Monday, March 21, 2011

House Holds Hearing on For Profit College Regulations

Arnold Mitchem listening to opening statements
Throughout my time as an organizer, one of the issues that I focused on was ensuring that low-income students have access to a high quality education. That is why I like how some for-profit colleges are able to work with both local employers and students to provide people with the skills they need to enter the 21st Century job market. The problem is that despite some positive aspects of for-profit schools, many of these schools only graduate an extremely small number of students. This means that many low income students are left with a mountain of debt and no degree to help earn them a well paying job. As a result, the Higher Education Act says that for-profit colleges must have programs that “prepare students for gainful employment in a recognized occupation” in order to participate in federal student aid programs.

While these programs aren’t public institutions, Rep. George Miller pointed out that “in some cases, these in 90 percent of their revenue from federal student loans.” This is also especially important when you consider some of the other facts that Miller pointed out. Students graduate at a much lower rate from for-profit schools, for instance, and they account for a disproportionate number of students receiving pell grants and defaulting on their federal loans.
In fact, only 22 percent of students graduated from for-profit colleges, compared with 65 percent at private colleges or 55 percent at public universities.

A recent report from Ed Trust showed that 24 percent of all Pell Grant recipients are at for-profit colleges even though they only represent 12 percent of total college enrollment. This number has nearly doubled from 10 years ago. The report also shows that for-profit colleges account for 43 percent of all federal student loan defaults.
Since these numbers have been rapidly growing in recent years, the Obama Administration wants to define what “gainful employment” means. The Senate has already been looking at how to properly regulate the for-profit college industry and the House Committee on Education and the Workforce joined in the process on Thursday. While the specific purpose of the hearing was to look at the “gainful employment” regulation, the hearing did take a broad look at the industry at large.

One of the people who testified at the hearing was Arnold Mitchem, who is the president of the Council for Opportunity in Education. His testimony is important because many of the students who attend for-profit colleges are low-income students who are oftentimes the first in their families to go to college. While it’s good that these students are attempting to obtain a higher education, Rep. Miller had already pointed out that a large portion don’t graduate and are left with a large amount of debt. Mitchem pointed out that the problems don’t stop there. Students who start at for-profit colleges often have trouble transferring credits, which can often hinder their aspirations to receive a high quality education. To help illustrate this point, Mitchem highlighted the story of a Iraq war veteran.
This individual completed 54 of a 60 credit associate’s degree program at a for-profit “college” before being deployed to Iraq. When he returned home and attempted to enroll in a university, he found that none of these credits were transferable, though he had been assured that they would be. Often TRIO-eligible students begin their postsecondary careers at for-profit institutions, assuming that it is a building block in their long-term educational plans. But, too often, their enrollment at these institutions hinders those plans.
This story is important because it not only illustrates how for-profit colleges can hinder a student’s ability to receive a degree, but also highlights how many of these schools use deceptive tactics when trying to recruit students. This is especially the case with these low income students who aren’t familiar with the college system and wouldn’t even know they should be concerned about whether credits are transferable. What makes the situation worse is that frequently these for-profit colleges use advanced marketing techniques that are specifically designed to target these students. Furthermore, many students don’t realize that their first interactions with a for-profit college aren’t necessarily with a college counselor, but with a sales representative. This means that people who don’t know a whole lot of the college system are interacting with people who are more focused on a sales quota rather than what’s in the best interest of the student. The student therefore might not realize that attending a for-profit college isn’t his or her best option.

Mitchem addressed the misinformation that is out there during his testimony. Many proponents of for-profit colleges claim that they are the best institutions for providing access for low income and minority students. The Republicans even had one person testify about how she relied on for-profit colleges to advance her education. While there are success stories like the one of Catherine Barreto, Mitchem pointed out that experts in higher education have said “it’s rare that they found for-profit programs to be the best fit for the students they counseled” because there are public programs available that wouldn’t require students to have such a high amount of debt. There are also many public schools that actively looking for ways to provide access for low income students, but many “students are simply unaware of the entire range of educational opportunities available to them.” When there are sales representatives trying to hit their sales targets by providing glossy marketing material to unexpecting students, it therefore shouldn’t be surprising that many students decide on for-profit colleges before knowing about all their options.

With all these concerns about for-profit colleges, action needs to be taken in order to ensure that students truly are receiving the best education possible. As Rep. Donald Payne (D-NJ) pointed out, this isn’t about limiting access to for-profit colleges but is about making sure that students have all the information they need to make a good decision about their education. Although the for-profit college industry has come out in opposition to the administration’s decision to define what “gainful employment” means, the hearings that have taken place on the Hill has made it clear that something needs to be done in order to protect students. With so much federal money going towards helping students attend for-profit colleges, anyone concerned about the budget should want some better regulations of the industry in place to help ensure our tax dollars are spent wisely.

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