decisions in a given year, today that same institution, particularly if located where the population is growing, may have 2,000 such decisions. One Midwestern public university with over 12,000 students annually makes nearly 4,000 credit transfer decisions. The staff in admission and registrar offices have experienced only modest growth during this same period. As a result there are far fewer resources available to address credit transfer decisions.

This explosion in student numbers is but part of the problem. Equally problematic is the growth in the number of institutions offering higher education credits. The latest figures (2006) indicate there are 2,713 proprietary institutions eligible for federal Title IV Funds, most marketing themselves as “accredited” with their accrediting agency recognized by the United States Department of Education. Just over half of these are less than two-year institutions, many offering freshmen “equivalent” courses.

Federal student aid policies, particularly those grossly expanding “guaranteed student loan” programs, have significantly contributed to growth in the proprietary sector. Recent changes in educational benefit programs for active duty military personnel have likewise contributed to the creation of institutions seeking to serve military personnel. From 2000 to 2006 the number of proprietary institutions offering baccalaureate degrees increased over 50 percent, from 274 to 429. Our sympathies should flow to registrars and admission offices flooded with transfer requests and at times confronted with transcripts from distant institutions whose names are hardly recognizable.

I would argue the opposite of the position now being made by policy makers and their patrons: Accreditation status, especially that conferred by established regional accrediting groups, should be a key part of the decision-making process by which institutional officials make credit transfer decisions.

Where institutions not regionally accredited are known to registrars it makes eminently good sense that they would make credit decisions based on what they know: articulation agreements, the experience of earlier transfer students, and the Transfer Credit Practices database used by the American Association of Collegiate Registrars and Admissions Officers. But for distant, recently created and even suspect institutions not well known to registrars and admission officers, credit transfer decisions based solely on the absence of regional accreditation status are reasonable and justified. Institutional accreditation by the six regional associations remains the most thorough and reliable of all accrediting efforts. It is also a process historically resistant to political and financial influence.

Does such a position unfairly discriminate against proprietary institutions? Not necessarily. The most recent data available (2004) indicate that 165 of the then 375 four-year proprietary institutions (or 44 percent) had earned regional accreditation. In short, a large number of those proprietary institutions meet the same standards as do independent and public colleges and universities and for them credit transfer would be handled on comparable bases. The remaining proprietary institutions would better serve their students by likewise pursuing and achieving accreditation from one of the six regional accrediting entities, rather than marketing a narrow peer accrediting status (often called “national accreditation”) and seeking governmental intrusion in the accrediting process.

The public interest would be better served if policy makers, rather than berating credit transfer decisions or proposing “federalizing” transcript evaluations, would, instead, support the work of regional accrediting agencies. Moreover, policy makers should question complaining institutions about why they have not earned regional accreditation as have a significant proportion of their proprietary counterparts.

Author/s: 
Constantine W. Curris
Author's email: 
newsroom@insidehighered.com

Constantine W. Curris is president of the American Association of State Colleges and Universities.

Counterpoint: What About the Students?

Constantine Curris’s Inside Higher Ed essay about transfer of credit this week confirms in print what many of us in the national accreditation sector already know: that many institutions base their decisions on credit transfers arbitrarily on the accreditation status of the “sending” college, with complete disregard for the students’ capabilities or the course equivalency of the credits the student seeks to transfer.

What is particularly alarming about the article’s portrayal of the transfer of credit issue is its reliance on history, its almost exclusive emphasis on the burdens imposed on the registrars, and, most importantly, the article’s absolute disregard of the effect that current arbitrary transfer of credit decisions have on the millions of students who attempt to change institutions in order to complete or advance their educations. Should not this national debate focus first on the students and the national education policy goals of helping them complete their educations in the most timely and cost efficient manner, while also ensuring the quality of their educations? If so, then resolving the transfer crisis by prohibiting the arbitrary denial based solely on accreditation makes eminent sense.

While Curris acknowledges the increase in student mobility and in enrollments generally, he seems content to justify current transfer policies on the historical basis for such determinations and on a time in particular when accreditation by “region” served a specific purpose. However, the increasing number of “contemporary” students enrolled -- students who are older, sometimes employed, part-time, and mobile -- is undeniable, and federal education policy and institutions must adapt to and accommodate these students.

Indeed, this fact should not be viewed as a burden, but rather as a responsibility and benefit to this country’s citizens, their educational aspirations and achievements, and to the U.S. economy’s increasing need for continuous educational upgrades. Curris’s article, however, confirms the entrenched and fundamental unwillingness of many institutions to voluntarily adapt their policies and practices on transfer of credit.

Here are the facts: Denial of credits results in the denial of access, as well as in increased education costs when students are forced to pay twice for the same course. These obstacles to completing or improving academic credentials come at a cost not only to those individuals, but also to the taxpayers who often foot the bill for the repeated coursework, and to our economy in the form of the affected students’ delayed entry to our nation’s workforce.

Indeed, in a 2005 report prepared by the Government Accountability Office on the transfer of credit issue confirms the national agencies’ own experiences. The GAO found that “84 percent of postsecondary institutions had policies to consider the accreditation of the sending institution when assessing transfer credits.” An official at the Department of Education recently indicated that the single largest number of complaints the Office of Postsecondary Education receives are from students wondering why their credits were denied by receiving institutions.

Accreditation and the accrediting agencies should play an important role in facilitating, not denying, credit approvals as Curris suggests. All recognized accrediting agencies -- whether regional, national or specialized -- are subject to the same criteria and approval processes by the Department of Education. The Council on Higher Education Accreditation (CHEA) and other organizations, like the American Association of Collegiate Registrars and Admissions Officers, have jointly and formally adopted a policy confirming that institutions should evaluate credits for transfer without discriminating based on the sending institution’s accreditation.

And, yet, the credits of students who attend nationally accredited schools continue to be denied on the basis of accreditation. Curris says that this denial is not necessarily about discrimination against proprietary schools. He is right -- this debate is not about the proprietary institutions. It is about the students who choose to attend institutions that have met Title IV eligibility and are accredited by agencies that meet the same criteria for U.S. Department of Education approval as the regional accrediting agencies. Curris seems skeptical of the types of schools the national accrediting agencies accredit -- in fact, many of these schools and their students look very much like the two year programs and students found at regionally accredited community colleges.

Instead of making arbitrary transfer decisions based on accreditation, the focus by institutions in these decisions should instead be on the students and the quality of credits they received. Even if institutional resources are tight, receiving institutions should be examining the course equivalency of the sending institution and student competency; students deserve this level of basic attention to objective measures. There is no legislation or regulatory solution proposed that would deny or affect the very important autonomy of an institution to make an independent judgment on the merits of the transfer request. The legislation that had been proposed merely asked institutions to give a student’s record a fair review.

This is a national problem requiring a national solution. Articulation, policy statements and other private sector arrangements, while helpful, do little to ensure that students nationwide will be fairly and consistently treated when considering a transfer. To support legislation in this in this area would provide affirmation to students, institutions, and accreditors that Congress intends to support student achievement, mobility, and access to an affordable education, as a matter of national education policy.

That Curris, as the head of one of the country’s major associations of public colleges, would argue otherwise is dismaying.

Author/s: 
Elise Scanlon and Roger Williams
Author's email: 
info@insidehighered.com

Elise Scanlon is executive director of the Accrediting Commission of Career Schools & Colleges of Technology, and Roger Williams is executive director of the Accrediting Council for Continuing Education & Training.

Missing the Point

The for-profit college industry is taking fire from all directions because a substantial number of for-profit colleges offer aggressively marketed programs of little value in the job market, leaving individuals unable to repay their debts and saddling taxpayers with the default burden. Much of the bad press is deserved, but the atmosphere of scandal and abuse detracts from a larger point: We have failed to adequately connect college and careers. The current abuses are but the worst-case examples of this failure.

This failure has broader implications because a postsecondary credential has become the prerequisite for middle class earnings, but there are enormous discrepancies in earnings returns between different credentials. Sometimes, a particular certificate is worth more than a particular bachelor’s degree. For example, 27 percent of people with licenses and certificates earn more than the average bachelor’s degree recipient does. This information is not intuitive, but it is available, and prospective students should have access to it to understand what they’re getting.

Like it or not, postsecondary education is already almost entirely occupational. All certificates and occupational associate degrees are intended to have labor market value. Academic associate degrees have minimal return unless they lead to a bachelor’s. Only 3 percent of bachelor’s degrees are liberal arts, general studies, and humanities degrees -- the remaining 97 percent have an occupational focus. (Add in English, philosophy, religion, and cultural and ethnic studies and you're up to 8 percent.) Moreover, for most students, liberal arts degrees are preparation for graduate and professional degrees, virtually all of which are intended to prepare students for careers.

The current dust-up shouldn’t be about for-profit colleges being all bad, nor about public colleges being off the hook. Rather, we should attempt to use data to find out which colleges are performing for their students.

The current scandal has arisen because of bad information. Slick subway ads and glossy brochures will not suffice to provide potential students weighing their options with accurate career advice. There is a real alternative to late-night infomercials that promise undeliverable outcomes. In fact, the detailed elements of such a system already exist -- including unemployment insurance wage records, transcript and program data, job openings data, and detailed information on occupational competencies.

It’s just a matter of putting them together effectively -- some states have already built the rudiments of such systems -- and making the information publicly available and in online, user-friendly formats.

To build this data system, wage record data would have to be tied to transcript data. Wage record data, which is actual wages at the individual level as reported by an employer, has been around since the late 1930s and is used to verify eligibility for unemployment insurance. These records are held at the state level by employment services agencies, and are also given to the federal government every three months. Transcript data is not currently collected by any federal agency, but is available in varying degrees in all but five states. Eleven states have already linked their transcript and wage record data, and are able to track earnings returns to postsecondary programs. Only seven states can link transcript and wage record data for programs at proprietary schools. This system is still nascent, but has enormous potential to help students evaluate their options, as well as inform institutions in planning new programs and evaluating existing ones.

Building a user-friendly interface is the next step, if we wish for this information to be useful for consumers. Imagine being able, with a few clicks and keystrokes, to explore various careers, find out how many jobs are currently available in the field, how many there are likely to be over the next several years in your area, what education and training programs exist in your local area and online, what they cost, what financial aid is available, and what the average salaries are for graduates of each program. Such a system would empower individuals to choose careers that would truly benefit them, and encourage institutions to offer programs that would prepare them for the jobs that will actually exist.

Such an information system would not eliminate, but would reduce, the future need for intrusive federal oversight or expensive additional state-level regulation. Further, such information systems that connect postsecondary programs with labor markets represent a savings to the taxpayer, improving efficiency in matching programs to careers and curbing the enormous cost of student loan default.

Educators and others may worry that tying curriculums to careers may subjugate education to economics. We clearly need to aspire to a pragmatic balance between postsecondary education’s growing economic role and its traditional cultural and political independence from economic forces. While it is important that we not lose sight of the non-economic benefits of education, the economic role of postsecondary education -- especially in preparing American youth for work and helping adults stay abreast of economic change -- is also central to the educator’s broader mission to cultivate thoughtful individuals.

The inescapable reality is that ours is a society based on work. Those who are not equipped with the skills and credentials necessary to get, and keep, good jobs are denied full social inclusion and tend to drop out of the mainstream culture, polity, and economy. In the worst cases, they are drawn into alternative cultures, political movements, and economic activities that are a threat to mainstream American life.

The current abuses are a wake-up call -- they signal the disenfranchisement of students who are denied access to the middle class and full social inclusion because they lack information on what kind of education can get them there.

Author/s: 
Anthony P. Carnevale and Michelle Melton
Author's email: 
info@insidehighered.com

Anthony P. Carnevale is director of the Georgetown University Center on Education and the Economy, and Michelle Melton and Laura Meyer are research associates there.

Sweating Bullets at the GAO

The authors of the Government Accountability Office’s for-profit secret shopper investigation pulled off a statistically impressive feat in August. Let’s set aside for the moment that on Nov. 30, the government watchdog quietly revealed that its influential testimony on for-profit colleges was riddled with errors, with 16 of the 28 findings requiring revisions. More interesting is the fact that all 16 of the errors run in the same direction -- casting for-profits in the worst possible light. The odds of all 16 pointing in the same direction by chance? A cool 1 in 65,536.

Even the most fastidious make the occasional mistake. But the GAO, the $570 million-a- year organization responsible for ensuring that Congress gets clean audits, unbiased accounting, and avowedly objective policy analysis, is expected to adhere to a more scrupulous standard. This makes such a string of errors particularly disconcerting.

In fact, the GAO is constituted precisely to avoid such miscues. Its report-vetting process entails GAO employees who are not involved with the project conducting a sentence-by-sentence review of the draft report, checking the factual foundation for each claim against the appropriate primary source. While the research is compiled and proofed, legislators who requested the investigation may keep in routine contact with the GAO to stay apprised of the inquiry.

The GAO issues hundreds of reports a year, and by most accounts revisions of the kind released two weeks ago are almost unheard of. As a former GAO assistant director who worked at GAO for a decade on issues including higher education explained to us Wednesday, the organization’s rigorous review process leaves little or no room for error.

He said, “[It is] extremely rare for the GAO to issue corrected testimony or reports. In fact, in my 10 years that I was there, I never once saw that happen.” He went on to say, “It is stunning to me, given [the GAO] process, how this many errors could have happened. It raises a lot of questions as to the pressure the GAO was under. . . . They must be sweating bullets over at GAO.”

What kinds of mistakes are we talking about here? The corrections were generally changes in emphasis or wording that altered the complexion of the finding. For instance, the original report claimed that a financial aid officer purposely ignored an undercover applicant’s supposed $250,000 in savings when calculating eligibility for financial aid. What the report neglected to reveal was that the financial aid representative did so “upon request by applicant.” This does not necessarily exonerate the financial aid officer, but it does raise questions about the impetus for the inappropriate behavior.

In another instance, an applicant went from being informed that he or she “could take out the maximum in student loans” despite not actually needing that much (revised) to being told that he or she “should” (original) do so. And in a different scenario, a for-profit official supposedly told an applicant that massage therapists could earn up to $100 an hour -- when the review showed that the official actually said that the applicant could expect to earn up to $30 an hour, a figure that is below the Bureau of Labor Statistics’ estimate of $34 for therapists in California.

The list goes on and on. Each of the GAO’s 16 corrections indicates that the recorded evidence was presented in an inaccurate or incomplete fashion, in every case portraying for-profits in a negative light.

What happened? Our source speculated that the pressure of issuing the report in time for Sen. Tom Harkin’s Aug. 4 committee hearing and in time to support the issuance of the Department of Education “gainful employment” regulations led GAO investigators to be less careful than normal.

The problem is that the “we were in a hurry” defense doesn’t explain why the errors all point in the same direction — one that happens to reflect the policy preferences of the chairman of the Senate HELP committee and of administration appointees at the Department of Education. Lanny Davis, the veteran Clinton hand who has now taken to the barricades for the for-profit providers, told us Wednesday that he thinks there is an obvious distinction between “gross incompetence” and “setting out to deceive” — and that the original GAO report crosses the line. “Given that all 16 of the so-called mistakes portrayed career colleges in a negative light, I believe there is no sliver of possibility that this was not an intentional distortion of the truth by somebody with an agenda or somebody who was pushed into doing it,” Davis argued.

The issue goes beyond incompetence or politically motivated misinformation in a government report; the message of the GAO’s initial publication has been “baked in” to the Harkin hearings and the Department of Education’s rulemaking on gainful employment.

Our GAO source observed that the original report’s finding that all of the investigated providers were up to no good was “woven into the overarching narrative that there are a lot of bad actors out there that have to be dealt with.” Even though the GAO’s revisions were substantial enough to merit a public correction, the narrative has crystallized and been wielded by Harkin and Department officials to press the case for their agendas as recently as this week (see Harkin’s December 14 speech on the Senate floor). Even more troubling, despite finally acknowledging the litany of errors that permeate the report, GAO spokespeople have asserted that “nothing changed with the overall message of the report, and nothing changed with any of our findings."

The bigger question is whether we can be confident that the GAO has caught all of the errors or is being honest with the report’s critics. The former GAO official speculated that the recent corrections could be just the "tip of the iceberg in terms of the mistakes made in the report. It calls into question the entire report because it shows that there were not sufficient quality controls in place for whatever reason.” Complicating things is that the GAO is not subject to Freedom of Information Act Requests, which makes getting to the bottom of things just a bit difficult. (Of course, the Department of Education is subject to FOIA requests, and the advocates for the career college sector have filed suit to obtain the primary source materials.)

Regardless of how this gets sorted out, this affair has crippled efforts to talk honestly about problems that need to be addressed. It is hardly shocking that there are unscrupulous for-profit providers trafficking in misinformation and misusing federal student aid dollars. Every sector, public and private, faces such problems. And the practices of all providers that collect public funds deserve to be scrutinized and monitored. The government has every right to police how its student aid dollars are being spent.

But trampling public confidence in an esteemed federal watchdog helps no one — not the individual students that are being taken advantage of by fly-by-night providers, not the colleges that are acting in good faith, not the bureaucrats charged with regulating the sector, and not the taxpayers who wish to root out corruption in student lending.

Author/s: 
Frederick M. Hess and Andrew P. Kelly
Author's email: 
info@insidehighered.com

Frederick M. Hess and Andrew P. Kelly are director of education policy studies and a research fellow in education policy studies, respectively, at the American Enterprise Institute.

Pages

Subscribe to RSS - For-profit colleges
Back to Top