For-profit universities must remain accountable

In a December op-ed and again in a discussion paper, Steve Gunderson, president and CEO of the Association of Private Sector Colleges and Universities (APSCU), attempted to articulate a future-focused message for the for-profit colleges in his association. Unfortunately, his argument sidesteps past failures and the resulting need to regulate the sector, preventing readers from understanding the full story.

Gunderson cited a new report that found there “are still 2 million jobs for workers with some college or an Associate’s degree than there would have been if the recession had not occurred.”  Unfortunately, owing to the actions of unscrupulous providers of for-profit education, numerous studies have shown that employers do not prefer applicants listing for-profit degrees compared to an associate’s degree or no degree at all.  In fact, other studies indicate that employers avoid interviewing and hiring these students because they do not have the skills or training needed to be effective workers. The great irony in these findings, and perhaps tragedy for APSCU and its members, is that the aggressive pursuit of federal financial aid money at the expense of unfortunate students and taxpayers has played a key role in not addressing the demand for qualified workers that remains to be filled.

{mosads}Next, Gunderson states, “Private sector higher education has existed in our country since the beginning.”  Unfortunately, so have problems associated with unscrupulous for-profit institutions. The federal government has been aware of problems in the for-profit sector for much of the past century, stretching back as far as the Carnegie Foundation’s Flexner report (1910); GI Bill protections as a result of fraud in the 1950s; Education Commissioner Terence Bell’s testimony before Congress about threats to the federal aid program (1975); Education Secretary Bill Bennett’s attempt to stimulate action in Congress to prevent for-profit education fraud (1988);  the Senate Joint Committee on Investigations report on abuses in the student aid programs (1991); and the Harkin Report (2012).  The methods and tactics of unscrupulous institutions has remained remarkably consistent: high-pressure sales and marketing tactics, misrepresentation, sub-par educational offerings, low completion rates, few prospects for employment, and high debt/default levels among former enrollees.

Lastly, Gunderson says, “The sector has changed.”  It is doubtful that the change he speaks of would have happened without the Obama administration calling attention to the failures of the for-profit sector and implementing a range of regulations designed to protect the integrity of federal student aid programs.  Obama and former Secretary Duncan took on the difficult task, over the objections of APSCU, of cleaning up the mess left by the deregulatory efforts of the previous administration. The new program integrity regulations, including the highly controversial Gainful Employment (GE) rule, are most appropriately viewed not only as a ‘corrective’ measure after the failures of recent deregulatory measures, but also as the culmination of nearly a century of frustrated policymaking on a problem that seems determined to repeat itself.

Four days after The Hill published Gunderson’s op-ed, The Washington Post published an interview with Brian Jones, president of for-profit Strayer University, in which Jones noted, “I expect that we’ll fully and happily comply as it [GE] rolls out…. There is no question that the for-profit sector in recent years has come under a great deal of scrutiny, and some of that is justifiable.”  Several other for-profit executives have indicated that far from fearing GE and the other program integrity regulations, they expect to “not anticipate any material changes to either our academic offerings, operational plans or capital structure in order to comply with this regulation,” as one put it. 

Gunderson suggests that Obama and former Secretary Duncan should not be proud of their legacy as it relates to cracking down on for-profit colleges and helping thousands of students avoid staggering debt without gaining the credentials to secure a job and pay off that debt. We disagree. As participating in federal student aid programs is a privilege for postsecondary institutions, we believe it is incumbent upon those institutions to remain accountable to their students and the United States taxpayers. We also believe Congress and the Department of Education must exercise its due diligence to ensure that taxpayers’ money is being spent responsibly. The excesses of the higher education bubble from 2002-2013 should not be allowed to reoccur, given the predictability and reliability with which such excesses have occurred over time. We believe that that it is far better to be remembered for a legacy of protecting students and taxpayers than for exposing them both to waste, fraud, and abuse. The successful for-profit institutions of the future will be those that understand this costly lesson.

Rose is the associate director for Government Relations at the National Association for College Admission Counseling.