Since the creation of the Education Department in 1980, the agency’s chief policy maker for higher-education issues
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For-Profit Colleges’ Wish List
has been plucked from a variety of organizations, including public and private colleges, state higher-education boards, and even private industry. But until now, no one representing for-profit colleges has ever been chosen for the post.
That’s why officials at for-profit institutions are so excited about President Bush’s decision last month to nominate Sally Stroup to be the department’s assistant secretary for postsecondary education. Ms. Stroup is the chief Washington lobbyist for the Apollo Group, which owns the University of Phoenix, a fast-growing chain of for-profit institutions.
Although Ms. Stroup has spent most of her professional life at a student-loan-guarantee agency in Pennsylvania and as a top aide on the House of Representatives committee that deals with college issues, advocates for career colleges are hoping that her 10-month stint at Apollo will bring a new perspective to the department.
“Sally understands, in a way that previous department officials have not, the day-to-day concerns of for-profit institutions,” says Nancy B. Broff, general counsel of the Career College Association.
The nomination of Ms. Stroup, representatives of career colleges say, is just the latest sign that the Bush administration will no longer allow the Education Department to treat for-profit institutions as second-class citizens.
Career colleges have been fighting for years to relax certain rules that for-profit institutions must follow to participate in the federal aid programs, and Education Secretary Roderick R. Paige supports some of their efforts. And at the urging of career-college lobbyists and some Republican lawmakers, the department’s leadership is also conducting an internal inquiry into how actions taken by nonpolitical department officials to penalize Computer Learning Centers might have led inadvertently to the closing of its 25 institutions. The shutting down of the for-profit chain affected 9,000 students.
“The bottom line is, we are here to treat everybody fairly, no matter what sector of higher education they come from,” says William D. Hansen, the Education Department’s deputy secretary. “At the same time, we won’t put up with any nonsense from any of the sectors.”
Such sentiments please Bruce Leftwich, the Career College Association’s vice president for government relations. “The environment has changed at the department,” he says. “Secretary Paige and his staff understand the vital role that our schools play in educating and training the nation’s work force.”
Less than a decade ago, all proprietary institutions were tarred by news coverage of fly-by-night operations set up to reap profits from the federal student-aid programs. Reeling from the negative publicity, the for-profit sector had to battle hard just to avoid being thrown out of the aid programs.
In 1992, Congress gave the Education Department more power to crack down on problem institutions. Since the early 1990s, more than 1,500 for-profit colleges have either been barred from participating in the student-aid programs or have withdrawn voluntarily because of the more-rigorous federal standards.
Now, with fewer problems and the emergence of a new crop of high-profile career colleges that are hot on Wall Street, the reputation of the for-profit sector has significantly improved.
But for consumer watchdogs and some Democratic lawmakers, old suspicions die hard. They argue that now is not the time for the department to let down its guard on the for-profit sector, as a growing demand for distance-education programs could spawn a new round of scams.
“As we design education programs for the future, we cannot discard protections that have proven effective in limiting fraud and abuse,” says Deanne Loonin, a staff attorney at the National Consumer Law Center, in Boston.
Ms. Loonin and other consumer advocates are especially unhappy that Secretary Paige has come out in support of H.R. 1992, a bill that would pare down powers that Congress previously had given the department to weed out unscrupulous institutions from the student-aid programs.
The bill, which was overwhelmingly approved by the House last month, would eliminate an Education Department requirement that students who attend institutions that do not use a semester, trimester, or quarter system must be in class at least 12 hours a week to be considered full-time and thus eligible for federal aid. The legislation would require students to spend just one day a week interacting with their professors, either in person or via e-mail, phone, or teleconference.
The department drafted the original regulation to make sure that students receiving aid in nontraditional educational programs were getting an adequate amount of instruction. But supporters of the House bill say that the regulation has impaired the growth of distance-learning programs.
The legislation would also alter a provision in the Higher Education Act, which governs the student-aid programs, that prohibits colleges from providing bonuses or other incentive payments to admissions officers or financial-aid administrators based on their success in enrolling students. Among other things, the bill would allow colleges to provide bonuses to employees who perform “legitimate recruiting activities” before admitting and enrolling students, such as advertising and other activities that stimulate interest from prospective students.
Congress added the restriction following reports in the late 1980s and early 1990s that for-profit colleges were sending recruiters to welfare offices, where they would round up students who qualified for financial aid but weren’t ready for college-level work. Supporters of the new legislation say that the department has interpreted the provision too broadly, making it almost impossible for institutions to reward their employees for performance.
Traditional college groups are divided over the bill, which is stalled in the Senate. While the American Council on Education supports it, others, such as the National Association of Independent Colleges and Universities, do not. The Career College Association, whose members have been scarred by the 12-hour and incentive-compensation rules, is among the bill’s most fervent advocates.
Last year, the University of Phoenix agreed to pay the Education Department $6-million to settle charges that its students were not spending enough time in class.
Last December, the department ordered Computer Learning Centers to return $187-million in aid funds, after finding that the company had compensated its admissions officers based on how many students each recruiter enrolled. Five weeks after the department’s order, the chain filed for bankruptcy. The inquiry ordered by Secretary Paige will determine whether the department’s actions were warranted.
Consumer advocates and some Democratic lawmakers have urged Secretary Paige to oppose the new legislation. They say that the recent fines for for-profit institutions are an indication that this is no time to relax federal oversight of the sector.
During debate on the bill on the House floor, Rep. Patsy T. Mink of Hawaii, the ranking Democrat on the House subcommittee in charge of higher-education policy, said that easing those restrictions would “endanger the stability and integrity of the federal student-financial-aid programs and could lead us back to a time of high double-digit default rates.”
Despite such concerns, Secretary Paige has expressed enthusiasm for the bill. In a letter he sent to lawmakers in July, Mr. Paige wrote that he believed the legislation “would allow needy students who require federal student aid to have access to the many new educational opportunities now available.”
While representatives of the career colleges are pleased by the actions taken by the department’s leadership so far, they are especially excited about the pending arrival of Ms. Stroup at the department. (Ms. Stroup, who has not yet been confirmed by the Senate, declined to be interviewed.)
They believe her presence at the department will give them something that they have never had before: equal footing with other colleges.
“We are not looking for any special advantages,” says Mr. Leftwich of the Career College Association. “We just want to have a seat at the table.”
FOR-PROFIT COLLEGES’ WISH LIST
Here are some changes that the Career College Association, which represents for-profit colleges, would like the Bush administration and Congress to make to the laws and regulations that govern federal student-aid programs:
- Eliminate an Education Department requirement that students must receive at least 12 hours of instruction a week to be considered full-time and thus eligible for federal aid. The association says the regulation makes it difficult for financially needy students to participate in distance-education and other nontraditional programs.
- Alter a federal law that prohibits colleges from providing bonuses or other incentive payments to admissions officers or financial-aid administrators based, directly or indirectly, on their success in enrolling students. The group says the law does not allow employees to be financially rewarded for exceptional performance.
- Revise department rules to broaden the types of revenue that for-profit institutions can count toward the 10 percent of income that Congress requires them to earn from sources other than federal aid funds. The group says the department’s regulations are too restrictive.
- Rewrite a federal law that makes it difficult for for-profit institutions to challenge, in federal court, actions taken by the Education Department. The association says the institutions need due process to stop the department from taking actions they believe to be unlawful or arbitrary and capricious.
SOURCE: Chronicle reporting
http://chronicle.com Section: Government & Politics Page: A24