House Republicans Move to Protect For-Profit Schools’ Earnings

Rep. Virginia Foxx leads the GOP effort to block federal regulation of schools that prey on low income students of color.

By Julianne Hing Feb 16, 2011

True to her word, North Carolina Rep. Virginia Foxx is going to back for-profit schools against impending regulation that might curb the industry’s exploitation of its students.

This week Foxx, the chair of the House Higher Education Subcommittee, Rep. Alcee Hastings and House Education Committee Chairman John Kline introduced an amendment to the Republicans’ continuing resolution bill that would forbid any federal funds be used to enforce the controversial gainful employment rule.

Congress is considering the bill right now, and the amendments could be voted on as early as this week. The current continuing resolution expires March 4. If passed, the Department of Education would have to halt work on the most crucial regulatory provision of the industry, and not be able to implement it anyway.

Last year the Department of Education unveiled a suite of regulations that would require for-profit schools to disclose statistics about graduation and job placement rates and would bar admissions representatives–who function more as sales representatives–from receiving commission pay for every student they register. The last piece of the regulation package, the gainful employment rule, has yet to be finalized. It would bar for-profit schools from accessing their students’ federal student aid and grants if they send students off with too much debt that they’re unable to pay.

APSCU, the Association of Private Sector Colleges and Universities, which represents the industry, praised the Republicans’ amendment.

"This critical amendment, with its bipartisan support, prevents the Department from singling out our schools and the non-traditional students they serve by doing an end-run around the legislative process, and allows Congress to determine what measures are appropriate for all post-secondary education institutions," APSCU President Harris Miller said in a statement.

Civil rights and education groups have come out against the Republicans’ amendment. "We urge you to oppose the amendment to H.R. 1 that would limit the Department of Education’s ability to issue or enforce regulations regarding ‘gainful employment,’" wrote The Leadership Conference on Civil and Human Rights in a letter addressed to House leaders yesterday.

"This amendment to H.R. 1 would hobble the administration’s ability to protect students from for-profit colleges that have used the American Dream as bait to trap vulnerable students into underperforming schools and saddle them with a lifetime of debt," said Nancy Zirkin, executive vice president of The Leadership Conference, in a statement. "We support the Department of Education’s efforts to hold these schools accountable by issuing this rule and vigorously enforcing it."

The Leadership Conference says that the regulations are crucial for protecting the already underserved communities that have become the for-profit schools’ primary consumer base. An Education Trust report last year found that half of for-profit schools’ students are low-income, and 37 percent are students of color. In recent years for-profit schools have begun recruiting heavily among armed-service members and veterans.

This demographic profile isn’t evidence of for-profit schools’ dedication to upholding universal educational access. Rather, these communities are uniquely vulnerable to exploitation from the industry because they are eligible for federal student aid and other benefits that have become the primary source of revenue for for-profit schools, regardless of their students’ graduation rates or future job prospects. Or debt loads.

Education Trust yesterday asked supporters to send a letter to their representatives urging them to oppose the amendment and protect the gainful employment regulations.

"The absence of these regulations has left the most vulnerable students unprotected from unethical for-profit colleges and has bilked tax payers out of millions of precious dollars in Pell Grants and Stafford Loans," read a line from the letter.

The only question now is whether Congress will be able to see through the multimillion-dollar lobbying and astroturfing haze to put students’ needs first.