Lessons (not) learned

Shortly after taking office, President Obama proclaimed that the United States would once again have the highest proportion of college graduates in the world by 2020. “That is a goal we can meet,” said the president. However, recent actions by the Department of Education indicate that the administration has a different agenda, one that will severely limit opportunities for millions of Americans looking to further their education. In a nutshell, the actions of the administration do not match their words.

{mosads}Last month, the department showed just how far it is willing to go in its crusade against for-profit colleges by placing a three-week hold on financial aid payments to Corinthian Colleges, Inc. for “failure to address concerns about its practices.” The hold ultimately amounted to a death sentence for the California-based private sector institution, although the department continues to claim it “didn’t know” that this would be the result of its action. Unfortunately, the department’s feigned ignorance is already having huge repercussions for the 70,000-plus students enrolled in Corinthian schools as well as its 12,000 employees.

If that wasn’t bad enough, the department’s thirst for private-sector blood continues as it looks to finalize its proposed “gainful employment” rules, which would devastate thousands of good programs offered at proprietary colleges by restricting their access to Title IV federal student aid if they don’t meet certain arbitrary metrics. Millions of students rely on these programs to learn the necessary skills to enter today’s hyper-competitive workforce and ultimately improve their lives.

What the department and the administration continually fail to recognize is how their shortsighted decisions ultimately hurt the educational opportunities of many traditionally underserved Americans. This growing trend of taking action without considering the real-world consequences of those actions is clearly illustrated by the recent Parent PLUS loan meltdown, which prevented thousands of black Americans from enrolling in college and placed at risk many more in terms of their ability to continue their higher education.

In October 2011, the Department of Education added new underwriting standards for the federal PLUS loan. The changes tightened the credit requirements needed to access the loans, resulting in a spike of denials, including for many who had been previously eligible for the loans. The change was made without convening a rule-making panel, and the department failed to do so much as issue a letter to colleges explaining it. Instead, the impact of the change manifested itself as students at many Historically Black Colleges and Universities (HBCUs) lost access to their loans. The change disproportionately affected HBCUs, causing 28,000 students attending these schools to be denied loans and costing HBCUs upwards of $300 million in lost grants from federal agencies and lost tuition revenues.

As noted by the Associated Press, families of students at HBCUs were twice as likely to use the program, and, according to figures from the United Negro College Fund, the changes in the PLUS loan program have blocked as many as 400,000 students nationwide from enrolling in college. The changes were made to bring the Department of Education’s requirements in line with industry standards, according to a department spokesman, but the department’s failure to recognize the impacts of its decision created a crisis which is only now being addressed by the administration.

Thanks to pressure from congressional leaders, organizations, parents and students, the administration has agreed to make changes to the PLUS loan program; however, the damage done over the past two years is irreversible and some colleges may never fully recover. And now, rather than learn from its past mistakes, the administration is set to create a new crisis on an even grander scale with its gainful employment regulations.

Moreover, in many cases, the public colleges that the administration promotes as an alternative have worse outcomes than for-profit schools, with subpar academic standards and high percentages of students failing to graduate on time. Despite this, the administration continues to defend these schools, shielding them from their proposed regulations and bailing out even the poorest performers. One need look no further than the bailout of the City College of San Francisco, which suffers from higher default rates and lower graduation rates than Corinthian Colleges, to grasp the department’s double standard.

Improving the quality and outcomes of higher education in the United States is an important undertaking, one that the current administration should take seriously. Rather than rush to impose a rule with potentially devastating effects on a large swath of the U.S. population that needs the most help, the administration should heed the warnings of its own party and the thousands of students, teachers, parents, employers and employees who have said that the gainful employment regulations are steering our country in the wrong direction.

Alford is the cofounder, president and CEO of the National Black Chamber of Commerce.