The Obama administration has been trying to implement new regulations governing the for-profit college industry — which makes the vast majority of its revenue from the taxpayer while leaving scores of students crippled with debt and bleak job prospects — but has run into staunch opposition in the House. House Education Committee Chairman John Kline (R-MN), after receiving substantial donations from the for-profit college industry, has pledged that the new regulations won’t come online.
The House actually used the spending bill that it passed last month to deny funding to the Education Department for implementing the new regulations. And now the House has some allies in the Senate, as Sen. Jim Risch (R-ID) — joined by Sens. Tom Coburn (R-OK), Jim DeMint (R-SC), Ron Johnson (R-WI), and Mike Lee (R-UT) — has introduced legislation blocking the new regulations. Here’s how Risch described his effort, which he’s calling the “Education for All Act“:
“The ‘gainful employment’ rules could deny hundreds of thousands of students access to the training and skills development they need to secure a job in today’s troubled economy. It would particularly have a negative impact on the health field where nearly half of all workers are educated at proprietary institutions,” said Risch. “It is simply irresponsible for the government to throw roadblocks in front of students and institutions at a time when job creation in America should be the administration’s number one priority.
For one thing, Risch is parroting the for-profit industry’s claims about the number of health care workers it trains, even though those claims don’t stand up to scrutiny. And as Julie Margetta Morgan noted this morning, gainful employment regulations — which would cause higher education programs to lose their access to public money if their graduates fail to meet a certain debt-to-income ratio or have high rates of student loan default — would not deny federal aid to students. They would, instead, ensure that taxpayers don’t continue to throw money at programs that leave students ill-served.
Currently, just 11 percent of higher education students in the country attend for-profit schools, yet they account for 26 percent of federal student loans and 44 percent of student loan defaults. The latest data shows that 25 percent of for-profit college students default on their student loans within three years. The schools often use misleading and intimidating tactics to recruit students, many of whom would be better served, both financially and with regard to job prospects, if they attended a community college.
At the same time, for-profits schools make up to 90 percent of their revenue from the federal government, through the Pell Grants, Stafford Loans, and other federal assistance used by their students. For instance, 91.5 percent of Kaplan University’s revenue comes from the government, along with 88 percent revenue at the University of Phoenix. Executives at the schools make huge salaries, with Strayer University’s CEO pulling in $41 million in 2009.
A former for-profit school chief, writing at Higher Ed Watch, admitted that the schools use “very questionable” practices, and explained why the sector “must change its ways.” But the for-profit industry has been intensely lobbying to preserve its taxpayer largesse, and Republicans in both chambers of Congress seem more than willing to play along.
For more information, read our resport, “For-Profits, Not Students.”