The Obama administration’s scorched-earth approach to for-profit education

When it comes to education, the Obama administration has taken a scorched earth approach to private sector (for-profit) higher education. Despite all common sense, the administration has finalized its “gainful employment” regulations and imperiled the future of thousands of underserved minority students. Under the guise of reducing student debt and curbing alleged abuses by career colleges and universities, these regulations would actually have the opposite effect, and cause irreparable harm to those in this country most in need of an education to pursue life improvement.

While the administration and many private-sector education critics claim that the final regulations have been “softened,” the reality is that they are far more onerous and burdensome than the Department of Education’s initial proposal back in 2011, subsequently struck down by a federal judge for using “arbitrary” and “capricious” metrics to judge the quality of programs offered by proprietary colleges and universities. By the Department of Education’s own estimates, some 1,400 programs will fail the new regulations, impacting 840,000 students — 99 percent of whom are enrolled at proprietary institutions — who would be displaced from programs that do not pass the new accountability standards, many having no alternative options to continue their education.

{mosads}As required by law, prior to issuance of the regulations, the administration met with stakeholders in the education space, including representatives of the private sector, to evaluate the impact of the new regulations. Evidently a deaf ear was turned to the numerous warnings these stakeholders repeatedly expressed about the detrimental (unintended) consequences of the regulations on access to higher education and the economy.

The major change made to the final regulations was the removal of cohort default rates as a measure of accountability. While some view this action as weakening the regulations, the reality is that it is a clear indication of the administration’s bias toward community colleges and against the private sector. This means that, despite high default rates and low graduation rates, almost no community colleges will be penalized. However, proprietary institutions, with higher graduation rates and lower default rates, will bear the full brunt of the rule.

As the Parthenon Group has pointed out, the regulations’ metrics are an ineffective measure of program quality. Moreover, studies from the Department of Education have shown that many traditional colleges and universities would not meet the strict metrics were the regulations applicable to them. What this means is that programs offered at proprietary institutions would be eliminated, while the same types of programs at traditional institutions, with similar outcomes, remain unscathed.

What makes the new regulations even more astounding is the administration’s utter disregard for the students affected. The new regulations give no indication of where or how displaced students can continue their education. The department already faced backlash for failing to effectively address students affected by the closure of Corinthian Colleges and Anthem Education. The gainful employment regulations will displace exponentially more students. Many of the community and public colleges and universities that the administration is endorsing as an alternative are already at or above capacity and would be unable to serve the thousands of displaced students seeking to continue their education.

While the department feigned ignorance in the case of Corinthian Colleges, it has fully acknowledged the impact of the gainful employment regulations. This malicious approach to the private sector shows blatant disregard for American students and flies in the face of the administration’s stated goal of once again leading the world in the number of college graduates by 2020. The point has been belabored by me and numerous others, but programs offered by proprietary institutions are essential to closing the skills gap and preparing students for high-demand fields such as nursing, pharmacy, computer sciences, culinary and many others.

As Sen. Lamar Alexander (R-Tenn.), the top Republican on the Senate Health, Education, Labor, and Pensions Committee, correctly pointed out, these regulations use early-year earnings to determine a program’s worth rather than earnings over graduates’ lifetimes. This means that many successful programs will be undercut because graduates typically earn less immediately after graduation; in fact, if the rules were applied across all of higher education, programs such as a law degree from George Washington University or a bachelor’s degree in social work from the University of Texas would fail.

It is the privilege and responsibility of community leaders such as myself to ensure that all students are given opportunities to access quality, affordable higher education. However, biased and arbitrary regulations are not the answer. It is my hope that Congress will come together to address the current issues in higher education through the reauthorization of the Higher Education Act, and that members will throw out the gainful employment regulations.

Alford is the co-founder, president and CEO of the National Black Chamber of Commerce.