Wednesday, September 8, 2010

For-Profit Colleges Step Up Lobbying Against New Rules

The New York Times' Tamar Lewin reports:

For-profit colleges have increased their lobbying against proposed Education Department rules to cut off federal financial aid to programs whose students take on too much debt for training that provides little likelihood of leading to a well-paying job.

In addition to making personal visits to Capitol Hill, executives at the colleges have provided employees with “personalized” letters to send to Washington and urged students to speak out against the proposals.

So far, the department has received about 45,000 letters on the proposed “gainful employment” regulations, in the comment period that ends Thursday.

Last week, John Sperling, the founder of the nation’s largest for-profit college, the University of Phoenix, e-mailed every member of Congress, seeking help opposing the regulations, and attached a sample letter to be sent to Education Secretary Arne Duncan, asking him to withdraw them.

Donald Graham, the chairman and chief executive of The Washington Post Company, which gets most of its revenue from its Kaplan education business, visited Senator Tom Harkin, Democrat of Iowa, whose Health, Education, Labor and Pensions Committee is holding hearings on the for-profit education industry.

Under the proposed regulations, announced July 23, for-profit education programs would qualify for federal student aid only if enough former students were repaying their student loans, or if graduates generally earned enough to repay their debts.

Many for-profit colleges have urged students, professors and administrators to send in criticisms of the proposals.

The Education Management Corporation (owned by Goldman Sachs), the second-largest for-profit company, hired DCI Group, a public relations firm, to contact its employees for information that would be used to create a personalized letter, which would then be delivered back to the employee for signature, along with a stamped, addressed envelope.

“EDMC believes it is important, that during this public-comment period on the proposed Federal Gainful Employment Rule, that our students, faculty and staff have the opportunity to voice their opinion, if they choose to do so,” said Jacquelyn Muller, a spokeswoman for the company.

EDMC also has a Web site, the Higher Education Action Center, guiding students or employees to oppose the regulations, offering “pre-crafted” letters. Argosy, a unit of EDMC, said last month in an e-mail soliciting more comments that more than 2,000 people had used the site in the previous week. It is unclear how many comments were generated by for-profit colleges’ campaigns.

Some of the letters show little familiarity with the proposed regulations. For example, a Education Department official said, students at a particular school sent in dozens of hand-written letters asking for continued aid to for-profit colleges, but never mentioning the regulations. He said he called a letter-writer to ask whether the letter was intended as a comment on the regulations, and was told, “This is what the school asked us to write.” He would not identify the school.

The department said the new regulations would protect students from programs that saddled them with heavy debts and gave them credentials that proved to be of little value in finding a good job.

Last month, the Government Accountability Office said an investigation found fraud or deceptive practices at all 15 of the for-profit locations it visited.

Students at for-profit colleges, about 10 percent of those enrolled in higher education, are far more likely to default on their loans.

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