Testimony Before the Department of Education: Negotiated Rulemaking Governing the 90/10 Rule

On behalf of the institute I want to express my concern with the proposed changes to the 90/10 rule governing the share of revenue that career colleges can receive from the federal government.

At the Institute we 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 avoided vocational training, for-profit career institutions have filled the gap, training students in fields that are in high demand, including home healthcare workers, auto mechanics.

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.

Meanwhile, the successes of proprietary institutions are often overlooked. 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.

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. For that to happen, these students need a fair hearing. With that in mind, we would like to request that these hearings be extended, so that those who will be most adversely impacted by this proposed rulemaking get a fair and thorough hearing.

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