Duncan Says For-Profit Colleges Are Important to Obama's 2020 Goal

May 11, 2010

Arne Duncan, the secretary of education, expressed support on Tuesday for the role that for-profit colleges play in higher education at a policy forum here held by DeVry Inc.

For-profit institutions have come under fire recently for their low graduation rates and high levels of student debt. A Frontline documentary last week focused on the for-profit sector, and a speech by Robert Shireman, a top Education Department official, was initially reported as highly critical of for-profit colleges, even though a transcript of Mr. Shireman's remarks showed that he actually spoke more temperately.

Mr. Duncan said on Tuesday in a luncheon speech at the forum that there are a "few bad apples" among actors in the for-profit college sector, but he emphasized the "vital role" for-profit institutions play in job training.

Those colleges, he said, are critical to helping the nation achieve President Obama's goal of making the United States the nation with the highest portion of college graduates by 2020. Mr. Duncan also praised a partnership between DeVry and Chicago high schools that allows students to receive both high-school and college credit while still in high school.

Mr. Duncan's comments come at a time when for-profit college officials are anxiously awaiting the release of new proposed federal rules aimed at them. A proposal that would tie college borrowing to future earnings has the sector especially concerned.

The rule is not yet final, but the Education Department is considering putting a cap on loan payments at 8 percent of graduates' expected earnings based on a 10-year repayment plan and earnings data from the Bureau of Labor Statistics.

Supporters of for-profit colleges say the rule would basically force them to shut down educational programs and as a consequence leave hundreds of thousands of students without classes.