Expert says government officials unfairly target for-profit schools

For-profit colleges have come under increased scrutiny by government officials as various scams and deceptive practices have come to light in Illinois and around the country, but supporters of for-profit institutions believe unfair regulations target these colleges and limit students’ options. 

Sen. Dick Durbin (D-IL) is arguably one of the most notable voices in Congress against for-profit colleges.

In recent years, the Democratic legislator has urged the Department of Education to investigate the practices of several for-profit schools and pushed to end the for-profit industry's deceptive recruitment of prospective students as he writes letters to high school principals, counselors and teachers across the state soliciting their help in protecting students from abuses.

Durbin has also proposed legislation that would provide increased oversight of the for-profit industry and better protect students.

Competitive Enterprise Institute (CEI) fellow Carrie Sheffield wrote an article defending for-profit schools and said government officials criticizing for-profit schools are unfairly targeting the for-profit industry.

“Yet, these same officials (criticizing for-profit colleges) are unfairly aiming their crosshairs at for-profit institutions while applying weaker standards and greater accommodation with not-for-profit schools,” Sheffield wrote.

In the wake of several for-profit scams and reports of mounting student loan debt, the U.S. Department of Education implemented gainful employment regulations that set minimum debt-to-income and loan-default rate thresholds on programs at for-profit schools, community colleges and nonprofit institutions. Programs that exceed the threshold would be at risk of losing their ability to participate in taxpayer-funded federal student aid programs.

The regulations went into effect last July.

The implementation of such regulations has raised concerns among many advocates of for-profit education who believe the regulations are discriminatory because, although the regulations apply to all higher education institutions (including nonprofits and community colleges), for-profit colleges, which rely heavily on taxpayer-funded student aid, are affected the most.

Sheffield, like many advocates of for-profit colleges, rejects the notion that not-for-profit automatically means better.

“For-profit schools enable low-income and racial minority students, including many who are non-traditional, to gain practical, skills-based training that better equips them for the marketplace relative to many traditional academic paths,” Sheffield wrote.

The challenge is that many students attend for-profit colleges because they provide non-traditional avenues to complete post-secondary education by offering an array of growing and emerging occupations, which translates to more options for students.

“A generation ago, for-profit schools awarded virtually no bachelor’s degrees,” Sheffield wrote. “Today, for-profit colleges account for 20 percent of associate’s degrees and 7 percent of bachelor’s degrees. As STEM (science, technology, engineering and mathematics) careers become ever more important, critics should take note that for-profit colleges produce 51 percent of associate degrees in computer science and information technology, according to research by Harvard University.”

Kara Cheseby wrote a report for the CEI stating that gainful employment regulations limit options for at-risk student populations, hurt the economy and attempt to micromanage students’ career paths “by dictating that only tuition price reductions and specific near-term salary results make a post-secondary education at a career college worthwhile.”

“The proposed gainful employment rules will limit choice and access to post-secondary education for an underserved population under the guise of consumer protection, as well as damage an important education channel that is providing post-secondary education at a lower true taxpayer cost than public institutions and private not-for-profit schools,” the report stated.

In Illinois, government officials are reportedly monitoring, investigating and prosecuting 25 for-profit colleges. Last month, Illinois Attorney General Lisa Madigan’s office announced that education-related complaints made the Top 10 list of consumer complaints in 2015 for the first time.