ACI Comments on DOE’s Proposed Changes Regarding 90/10 Rule and Career College Impacts

The Following are Comments to the Department of Education (DOE) by the American Consumer Institute in Regard to the Negotiated Rulemaking and Regarding Proposed Changes to the 90/10 Rule and Career College Impacts:

Today, we express our concern with the proposed sweeping changes to the 90/10 rule governing the share of revenue that career colleges can receive from the federal government.

The Committee should reconsider proposed rules that would broaden the scope of “federal funds” under 90/10. If the Department enacts these changes, hundreds of schools would be forced to shut their doors, leaving thousands of students who attend these schools for a variety of good reasons out in the cold.

These measures may please critics of nontraditional education, but they overlook the unique value these schools provide, as well as their performance relative to state and nonprofit institutions. Moreover, these selectively applied regulations are a poor substitute for the system wide transparency and accountability measures that are necessary to fix higher education in America.

The Department of Education exists to ensure that all Americans have access to a quality education. This mission demands a system that provides a diverse array of options for learners of all types with the understanding that American students have different education needs, expectations, and abilities.

The American Consumer Institute analyzed the role of proprietary institutions in higher education back in October. Our research shows that proprietary and career colleges provide a real value, offering educational and vocational opportunities to the sort of students the Department of Education should prioritize – nontraditional learners who might otherwise fall through the cracks. Through measures like open enrollment, flexible scheduling, and career-oriented curriculum, these schools provide pathways to success for students who lack the academic credentials required by traditional state and nonprofit schools. And as these more traditional schools have eschewed vocational training, for-profit career institutions have filled the gap, training students in fields that are in high demand, including home health care workers, auto mechanics, and truck drivers.

Transparency and accountability are necessary to reform education, but by focusing regulatory efforts solely on proprietary schools, the Department ensures that students at high performing for-profit schools will suffer, while the failures of state and nonprofit schools remain unaccountable. These failures must also be addressed. For example, Research by the Independent Women’s Forum notes that most four year, non-profit schools would have to close their doors if subjected to the same gainful employment requirements the committee intends to restore on for-profit colleges.

Certain measures even find America’s elite institutions are failing students in meaningful ways. A new report by Third Way introducing an Economic Mobility Index for measuring the success of institutions of higher education found that the reach of institutions that rank high on traditional college rankings do very little to offer students economic mobility—in large part because they admit such a small share of low-income students to begin with.

Meanwhile, the successes of proprietary institutions are often overlooked. In comparing nonprofit and proprietary schools, Heritage Foundation found that “when apples to apples comparisons are made between program types, for-profit colleges even graduate students at higher rates than their traditional college counterparts.”

A recent Georgetown University study focused on return on investment for low-income students found that when accounting for graduation rates and earnings of Pell Grant students, the bachelors-level colleges with the best return on investment for low-income students are two for-profit colleges, the Neumont College of Art and Design and SAE Expression College. The same study found that when ratings are designed to reflect graduation rates and long-term earnings, six of the top ten associate’s level colleges were private for-profit institutions.

Career and proprietary colleges play an essential role in our education system, and we should think carefully before enacting measures that will punish students who freely choose to attend these schools. If the Department truly wants to help students, then the best course of action would be system-wide transparency and accountability measures to ensure that every student can get the quality education they need. We would be happy to work with you on developing these standards.

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