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the demand for college- and
university-educated workers
by at least three million as
soon as 2018. Meeting the goal
of the president’s graduation
initiative would require
graduating an additional eight
million students by the end
of this decade, an increase of
four percent, according to the
National Center for Higher
Community colleges,
where only one in four
students now earns a degree
within three years, are “the
lynchpin” of this plan, Kanter
told reporters in a conference
call the night before theWhite
House summit.They would have to turn out an additional five
million graduates by 2020.This at a time when, in addition to
their chronic problems with completion, community colleges
in 32 states were struggling just to get by on flat or lower
budgets, and when their full-time enrollments had ballooned
by 24 percent in the two years from fall 2007 to fall 2009. A
survey of community colleges by the Education Policy Center
at the University of Alabama found that most were in no
financial condition tomeet the graduation goals.
Yet as crowded and cash-strapped as they are, the
community colleges seemed as ambivalent about that lost $12
billion as their university counterparts onDupont Circle had
been about the savings generated by the student-loan reforms,
and on the same grounds: because the government, for the
first time, wanted to attach significant conditions to the money.
To get it, they would have to set and
meet graduation, job-placement, and
other goals reviewed and approved by
bureaucrats inWashington.
“We’re not even that close to
Dupont Circle, and you could hear
the crying and screaming fromhere”
as the reality of the tradeoffs sank in,
saidHarris Miller, president of the
Association of Private Sector Colleges
and Universities, which represents
the for-profit schools that have
become community colleges’ biggest
Miller’s members were beginning
to feel their own pain.
Prodded by consumer advocates, high student-loan
default rates, and allegations of fraud, the administration was
proposing regulations clearly aimed at cracking down on for-
profit universities in ways the previous administration had
not. Among those doing the prodding: traditional nonprofit
universities and their associations.
Private, for-profit schools, after all, now account for nearly a
quarter of all Pell spending, or $4.3 billion last year alone—and
students who attend themborrow billions more per year to pay
for tuition. But two years into repayment, nearly 12 percent of
those students have defaulted on their loans, three times the
rate at nonprofit private institutions, and double the proportion
at public universities and colleges. (The for-profits argue that
their default rate is disproportionately high because they serve
a lower-income market already struggling tomake ends meet.
According toHarris Miller, three-quarters of their students
are financially independent of their parents, and nearly half of
themhave children.)
Undercover investigators from the General Accounting
Office, posing as prospective applicants to 15 for-profit colleges,
found that all 15 gave themdeceptive information, and four
encouraged downright fraud to help the applicant qualify
for federal financial aid. Some of the purported students, the
investigators say, were urged to falsify financial information.
Others got exaggerated estimates of what they could expect to
earn after they had graduated, or misleading information about
the cost of courses, and were pressured into signing contracts.
An investigator who inquired about a certificate program in
massage therapy was told the $14,000 fee was a good value
when, in fact, a nearby community college charged only $520.
The Florida Attorney General’s Office also has announced
that it is looking into allegedmisrepresentation by for-profit
universities. Previous investigations found that some for-profit
institutions were enrolling grossly unqualified students for the
sake of getting access to their federal financial aid.
Long experienced inWashington politics as a senator’s aide,
a House committee staffer, and a candidate for Congress from
Virginia, Miller deftly seized onObama’s graduation plan and
positioned the for-profit universities as part of the solution.
With ten percent of total enrollment, or 2.3million students,
the for-profits said, they were there to help. “The president is
verymuch singing our song,”Miller said. “We are in violent
agreement that there is this huge population of underserved
students and that they need a higher education, in terms of
their personal growth and fulfillment, and for our country’s
sake to be globally competitive.”
The administration wasn’t biting. EducationDepartment
officials started work early inObama’s termon 14 regulations
to control abuses. Several were clearly aimed at the for-profits.
One, the “gainful-employment” rule, proposed tomeasure the
loan debt of students in vocationally oriented programs as a
proportion of their estimated annual income. Programs with a
debt-to-income rate that is too high would lose their eligibility
for federal financial aid, effectively shutting themdown.
Another regulation prohibits bonuses or other incentives for
student recruiters or admissions officers based on howmany
students they sign up or howmuch financial aid they bring
in.The EducationDepartment gave itself more clout to ban
deceptive marketing and advertising, and institutions will
have to disclose their graduation and job-placement rates and
students’ median debt.
The for-profit sector fired back with guns blazing.
Although they were also forcefully opposed to the incentive-
compensation regulation, their principal target was the gainful-
employment rule.They said it would require huge amounts
of paperwork and would discourage institutions from starting
new programs.They said that was counterproductive at a time
The president elevated
the profile of the
community colleges, and
announced his goal of
raising graduation rates
by 2020 to restore the
nation’s global primacy
in college education.
Education Secretary Arne Duncan has emphasized
greater federal oversight, something that both for-
profit and nonprofit institutions dislike about the
Obama administration’s higher education strategy.
Dennis Brack, Black Star, for CrossTalk