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For-Profit Schools Bus and Fly Students to D.C. to Oppose Regulations, Scrutiny of the Industry

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APSCU Chairman and Chancellor of Kaiser University, Art Keiser, speaks at for-profit college rally at the U.S. Capitol on September, 29, 2010.

CREDIT: Flickr / cliff1066

Representatives of for-profit colleges and universities brought students from their schools to Capitol Hill on Wednesday for what they called the first-ever "Career Day," a rally to oppose regulations proposed by the Department of Education. Although the rally’s focus was on how the regulations affect students, the proposals are aimed at requiring operational changes in the for-profit industry, which has recently been under scrutiny for its high default loan rates and relatively low employment rates among its graduates.

The rally featured speeches from members of congress, including Rep. Rob Andrews (D-N.J.), Rep. Glenn Thompson (R-Penn.), Rep. Brett Guthrie (R-Ky.), Rep. Alan Grayson (D-Fla.), Sen. Jim Risch (R-Ind.), and Rep. Alcee Hastings (D-Fla.). Students at the rally wore navy t-shirts that said, "My Education, My Job, My Choice" in white lettering. Many came wearing scrubs, standard gear for medical professionals, a sign that the rally was targeting students who pursue technical and particularly medical degrees.

"When I heard that they were trying to cut the funding for schools like this, I had to be here. It may not affect me, but it would affect someone like me who comes later on," said Anthony Owens, 45, who is pursuing a certification as a surgical technician at Medix School-West in Baltimore, Md. Owens was one of more than 1,000 students in attendance.

The funding cuts Owens refers to would be a removal of federal grants and federally backed loans for specific programs at schools that have too-high default rates, not stripping of funding from entire schools. Default rates at for-profit institutions, also known as career colleges or proprietary institutions, are at 11.6 percent. That’s nearly double those of non-profit schools, which come in at 6 percent for public schools and 4 percent for private schools.

The regulations would use a calculation of expected earnings-to-debt ratio and default rates to decide which programs will continue to receive federal funding. But industry advocates say the for-profit industry is heavily dependent on federally subsidized grants and loans because it services more low-income students than other non-profit schools do.

"I'm out here because if I didn't have the loans then I wouldn't be able to have my education to get better employment for my family," said Laura Grabenstein, 27, a single mother who also attends Medix in pursuit of a radiology certification. "Our teachers and the dean of the school passed out fliers and let us know the issue that was going on with the Title IV loans [the section of the law that provides Pell grants and subsidized loans] for proprietary schools."

The rally was sponsored by the Association of Private Sector Colleges and Universities (APSCU), formerly the Career Colleges Association, and is one of several industry-sponsored efforts to push back against the proposed regulations. Corinthian Colleges recently took out full-page ads in the Washington Post and other newspapers across the country to attack the proposed regulations. (The Washington Post Co. owns Kaplan College and an 8 percent share of Corinthian Colleges)

Many of the students said that the schools they attend had provided transportation, and in some cases, hotel accommodations to those attending the rally. Grabenstein said, “They brought us out here on a bus, provided lunch for us. They were very supportive of it. It was, you know, optional.”

Another student, Alex Blankenship, 20, a medical technician student at All-State Career School, said she wasn’t entirely clear on the proposed policy or its effects, but was supportive of the rally. “A couple weeks ago we wrote letters and they said we're going to be taking a bus trip. It wasn’t mandatory, but pretty much everyone's going from our school. I think pretty much everyone is for it,” she said. “They paid for the buses and they're providing us lunch. We didn't have to pay anything.”

While schools gave students transportation and accommodations for the rally, it appeared that they hadn’t clearly explained the regulations. When pressed for more information about what her school had told her about the regulations, Blankenship said, “I was never very good at understanding stuff like this, so I'm kind of in the dark. But I know that it's for a good cause. I know this is for a good cause.”

Admittedly, the proposed regulations are complicated. They only target specific programs at specific schools and have a complicated math of default-to-expected-earnings ratios. It’s much easier for schools to tell students that funding is getting cut and pay for them to attend rallies. What’s harder is explaining default rates, debt-to-expected earnings ratios, and complicated industry practices.

Harris Miller, the CEO and president of APSCU, began informally polling the crowd between speakers. He asked how many students were veterans, to which a handful raised their hands. Miller then asked how many students worked full-time, were first-generation college students, or were parents. At each of these questions, large chunks of the audience raised their hands and cheered. Miller said, "Today is about students and choice."

While industry advocates have done a good job of selling the new regulations as pulling funding from their schools as a whole, supporters of the regulations (of which Campus Progress’ advocacy arm is one) say that this is a misleading depiction of the proposed regulations.

“Any time that students from any sector of higher education get engaged in the legislative process it is a great day,” says Angela Peoples, policy and advocacy manager at Campus Progress. “However, I question the tactics that were used to draw these students to Washington, D.C. … While the call to ‘protect our education, or protect our choice’ may be clever messaging it does nothing to help those students who will leave these institutions with more debt than they could ever hope to pay off. It ignores the egregious policies and practices at these institutions that are designed to churn the biggest buck for the school’s executives at the expense of their students.”

A recent analysis conducted by Ben Miller (no relation to Harris Miller) at Education Sector, an independent think tank that focuses on education issues, shows that the proposed regulations would only affect a small percentage of proprietary programs. The new regulations would, he says, force for-profit institutions to lower their tuition. Such a side effect would likely make loans more affordable and less of a burden on low-income students.

In a statement put out by several groups—including Campus Progress, the American Federation of Teachers, The Institute for College Access & Success and its Project on Student Debt, Public Advocates, U.S. PIRG, and the United States Student Association—they noted it is programs and schools, not students, who will be regulated and, if they fall short, penalized.  

“Programs that do not meet the thresholds established in the proposed rule will lose [Higher Education Act] Title IV eligibility for future students, but students already enrolled in those programs will have the option to complete the program or move to a different program or institution,” the statement reads. “The rule has no impact on student eligibility for federal grants and loans; it only impacts which programs are eligible, thereby preventing rip-off programs from continuing to profit from federal aid at the expense of students and taxpayers.”

Students at the rally, on the other hand, believed they had a major stake in the outcome of the dispute. “We know that critics of our schools have tried to call this new student group ‘astroturf,’ an artificially created grassroots movement,” said Dawn Connor, president of the newly created Students for Academic Choice and a veterinarian technician student at Globe University, a for-profit institution in Eau Claire, Wisc. “But that is just not true. Look at all of us here. We are part of a grassroots movement, and we are proud of it.”

Kay Steiger is the editor of CampusProgress.org.

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