Education Department Hears from Small For-Profits On New Regs

Print More

The Department of Education’s public meetings on the gainful employment rule Thursday provided a pedestal for numerous, and repetitive, arguments on yet-to-be finalized rules aimed at regulating for-profit colleges.

More than 30 speakers took turns giving five-minute prepared statements, often repeating the same few points to a panel of Department of Education officials in the first of a two-day public meeting on the subject.

The department is likely to issue guidelines that establish minimum requirements schools would have to meet in order to be eligible for federal student loans. These minimum requirements are in debt-to-income ratios – the amount of student debt at graduation compared to the amount they earn after graduation – and students’ loan repayment rates.

The Department of Education has proposed setting their minimum rates for schools to be eligible for federal loans at an 8 percent debt-to-earnings ratio and a 45 percent loan repayment rate. If those new definitions are announced in 2011, colleges would have to adhere to them by July of 2012.

A few students’ rights groups showed up to commend the Department for taking measures to scale back career colleges, but most of the speakers represented the mom-and-pop career and technical colleges that are at most risk of being wiped out by this proposed new definition of gainful employment.

“If this rule is adopted as proposed, many of the small, community-based schools will be wiped out,” said the morning session’s first speaker Scott Rogers, director at Ohio Valley Technical College, in his statement to the panel. Rogers went on to recommend an exemption to the rule for small schools. 

The speakers were selected from authors of more than 90,000 letters to the Department of Education concerning its proposed new gainful employment measure. But the department’s final decision likely hinges more on private meetings than public comments.

The panelists – split between members of the Department of Education’s general counsel and postsecondary education units, with a brief morning appearance from James Kvaal, the deputy under secretary – spent the entire day listening and taking notes, not once asking a follow-up question or opening up the floor for debate.

“I think the Department is trying to cover all its bases,” said Angela Peoples, a policy and advocacy manager in the Campus Progress division of the Center for American Progress Action Fund. “Any time they open it up to public comments they have every intention of listening, but at this point anything that was said has already been said days and days earlier.”

The speakers can hardly be blamed for that: they were instructed by the department to limit their comments to specific points already addressed in their letter and not to introduce new ideas.