If any of you were paying for the education of some college students I know, my hunch is you’d all agree that serious changes in our higher education system were urgently needed.

Well, guess what? You are paying for their education, and you’re not getting your money’s worth. In fact, you might actually be contributing—just as I am—to making the problem we’re discussing this week worse.

When our tax dollars go to support financial aid for students who are unlikely to repay those debts after college, we create two problems: wasted money and wasted students. I don’t think the “gainful employment” rule address will either of these issues.

First of all, it’s a painfully blunt instrument, one that will surely do more harm than good by encouraging institutions to punch up phony numbers (just like states punch up phony test scores) thus making reality even harder to discern.

Second, it’s all symptom and no cause. The problem is rooted not in the for-profit higher education sector, but in all of the higher education sector—and in our society’s current obsession with college degrees regardless of the knowledge and skills students acquire in the process of receiving them.


FROM THEORY TO PRACTICE

Everyone this week is doing a terrific job analyzing this issue from a theoretical vantage point, so I’ll respond with a real-world perspective. My intention here is not to “out” anyone or to expose any “inconvenient truths.” Merely to show what this issue looks like from the vantage point of the college classroom.

If you’ve taught undergrads in the last ten years, you know these truths already, and obviously they don’t seem terribly inconvenient to anyone other than students who realize, far too late in most cases, that the reason they can’t pay for their educations is because their educations aren’t worth a plugged nickel.

In particular, I know of a place that won’t be affected at all by forthcoming regulatory changes because it’s a decades-old traditional institution, not a newfangled for-profit institution.

Yet the very same thing the government is trying to regulate in the for-profit sector is happening in my traditional neck of the woods—and many other institutions of higher education, too, from what I am told and from the research I read.


GREEDY SCHOOLS, EASY ADMISSIONS, AND “FREE” MONEY

The problem of charging kids—and ultimately the taxpaying public—exorbitant sums of money for sham degrees has been alive and well ever sense the modern financial aid system was created.

Even before taxpayers began subsidizing poor teaching and learning at the college level, students, families, and foundations were picking up the tab for eduations at schools that cared less about scholarship and more about dollarship.

Most of the students I am currently observing should never have been admitted to college in the first place—any college. They are good people and I think they are doing the best they can. They come to class. They attempt the assignments. They are polite in e-mail and online exchanges.

They interact to the best of their ability. But their ability is so slight that it seems unlikely they will make the grade—even though some of their teachers offer many hours of additional one-on-one help far outside the scope of course curricula.

This isn’t entirely the student’s fault; though it is their responsibility to correct. They could do so by trying to learn something, or by correcting their voluntary enrollment in programs they know within a class or two that they can’t complete. This is precisely what the traditional “drop/add” period is for.

It isn’t entirely the fault of their professor’s either, though many conspire with their schools to pass kids along who never had the skills or ambition to do the coursework to begin with. A few truly dedicated profs put in hours trying to help kids make up for time and learning lost back in junior high and high school. But far too many are able to rationalize, within the context of a system that offers them no viable alternative, the graduation of 20-, 30-, and 40-somethings who can’t read, write, and think at levels even comparable to our new K-12 Common Core State Standards.


LET’S STOP PRETENDING

I see these kids—and if you teach undergrads anywhere but at the most selective institutions, you see them, too. I talk to profs all over the country. I read the research. This problem is real. And it’s not just happening in the for-profit sector. It’s just more egregious there, and therefore much easier for our government to beat up on the “bad guys” than it is to beat up on itself.

The problem, of course, is that the institutions in question let these kids in not for the purpose of educating them but for the purpose of cashing their—uh, our—checks. Then they begin passing them from class to class regardless of the learning they acquire.

In classes I’ve observed, even juniors and seniors lack basic skills in reading and writing—some even lack basic speaking skills. (I’m referring to speaking in complete, correctly-formed sentences here; not giving TED talks.)

This is not an isolated incident. I’ve seen and heard of many ill-prepared, degree-crazed kids in supposedly serious schools of all kinds—not just in these for-profit places everyone is crowing about.

These are “respectable” institutions of higher learning, state schools mostly, institutions where we might assume kids are getting a fair shake—instead of shaking piggy banks paying for worthless BA’s via mom and dad’s second mortgage and Uncle Sam’s largesse.


LET’S GET THE PROBLEM RIGHT, FIRST

The problem is that we’re arguing about the wrong problem. We shouldn’t be attaching percentage requirements to what kids can recoup from college expenditures, we should be attaching common sense to our national higher education policy, and to our culture’s ridiculous obsession with college as a proxy for knowledge.

This is not a situation where money-grubbing private institutions pick the pockets of earnest young souls striving, Horatio Alger-like, to make something of themselves in the world. It’s a situation where too many ill-equipped and unmotivated students are beginning to define undergraduate education—for-profit, non-profit, and traditional—to the point where the system itself now depends on them the same way health clubs depend on people not showing up to work out.

Young poeple arriving at college these days are the first generation to have grown up in the era of high-stakes testing—and it really shows. Many kids I see and hear about think getting an education is reading a short article and filling in bubbles on an answer sheet.

But older students seem to struggle, too, though I don’t think it’s for lack of ability in so many cases. These folks just want a piece of paper because they think it will get them a better job. Maybe it will. Probably it won’t.

In many college courses today, writing even very short essays on simple topics, does not fly. Reading a book, perhaps something in the non-fiction genre of 200-300 pages in length, is anathema. Requiring even just 30 minutes of nightly study for a given class leaves students slack-jawed. Throw in a short informal essay each week and you might have to call the emergency room.

Even just five hours a week of modestly challenging out-of-class effort for a five-credit course seems outrageous to many undergrads, most of whom seem to feel they are entitled to a degree simply because someone—that would be you and me—wrote a check for it.

But this isn’t about the work or the fact that the kids can’t do it. I’m a teacher. I can teach them up to where they need to be in a New York minute. I’m willing to do it, too, even if I have to personally instruct multiple students in skills far outside the scope of a given course. It seems, however, that for today’s undergraduates—especially those in smaller state schools—New York minutes are as rare as Rhodes Scholars.

Many students have little interest in learning. Seat time is all that matters, and some students don’t even show up regularly to keep their seats warm. But once they’ve paid—or once we’ve paid—they feel entitled to a degree.


THE UN-KNOWLEDGE ECONOMY

Three trends have conspired to create what I sometimes refer to as the “un-knowledge economy”:

1. A nation that wants more college graduates regardless of the skills their college graduates possess;

2. Families and children who want undergraduate degrees at any cost, and who don’t feel even a bit shy about asking the government to cover that cost even if learning has little to do with one’s reason for going to school; and

3. Post-secondary institutions happy to play the middle man for a not-so-small fee.

What makes this such a perfect conspiracy is that there's no incentive for any party to rat out any other. It’s win-win-win. Until it’s lose, that is.

Our nation gets more college graduates than ever before (a win for politicians). Students get to enjoy their social lives at school (a win for the Facebook generation) or their real lives outside of school (a win for harried online and night-school attendees). Universities leverage all this pent-up demand from politicians, policy makers, parents, and pupils to raise costs far faster than inflation (a win for empire-building deans and presidents).

It’s a perfect system, a system so perfect that it can’t be regulated out of existence. It can only be destroyed and rebuilt from scratch through courage, honesty, ethics, and hard work.


OF SAVVY SCHOOLS AND DODGY DATA

The current administration’s attempt to regulate for-profit post-secondary institutions will be ineffective and may perhaps even make things worse. Why? Because savvy schools will rig their data to comply. Some will also offer money back guarantees to students as an informal caveat emptor disclosure system.

This will help the institutions who will be able to prove that they are at least honest swindlers, but it won’t help the students. They still need degrees—or at least they think they do. Even if money back guarantees are offered, struggling students won’t take them because going somewhere else won’t increase their chances of securing a sheepskin.

I suppose people with unusual determination and a lot of time on their hands could maneuver themselves down the ranks through trial, error, and early withdrawal to the easiest programs in the country. But, in general, we’re not talking here about people with unusual determination and a lot of time on their hands.

Let’s remember, too, that regulating the for-profit sector won’t fix the problem because the problem isn’t just in the for-profit sector. This isn’t a case of a few bad apples. It’s practically the whole bunch that’s rotten.

IT'S RIGHT THERE IN THE NUMBERS

Take a look at the stats on who gets into college, how they fared in high school, who needs remediation when they arrive, the relatively low percentage of kids who graduate, and so on.

Take a look, too, if you dare, behind the scenes, in the offices of conscientious college professors struggling with a horrible dilemma: pass kids on to their colleagues and conspire in the problem, or flunk entire classes, expose the system for what it is, and immediately head back to school themselves so they can find a new profession.

If we let unprepared students in and then through, we’re part of the problem; no better than the greedy recruiters and diploma mills we’re all so upset about. On the other hand, if we dispense with the ignominious tradition of the “Gentleman’s C” and live up to real standards of academic achievement, significant portions of significant institutions might be at risk.

Perhaps even harder would be looking students squarely in the eye and telling them what they already know: they’re flunking themselves out of school, out of jobs, and maybe even out of fulfilling lives. Then again, all this gets us is more unhappy students who can’t pay back their student loans.


LET’S TRY TO REMEMBER WHY WE’RE HERE

I got into education to help people, not to ruin their lives. But if I let unskilled students through like thousands before me, am I not lying to these people about what life is going to be like after they graduate? Am I not saying, “Hey, you passed! Good for you! Sorry I didn’t hold you to a standard that would help you make your way in life.”

But if I do hold them to that standard, if I do bring in a bit of the real world, a few recent industry studies, and my own experience of what it’s like trying to get and hold a decent job in this bold new economy of ours, I’ll probably have to flunk most of them, won’t I?

As a result, some will be deeply discouraged and may quit school altogether; others will just “pay and pray” that they can get through somehow by finding one of the “easy” teachers next year when the same course comes around once more.

As for the conscientious professor, who can deal with 10-20 “grade appeals” each semester, or hope to survive when one’s personal values conflict so deeply with those of his or her employer?


WHATEVER HAPPENED TO STANDARDS?

We seem to have decided (though I’m not exactly sure how) that national standards for academic achievement at grades K-12 is a good idea. We’re nowhere near ready to help kids meet those standards but putting carts before horses is kind of the way we do things in education.

So what about higher education? If standards are good for the goose are they good for the higher goose?

My guess is probably not.

What college teacher would put up with being told what to teach, how to assess it, and why he or she should be required to take up inordinate amounts of class time with mindless test preparation?

Then again, I don’t’ know why so many K-12 teachers are willing to put with this either, but that’s another mystery for another day.


WHAT DO WE GAIN FROM THE “GAINFUL EMPLOYMENT” RULE?

The “gainful employment” rule does nothing to address the real problem of kids getting degrees without developing economically viable skills. It’s just another way of applying technocratic quantification to a problem that is almost entirely qualitative, social, and cultural in nature.

Everyone wants everyone else to have a college degree these days. The easiest way to achieve this is simply to give out degrees. The more we can charge for them, the more we seem to think they’re worth—even though this is a proven fallacy.

The fact that so many people want degrees simply means institutions need only estabilish the capability to print diplomas; education need not be more than an afterthought. Throw in a little “online learning”—which I like to think of as education’s next oxymoron—and, as that perky little gal says in those 1-800-BA4UNOW commercials, you can get a college degree in your PJs. (There’s probably even a “sleepover” option for groups!)


JUSTICE BRANDEIS WEIGHS IN ON THE POWER OF SUNLIGHT

The solution here is not a "gainful employment" rule but a transparency rule. Require all institutions—not just for-profit ones—to publish acceptance rates, remediation rates, matriculation rates, debt rates, employment rates, post-graduation student satisfaction surveys, independent audits of curriculum, instruction, student work, and honest information about “TCG” or “Total Cost of Graduation”, etc.

We’re all so obsessed with education data these days, why don’t we just start collecting and publishing some of it in ways that taxpayers, families, and students can understand?

I am not anti-college; rather, I am pro-knowledge. If college is where people can get the knowledge they need to lead fulfilling lives, then that’s where they oughta go to get it, and they oughta pay a pretty penny for the privilege. Because that’s what studying at the college level is—a privilege.

But if people can get knowledge by other means, why shouldnn't they be encouraged to get it? And if colleges know prior to admission that potential students don’t have what it takes to succeed both in school and out of it, why not make them at least fess up to this reality?

We can’t regulate the tacit complicity of institutions, professors, states, politicians, parents, policymakers, students, and the taxpaying American public—all of whom benefit in some way from the current state of the system, if only by feeliing better about themselves until it's time to pay the piper. If our government can print money, why can't we give to institutions to print diplomas?

We could, as in some European countries, retarget the recipient of financial aid from students to institutions. This might encourage schools to allot their allotments a lot more smartly by subsidizing only those students they feel have a reasonable chance of success. Here in America, however, we hate even good ideas that come from other countries, so I doubt we’ll ever get around to this one.


THERE ARE SOME THINGS GOVERNMENT JUST CAN’T DO

We can’t regulate stupidity. The college students I see know exactly that they don’t know anything. They know exactly that they aren’t doing their work. They know exactly how much they’re clinging to the all-too-easily-fulfilled fantasy that somehow 20 or 30 profs will pass them right along humming “Pomp and Circumstance” as they glide effortlessly through their college careers en route to no careers at all.

We can’t regulate the truth or people’s perceptions of it. But we can make it easier to discern. While I’ll be the first person to argue that college-level knowledge is a good thing for everyone, I don’t think college itself necessarily is.

I know many un-degreed people who have BA-ish, MA-ish, and even Ph.D.-ish expertise—and great careers to go with it—while possessing nary a relevant credit on their life transcript. It’s so easy to learn now. And, in what is truly the best result of our nation’s embrace of it’s educational crises, more people than ever want to give of themselves to help others become better educated.


ASPIRATION OR EXASPIRATION

If we truly believe in free-market solutions, there’s no better marketplace in which to test our devotion than the marketplace of ideas. I don’t think free-market ideologies hold up very well in education, but in deference to our American heritage, I think we should at least give it an honest shot, if for no other reason than to finally wake up to the fact that theories of classical economics, the Invisible Hand, markets, and the “rational actor hypothesis”, don’t constitute a workable model for schooling up a nation.

If employers would wise up and hire people for their wisdom; if politicians and policy wonks would stop lusting after better stats; if parents would stop worrying that their babies will end up living in cardboard boxes if they don’t have an Ivy League degree; and if students realized that learning was more important than schooling; I think some measure of sanity might settle upon this mess, and thereupon we might begin, with a humble nod to honesty, ethics, and common sense, to connect higher education with higher aspiration, as it is truly meant to be.

I'm late to the party but agree with Spellings and Bailey (and have no financial state in this issue).

Harkin is on the war path to kill private participation in education. Instead we should focus on the goal that Obama set out in the state of the union--to be first in the world in completion. Most of our public institutions have terrible completion rates because their funding causes perverse incentives to churn lower classmen to pay for upper division programs. In many cases for-profits have better completion rates than public counterparts and serve needier populations. As I wrote on July 15, don't kill the guys that will make the US #1

The Education Department said Friday that it will delay until early 2011 its final rules on gainful employment as it relates to a program's eligibility to receive federal student aid.

"We are taking additional time to consider the comments we received and to host several meetings and public hearings in the coming weeks. These meetings will allow interested parties to clarify the comments they've submitted and respond to questions from Department officials while allowing for the regulations to go into effect on or around July 1, 2012, as planned," the department said."

The announcement shouldn't be taken as a sign that Ed is backing down.Education Secretary Arne Duncan said, "Let me be clear: we're moving forward on gainful employment regulations. While a majority of career colleges play a vital role in training our workforce to be globally competitive, some bad actors are saddling students with debt they cannot afford in exchange for degrees and certificates they cannot use."

The department is on track to publish other aspects of the rules on for-profit colleges on or around Nov. 1, including graduation rate and job placement disclosures and tighter prohibitions on incentive compensation for admissions recruiters.

At a time when the Obama Administration is searching for additional stimulus ideas in response to a struggling economic recovery, it is ironic that the Administration would consider advancing a proposal that will only contribute more economic uncertainty and limit important job training efforts moving forward.

Career colleges play an important role in our diverse system of higher education. They offer flexible course schedules and use online technologies to meet the unique needs of working adults, single parents, and other non-traditional students many of whom have been hit the hardest by the recession.

The proposed gainful employment regulation risks disrupting career opportunities for millions of these Americans, many of whom are minorities. It also undercuts the President’s goal of leading the world in college graduates by 2020. Here are a few of the flaws with this proposal:

• Only Targets One Segment of the Higher Education System. Protecting students and taxpayers from low-quality programs and unwieldy debt burdens should be a priority, but these are issues we face across the whole system of higher education. Yet, the Administration has decided to only target the career colleges sector with a series of tests that many public institutions could not meet. For example, Harvard’s Medical School would fail to meet the loan repayment standard given their current repayment rate is 24%. And it is not just career college students who may struggle with their loans. At CNBC’s Town Hall meeting with the President held earlier this week, a law school student expressed his frustrations with managing his student loan debt, mortgages, and having a family.
  
• Penalizes Schools for Broader Economic Trends: Michael Mandel pointed out that college debt has become more burdensome for students because of flattening wages. While college costs have risen faster than the rate of inflation, the real earnings of college graduates – regardless of the institution they attended - have gone down since 2000, particularly during the recession. The proposed gainful employment equation doesn’t reflect this and instead penalizes institutions for economic trends outside their control.

• May Decrease Low-income and Minority Student Access: Instead of increasing low-income and minority student access to higher education, the proposed rules will limit capacity and opportunity. The new rules could also create the perverse incentive for institutions to discriminate against lower income students or anyone who might be a credit risk. This would be a bitter pill to swallow since many of these same individuals probably have the most to gain.
• Insufficient Analysis: The proposed regulation would introduce far-reaching changes with repercussions for both students and employers but the Department lacks sufficient data to assess the full impact of this complicated and confusing regulation on the economy, students, and the broader system of higher education. There also remain unanswered questions about how public institutions could absorb so many displaced students at a time of declining public funding.
  
• Targeting the Wrong Problem at the Wrong Time. The Administration’s concern for unwieldy debt is also laudable, but the focus of such effort should be on housing. As the Federal Reserve Bank of New York's report on household debt and credit shows, the major debt challenges are not student loans, but rather mortgages which account for 74% of all household debt. More than 24% of all residential mortgages are in negative equity – meaning they owe more than their house is worth – and more than eight million home loans are in delinquency, default or foreclosure. This is not only slowing the broader economic recovery but it also contributes to lower repayment rates on other forms of debt, such as student loans, especially as individuals shift more of their income to mortgage payments to prevent foreclosure. If helping individuals manage unwieldy debt is a concern, the Administration should focus their efforts here, especially after so many have acknowledged that the HAMP program has failed to provide any meaningful assistance.

For all these reasons, it is not surprising that the proposal has attracted broad, bipartisan opposition ranging from students, to brigadier generals, to the Rev. Jesse Jackson. More than 80 members of Congress, including members of the Congressional Black and Hispanic Caucuses, have expressed concerns. The U.S. Chamber of Commerce argued that the “Administration is attempting to regulate America into an economic recovery and causing tremendous uncertainty in yet another sector of the economy.” Local chambers in innovation centers such as Silicon Valley and Redmond, Washington have expressed concerns that the regulation could hurt our nation’s global competitiveness. And more than 80,000 individual comments were filed, the most in the Department of Education’s history.

The Administration should delay enacting this regulation. At minimum, more time should be given until there is better data upon which to craft a proposal and assess its full effects, especially because of the number of aspiring students and job seekers that would be impacted during very challenging economic times. The Administration should also look for ways to encourage more private sector investment in our education system, not less, particularly in developing the job training programs needed to keep our nation’s innovation edge. And any discussion of quality must include all segments of the system, not just the career colleges.

Federal law requires career education programs that receive federal student aid to "prepare students for gainful employment in a recognized occupation." The proposed rule defines what this means so the law can be enforced. NEA has joined a coalition urging the Department of Education to issue a strong rule to protect both students and taxpayers from career education programs that over-promise and under-deliver.

While for-profit colleges enroll less than 10 percent of all students, they account for 25 percent of federal student aid and 44 percent of all federal student loan defaults. A recent report from the Government Accountability Office (http://www.gao.gov/products/GAO-10-948T) found for-profit colleges engaged in deceptive and questionable marketing practices. Among the examples cited in the report were colleges promising jobs with the Federal Bureau of Investigation or the Central Intelligence Agency after earning an associate degree when positions as an FBI Special Agent or CIA Clandestine Officer require a bachelor's degree at a minimum, and promises of salaries of $150,000 to $250,000 a year for barbers when the Bureau of Labor Statistics reports that 90 percent of barbers make less than $43,000 a year.

At a time when some type of post-secondary education is becoming more essential for adults of all ages, sensible protection is more important than ever. We must not, in the name of protecting student access, protect programs that leave students without prospects and with excessive debt. Our goal must be to increase student access to quality and affordable education.

For-profit, or career, colleges, play an important role in the post-secondary education environment by ensuring access to higher education for millions of Americans and working towards President Obama’s goal to lead the world in college graduates by 2020. For-profit colleges should be treated as equal partners and an essential cost effective way of assisting the President in meeting those goals. Should the Gainful Employment regulation be imposed, it would incur disproportional harm to low-income and minority populations by discriminating against students who must borrow the needed tuition to attend college.

Studies show that by offering career-focused curriculum to many students, who may be working a full-time job, a single parent, minority or lower income, career colleges do a much better job at graduating low-income students than their four-year and two-year public and private non-profit counterparts. And despite similar enrollment factors, the graduation rate for two-year career college is more than double the rate for community colleges. What’s more, at four-year institutions, with more than 40 percent of their students receiving Pell grants, the graduation rate at career colleges is 38 percent as compared to 33 percent at public institutions.

What should not be lost in this debate is the financial contribution that career colleges deliver to the economy. Career colleges are the only institutions that pay state and local taxes, contributing nearly $1 billion to tax revenues in 2008. The proposed Gainful Employment rule creates a false perception that career colleges cost American taxpayers significantly more for student education than their non-profit college counterparts. In fact, total federal and state grant subsidies for four-year public colleges are over twice that of career colleges. Clearly, during these difficult economic times, career colleges are helping to improve the sustained 10% unemployment that our country has endured for over two years.

The Department of Education should follow President Obama’s commitment to providing opportunity to millions of low-income Americans by rescinding the proposed Gainful Employment Rule.

Senate Health, Education, Labor and Pensions Chairman Harkin has scheduled a hearing on for-profit schools for Sept. 30. The hearing, one of a series, coincides with an investigation underway in the committee. Harkin has been critical of for-profit colleges' practices, and he isn't expected to back down now. I welcome thoughts on how this hearing could change the debate.

You would think the tough economy coupled with President Obama’s goal of America being number one in degree completion by 2020 would give the Administration pause before it regulates any piece of our higher education system into potential collapse.

All sectors of higher education -- private, public, community colleges and the proprietary sector -- play a necessary role. The proprietary sector in particular is a proven leader in innovation, including in the delivery of instruction, as well as program development for non-traditional students, among them single parents and first-generation college students who are holding down jobs while furthering their education. We need more private-sector investment and innovation in higher education, not less. Yet, the Department’s actions will have a chilling effect on innovation and result in reduced access, less opportunity and convenience, and fewer choices for students.

Affordability in higher education is an issue, to be sure, but it’s an issue across the whole system. Despite this fact, the Department is targeting the proprietary sector and justifying its actions by pointing to language written into the Higher Education Act in 1965 when they were solely career training schools. Today’s proprietary schools are not unlike traditional schools. They offer bachelor’s degrees, master's degrees and are accredited by the same entities in many cases. Yet they are being singled out, in my estimation, because they are “for-profit.” This administration has by its repeated actions shown an utter distaste for the private sector in education and a bias toward government solutions.

Those who stand to lose the most are those least well served by traditional institutions. Nearly three million students, many of whom are low-income, attend proprietary schools each year and are on a path to job security. This proposed rule is lethal to programs that enroll significant numbers of low-income students because they tend to borrow more money than their more affluent peers, regardless of the school. In addition, this measure flies in the face of President Obama’s degree attainment goals. It targets high-quality degree programs that take longer to complete, in favor of less costly diploma and certificate programs. Virtually no colleges, proprietary or otherwise, can meet the 8 percent threshold for bachelor’s degree programs. The Department’s message is clear: if you’re a low-income student, aim your sights on non-degree, less expensive programs and leave degree programs and the access they provide to more and better job opportunities to your affluent peers.

Given that Congress has requested GAO study the sector, it would be wise for the Department to wait until that review has been completed and the data exists to better inform the proposal and understand its true impact on the industry, the economy and, most importantly, the students.

Here is a guest post from Lanny J. Davis, a special adviser to the Coalition for Educational Success, a group of for-profit colleges, and former special counsel to President Bill Clinton.

"The Education Department’s proposed 'gainful employment' regulations would likely have a disproportionate adverse impact on low income and minority students – i.e., those who predominantly attend for-profit colleges, which have 'open admissions' policies, unlike most private not-for-profit colleges. Can you imagine the cries of outrage from congressional liberals if this were a Republican Administration making such a proposal?

These proposed regulations are so poorly crafted that if applied to non-profits too (as of now, they do not), Harvard Medical School and D.C.’s famous minority school, Howard University, would all fail the loan repayment test -- one of two critical tests the Department proposes to determine continued eligibility in Title IV funds for student loans.

Education Secretary Duncan needs to put on an amber light before finally issuing these regulations. He needs to use a scalpel, not a hatchet, to address the issue of excessive student debt without disproportionately affecting America’s most vulnerable lower income students. And of course he should focus on stopping serious abuses of recruiting and other abuses – which, incidentally, are not even addressed in the 'gainful employment' proposed regulations – but at all colleges where they occur, not just for-profits."

Private sector colleges and universities should and do play a large and growing role in the higher education landscape, bringing heightened access, innovation, and competition to traditional approaches that have all too often lacked all three. Where does gainful employment fit into the mix? The Department of Education claims gainful employment is an attempt to control excessive student debt. But much of student debt, excessive or otherwise, is incurred to pay for expenses far beyond tuition and fees.

While some critics claim that the excessive debt situation could be averted simply by the institutions themselves cutting their program costs, there is little to suggest that doing so would actually lower student borrowing. Meanwhile, it comes as no surprise that students with fewer financial resources borrow more and have a more difficult time paying their debts.

On the earnings end of gainful employment equation, again the logic is elusive. The current Department of Education proposal would tie its debt to earnings ratio to the income amounts reported by specific cohorts of students in the first years after attending specific programs. Doing so allows enormous variability into the formula. Those deciding not to work, to enter a different field, to join the military, to care for a sick relative, or to pursue other options throws a major wrench into the calculation, while the calculation itself fails to factor in the probability that earnings increase with years of experience.

It’s no accident that over 80,000 students, employers, institutions and other interested parties, including 80 members of Congress, have responded to the Department of Education’s gainful employment proposal, most negatively. Americans want choice. A recent survey commissioned by the Career College Association found that almost two thirds of adults surveyed think that the decision of how much debt one can take out to pay for education should be left up to the student.

Can more be done to improve the performance of private sector colleges and universities? Absolutely. Just as more can be done to improve community colleges, liberal arts colleges and state universities. We supported numerous provisions of the Education Department’s most recent rulemaking.

More can be done, and should be done. But not in a way that discriminates against those attending private sector colleges and universities and threatens the postsecondary education of two million students over the next decade.

Here is a response from Ben Miller, a policy analyst at Education Sector and the author of "Are You Gainfully Employed? Setting Standards for For-Profit Degrees"

http://www.educationsector.org/publications/are-you-gainfully-employed-s

"Two distinct issues are currently at play in the for-profit sector—helping students hardworking students make better decisions and preventing schools from engaging in fraud or questionable activities.

The gainful employment standard falls into the former category. It examines the outcomes for students who have done everything right—the ones who have worked hard, sacrificed precious time with their family, gone into debt, and eventually earned a degree or credential. Right now, all the marketing materials and information presented by colleges tells students that if they graduate, if they make those sacrifices, then they will put themselves in a better position. The ads talk about how graduates will be more valued and work in more exciting areas.

Unfortunately, that’s not always true. Take for example students who are encouraged to pay nearly $50,000 to follow their passion and explore their creativity (real words from an ad) and get a culinary arts degree, but graduate only to find themselves in a field with an average starting salary below $20,000. And that’s not an isolated incident. In many cases, programs are loading students up with unmanageable debt levels; amounts so high that even if students do manage to find employment in their field, their earnings couldn’t ever be enough to meet the monthly payments.

Putting students in that position is a cruel joke and the gainful employment standard would put a stop to this problem. For the first time it would provide reliable and comparable data across institutions for every program at for-profit colleges. This information would allow consumers to see actual data on earnings and repayment rates. Those programs for where the earnings promises are a reality—and various studies including one I conducted myself indicate that most programs will fall in this category—will be unaffected. But those that fail to hold up their end of the bargain and are leaving their hardworking graduates stuck in careers that will never help them repay their debt will be in trouble and have to change their ways."

The Department of Education deserves praise for initiating a rulemaking process to safeguard taxpayer investment in Title IV gainful employment programs and to ensure that these programs adequately benefit students. Everyone with a stake in higher education should be concerned by findings of recent Congressional hearings that students enrolling in some job training programs have later found themselves unemployable in their anticipated career fields and saddled with large student loan debts. Postsecondary education and job training programs should increase the employability and future earnings of students, not leave them worse off.

Approximately 53,000 programs will be affected by this regulation, according to Department of Education data, including 40,000 at traditional colleges and universities. Congress, the American public and, most importantly, students enrolled in gainful employment programs must be assured that these programs provide value. Ability to repay student loans – what the government calls “the repayment rate” – is potentially an important indicator and we’ve encouraged the department to continue to refine it. However, at present, the impact of their proposal cannot be simulated for the many programs it will affect.

The American Council on Education and more than 50 higher education and accrediting organizations submitted comments to the Department of Education on the proposed regulation in an effort to help the department better target the regulation and achieve its intended purpose. The department is to be commended for moving forward but we urge caution until the full impact of these regulations is known.

This guest post is by Fardad Fateri, President and CEO of International Education Corporation, headquartered in Irvine, Calif. He has served as a professor, staff member, administrator, executive and senior executive in nonprofit higher education and proprietary career education for most of his adult life.

Since we live in a country deeply rooted in justice, equality and fair treatment of all, we should create an even playing field for all postsecondary institutions. I fully support the importance of regulatory oversight for all postsecondary institutions, from market funded entities to public institutions. This must be a thoughtful and holistic approach for all and we must put the student, not politics at the core of our conversation and align our thoughts and actions around what is best for the student.

However, the U.S. Department of Education and Congress should not blame career colleges for addressing a need in society and for serving the common good. Don’t use the tax status of career colleges and the subject of funding to delineate us from our peers in the nonprofit sector, this is an inferior approach to formulating public policy. Instead, a responsible methodology must be used to assess the viability and value of any postsecondary institution by integrating direct measures to assess quality and integrity.

Will the people who run traditional colleges and universities as well as community colleges accept being accountable for direct measures of student retention, graduation and employment? Doubtful.

This is a guest post by Willie Gary, a senior partner in the law firm of Gary, Williams, Finney, Lewis, Watson & Sperando.

Career colleges are successfully preparing students for careers in business, information technology, art, allied health, culinary arts, and more than 200 other fields. The colleges are also preparing students for promotions, helping them get better jobs at higher wages so they can better care for their families.

It would be a national travesty if the federal government denies youth, as well as working adults, opportunities to enhance their quality of life through career colleges. I am stunned to find our government adopting such an elitist attitude. The students at career colleges are disproportionately minorities, women and low-income earners. How can the Department of Education close the door on their opportunities? These students may not have the resources or educational backgrounds to attend Ivy League schools, or other non-profit colleges and universities, but that doesn’t mean the federal government should trample on their right to further their education.

Clearly, the Department of Education needs to develop and implement regulations that protect career college students from the few scam artists that bilk the government and do little to educate or train students. But that is just a tiny fraction of the career colleges in America. Most do outstanding jobs. The Department of Education has a responsibility to separate the good from the bad, so that students willing to learn additional skills have opportunities to do so.

This is a guest post by Tom Moore, President and CEO of Education Corporate of America, operator of career colleges in Alabama, Florida, Georgia, Louisiana, Mississippi, South Carolina, Texas and Tennessee.

The facts show that the traditional model of higher education – nonprofit public and private universities and community colleges -- is limited in its ability to support this pathway. The overcrowding problem is so acute at some community colleges that many students have stopped making progress toward earning a degree simply because they are unable to get access to necessary courses. While capacity is a major problem, there is an even greater concern around capability. Career Colleges are built around serving the needs of the workplace and preparing graduates to be "Employment Ready". This is one of the main reasons that for-profit colleges have become so accepted and widespread-- classes when they are needed with a focus on building the skills, knowledge and professionalism necessary to be successful in the work place. This is critically important to meeting the demands of the emerging new economy. Today, the 2.2 million students at career colleges represent 13% of the total college population.

This is why it is ironic that so-called career colleges have recently come under attack from the Department of Education. This at the very time that the President is calling for the US to add eight million more college graduates in the next decade and lead the world in the proportion of college graduates. Shouldn't all schools be subject to the same set of rules regardless of their tax status? Don't we need every possible outlet for reaching this goal?

Today’s question assumes the U.S. Department of Education's proposed regulations – including the introduction of "gainful employment" limits on student loan debt – are designed to improve "how for-profit colleges operate." If that were the sole motive, we could discuss gainful employment as if it were an attempt to reform one sector of higher education.

Unfortunately, the intention of these proposed regulations is to cripple for-profit higher education – much of it delivered online via the Internet – while exempting public, government-owned educational institutions from any and all regulations.

In Colorado, for example, Otero Junior College is approaching a student-loan default rate that will cause it to lose access to Title IV grants and direct student loans. Otero serves working-class families and students, many of them first-time college students. For all the customary reasons, student-loan defaults among this demographic are higher than among upper- and middle-class students who come from families with a history of college attendance. High loan defaults historically and presently track low-income populations regardless of whether they choose to attend for-profit, non-profit or government-owned institutions.

Much has been made of disgraceful recruiting practices exposed by investigators who recorded and videotaped admissions personnel at for-profit colleges. In the case of Westwood College in Colorado, Westwood's accrediting association has acted to remove Westwood's accreditation. The means to sanction bad actors already exists in the current accreditation process.

What the U.S. Department of Education wants to do, however, is to limit, if not eliminate, access to Title IV programs by for-profit private educators. Moreover, the Department is attempting this not through the legislative process, but through the making of administrative regulations.

Congress spent five years deliberating the reauthorization of the Higher Education Act that governs higher education and government tuition assistance programs. That legislation was passed in 2008.

Avoiding Congressional and public scrutiny of its intentions, the Obama Administration has chosen not to bring its proposals for "reform" to the appropriate committees of Congress. Rather, the Administration is pressing to impose them on higher education by means of the negotiated rule-making process.

Their proposals were published in the Federal Register in June and elicited 18,000 responses – an extraordinarily high number – because those proposed regulations are radical, ill-crafted and manifestly unconstitutional. The gainful-employment regulation elicited 25,000 responses.

These proposals belong in Congress where there is an established, public, and deliberative process that achieves reform through consensus. That cannot be accomplished by regulations dreamed up in some back room and then forced on the higher education community.

Our system of federal student aid depends upon assurances that public funds are properly spent, that institutions engage in ethical practices, and that students and the public are not deceived. Unfortunately, Government Accountability Office investigations and news stories about unethical practices and graduates who earn so little that they have no hope of paying off taxpayer-backed loans have shaken the trust in our higher education institutions. All of us in higher education should be concerned by the testimony in recent Congressional hearings that revealed that students graduating from some job training programs are unemployable in their anticipated career fields and saddled with large and unmanageable student loan debts.

In order to rebuild the public trust and to assure both taxpayers and students that their money and time are being invested appropriately, the Department of Education has a responsibility to regulate and to ensure that its policies are followed. While the focus of the proposed gainful employment regulations is on the for-profit postsecondary education sector where the problems surfaced, the regulations apply to all sectors that provide non-degree training programs. Nonprofit institutions are being swept into the same pool. Virtually all community colleges offer programs that would be covered by the proposed regulations. Since these institutions are not nearly as well financed as for-profit colleges, the regulations could drain away precious resources and present a significant challenge.

Students attending community colleges account for less than 13 percent of all federal loans even though they represent 43% of student enrollments. The most recent data from the Department of Education show that only 5% of community college students in certificate programs take out federal loans to finance their education; for those who do borrow, the average debt is $3,600. The American Association of Community Colleges has been advocating for years to allow institutions more discretion in limiting loans for those students who are most likely not to complete programs. This authorization would provide further protection for students and taxpayers.

One example of a proposed regulation that makes no sense for public community colleges would require federal approval of new workforce programs. For public community colleges, new program proposals generally must be approved by vocational advisory committees, college curriculum committees, governing boards, and sometimes states and accrediting agencies. Adding another layer of bureaucracy would jeopardize the ability of these institutions to respond on a timely basis to local labor market needs. Burdensome reporting requirements would drain resources more appropriately used to teach and assist students.

Like community colleges, for-profit colleges are really government funded or backed, although at the federal-level as opposed to the state- or local-level. As stated in the Notice of Proposed Rulemaking, the five largest for-profit colleges derive 77% of their revenues from federal Title IV aid. By comparison, the average community college receives 6% to 7% of its funds from Title IV programs. However, community colleges are subject to significantly more public oversight, usually by elected or appointed local boards, state boards, accrediting agencies and sometimes state legislatures.

While I support Secretary Duncan’s efforts to develop regulations which safeguard taxpayer and student investment, I encourage the Department to understand the differences in risk posed by nonprofit and for-profit institutions—and to recognize that compliance with regulations has a cost. The rules should address the problems and not constrain institutions to do what is needed for students and local economies.