A coalition of higher-education groups and advocacy organizations is urging the federal government to stick to its guns in its efforts to more tightly regulate the for-profit education industry.
Educators, advocates and industry analysts are waiting for the U.S. Department of Education to issue regulations that, among other things, would withhold federal funding from institutions whose graduates' debt-to-income ratio is too high.
Flickr photo by YGXU.S. Secretary of Education Arne Duncan
The regulations are aimed at vocational or job-training programs, many of which are offered in the for-profit career college realm.
Career college groups have argued some of the draft regulations discussed in January would force the closure of thousands of job-training programs. Backers of the new proposals say the measures would protect students from getting into too much debt for a program that won't pay off.
In a May 20 letter to U.S. Secretary of Education Arne Duncan, dozens of groups – including the Institute for College Access and Success in Oakland, the California Community College Student Financial Aid Administrators Association, and the Consumer Federation of California – endorsed the administration's efforts to toughen the law and called on officials to make sure they include a few specific details or provisions.
Here's a quick run-through of some of their recommendations:
Incentive compensation
The issue: A slew of lawsuits have been filed against for-profit education companies accusing them of paying recruiters based on how many students they enroll – a violation of federal law. But one key exception says it's ok to give recruiters incentive compensation if it's not "based solely" on the number of students signed up.
The push: This group wants the government to ban incentive compensation, whether it's based directly or indirectly on applications or enrollment.
Gainful employment
The issue: You've heard the stories about students like Jeffrey West, who was told he could make $50,000 or $60,000 if he completed a nine-month program in auto body refinishing at a school owned by Santa-Ana based Corinthian Colleges Inc. Instead, he graduated with $30,000 in student loan debt and a $12-an-hour job weatherizing homes.
Federal law already requires certain vocational programs to "prepare students for gainful employment in a recognized occupation." Regulators want to beef up that requirement by withholding federal aid from colleges whose graduates don't make enough money to cover their student debt.
The push: The coalition endorses this proposal, and they want to make sure that the government does a few things when it measures colleges' compliance. When adding up student debt, they should count not just federal loans but also private loans, to prevent colleges from using a potential loophole.
Administrators should also make sure that a school's figures account for students who take on debt but never graduate. And finally, self-reported data on how many students complete programs and get jobs should be independently verified.
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