State of the Education Union

Education and accreditation leaders were not shocked when, in his State of the Union address, President Obama said this about higher education: “Taxpayers cannot continue to subsidize higher and higher and higher costs of higher education. Colleges must do their part to keep their costs down, and it’s our job to make sure they do.” This is a theme we have been hearing repeatedly from the Administration.

But the “supplemental document,” released after the speech, did contain a very big surprise for the accreditation community. In that document the White House said: “The President will call on Congress to consider value, affordability, and student outcomes in making determinations about which colleges and universities receive access to federal student aid, either by incorporating measures of value and affordability into the existing accreditation system; or by establishing a new, alternative system of accreditation that would provide pathways for higher education models and colleges to receive federal student aid based on performance and results.”

Right now, in order for their students to receive federal financial aid, a college must have institutional accreditation from an agency recognized by the US Department of Education.  (This is different from program accreditation which is what CAAHEP does). The main purpose of the recognition by the Department is to assure that the accreditors are serving as “gatekeepers” for that federal aid. But with rising default rates on student loans and ever-escalating costs for a college degree, the Administration clearly believes that those institutional accreditors are somehow failing in their duty as gatekeepers.

There has been a lot of debate in recent years in the accreditation community about how we should balance our roles as the cop who assures certain outcomes versus promoter of quality and quality improvement. That debate will no doubt continue.

But what is of particular interest to me is that the underlying philosophy in the Administration’s position seems to be that federal money should be used only to train students for jobs. If you want to spend $40,000 on a liberal arts degree that won’t prepare you for a profession, you have that right. But not at taxpayers’ expense.

Many of us in the “Boomer” generation started out with English or philosophy degrees before we ultimately settled into a profession. But given high unemployment rates and the fear of the looming crises over student loan defaults, this would appear in the minds of many to be a “luxury” we can no longer afford.

Just So You Know..."State Authorization" Has Not Gone Away

There was a lot of publicity recently when the U.S. Department of Education announced that it would no longer enforce a requirement that had been placed in their regulations that distance education programs would have to obtain permission to operate in every state in which they enroll at least one student.

While the Department's decision was good news, the issue did not go away. In fact, it moved to the forefront in many states. As one observer said, "the genie is out of the bottle." Many states already had laws on the books that required registration or some other form of authorization but had never enforced them, while a couple of states saw a revenue opportunity and swiftly passed such laws. Most states simply do not have the manpower to enforce the laws and with the threat of federal enforcement now gone, many colleges will simply wait to get caught rather than paying the registration fees or going through whatever process the state has set up.

There is another troubling aspect to this controversy - some of the state laws also say that placing even one student in a clinical or externship site also triggers a "physical presence" in the state and requires authorization.

Just so you know, CAAHEP has assembled a chart that provides a "thumbnail" sketch of what the various states require in terms of both distance education and clinical placements.  Proceed at your own risk! 

Déjà Vu All Over Again!

It has been more than a year since I posted a blog and what’s even more remarkable than how quickly that time has passed is the fact that my topic continues to be a variation on the same theme as previous entries: unethical or questionable practices by some colleges, most of them for-profit entities.

But while there have been lots of allegations about aggressive recruiting practices, misrepresentation of job placement rates and misleading information about accreditation status, today’s topic may be the most reprehensible yet, not because the behaviors are new but, rather, because of the population being targeted: veterans and active-duty military personnel.

Most of the abuse stems from something called the “90-10” rule which requires that no more than 90% of a school’s revenue can come from federal financial aid. But for some reason, revenue from veteran’s benefits is considered “other” income and is not counted in the 90% limit. Congress has debated ways to get at this problem but no consensus has been reached on legislation. So, on June 12th, President Obama signed an executive order that will force schools to disclose more information about topics like financial aid and graduation rates. It also requires DOD to set rules for recruiting at military installations.

In addition, the order sets up a complaint system for reporting suspected institutional fraud or abuse of veterans’ benefits, and it requires institutions to abide by the same rules as schools that receive financial aid from the Education Department.

In an effort to get out ahead of the story, the Association of Private Sector Colleges and Universities (the organization that represents for-profit institutions) issued a statement on June 11th outlining “Five Tenets of Veteran Education.” Needless to say, APSCU disagrees with many elements of the Executive Order and the battles will no doubt continue.

The "War" Continues

The “For Profit Wars” continue. Senator Tom Harkin has another hearing this week and a different Senate Committee held a hearing on March 2nd at which Senator Harkin was a witness.

Senator Thomas Carper (D, DE) held a hearing that focused on a report from the GAO that found problems with the Defense Department’s oversight of its tuition assistance program and some “improper or questionable marketing practices” by for profits.

It reminded me of an early morning call to the CAAHEP office from a woman who was serving in Iraq. In preparation for her eventual discharge she wanted to get trained in an allied health profession. She told me that she was being pursued (and pressured) by an online program that she had learned was not accredited. All I could do was confirm that it was not accredited and talk to her about the consequences of graduating from a non-accredited program. Somehow, misleading and high pressure sales tactics seemed especially egregious when directed at a young person who was putting her life on the line every day in a war zone!

So, the biggest surprise for me as a result of that Senate hearing, was learning that military tuition assistance is not considered “federal aid” under the 90/10 rule. The 90/10 rule was created in the Higher Education Act reauthorization of 1992, the last time there was lots of scrutiny of “fly-by-night” for-profits and student loan defaults. It says that a school cannot get more than 90% of its funding from federal student aid or it will become ineligible for continued receipt of federal money. Many institutions operate dangerously close to that 90% limit. And apparently one of the ways some schools keep below the limit is to market and recruit heavily among active duty military personnel because those tuition benefits are not part of the 90%.

I must admit, I don’t begin to understand why money that comes from the Department of Defense would not be considered “federal money.” And the rule likely will not change in the near future because there is bound to be opposition in the Republican controlled House of Representatives – in fact, House Republicans, who look far more favorably upon the for-profit sector, are talking about raising that 90% limit.

Whatever happens with the 90/10 rule it seems to me that members of our armed forces deserve better than what that young woman in Iraq was faced with. Shame on those who would take advantage of our military personnel!

The Fight Turns Nasty

The last several blogs have been about the scrutiny - primarily from the Obama Administration and Democrats on Capitol Hill - of for profit higher education. Damaging allegations from the GAO's "secret shopper" tapes made it difficult to argue that it was a case of "just a few bad actors." But the for-profit sector is fighting back. Millions of dollars are being spent on various lobbying campaigns and the effort was successful in delaying the proposed "gainful employment" rules from the US Department of Education.

Then, just the day before the historic (and first-ever) White House Summit on Community Colleges, a report was issued claiming that community colleges engage in "unsavory recruitment practices" and offer students "poorer-than-expected academic quality, course availability, class scheduling, job placement and personal attention." The firm that produced this report (on behalf of several for-profit companies) did some of their own "secret shopping." But the value of this "research" seemed highly questionable. The sample of students surveyed, for example, was composed of people who had withdrawn or graduated from community colleges and then enrolled in a for-profit institution. The authors of the report acknowledged this might mean that "bias may be present" (!).

On another front, Inside Higher Education reported that for-profit Keiser University filed a lawsuit against Florida State College at Jacksonville, complaining that college administrators "disseminated false information about proprietary schools, including Keiser, by working through advocacy groups and 'short sellers' who profit when the price of a publicly traded stock declines in value."

There's no question that community colleges have their own set of problems, especially in these economic times of severe budget cutting. But for-profit and non-profit alike need to do a better job of improving graduation rates and helping their "non-traditional" students to succeed.

Imagine if all the money that is being spent on lobbying and litigation went, instead, to program improvement? But, of course, that's not the way our system works, especially in these highly polarized times. We just have to hope that the students who need these programs if they ever are going to have a shot at a better life, are not "collateral damage" in these ongoing battles.

Collateral Damage

I took a call last week from a potential student searching for a medical assisting program. Of course, that isn't news - the CAAHEP office takes dozens of such calls every week. But this call was different in several respects. First of all, the young woman knew what she was looking for and was asking all the right questions. Secondly, she was asking these questions BEFORE she enrolled or took out a dollar in student loans. And perhaps most surprisingly, the program she wanted to attend was, in fact, CAAHEP-accredited.

So, what was her problem? The program is at a "technical school" and she had been hearing so many bad things about "technical schools," she just didn't trust her own judgment (or CAAHEP's) about this particular program. The institution in question is not part of a large national chain but it does have multiple campuses. We have no record of ever having received a complaint against this particular school (or any of its other campuses). But it's a "technical school" and nothing I said seemed to assuage her anxiety.

This is why I chose the title "Collateral Damage" for this blog entry. While the battle over for-profit higher education rages on Capitol Hill and in the media, there are a lot of conscientious, good-quality institutions that are suffering from the "fallout."

But, or course, this does not make the real problems any less severe. For the first time ever, as of June 2010, student loan debt now exceeds credit card debt. And while credit card debt can be erased in bankruptcy, student loan debt will follow a person throught his or her life (including possible garnishment of Social Security benefits).

The for-profit higher education industry have been vehemently fighting efforts by the Department of Education to impose "gainful employment" requirements (just as some of their opponents have been working in support of the draft rules). Recent stories have reported the huge amounts spent lobbying against these efforts and the organized letter writing campaigns that resulted in more than 80,000 comments filed with the Department both for and against the proposed rule. Meantime, Senator Harkin has announced another hearing by the Senate HELP Committee to be held on September 30th. This hearing is expected to focus on student outcomes and debt. Undoubtedly there will be more bombshells -- and more collateral damage.

To watch the hearing via webcast at 10:00 am Eastern time on September 30th , you can go to: http://help.senate.gov/.

More than a few "Bad Actors"

"This week the world changed." That was the quote attributed to Terry Hartle, senior vice president of government and public affairs at the American Council on Education following the most recent Senate hearing. Here's what happened.

As promised, Senator Tom Harkin (D, IA) held another hearing on the subject of for-profit higher education. But this time the first witness was an investigator from the Government Accountability Office who testified about the GAO's "secret shopper" efforts - and he brought video clips. The GAO Report begins with this finding:

"Undercover tests at 15 for-profit colleges found that 4 colleges encouraged fraudulent practices and that all 15 made deceptive or otherwise questionable statements to GAO’s undercover applicants. Four undercover applicants were encouraged by college personnel to falsify their financial aid forms to qualify for federal aid—for example, one admissions representative told an applicant to fraudulently remove $250,000 in savings. Other college representatives exaggerated undercover applicants’ potential salary after graduation and failed to provide clear information about the college’s program duration, costs, or graduation rate despite federal regulations requiring them to do so."

There was no more talk about "a few bad actors." Even the strongest defenders of the for-profit higher education industry had to acknowledge that there are serious problems.  Harris Miller, president of the Career College Association characterized the GAO's findings as "a wake-up call" both for him and for his members.

But perhaps the most disturbing aspect of the hearing for those of us who are involved in accreditation came from the hostile questions from Senator Harkin as well as Senator Al Franken (D, MN), directed at Michale McComis, Executive Director, Accrediting Commission of Career Schools and Colleges, a national accrediting body that accredits for-profits (including some of the 15 that were included in the GAO Report). The Senators questioned how the agency could not have known about the recruiting practices and why those schools were able to meet what the accreditor said were rigorous standards. Senator Harkin was disturbed to learn that the accrediting agency is funded through fees collected from the institutions they accredit. That seemed like a conflict of interest to him and he said "we'll have to look into that." Alas, that is pretty much the way every accrediting body is funded and the thought of Congress "looking into that" is pretty scary. Likewise, he seemed distressed at the idea that the site visits are done by volunteers (peers). That, of course, is the very foundation for our system of "peer review."

Senator Harkin has said he will hold more hearings throughout the fall and in the meantime he has asked for specific information on finances, recruitment, retention and cost at the 15 institutions named in the GAO Report. Republicans on the Committee continue to insist that any examination of recruitment, cost, student loan debt loads, etc., must also include non-profit and public colleges and universities, thus assuring that the entire world of higher education needs to pay attention to what is unfolding in Washington. As usual, stay tuned...