December 12, 2018

Betsy DeVos plans to eliminate gainful employment regulations!!

Betsy Devos for profit education

Education Secretary Betsy DeVos plans to eliminate regulations that forced for-profit colleges to prove that they provide gainful employment to the students they enroll, in what would be the most drastic in a series of moves that she has made to free the for-profit sector from safeguards put in effect during the Obama era.

The so-called gainful employment regulations put into force by the Obama administration cut off federally guaranteed student loans to colleges if their graduates did not earn enough money to pay them off. That sent many for-profit colleges and universities into an economic tailspin because so many of their alumni were failing to find decent jobs.

The Obama regulations — years in the making and the subject of a bitter fight that pulled in heavy hitters from both parties who backed the for-profit schools — also required such schools to advertise whether or not they met federal standards for job placement in promotional materials and to prospective students.

Its clear she understands the logic that a law should not apply to some colleges but not all of them…

Link to article: https://www.nytimes.com/2018/07/26/us/politics/betsy-devos-for-profit-colleges.html 

Breaking News! Secretary DeVos Resets the Clock on ACICS!

The U.S. Department of Education said Tuesday evening that a controversial accreditor, which had lost its federal recognition in 2016, would again be eligible to serve as a gatekeeper of financial aid.

The department restored the recognition of the Accrediting Council for Independent Colleges and Schools, which oversees primarily for-profit career colleges. That means that more than 100 colleges still accredited by the council will remain eligible to receive federal student aid, for now. It also means that the council, commonly known as Acics, will not have to face a federal advisory panel in May as part of the process to regain recognition.

The department’s announcement is a response to a federal-court ruling, issued in late March, that concluded the department had used a flawed process in removing the accreditor’s recognition. The accreditor sued the department after its recognition was removed, starting an 18-month countdown in which all of the colleges that it had accredited would have to find a new accreditor by June or lose access to federal student aid.

The judge’s decision did not overturn the department’s earlier action. But it did require the education secretary, Betsy DeVos, to reconsider whether Acics should remain recognized, after she reviews some 36,000 pages of material that the accreditor submitted to the department nearly two years ago. Although the material had been requested by the department, the court found that it had not been reviewed by department officials in revoking the council’s status. “As the court ordered, we will fairly consider all of the facts presented and make an appropriate determination” on the accreditor’s recognition, DeVos said in a news release.

The department’s announcement does not necessarily mean she will reverse the decision made under the Obama administration. But she will consider more options than just the binary choice of either renewing or denying the council’s recognition. And the council will have new opportunities to prove itself to the department, according to DeVos’s official order.

Link: https://www.chronicle.com/article/DeVos-Gives-Controversial/243028 

 

Possible changes to gainful employment signaled by the DOE

Recent discussions from the department of education indicate changes may be in the works.

 

Session 1: December 4-7, 2017

 

Issue Paper #1

 

Issue:                          Scope and Purpose

Statutory cites:           20 U.S.C. § 1221e-3; 20 U.S.C. § 3474; 20 U.S.C. § 1231a; 20 U.S.C. §§ 1001(b)(1), 1002(b)(1)(A)(i), (c)(1)(A); 20 U.S.C. § 1088(b)

 Regulatory cites:       34 CFR § 668.401

Summary of issue:     On October 31, 2014, the Department published final regulations establishing standards and other requirements for title IV-eligible programs that prepare students for gainful employment (GE) in a recognized occupation.   Those regulations went into effect on July 1, 2015.

 

The regulations established an accountability and transparency framework for GE programs.  The accountability framework conditions the eligibility of a GE program based on (1) the program’s performance under a debt-to-earnings (D/E) rate measure and (2) the institution’s certification that the program meets certain accrediting agency and State requirements.  The transparency framework provides students, prospective students, and their families with accurate and comparable information about a GE program to better inform their educational and financial decisions about enrolling or continuing in the program.  Finally, the GE regulations included reporting requirements to provide the Department with information required under both the accountability and transparency frameworks.  In adopting the accountability framework, the Department acted under its authority under sections 101, 102, and 481(b) of the HEA, which pertain solely to GE programs, among other authorities.  The Department also relied on its broader authority under the General Education Provisions Act and the Department of Education Organization Act.

 

A common criticism of the GE regulations is that one of the problems the rules aim to address—students being saddled with unaffordable levels of loan debt in relation to their earnings—is an issue across all institutions, and not just those that offer GE programs.  In addition, some have argued that many of the factors contributing to poor student outcomes, as measured by the D/E rates, are outside of the control of an institution.  Accordingly, some have suggested that the regulations should apply to all programs, not just GE programs, and that the loss of eligibility resulting from poor D/E rates is unfairly punitive.  Critics have also argued that the reporting and compliance requirements are overly burdensome.

 

In the issue papers that follow, we discuss in detail the individual components of the GE regulations.  Here we address broad issues of scope and purpose of the regulations.


 

Questions for consideration by the committee:

  • Should the regulations apply, in whole or in part, to all programs or just GE programs?
  • Should the Department retain, amend, or eliminate the accountability framework?
    • Should the Department retain, amend, or eliminate the D/E rates? For all programs or just GE programs?
    • If retained or amended, should the D/E rates measure be used to determine eligibility, result in other sanctions (e.g., warnings or other enhanced disclosures), and/or be used as a disclosure? If retained or amended for purposes of disclosure, should this pertain to all programs or just GE programs?
    • Should the Department retain, amend, or eliminate the certification requirements? For all programs or just GE programs?
  • Should the Department retain, amend, or eliminate the transparency framework? For all programs or just GE programs?
    • If D/E rates are removed from the accountability framework, should D/E rates be used for disclosures under the transparency framework?
  • Are program disclosures alone effective in helping enrolled and prospective students identify lower-performing programs with respect to job earnings?

 

Articles on this topic:

https://www.insidehighered.com/quicktakes/2017/11/30/education-department-signals-possible-changes-gainful-employment-rule#.Wh_84Y-jBFo.linkedin

https://www.wsj.com/articles/house-gop-to-propose-sweeping-changes-to-higher-education-1511956800

DOE Will Allow Two Large For-Profit Colleges To Become Nonprofits

US Department of Education

The Education Department has offered its stamp of approval for the controversial sale of two massive for-profit colleges, Kaplan University and the Art Institutes, according to emails obtained by BuzzFeed News — allowing both schools to convert to nonprofit colleges. Kaplan, which was purchased by Purdue University, will become a public college.

The two high-profile conversions have been closely watched by the for-profit education industry, which sees them as a bellwether for future attempts to convert to nonprofits. More and more for-profit colleges have been eyeing conversions as the industry continues to struggle to enroll students.

But there were questions about whether conversions would be allowed by federal overseers. The Obama administration had begun to block such deals over concerns that schools would not actually operate as nonprofits, independent from the for-profit entities that once owned them. There were also worries in and out of the administration that nonprofit conversions were being used to evade regulations.

 

Link to article: https://www.buzzfeed.com/mollyhensleyclancy/the-education-department-will-allow-two-large-for-profit?utm_term=.ojznP2Dyy0#.kn14qB2PPN

 

Will Devos help spur growth in the for profit sector?

betsy

HP article:

Senator Elizabeth Warren (D-MA) was the first and only senator to really press DeVos on for-profit college accountability issues. She asked DeVos, who admitted to have almost no higher education management or college aid experience, if she supported protecting federal taxpayer dollars from waste, fraud, and abuse?  DeVos said yes. Warren said she was glad to know that, since Trump’s higher education experience consisted of fraud so bad at his fake unaccredited university that he paid out $25 million to settle claims from students and New York’s attorney general.

Warren pushed, asking DeVos exactly how she would stop fraud. DeVos: “The individuals with whom I work in the Department will ensure that federal monies are used properly and appropriately.”

Warren pressed further, noting that there are already “a whole group of rules“ written by the Obama Administration to protect college students. In particular, she asked DeVos whether she would commit to enforcing the gainful employment rule, which would penalize career college programs, whether at a for-profit, non-profit, or public college, that leave graduates with insurmountable debt. New data released by the Department confirms what for-profit colleges feared as they have lobbied fiercely against the rule: 98 percent of the programs flunking the test in its first year were for-profits.

DeVos responded, “We will certainly review that rule and see that it is actually achieving what the intentions are.”

Link to article: http://www.huffingtonpost.com/davidhalperin/devos-declines-to-support_b_14235348.html

 

Wash Post:

Some amount of deflection in responding to pointed questions is inevitable. In some cases, DeVos may not have figured out her position yet on various questions, some of which were overly-specific, and a bit unfair. I didn’t find it unreasonable for her to decline to commit to specific current regulations under ESSA (Every Student Succeeds Act) that she might seek to modify or change.

The most evasive language, in my view, emerged in response to questions about school and college accountability. DeVos was reluctant to commit to strong federal efforts to ensure that all schools will be held accountable. Asked about financial risks posed by charter schools with relationships to Charter Management Organizations, many of which are for-profit, she dodged the issue, responding merely that she would work to “hold schools accountable for educating students.”

And after ducking Sen. Tim Kaine’s (D-Va.) question about equal accountability for all schools receiving federal funds four times in person, she’s said nothing to clarify her position.

Link: https://www.washingtonpost.com/news/answer-sheet/wp/2017/02/01/the-good-evasive-and-very-bad-answers-betsy-devos-gave-to-questions-from-democrats-about-education/?utm_term=.071c53e754ee 

EDU Dive:

  • The growing potential for Secretary of Education nominee Betsy DeVos to support deregulation for for-profit colleges and rollback several guidelines for federal standards on postgraduate outcomes takes centerstage in a Huffington Post editorial this week.
  • Author David Halperin explains that the for-profit industry has reaped billions in public funded student loans while leaving students with little-to-no prospect for gainful employment. But inaccuracies in federal reporting on these outcomes has allowed DeVos and Republicans to challenge the policies outright.
  • DeVos declined to endorse guidance for gainful employment and accountability standards for federal funding to institutions of all types.

Link: http://www.educationdive.com/news/would-betsy-devos-scale-back-regulations-on-for-profit-colleges/435341/

Private Equity Investing in Education-Focused Companies 1/26 – Special Discounted Invitation

capital roundtable

MarketDrivenEdu is pleased to announce The Capital Roundtable’s full-day conference on Private Equity Investing in Education-Focused Companies.

 

Coming up on Thursday, January 26, in New York City, the theme of this conference is Why Investors Are Concentrating on Tech-Enabled Niches in Education.

 

As a friend of MarketDriveEdu,  you qualify for a special VIP rate — $995 ($500 off the standard rate). 

To register at this special rate, please call Sarah Burd at 212-832-7300 ext. 0, or email her at sburd@capitalroundtable.com.

Back in the day, buyouts of for-profit post-secondary school systems were the transactions that put private equity investors on the map in the education sector.

Nowadays, investors have shifted their focus to smaller companies that have carved out niches in the K-12, ed- tech, and continuing education and corporate training sectors — examples are, more sophisticated testing and measurement tools, better data management processes and meeting other specialized educational needs.

 

Our 20 knowledgeable speakers will boost your knowledge of this attractive area through their first-hand experiences and by answering key questions. See speaker list here.

 

Chairing the conference is Tom Formolo, a partner at New Harbor Capital. He formed the firm in 2013 after 23 years at CHS Capital, where he headed the education team.

 

At this conference, you’ll enjoy exceptional networking opportunities. The agenda includes ample time, with session breaks and a buffet lunch, to exchange ideas, swap business cards, and form new relationships.

 

To register, please call Sarah Burd, at 212-832-7300 ext. 0, or email her at sburd@capitalroundtable.com.

 

Please be sure to mention MarketDrivenEdu to receive this low VIP rate. And note this rate is not available online. 

Trump Wins! How does that affect your school?

trump

 

 

Donald Trump was elected as the 45th president of the United States on Tuesday in a stunning culmination of an explosive, populist and polarizing campaign that took relentless aim at the institutions and long-held ideals of American democracy.                                                                                                                                                                                                       Whats the impact on your business?

Gainful Employment?

For much of the race, Mr. Trump offered few clues about his specific plans for higher education, other than he shocked them all.

http://www.chronicle.com/article/Trump-s-Surprise-Victory/238346

 

 

 

How Much Money will you make After Graduating?

moneyWhen President Barack Obama announced the release of a new federal College Scorecard in his weekly address this past Saturday, he said the website would give Americans “access to reliable data on every institution of higher education.”  Sounds good right…

“You’ll be able to see how much each school’s graduates earn, how much debt they graduate with, and what percentage of a school’s students can pay back their loans,” he said.  Again, cool right?

However prospective students who utilize the revamped tool in order to estimate their future earnings probably will not get a realistic sense of what they can expect to make after graduating. And if they’re checking out the individual state websites with Geo specific wage data as well, they’re likely to end up even more confused than enlightened.

Link to article on Chronicle: http://chronicle.com/article/How-Much-Will-I-Make-After/233111/?cid=at&utm_source=at&utm_medium=en

Senate Dems Introduce a Free Community College Legislation

free college

House and Senate Dems Introduce a Free Community College Legislation

Last week, House Education and the Workforce Committee Ranking Member Bobby Scott (D-VA) and Senator Tammy Baldwin (D-WI) introduced the America’s College Promise Act in both chambers, which models President Obama’s proposal for state and federal funding to cover community college tuition for two years. Similar to the President’s proposal, the federal government would match every dollar spent by states to waive community college tuition and fees with three dollars of federal funding. The legislation also proposes a new $10 billion federal grant program to cover the first-two years of tuition and fees of low-income students who attend minority-serving institutions that enroll large numbers of low-income students. Currently, the House version has 65 Democratic co-sponsors, while the Senate version introduced has 13 Democratic co-sponsors. No Republicans have sponsored either bill at this time, a likely indication that it will stall as a standalone bill; however, there will be an effort by Democrats to incorporate it into the Higher Education Act reauthorization bill. Again Republican not likely to allow it.

Also, last week Oregon announced its Oregon Promise plan, making it the second state to adopt a free community college plan after Tennessee.

Link to article on NLR: http://www.natlawreview.com/article/senate-to-complete-esea-work-free-community-college-legislation-introduced-departmen

GOP budget would block key Obama higher ed regulations

gop

Take your higher education regulations and shove them, Obama administration.

Republicans in the House of Representatives didn’t use exactly those words in the 2016 spending bill for the Department of Education they released Tuesday, but the message they delivered couldn’t have been much clearer.

The bill drafted by Republican leaders of the House Appropriations subcommittee that oversees spending for education, health and labor programs would bar the Education Department from using any of its appropriated funds to carry out existing regulations related to “gainful employment” for graduates of vocational programs, state authorization, teacher preparation, and the credit hour, and to implement President Obama’s envisioned system to rate colleges and universities.

Essentially, it would block virtually all efforts by the Obama administration to hold colleges more accountable for how they use federal funds, which Republican lawmakers (and many college officials) have opposed as overreaching, misdirected and unlikely to work. Republicans have opposed most of the initiatives previously, but now that they control both houses of Congress, they are in a better position to actually block some of them — or at least force President Obama to horse-trade for some of them in negotiations over the spending measures.

Full Article Inside Higher Ed: https://www.insidehighered.com/news/2015/06/17/house-spending-bill-would-block-higher-ed-rules-and-ratings-hold-spending-flat

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