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June 18th, 2014

Obama’s Gainful Employment Rule



Harry C. Alford

On March 17, 2014 the Obama Administration took aim at career colleges and schools across the country with a new raft of regulations that would displace millions of minority students, strain local economies and reduce overall access to education for all Americans. The Administration’s proposed "Gainful Employment" rule is nothing short of a direct attack on private-sector schools, which have a long tradition of helping to provide opportunity for life improvement to the underserved in this country by providing them access to important vocational training and higher education that they would otherwise be unable to access.

The proposed rule targets programs offered at private-sector schools and colleges and would deprive them of access to Title IV federal student aid if they fail to meet certain arbitrary and arduous metrics. While the Administration claims that these regulations will help lower student debt and single out "bad actors" it neglects to mention that they will also shut down accredited programs with good outcomes and high pass rates on independent licensing exams, or force them to abandon their mission of serving many African-American, Latino and other minority students who otherwise would not have the opportunity to pursue a higher education. As the Washington Post editorial board recently noted, the current draft regulations would force schools to admit only low-risk students, making it harder for minorities, low-income people and nontraditional students to obtain the education needed to improve their lives.

Independent studies have shown that if the current draft of the rule were implemented as written, 42 percent of programs at proprietary schools would fail or be in the failing zone. This includes more than one-third of Certificate programs, three-quarters of Associate degree programs, one-fifth of Bachelor degree programs and one-third of professional degree programs. Moreover, in excess of 1.1 million students that are currently enrolled in these programs would lose eligibility for Title IV federal student aid under the proposed regulations, many while in the middle of pursuing their education.

By singling out private-sector schools with this rule the Administration shows a clear preference for public and non-profit colleges and universities, despite the fact that many of these schools perform no better, and in many cases, worse, than their private-sector peers. On top of that, community colleges would not even be able to absorb all of the students affected by the proposed rule. Many community colleges are already filled to capacity, and, in many case, making substantial cuts.

Despite concerns from industry experts and Members of Congress, including members from the President’s own party, the Department continues to push this regulation on the American people. Additionally, the Secretary of Education, Arne Duncan, has attempted to back up the Administration’s work with questionable, and sometimes false, statistics and misleading statements. Duncan claimed that 72 percent of graduates from for-profit programs earned less than high school dropouts, a statistic that was proven to be "bogus" by the experts at the Washington Post. Nevertheless, the Department has taken to social media to promote its fabricated numbers in an attempt to deceive the American public and damage the reputation of these important institutions.

Recent reports show that student’s aren’t enamored with the Administration’s decisions either. To the contrary, students realize that these regulations would not only hurt their own academic opportunities, but those of many future students and employers who rely on these important programs. CBS’s South Carolina affiliated television station recently captured comments from some of these students who are preparing for important careers in specific fields. "I believe that it not only just limits choice but it also limits creativity," said one student who is studying fashion retail management.

Gutting important programs offered at private-sector institutions by denying students the financial aid they need does nothing to further the Administration’s stated goals of improving access and affordability in higher education. Furthermore, the regulations would serve as another setback to the U.S. economy by adding to the skills gap we are currently experiencing in this country.

If the Administration truly believes its rules to be so great it would apply them equally to all institutions and end its crusade against private-sector institutions – in fact, as the Administration develops its proposed College Scorecard, if the metrics embodied in the Gainful Employment rule are a good measure of quality and outcomes for the private sector institutions, why not use those same metrics to measure the outcomes and quality of programs offered at traditional institutions, public and non-profit? The 845-page draft Gainful Employment regulation fails to acknowledge the important role that private sector colleges and universities play in educating an often neglected segment of the U.S. population and shows just how out of touch the Administration is with the American people. The Administration should rethink its Gainful Employment rule if it truly wants to help students receive the education of their choice and expand, not reduce, opportunities for low-income minority Americans in higher education.

Harry C. Alford is the co-founder, President and CEO of the National Black Chamber of Commerce.


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