Here we go again.
I’ve written about the ongoing battle between the for-profit education industry and federal regulators many times, but last week we entered a new phase: federal circuit judge Rudolph Contreras in Washington, D.C. overturned a key provision in the recently issued U.S. Department of Education regulations regarding the for-profit college industry. He ordered that the remaining regulations be reconsidered and rewritten, because they are entangled with those struck down. The regulations were designed to prevent the accumulation of high debt and poor skills by graduates of for-profit colleges, by requiring those colleges to prove that their graduates had achieved “gainful employment.” Those failing to do so would receive a penalty that might include losing eligibility for federal student aid.
In his written opinion, Judge Contreras upheld the majority of the USDOE’s regulations, arguing that “the gainful employment regulations are a reasonable interpretation of an ambiguous statutory command: that the Department provide Title IV funding only to schools that ‘prepare students for gainful employment in a recognized occupation.’” He also decided that, “because one of the debt measures lacks a reasoned basis, that regulation will be vacated as arbitrary and capricious. Because the majority of the related rules cannot stand without the debt measures, they will be vacated as well.” As he further explained,
“No expert study or industry standard suggested that the rate selected by the department would appropriately measure whether a particular program adequately prepared its students. Instead, the department simply explained that the chosen rate would identify the worst-performing quarter of programs. Why the bottom quarter? Because failing fewer programs would suggest that the test was not ‘meaningful’ while failing more would make for too large a ‘subset of programs that could potentially lose eligibility.’”
There is disagreement over the interpretation of this decision. Leaders in the for-profit college industry, including the Association of Private Colleges and Universities, which had collectively sued the USDOE upon the initial announcement of the new regulations, claimed it a victory. The federal government disagreed with this interpretation. USDOE spokesman Peter Cunningham argued that “the court upheld our authority and spoke to the need for the regulations but basically thinks a clearer rationale is needed for the 35 percent repayment rate.” Supporting this interpretation is Amy Laitinen, former USDOE policy advisor and current deputy education policy director at the New America Foundation. She said, “the key victory for the department is that they do have the authority to set these standards.”
While this difference in opinion can be seen as each side’s attempt to put a positive spin on this latest development, a careful reading of the decision does show, as headlined in The Chronicle of Higher Education, that is one that “gives each side something to cheer.”
What effect does this game of legal ping-pong have on students?
Critics of for-profit colleges have argued that it is less the judge’s opinion that USDOE regulations are “arbitrary and capricious,” but that the colleges themselves are. They believe that in their application of academic standards, these colleges provide poor-quality professional preparation, leading to high unemployment and insurmountable student loan debt. But what effect will this have on students at for-profit colleges? Pauline Abernathy, vice president of the Institute for College Access & Success, was disappointed in the judge’s decision and argued that it “leaves students and taxpayers exposed to unscrupulous schools that seek to swindle them and routinely saddle students with debts they cannot repay.”
But for-profit colleges also provide opportunities for students who, for a variety of reasons, need specific career training, require more flexibility than what is offered by traditional schools. They may also have a challenging academic background and were unable to meet the requirements of traditional colleges. Supporters of the industry argue, therefore, that regulations can imperil the freedom of students to choose among a broad range of higher education options.
On July 3, Association of Private Sector Colleges and Universities president and chief executive officer Steve Gunderson issued a letter to the USDOE in which he said of the federal court decision,
“It is my personal hope, and that of our members, that the era of litigation is over, and the era of public-private partnerships in putting people to work in high-quality, good-paying jobs is ahead. We look forward to working with the federal government to prepare more Americans to compete successfully for 21st Century jobs and to move our nation’s economy forward.”
I hope so, too, because I think that many people will agree with my opinion that the ongoing battle between the for-profit college industry and the federal government has grown wearisome. But I am not as optimistic as Gunderson. Unfortunately for students, this particular federal court decision will not end this struggle. The USDOE can still appeal the decision, or rewrite the regulations and wait for another round of protest, debate, and potential legal action. This means that students will continue to be affected by insecurity about their college choices, waiting for a clear signal that their needs will be met.
I also don’t think this conflict will go away, and I think it will manifest in many different future debates, because the heart of the matter seems to be a difference not in educational methodology, but in educational philosophy. Similarly to the problem our nation has with healthcare, we seem to be divided on what role education should play, who should have access to it, who should pay for that access, and, more importantly, whether anyone has a right to profit from it. Is the future of our nation to be determined on the principles of free market capitalism, which many argue is the root of economic freedom, or the ideals of humanitarian humanism, in which we as a society agree to pool our resources to provide to everyone with certain agreed upon essentials, such as food, shelter, education, and medical care. Until our society decides that, our education policy will continue to be a battleground.
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