Did the lobbyists at the American Council on Education (ACE) sleep through the hearings that Sen. Tom Harkin of Iowa have held on the for-profit higher education industry over the past two years? Were they too busy snoozing to notice all of the scandals embroiling the sector that have exposed the wholesale failure of federal and state regulators and accreditors to safeguard the federal student aid programs and protect students?
Judging from a letter that the American Council on Education (ACE) sent to Capitol Hill late last month calling on Congress to rescind the U.S. Department of Education’s state authorization regulation, it certainly appears so.
In the letter, which ACE sent on behalf of itself and about 90 other higher education associations (including the major national and regional accrediting agencies), ACE’s president Molly Corbett Broad argues that the regulation the Obama administration enacted last year to strengthen state oversight over colleges participating in the federal student aid programs is unnecessary, “given the almost total lack of evidence of a problem.” She continues:
The state authorization regulation intrudes upon prerogatives properly reserved to the states, potentially upsetting recognition and complaint resolution procedures that have functioned effectively for decades.
Functioned effectively for decades? If only it were so!
In reality, most states have utterly neglected the oversight responsibilities that Congress assigned them when it made states, along with accreditation agencies and the U.S. Department of Education, part of the regulatory “triad” in charge of overseeing the colleges that participate in federal financial aid programs. In so doing, they have failed to protect the most vulnerable students in their states from unscrupulous for-profit colleges.
For instance, many states have simply turned over their authorization and oversight responsibilities to accreditation agencies, which have proven to be even less adept at distinguishing good proprietary schools from bad.
Take California, for example. The California bureau in charge of licensing and monitoring for-profit institutions in the state has little to no authority over accredited schools. According to Erica Perez of California Watch:
Schools with national accreditation, such as the for-profit Art Institute of California-Los Angeles for example, are automatically approved to operate by dint of their accreditation. Colleges that are regionally accredited are exempt from nearly all the state requirements. This includes Argosy University-San Francisco Bay Area in Alameda.
Because Argosy, for example, is accredited by the Western Association of Schools and Colleges, it does not have to follow any of the state’s disclosure requirements. Students at the school can’t lodge a complaint with the bureau if they’ve been misled. And the bureau can’t investigate the school or take action against any fraud or abuse…
That means hundreds of thousands of California students in private [for-profit] institutions are not protected by the bureau. More than 250,000 students statewide attend regionally accredited private institutions – which includes a mix of private for-profit and nonprofit colleges.
The fact that the bureau has the power to oversee unaccredited trade schools is actually an improvement over recent years when these institutions weren’t being monitored at all.
California is hardly alone. In a report it released in December entitled “State Inaction: Gaps in Oversight of For-Profit Higher Education,” the National Consumer Law Center found that state oversight over the sector has generally been “dismal.” The group reported that many of the state agencies in charge of monitoring these schools lack sufficient resources and staff to carry out their responsibilities. Others have been captured by the industry. For example, in Kentucky, six of the eleven members of the state regulatory agency’s board work at for-profit institutions, and they have gone so far as to “actively lobby to reduce oversight of the industry.” According to the report:
Last September, the Board sent a letter to Education Secretary Arne Duncan requesting that he withdraw a proposed rule designed to protect students from programs with poor outcomes. The letter was signed by Mark Gabis, then-chair of the Board. He is now being sued by Kentucky’s Attorney General for violating the state’s Consumer Protection Act as president of Daymar College.
Talk about the fox guarding the hen house!
The lobbyists at ACE could have justifiably argued that the Obama administration erred by taking a one-size all approach in extending the state authorization requirements to their institutions. After all, the problems that the administration aimed to address came overwhelmingly from the for-profit college sector.
But that’s not the argument that they’re making (perhaps because they know how it would have been received by the industry’s allies in Congress). Instead, they are denying that there have been any problems at all.
Policymakers, regulators, and lobbyists have for too long perpetuated the myth that the regulatory TRIAD is working – all the while turning a blind eye to the extraordinary abuses that were occurring right under their noses. By putting their imprimatur on this fiction, ACE and the other 90 higher education organizations that signed on to this letter threw students whose lives have been damaged by predatory schools under the bus.