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House GOP plans to introduce bill that embraces deregulation of higher education

The for-profit industry has already benefitted from the policies of the Trump administration.

Students embrace as they arrive for the Rutgers graduation ceremonies  CREDIT: AP/Mel Evans
Students embrace as they arrive for the Rutgers graduation ceremonies CREDIT: AP/Mel Evans

House Republicans plan to introduce a bill that would make broad changes to policies that affect higher education and student debt, according to a Wall Street Journal report.

These policies, which would be part of the Higher Education Act, last reauthorized in 2008, would get rid of student loan forgiveness programs for public service employees, place caps on borrowing for graduate students, and provide more funding to community colleges for apprenticeships and partnerships with businesses.

If this wasn’t enough cause for concern, the new bill also “eases restrictions on paying student recruiters” and “touches on regulations that online programs view as burdensome,” according to the Journal. The Higher Education Act currently prohibits incentive compensation to employees for success in securing student enrollments, a common for-profit college industry tactic. The department clarified in 2015 that it does not include a ban on compensation for recruiters based on graduation or completion of education programs.

The proposed bill also reportedly refers to freedom of speech on campus, sexual assault, and changes in funding for historically black colleges and universities.

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Rep. Virginia Foxx (R-NC), who is chairwoman of the House Committee on Education and the Workforce, told the Journal, “We have a shortage of 6 million skilled workers. What we want to do is help colleges provide students with the skills they need to succeed in the workplace.”

Republicans often claim that traditional four-year colleges aren’t offering students practical skills to prepare them for the workforce and say that for-profit schools offer better paths. But for-profit colleges have often left students woefully unprepared for their intended careers and have misrepresented their graduates’ success. For example, one 2011 graduate of a Corinthian Colleges school was classified as finding a job in her chosen field of accounting when in reality, that classification was based on a food service job she held at Taco Bell beginning in 2006.

And some economists say that the argument that employers aren’t hiring because they can’t find skilled workers is mostly a myth. Andrew Weaver, University of Illinois expert in labor economics and workforce policy, conducted nationally representative skill surveys regarding a number of technical occupations, and found that persistent hiring problems were less widespread than politicians and employers claim. Weaver also found that skill requirements most consistently associated with hiring difficulties were not a lack of STEM skills but higher-level reading for manufacturing and higher-level writing or help-desk technicians.

House Republicans’ proposed changes neatly align with the priorities of Education Secretary Betsy DeVos. DeVos has repeatedly pushed the message that there is a “path for a successful life” that does not include a four-year degree and that skills-training programs have been “stigmatized.” Although it is true that vocational training and associate’s degrees have been characterized as dead ends, often unfairly, the question is whether DeVos is interested in making sure that disadvantaged students have a full range of options that they can realistically take, rather than pushing them into the only one they can afford. Thus far, the U.S. Department of Education under DeVos has not made it easier for students to make payments on their loans or to receive loan forgiveness after they have been defrauded by for-profit colleges.

Andrew Nichols, director of higher education research and data analytics at the Education Trust, told Inside Higher Education, “My main question to Secretary DeVos would be what are they doing to make sure apprenticeships or career tech programs aren’t options that disproportionately appeal to low-income black and Latino students just because they’ve been systematically disadvantaged in various aspects of society?”

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Colleen Campbell, associate director for postsecondary education at the Center for American Progress, said that some of the certificate programs many Republicans are so fond of are not necessarily effective. (Disclosure: ThinkProgress is an editorially independent site housed at the Center for American Progress.)

“It’s a question of how we encourage adults who do not have postsecondary education and are seeking to  improve either financial circumstances or enter a new field because their job is quickly being phased out,” Campbell said, “The challenge with a lot of these certificate programs is that we don’t have a lot of evidence that they are effective in educating students that enroll in them and bringing them into a field or changing their financial circumstances.”

Campbell added that apprenticeships that let community colleges partner with local businesses can be beneficial, but she is concerned that if they are broadly expanded without accountability, the programs could be so specific that they don’t help students in the long run.

“My concern is that when a local employer has very specific needs and they work with college or are given some kind of funding for a program and they basically make that program so narrow that it trains students for specific jobs in that business,” Campbell said. “What happens if that business relocates or shuts down or locks that student into that position with the inability to progress their career and have more experience and skills?”

Campbell says it’s hard to predict what the result would be of capping loans for graduate students, because it’s hard to say how graduate schools would respond. However, it could discourage debt-averse students from enrolling in graduate school, which would possibly increase education disparities or lead students to turn to private loans, which would leave them in a worse financial situation than if they took out federal loans.

House Republicans have already proposed tax policies that would eliminate the $2,500 tax deduction for student-loan interest, the $2,000 Lifetime Learning Credit, and treat as taxable income the tuition that colleges and universities currently waive for graduate students who work as teacher or research assistants.

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The for-profit college industry has benefited richly from DeVos’ policies this year. In October, the department delayed regulations that simplified the claims process for borrower defense to repayment. In June, DeVos announced a delay of key provisions of the Obama administration’s gainful employment rule, which was intended to protect students from being scammed into programs that did not result in employment in their intended career. In April, DeVos reversed Obama-era guidance that held student loan servicers accountable for improper or abusive customer service to student loan borrowers.

“They are addressing financing and student protections at every level,” Campbell said. “They’re rolling back gainful employment regulations … so hitting them at debt and income level and then at the front end, people are allowed to earn money for enrollment of students and are hurt at the front end. They’re potentially deceived into enrolling in an institution based on false promises or put into high pressure situations.”

The administration has also hired for-profit college executives, such as Julian Schmoke, a former DeVry University administrator as the head of the department’s student-aid enforcement unit. This means Schmoke will be able to look at allegations of fraud by colleges and universities, including for-profit colleges. DeVry has been accused of fraud, including distorting data it provides to the federal government, but it made settlements with the New York attorney general and Federal Trade Commission. Anthony Campau, who formerly worked at for-profit chain Strayer Education as associate general counsel, now works as chief of staff to the director of Office of Management and Budget division. Robert S. Eitel, who works as a chief compliance officer for Bridgepoint Education Inc., which was the subject of a number of government investigations, began working as senior counselor to DeVos this year. According to ethics experts interviewed by The New York Times, Eitel’s position could violate federal rules on impartiality and conflicts of interest. In August, Sen. Elizabeth Warren (D-MA) questioned whether Eitel helped Bridgepoint by pushing for a delay in a gainful employment rule provision.

Steve Gunderson, the president and CEO of Career Education Colleges and Universities, the for-profit college’s lobbying association, told Politico in August that the Trump administration represented “a very positive change for us” and dramatically improved over what we had.”