On July 1, the Department of Education’s long awaited “gainful employment” regulation finally took effect.
This rule – which protects students at for-profit colleges from abusive and deceptive practices – is a welcome improvement to a sector that has routinely preyed on veterans, minorities, and the poor. Rather than focusing on providing high quality education, many of these institutions have excelled at quickly separating emotionally and financially motivated students from their tuition and fees and their taxpayer funded federal student aid, while maximizing shareholder profits.
{mosads}In 2012, I released the results of an Oversight Committee investigation into executive compensation at 13 of the largest publicly traded for-profit colleges to determine whether salaries, bonuses, and other compensation were tied to the performance of students. What we found was staggering: corporate profitability was the single most important factor in determining executive compensation at for-profit colleges and universities. In fact, several institutions failed to demonstrate any link whatsoever between the compensation they pay their executives and factors relating to the success of their students.
The same year, former Sen. Tom Harkin (D-Iowa), then chairman of the Health, Education, Labor, and Pensions committee found that in 2009-10, taxpayers had invested $32 billion in these institutions via federal student aid with meager results– 25 percent of total federal student aid funds. In fact, while for-profit colleges enrolled just 12 percent of students nationally, their students accounted for almost half of all defaulted Federal student loans.
Unfortunately, in the three years since we released our findings, these institutions have continually failed to deliver on promises to promote educational opportunity. Instead, they have plowed huge amounts of money into lobbying and lawsuits to prevent regulations that would protect students. This misappropriation of priorities was exemplified just last year when for-profit Corinthian Colleges, under investigation by both federal and state authorities, continued to enroll students, despite being in the process of shutting down.
Steve Gunderson, CEO and president of the chief trade association for for-profit higher colleges, has repeatedly said that for-profit colleges play an important role in educating minority, disadvantaged, and non-traditional students. I agree with Gunderson on this point and believe that for-profit colleges could use their unique tools and expertise to showcase innovation in higher education. Unfortunately, far too many for-profit colleges refuse to make students a priority, instead promoting deceptive recruiting practices and placing profit ahead of student achievement.
It is past time for the federal government to take on stronger oversight of these institutions, and I’m pleased to see the Department of Education stepping up to the plate. Last year, I was proud to join Sens. Richard Durbin (D-Ill.) and Harkin in introducing the Proprietary Education Oversight Coordination Act of 2014, a bill which would create a committee to coordinate the Federal government’s oversight of for-profit schools. Late last year, with the release of final Gainful Employment regulations, the Department moved to do just that.
The current gainful employment rule has been upheld by two different courts. It is time for Gunderson and the schools he champions to put their money to use by improving student outcomes and working to root out bad actors.
Higher education should be a ladder of opportunity, not a treacherous marketplace mined with misleading statistics, exploitive marketing, and high debt. While for-profit colleges have outwardly pledged to broaden access to success through education, too many have failed to prove it with their actions.
Now that that “gainful employment” is the “law of the land”, it is time for those that are passionate about higher education, including my colleagues in Congress, and those who sit in the boardrooms of these institutions, to stop working to impede student focused reforms and instead lead by taking action to improve student outcomes. The cost of failing to provide an aspiring teacher, nurse, or mechanic with the high quality education they deserve is far too high to settle for mediocrity.
Cummings has represented Maryland’s 7th Congressional District since 1996. He sits on the Oversight and Government Reform and the Transportation committees.