The following comments were prepared by CASE chairman Gerard Scimeca for testimony before the Dept. of Education’s Negotiated Rulemaking Committee, February 18, 2022. The rule being considered would change the funding formula for federal loans to specifically harm for-profit and career-oriented colleges critical to veterans, working adults, and minority students. These comments have been submitted on the record.
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Good afternoon and thank you for the opportunity to speak today.
My name is Gerard Scimeca; I am chairman of CASE, Consumer Action for a Strong Economy. I’m here to express my concern with the DOE’s Rulemaking Committee consideration to alter the formula dictating the share of revenue that for-profit colleges can receive from the federal government, the 90-10 Rule.
If the proposed changes are adopted, proprietary and career colleges across the nation will be forced to shut their doors. And this seems intentional. Although billed as an effort to protect students from so-called “predatory” institutions, these measures will further entrench a failing education establishment at the expense of student opportunity.
It is clear these measures intend to punish career-oriented schools for the broader failures of our education system. But despite years of burdensome regulations, career colleges remain an extremely popular economic bridge for non-traditional students. As the American economy has evolved, a college degree or specialized certification has become a bare minimum in the job market. For-profit, career-centered institutions have innovated and adapted to meet student needs.
Non-traditional schools are leaders in expanding access to anyone with a dream for a better future. This means that a single mother managing a difficult schedule can go online for a virtual education at her convenience. It means veterans or active duty military, as well as adult learners with families can obtain a degree that once seemed out of reach.
Transparency and accountability are indeed important to weed out bad actors. But in choosing to impose heavy-handed rules selectively on career-oriented schools, the Department deeply undermines its credibility.
And despite efforts to malign proprietary institutions, evidence confirms many for profit colleges outperform their 4-year counterparts. This includes schools such as Monroe College in New York, which placed 100 percent of its graduating nurses in jobs in 2017, and ECPI, which ranks in the top ten percent of schools for online programs.
The failure of the Department’s approach to regulate colleges based on tax-status is most evident when considering the Gainful Employment Rule, a measure instituted during the Obama Administration that applies to “for-profit” schools only. Meanwhile, heavily endowed state and private nonprofits can fail students without consequence.
And many public colleges and universities would fail the gainful employment test. An analysis by the Texas Public Policy Foundation found that only 60 percent of programs at private nonprofit schools, and 70 percent at public colleges would meet the requirements of this Rule.
To conclude, given our nation’s critical shortage of skilled workers and rapidly changing student demographics, the Department should be working to expand educational opportunity through greater choice and competition. It should not be closing the door on the only opportunity many may have in higher education. American students deserve no less.
