CREW: Department of Education: Regarding For-Profit Education: 8/16/2011 - OS Additional Docs 11-00026 Weismann III

8/6/2019 CREW: Department of Education: Regarding For-Profit Education: 8/16/2011 - OS Additional Docs 11-00026 Weisma

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DeVry _,Dl'hy Inc.lOOS Hlgt\J.nd Pal\My~ ' " G r o " ' lllinoil 50S1~ - ~ 7 9 9 6 3 H t ~ - n o o September 8, 2010

The Honorable Ame DuncanSecretary, U.S. Department of Education400 Maryland Ave S\N, Room 7W311Washington, DC 20202

Dear Secretary Duncan,I would like to share my ooncems with the proposed "Gainful Employment"rules and also offer an alternative strategy. Your consideration of theserecommendations Is appredated. We will also offer a formal response to theproposed rule that will further articulate our concerns as well as elaborate onour recommendations.For 80 years, OeVry has been a leader in private-sector education. We havedeveloped a strong reputation by focusing on developing quality programs,managing our nstitutions and the public trust with accountability and integrity,and maintaining a commitment of SefVioe to our students. We support yourefforts to Improve academic outcomes in higher education as Well as inelementary and secondary education, as exemplified by our CeVry UniversityAdvantage Academy, a partnership with public school districts In Chicago andColumbus.We understand that the objectives of the proposed rules are to control forthree concerns:

A disproportionate amountof debt taken on by students to completetheir program of study as compared to their economic expectations asgraduates, Including expected earnings and employment opportunities; A misalignment of the economic expectations of new Institutionalowners compared to the educational and career expectations of thatinstitution'sstudents; and Inappropriately aggressive marketing practices and misrepresentationof programs or institutions to prospective students.

We have a long historyof working with the Department to effect positivechange to the benefit of students and taxpayers. We continue to seek to doso. With changes along tha lines of the following six simple recommendations,we are in support of the Department's proposed rule.


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DeVry's former Chairman and CEO, Dennis Keller, liked to start these sorts ofcommunications with the recommendation first, and follow that with therationale and commentary. Since that has served us well in the past, I will offeryou the same approach.Recommendations

1. Use 3-year cohort default rates (at the program level) instead ofthe proposed repayment rate, and use BLS data fo r the debtservice rate.DeVry has a number of concems with the proposed repayment rate,many of which mirror some of the public comments you have receivedso far. Some of our larger concems are discussed In the secondsection of this letter.As an alternative, the 3-year default rate has already been legislatedas a means to address the possibilityof "manipulation" of default ratesthrough the use of deferments and forbearances. We recommendusing the established 30% rate at a programmatic level to identifyprograms fhat need fixing.As noted in the second section of this letter, we aJso have concernswith using actual earnings data, the periods in which earnings datawould be captured and the lack of a known process for capturing thoseearnings. Also concerning is the lack of transparency into the earningscalculation. As an alternative, we recommend that BLS data be usedlnltiaUy for the debt-service calculatJon. It Is knowable Information, Itcan be mapped to specific occupations


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We recommend that the default and debt-&ervlce metrics be used fo rnon-degree undergraduate certmcate programs, butno t for degreeprograms, whiCh are better assessedby a test ofemployment aftergraduation.Throughout the Title IV statute end regulations, there are precedentsfor variances in how eligibility, student and Institutional performanceare measured according to program level and student status. Forexample. academic progress is measured differently for studentsenrolled In clock hour v. credit hour programs and even differently forstudents enrolled in standard-term v. nonstandard-term credit hourprograms. We recommend you extend thjs c o n ~ p t , measuringwhether a program successfully prepares a student fo r gainfulemployment differently for dffferent levels ofprograms.Department of labor data shows that the expected earnings forgraduates with only an undergraduate certificate will be just slightlyhigher than earnings for someone with only a high school diploma. rt'/enote. of course, that there are other benefits to the certificate graduate.such as lower unemployment rates and better employment benefits.)This earnings data is summarized in the chart below.

$50,000 . Previous wilges (Light color} Current wages (Dark color )

$40,000 - $31.782. $2t.224S3o,ooo " $ l 4 . a s ~ $2s,tsa!szo.ooo 1SlO,OOO l .,.

so 1....--(Control} No

Degree,Considered School

(n-:208)

Certificate(n=159}

Associate's(n=67}

Bachelor's(n=37l)

This studywas conducted by The C ~ r o Group from one institution's prospectivestudent pool from 2003. Tha study shows the change in esmings from 20()3 to 2010bytevel ofprogram altainment.Thus, we believe it reasonable to control unaffordable debt andunqualified enrollment in non-degree progrems through metrics suchas those proposed by the Department.However, expected earnings begin to substantial ly Increase withdegree attainment, and thus the proposed GE metrics become lessfunctional as a measure of gainful employment. The return on almost


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all degrees is substantial, and that return must be measured over Ulelong period for which an Individual's investment in a degree isappropriately amortized. Put differently, unlike a student's investmentin a certificate course of study, which Is generally amortized over arelatively few numberof years, a student's Investment in a degreeprogram Is generally amortized over the lifetime of that Individual'scareer. As sucll, near-term measurement ofearnings as it relates tothe debt taken on to obtain Ulat degree is inappropriate.Alternatively, In order to assess degree programs, we recommendmeasurementofhow wen graduates of hose programs obtainemployment In their leldofstudy. Specifically, we recommend that astandard 1/l


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Failure to hit minimum thresholds shoUld trigger actions designed toenable the institution to improve. The objecllve should be to driveimproved performance and to Increase capacity at that improvedperformance level- ro t simply to cut off the weaker performers withoutthe opportunlly for cure, which Is akin to ejecting a player after theirfirst foul. Only those programs that show no ability to improveperformance should be ultimately subject to the Secretary's limitation,suspension and termination authority. This approach is, of course,consistent with the Departmenrs historical practices -when aninstitution faits to meet either the Cohort Default Rate, the 90/10 or thefinancial responsibility thresholds, the institution is given an opportunityat remediation before the program or Institution is terminated fromparticipation in Title IV.

4. Continue work on repayment rate and use of ac:tual eamlngs inthe debt-service rate. We like these metrics at the conceptual level.With development, testing and refinement, we beUeve they have thepotential to be more reflective than the current CDR mebics of actualperformance and risk associated with the programs. But, they are notyet ready for use. They have not been clearty defined or scoped. Theyare not transparent In their impact, or capable of being monitored byschools on an ongoing basis. As currently drafted, almost one-half ofall colleges would fail to meet the first threshold (45%) for therepayment rate, includflg many well-regarded Institutions.We recommend that you defer implementation of these rates, andassign them to either a special task force or a focused negotiatedrulemaklng to develop them k) e point that they could serve as thebasis for a regutatory regime that would hold all institutionsacooun1able for the programs and services they deliver. We would beeager to wolt( with the Department in that regard.5. Limit growth fo r lnstltutfons with new, unqualified ownership.New institutions are prohibited from participating In Title IV programsuntil they have been established and operating for at least two years. Asimilar restriction couki be imposed on institutions with a change ofcontrol that results In control vested in a person or organization thatdoes not heve previOus experience in Title IV administration. Werecommend Title IV assistance be capped at pre-change levels for aper1od of two years, and until a postchange program review has beencompleted by the Department to assure that no substantial change in

mission or educational outcomes has occurred pursuant to the change.We believe these proposals would serve to mUfgale potentialmisalignment of the Interests Of new Institutional owners and theeducational and career expectations of that lnstitutfon's students.6. Move forward with the new, tougher standard on"mirepresentatJon" and Increased enforcement ac:tlon. We


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agree with the proposed rule oonceming misrepresentation ofprograms. AOO we applaud the recent announcement of i n c ~ a s e d levels of enforcement. Together. we believe these actions wilt addressthe Oepartmenrs concerns regarding misrepresentation, Includinginappropriately aggressive mar1


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proposed regulatory reg ime would invariably tamt these high-qualityinstitutions, right alongside a range of high-quality proprietaryproviders. The chart below illustrates the unintended consequences ofthis arbitrary methodology, as many long-established, well-regardedinstitutions have low repayment rates, induding Spelman, Rooseveltand North Carolina Wesleyan.

The proposed definitionof repayment" ignores students who arerepaying. It also penalizes schools for debt incurred at a previousinstitution. The proposed rule too narrowly limits the definition ofborrowers in repayment to just those whose outstanding principalbalance is reduced in a given year. This omits a numberof borrowerswhose loans are in good standing and many of whom are current intheir payment obligations. Last year, you and the President lauded newloan repayment plans that harped borrowers be responsible Inrepayment, but at the same time reduce the stress or repayment -especially during this economic crisis. These plans, income-based orgraduated repayment, require reduced payments in earty years andtypically etld up with the borrower accruing unpaid interest in thoseyears, resulting in an increase in the prindpal amount owed. Borrowersopting for thase plans and maintaining a good record of repayment donot count in the proposed repayment rate methodology as repayingtheir loans. These plans are especially attractive to students who wantto consolidate loans from m.tltiple lenders, loans from both the FFEL


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and Direct Loan programs. and loans that were received inundergraduate as well as graduate programs.Additionally, borrowers who retum to school and receive defermentson unsubsidized loans will see interest accrue while they are back inschool. Th is accrued interest ends up being capitalized and added tothe outstanding prtndpal when they retum to repayment. The result isthat, even though the borrower is current on their payment obligations,there has been an Increase in principal balance and the ir loans fall tomeet the requirements to be considered in the repayment calculation.All of these situations apply heavily to DeVry students, and as a result.have a punitive impact on the repayment rate of DeVry schools. 35%of OeVry University and Chambertain College of Nursingundergraduate students enroll with debt Incurred from prior schools.Last year, the average debt from prior enrollments for these studentswas almost $14,000. And, of course, the issue is greater at tflegraduate schoot level. Almost 75% of DeVry University graduatestudents have prior debt with this debt averaging more than $33,000.When these students leave DeVry, the combined debt from themultiple enrollments will innuence many of these bonowers to opt for arepayment plan that may result in a negative amortization in the earlyyears. Further. fhe p r o p o ~ l fo r fM debt-seNice rate recognized theunfairness of ncluding prior debt in fhaf calculation, but there is nosuch exclusion In the repayment rate propooal- there should be.

b. Debt-Service Rate The Depattment proposes a single debt-service rate (or range) toapply to al lprograms, regardless of evel or duration. But one size

does not fit all. Much of the Department's rationale is based on thestudyof Sandy Baum and Saul Schwartz. However, Baum andSchwartz specifically criUcize the use of such a blanket threshold,asserting that there is a greater capadty to afford higher debt levels as(expected) earn ings Increase. This is consistent with the eamlngsgrowth rates that are realiZed with Increased education. Many studies,induding Department of Labor research, have established that there Isa correlation between earnings growth and education level - the higherthe education level. the htgher the earnings growth rate. It is theninconsistent with this research to assign the same debt-servicethresholds to all levels of education. It is entirelyappropriate andconsistent with the research in this area to establish different forms ofmeasure and different standards for higher level programs.

Thank you for your consideration of my comments and proposals. I would bedelighted to discuss these matters. and will make myself and my team


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available at your convenienoe. OeVry stands ready to work with theDepartment and is committed to assuring accountabieity and integrity In theTiUe IV programs.Sincerely,y a J ~ Daniel HamburgerPresident and CEODeVry Inc.


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9/26/2010(b)(6)

Mr. David Pauldine, PresidentDevryl Inc.3005 Highland ParkwayDowners Grove, IL 60515-5799

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Re: Conunents by Harris Miller, APSCU CEO, to the Atlanta Journal-constitutionDear Mr. Pauldine:As much as I consider DeVry the only McUniversity that I 'WOuld pay money to attend, some commentsby Mr. Harris in Dtfaulq llffDIICt s c l f o o l s ~ Atlanta Journal-constitution Sept. 26. 2010 are mostunhelpful and serve to clarify the need to do something about the bounty ofcrooked for-profit schools.

~ Y o u , s h o u l d be able as a grown-up to decide to.enroll. The Departmc:nt of Education thlnksw ~ ~ ~ m O W s best- better even than well infonned consumer." As a taxpayer, my view is that if a.~ t i a l has his or her own money to pay for training he/she may enroll in any school he/shechooses.to attend. I can not make an agenda ofpeople1s decision when they spend their own money.. .. . ...' . .However, if that individual intends to spend my money for an education I demand that the Departmentof Education insist that the individual receive a meaningful and gainful education- enough for thegraduate to enjoy employment and return ofmy money to the US Treasury. This point is not negotiable.I do not want to hear' anything about the color or ineptitude of the student body, because lf1Iieorganizations have a long and proud history of running to any minority concentrated poverty abatementgovernment initiative to set up fronts, frauds, surrogates, and button men to rip off the initiative.Invariably, the minorities are left in debt, with a criminal record, ruined reputation, and even morepoverty. if you do not believe this Google "HUB Zone Abuses,'' "Empowerment Zone fraud." HopeVI fraud," and "student loan abuses." You will see why taxpayers are sick and tired ofyour industry.Perception is reality. Fact is that the for profit education industry has a more squalid reputation than askunk in attendance at the queen's candle light dinner party. We have images of industry boiler roomrecruiting process enrolling criminals, who could not get a job with four Ph. Ds . We have footage ofindustry lying to innocent working class people, trying to educate their way out of poverty. We havefootage of industry employees slamming doors on reporters, when the fonner could not explain abusiveacts. We have footage of enrollment officers helping unqualified applicants to lie about the latter'seligibility to get a student loan- all in the name of getting these people1s government ftm.ded tuition.Goverrunent should not butt out, and I will work in the political process to terminate any governmentthat fails to crack down on fur-profit schools and force them into a place where they are part of thesolution and not part of the problem. Mr. Harris should not be deluded.


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MI. Hanis is speaking as if government money is free money and government is like a spo'ilinginterloper who has come to disinfect this economic cesspool and spoil the stinking fm. WelJ, he shouldbe clear that the boom bas come to town and is coming down on McSchools where his mentalitypervasive administrative currency. I must admit that all these schoo]s are not lik.e American InterContinental University. DeVry is ashining example, with a long record of training people successfully and ethically and then putting themto work making good money and making a real difference in their respective industries . So, I am notagainst for-profit schools per se. I am against the red light district reputation of the industry, and itsview that the US Treasury is a plantation to be raped, plundered and burned.Mr. Harris continued, "You could have hundreds of thousands of thousands of students no longerlonger given the opportunity of enrolling in these programs." What he is weeping about is that hisindustry's abuses will be stopped. This bleeding heart notion has nothing to do with the academicsuccess of poor people- he already said tky are black and overworked, meaning that low expectationsare justified. It is about his for-profit heart breaking, at the prospect that business as usual in hisindustry will fmally come to a day ofreckoning.Fact is 1hat the national return on investment (ROI) is not there for this $30 billion industry. 88% ofthese students borrow from the government. They borrow twice as much as govenunent school and nonprofit school students. They default twice as often. A Phoenix degree boost the graduates income ananemic 9%, and at the end of fifteen years a full 30%, or twice as much as the n o n ~ p r o f i t andgovernment school students, will default. In some countries people like MI. Harris would be sent to alabor camp in a place like N e ~ a d a or Alaska for these kinds ofmetrics.Mr. Hams shows a proverbially worst weakness of an incompetent or dishonest producer, who is notcommitted to positive changes, quality assurance, and imitating great b e n c l u n a r k s ~ they blame the rawmaterial; his students, he cites, are minorities (read stupid) and have mortgages and juggling families. Itis quite foolish to make these claims because the majority of the graduate degrees, in this country, areawarded to women with children, husband, jobs, and community participation. So, the rotten appleinventory is purely and excuse to continue robbing the taxpayers blind.

Sincerely, /"'\(b)(6)

~ - - - - - - - - - - - - - - - - - - - - ~ cc: Robert Herzog, Treasurer Harrison CollegeHarris Miller, CEO, APSCUArne Duncan, Secretary ofEducation, United States OfAmericaSteven J. Tober, CEO, AmericanlnterContinental UniversityDavid J Kaufman, JD, Board Vice Chair, Duane Morris, LLP


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Catoe, TracyFrom:Sent:To:

Catoe, Tracy on behalf of Duncan , ArneThursday. September 09, 2010 8:25AM'Rebecca Campoverde'Subject: RE : KAPLAN LETTER TO SECRETARY DUNCANt>eor Ms.Campoverde:Thank you for your e-mail to Secretary of Education Arne Duncan. We appreciate hearing from you .Your message has been forwarded to the appropriate staff member for review.Thank you again for contacting us.

Sincerely,T. Tracy CatoeDeputy Director, Correspondence andcommunications Control UnitOffice of the SecretaryU.S. Departmel'lt of EducationWashington, DC 20202From: Rebecca Campoverde (mailto:Rebecx:[email protected]]Sent: Wednesday, September 08, 2010 8: 10 PMTo: Duncan, ArneCc: Miller, Tony; Yale, Matt; '[email protected]'Subject: KAPlAN LETTER TO SECRETARY DUNCANMr . Secretary,Attached please find a letter from Andy Rosen, Chairman and CED of Kaplan, Inc. The Jetter is also being flied separatelyas a comment to the Gainful Employment NPRM, but Andy wants to be sure that it first be sent directly to you with acopy to Sec. Miller.Rebecca CampoverdeVice P r e s i d e n t ~ Government RelationsKaplan, Inc.202-334-6684 (0)703-629-8532 (C)R e b e c ~ . C a m p o v e r d e @ k a p l a n . c o m Thi' transmi,ion may contain infonnation that is privileged, confidential and exempt from disclosure under applicable law. I fyoureceive thi' transmission in error. do not read, use or copy it. Please immediately contact the sender and destroy the material in itsentirety. whether in electronic or hard copy fonnat. Thank you.

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ANDREWS. ROSENCMirmMMICEO

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September 8, 2010The Honorable Arne DuncanSecreWy ofEducationU . ~ c n t o f E d u c a u o o 400 Maryland Avenue, SWWashinaton. DC 202020008Re : Docket NumberE0.201 O - O P ~ 0 1 2 Dear Mr. Secre1ary :Readeni of recent news reports and cuual observers might conclude that private sector("for-profit") coDeges and the federal government arc adversaries. with different viewsabout tbe needs ofom students. I believe the cootrary is true.I write to you from the pointofviewofsomeone who shares your dedication toexpanding access to high-quality education. I believe there are far more similarities inowgoals than points ofcontention. Neither of us wants to see students take on debt they wiDhave difficulty discharging, nor taxpayers bearing undue burden. We both want toprovide acc.css to u.Dderserved students, especially low-income working adults who mayhave been left behind by traditional post-secondazy institutions. We both believe deeplythat all students deserve consistent access to educational excellence. And we bothrecognize the value that competition can oontitme to play in crcatina a world class highereducation system. None ofus claim tohave allof the answers, but 1 think we both seehow new leamina approaches and innovation strengthen our country's education system .Kaplan Higher Education has graduated more than a quarter-million students over thepe!t ten years, and I'm consistently moved when I see at our graduations the pride andsense of accomplishment in ow students' faces. Frequeatly the voices of celebration inthe audience are those ofour graduates' children. whc look upon their parents as rolemode ls for the proposition that bard work and study really matter. Our araduates- oftenfrom limited means - have taken their place as important contributors to the Americanstory.Kaplan ' s roots as an education company go back more lhan 70 years. from thebeginning, our focus has been on expandiDi access to education. Stanley Kaplan, ourcompanys founder, enabled immigrant families to pin entrance into competitivecolleaes by demonstrating merit on standardized tests.1bat mission is no less central to

6:f0l Klplln UnlvtrtltyAwnut. foft Lauderdale, FL :J:Jl09


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Kaplan today. Our entry into post-secondary education ten years ago was based onserving non-traditional students who found traditional college pathways poorly suited totheir needs. Over 60 percent ofour post-5ccondary students are low-income. Many arethe first in their families to pursue a college education.I am writing this letter because of the recent Notice of Proposed Rulemaking of"GainfulEmployment'' rules. While I applaud the effortsof he Administration and theDepartmentofEducation to improve higher education standards and I welcome theDepartment's oversight, I am confident there are better ways ofaccomplishing theDeputmcnt's goals.There has been a lotof alk about good actors" and "bad actors" in for-profit education,without a clear definition ofwhat those rcfetences mean. What this talk frequently fails toconsider is the fact that di verst student populations exist among institutions. In the nonprofit world. what might constitute excellence on certain metrics at Chicago StateUniversity, for example, might be tar below expectations at DePaul University orNortbwestem University. This differentiation holds true at for-pofit institutions as wellI wll/4 saggnt tlull 1 "good tJc/Qrn is one tlr11t conslstelltlydelivers RIWIN metrlcsWMII collfiHI.nd to ilutitutltJM with simllcr stlldatpopllltltions. Institutions whosestudents average fewer than two of the Department's "risk f a c t o r s ' ~ should be compamlto other ''low risktt institutions; those with students averaging between two and fourofthe "risk factors'' with other "mediwn risk" institutions; and those with more than fourwith a "high risk" cohort. Within these cohorts, this oommon yardstick would distinguishamona those institutions 1hat are setVini their sndents well and those 1hat are coming upshort. Comparisons within cohorts on a rangeofmetrics- graduation, placement, default.income cbqe , eu;, - would be appropriate.I \Wuld, argue that all institutions, regardless of ax statui, should be compared by cohorton these same mctrics. After all, to the extent the goal ofregulation is to protect students.it should not matter whether an institution is non. profit or for-profit. Even so, to theextent the political environment dictates 1hat you f o e w ~ only on for-profits, at least thedeterminationofwhether the institution is a "good'' or "bad" actor should take in10atCOUnt how that institution performs relative to all providers serving similar populations.I wolll4further s11gpst thllt 11 "good lldfJr"uone tlult e M ~ tlullstlldmu h11veailifonMd11ntkrsltlndlngo f heprogl'tl bfst114y they re undntiiJing- i n c l u d i n ~ among other things, cost, anticipated debt burden, and likely outcomes- and anopportunity to knowingly agree to those expectations. At Kaplan Higher Education,are absolutely committed to furthering these goals, and we have recently taken significantsteps to reduce the chances of any individuals violating that commitment. I wouldwelcome the opportunity to discuss these steps with you or members ofyour staff.1 lbe I>epartmeats Nationa.l Center for EduC.U011 S t a t i s t ~ (NCES) defines a b l ~ r i s k stu


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Kaplan's goal, however, is to go even further by making an introductory portion ofourprogram "risk free" to our students. That is, we want to enable any students wbo chooseto enroll in our programs to bave a multi-week period, depending on the length of heirprogram, in which they can assess whether the program is right for them. If hey deeidcfor any IQSOn it is not, we will refund all tuition payments to the student or to theDepartment ofEducation. This approach, assuming it meets with regulatory IUld otherapprovals (and we invite your office's help to ensure that it does), will not only letstudents get a real experience with our courses before incurring any expenses or futuredebt, but will diminish IUlY motivation to ~ o v e r s e l l " students into programs. While thisapproach will be expensive for us to implement, it will help us meet our goalofensuringthat every one ofour students is in class bccawe he or she is committed to being thereafter fully understanding the commitmenthe or she is making. At the same time, it willserve as an importantprotection for taxpayers.I believe these are more appropriate ways to discern thediffenmce between "good" and"bad,. actors thiUl the proposed Gainful Employment (GE) regulation, which servesprimarily to punish institutions that have taken on the task ofserving high-riskpopulations. Private sector institutions would be pushed by this regulation to seek toserve the same more-affluent student populations that are already wellserved in themarketplace, rather than the more needy students who can most benefit from our help.Kaplan Higher Education will submit its fonnal Comments to the July 26; 2010 Notice ofProposed Rulemaking, and I refer you to those Comma1U. However,1wish to make thefollowing brief comments11bout the reasons we think the proposed Gainful Employmentregulation will lead to unintended and unwanted consequences:

GE will dramatleaft1 reduce educational options for lowmwme1tudents.The correlation between violations of he GE standards and low-income studentpopulation is veryhigh, suggesting on its 18ce that the proposed regulation servesless to distinguish between good IUld bad actors, and more to distinguish betweenthose who welcome under-served students and those who do not.

GE wW result i l l slplfieaatly lliglaer eo1tt for tupayen. Several recent studieshave concluded that for-profit education is the most tax-efficient ofall sectorsofhigher education. Public institutions reQeive between 90% (at two-yearinstituooris) IUld 5900.4 (four-year institutionsrmon in combined federal, stateand local taxpayer support per student than do for-profit institutions. Any attemptto shift students .from private sector to public institutions will require dramaticallyhigher taxpayer contributions- at a time of significiUlt pressure on governmentresources. GE wJD diminish educational outcomes for the reclueed a umberoftudentswo are able to coatiDue their educatioa. Even for those students for


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prospects are not promising. Recent studies have demonstrated thin graduationrates for students at two-year for-profit institutions are nearly triple that ofcommunity colleges,3 and earnings increases for private sector students outpacethose ofpublic two-year institutions.4 GE will reduce competitioa aad iaaovattoa blllipereducation. TheAmerican higher educatim system became the best in the world when our fundingsyscem put IMney in tbe hands ofstudents. so they could choose tbe institutionsthat best served tb:ir n ~ d s . That approach bas made studen&s the winners asinstitutions innovate and compete for student loyalty. Oveniding student choicethrough the regulatory process will only weaken American higher education andreduce the healthy competition that bas been central to its success.

GE will plate tbe .Depart:mtat ia tile aacomfortable aad iaapproprt.tepMitioa ofHttmg tuidoa pricea, detfl"lDiiiiDg whicb PJ'OII'IIIIll schoolt anoffer, aad dictatin& wbieh atudeats Hllooll c:aa aecept to nmaiD eompllaat.The proposed rqulations are troubling in the extent to which they turn theDep.unent into a decision maker in 8laiS that pteViously were assumed to be-and that Congress expressly wanted to be-within tl p ~ e r o g a t i v e s of studenU orinstitutiona. Beyond the questionable legal basis fur such a step, this move towardfederalizing higher education is very poor policy, and will undermine the vitalityof institutions America needs to retain its ec.onomie pre-eminence.

I believe that Kaplans goals and those of he Department are alisncd in most areas.Although I disagree stro111ly with some of the approaches presented in the NPRM as away to achieve those goals, I am fully committed to the proposition that in addition toeducatimal excellence, students deserve a full \Dlderstandiogof tbeit responsibilities andobligations; they should never be matched with progmms unsuited to their skills oraspirations; and students should never be encouraged to take out lo.m that they will notbe able to repay.We embrace the challenge ofhelpinJ President Obama meet his goal of restoring ouroountry to leadership in edlJcatiooal attaimnent We believe his goal is achJevable, can berealized at a price our country can afford, and will have very importantpositiveimplications for om society and economy in coming decades. At Kaplan, we haveinvested significantly in tcchnology, pedagogy, and research into student learning. all ofwhich we think can be helpful in achieving this soal, and we are eager 1D !hareourexperience, research, data and capabilities to assist you. To reach important goals likethis, our country needs all of us pulling together. ! urge you to slow down the sprint toimplement regulations that are so contrary to the President's goals, and instead substitutenew regulation that would encourage uaood actor., inltitutions to cootinue their goodJ NCES: Enrollment in Posuec:ondluy lmdtutiou, Fatl 2001; GraduaUon Rates 2002 and 200S Cohorts;lnd F ~ i a l Statisti.cs FY 2003, P\lbliabed AprillOJO,pap 1. The Panhnon Group: PerspecUves oo Private Sector Posl..ScronduyStbools,Do They Deliver Value toStudenes and Society?; Robert Lytle, RoaerBriMer, Chris Roa; Febnwy 24, 2010.

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work across all ofour country's student populations and become full partners in the effortto achieve our nation's pressing goals.

Sincerely,

Andrew S. Rosen

Cc:The Honorable Anthony Wilder MillerMs. Jessica Finkel


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l(b)(6)

Tom HarkinSenatorUnited States Senate731 Hart Senate Office BuildingWashington, DC 20510August 25, 2010

Dear Senator H a r k i n ~ I write to offer both my gratitude for ~ u r efforts to better n ~ s u f a t e for-profit colleses and mysuaestlons fo r areas of urther Inquirywithin proprietary higher educatfon. For more than a year, Ihave been employed as a Generctl Education Instructor by the Riverside campus of Kaplan Coftege-oneof the four institutions at which the Government Accountabil ity Office (GAO recently uncoveredevidence of "fraudulent practices" within the admissions and financial aid departments. While laereewith the recent assessments made by Bannak Nasslrian and others that the proposed US Department ofEduQtion rqulatlons coutd be more effectlvelystrlnsent, t also believe these regulations are anImportant step necessary to protect future students at for-profit cofleses. Y a . . ~ r effor ts In this reeard wiUhave positive reat world consequences fo r a multitude of people; fo r that I admire and applaud you.I hope, however, that your efforts at refonn do not stoP at the collegiate front end." As chairman ofthe Senate Health, Education, Labor and Pensions (HELP) Committee, I am certain you have encountereda numberofcomplaints about the quality of education at for-profit colleges. Stilt, I would like to add myvoice to the cacophony and hope that my observations may flnal iy tlp the scales and spur you to evenmore action.I cannot speak to the practices of the entire for-profit Industry. Norcan I definit ively speak to thepractices of Kaplan Col ese in general. But I can provide you with my limited observations andexperiences as an Instructorat Kaplan College. I belieVe that my experience as a Kaplan ColleaeInstructor s no t singular, and as such I hope to provide with first-hand Insight into the educationalexperience at Kap!an Colleae. Riverside.Wfthin weeks of my tnltlai employment. I recognlzed that the school seemed willing to enroll anystudent so long as those students could procure l ~ n s fo r tuition. Moreover, I quickly reali led that theeducation of hese students was no t merely a secondaryor tertiary priority among the campusadministration; i t was no t even a blip on their collective radar. Duringmy tenure at Kaplan College,Riverside, I have never had a serious converntlon about pedagogy or subject matter wfth my mmediate


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supervisor, the Education Department Proeram Director, or any other member of the administration. Ishoutd note that pedaeosv Is discussed during monthly fnservlce meetings required of he collese tomaintain accreditation; however, thesepedag081callectures and discussions are led by peopJe who haveno background in educationat theory and who, more often than not, misrepresent pedae08ical theoryand practice. These meetinp are unproductJve In terms of professional devefopment and only exist, Ibelieve, to maintain campus Kcredltation which, in turn, maintains the college's eligibility to receivefederal student loans.While the college admtnlstrab'on seems to have little interest in fostering serious pedagog)caldlscusslons with and among Instructors, they do manage to havedallydlscusslonsand meetlnss aboutstudent attendance and retention. I am required to call students multiple times to try to convince themto show up to dass, If only for a moment. As long as my class attendance rosters show no absences, mysupervisors are content. l


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they cannot repay fo r an "education" that will not serve them after graduation. So, shortly beforesending this letter, I submitted my resignation to Kaplan College.While the .,gainful employment" provision wlthln th e current proposed regulations mlght provide someimprovement with regard to educational quality at proprietaryco"eges, It will no t resolw the systematicfailure of these instttuttons to value educat ion above profit. You, however, might very well be able tofind a ptace fo r education within the for-profit business model using a similar strategy to that so wellImplemented with the clandestine investigation of for-profitadmissions and financial aid departments.I suggest that you conduct a secret student rather than secret shopper, investigation. The results ofsuch an investigiltion would, I have no doubt , reveal unethical,if not fraudulent practttes within forprofit higher education. More Importantly , I think, such an investigation would provide a stark contrastbetween the quality of education provided il t tradttionai, non-profit lnst1tutlons and the quality ofeduc.tlon provrded at for-profit colleges.I wish I could do more for my students. 1wish that I held a position ofpower from which I might fightfo r them. But as a soon-to-be unemployed teacher, there Is little I might do. So I pu t my hope in you,Senator. Your actions with regard to the current proposed regutations bespeak your investment in thisissue. I implore you to further that Investment by more diligently considering how students areeducated af ter they pass through for-proflt admissions ha,Js.f)(6) -Cc; Arne Duncan, Secretary, US Department of Education


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Sunday, August 22,2010Secretary Arne DuncanU.S. Department of EducationDocket ID: ED-2010-0PE-00121990 K Street, NW Room 8031Washington, DC 20006-8502

Mcintyre 1

Dr William McintyreEDMC -Art lnstitute, Inland EmpireThe University of Phoenix. Southern California22422 Glenwood Dr#2200Crestline CA 92325Email: [email protected] r . '...

RE: Gainful Employment Rule Denies Student Access, Costs Critical JobsDear Secretary Duncan:The various metrics in the proposed "Gainful Employment Rule" are in some casesarbitrary and unfair. For instance, some years ago, I graduated with a Bachelor's degree inEnglish Literature from U.C. Berkeley, a top-rated university. What job did this degreeprepare me for? Writing 18th century novels? Writing Shakespearean-era iambicpentameter plays? Certainly, no t teaching-- for that, I needed additional credentlals. By theproposed rule, because I and almost aJJ other English majors were no t able to find a job inmy "field," this program would be disqualified, as would many programs in the Arts andsocial sciences.Later, 1acquired a master's degree in English IJterature, with an emphasis in creativewriting from Cal State University San Francisco. Again, my degree did not allow me toobtain a job as a best-selling novelist (or anything selling novelist) or a paid screenwriter.Would you disqualify this program?Additionally, the rules you propose are grossly unfair in that they apply to one category ofschools but not another. You establish a false opposition between private and public, forprofit and notfor-profit. The same rules should apply to aJI colleges and universitiesbecause you fail to take into consideration that the for-profit sector serves a student-bodypopulation that has not been served by traditional schools. The sectors do no t stand Inopposition to one another; they complement one another.For instance, one of the schools at which l teach-- the University of Phoenix-- has been oneof the Innovators of onHne education, which has carried the opportunities of education tostudents outside of the demographic and geographic areas normaJly served by traditional


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Mclntyre- 2schools. Additionally, the University of Phoenix also has structured its "on-ground" coursesaround two principles: 1) take the school to the students, and 2)arrange for class times thatmake the education accessible to working adults. At the University ofPhoenix. I haveencountered countless students for whom higher education is only a possibility because ofthe innovative scheduling and modalities.On more than 45 campuses, The Art Institutes' faculty and staffprepare students for asuccessful career in their preferred field- from culinary arts to photography to graphicdesign. We take great pride in our skilled faculty's ability to educate students, and I haveclosely followed the Department ofEducation's consideration of a Gainful Employment rulethat- as currently proposed- could bar thousands of our students and millions nationwidefrom receiving an education of their choice.Having worked so closely with our students and the academic programs in which they areenrolled, I can attest that the quality of a higher education cannot be judged by an arbitrary,one-size-fits-all metrlc test. In fact, the rule proposed by the Department Is biased againstthe qual! ty degree programs offered at The Art Institutes, in favor of Jess costly certificateor diploma programs.The Department of Education's proposed rule would block studentsfrom academic programs that position them for success in the job market Over the years, Ihave seen countless students come through The Art Institutes and leave with practicalskills that translate into real world experience and a job. Without student aid, this wouldnot be possible. This is an unwise and inadvisable course of action at a time of highunemployment across the country. Career education should be encouraged, notdiscouraged.The proposed rules fall to consider that many ofthe students whom we serve are nonconventional and otherwise "a t risk." At the Art Institute, for instance, most of our studentshave not been prepared by our (mostly) public education system for traditional academicstudy or are just not inclined to such study- which is in traditional venues taught in apedagogic style that is more than 1,000 years old and is heavily focused on content whichmany contemporary students find irrelevant to their needs. Oneof the prime virtues ofsuch for-profit schools is that they focus on the perceived needs and interes ts of thestudents. This is why they have grown exponentially over the past years -- not because theyhave "tricked" people Into enrolling.The Gainful Employment rule will have a particularly adverse effect on degree programsoffered to low-income, minority, women, working adult, and otber at-risk students. Thiswill result in reduced access, less opportunity, and fewer choices for these students.The students who enro1J at the for-profit schools do so well aware ofthe other educationalopportunities available to them. At the Art Institute Inland Empire and the SouthernCalifornia campus of the University of Phoenix, for instance, I teach students are well awareof the much lower cost colleges and universities in the vicinity. Within a 20 minute drive ofeach campus at which I teach, there are a half-a-dozen (a t least) public venues for highereducation. Yet, these students chose to enroll with us. They do so for a variety of reasons-the for-profit schools offer courses of study not offered at more conventional schools. The


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Mcintyre- 3

modality of instruction is often times much more "user friendly." Often, the for-profitschools are smaller, which lends them to more interpersonal interaction- student tostudent and student to instructor; for instance, it is no t uncommon that in a single walkdown a hallway I encounter half-a-dozen students whom I know (and whom I will greet ...often by name); this personal closeness possible at a school with a 1,500 population but notpossible at a university with 30,000 students.Should abuses be corrected? Yes. Should enrollment counselors be regulated so they tellthe truth to prospective students? Yes, undoubtedly. But should the for-profit educationalsector be governed by unfair and unevenly applied rules. Absolutely not

Because if you shut down the forprofit educational sector, you are doing more thanshutting down a few businesses . You are shutting down the hundreds ofthousands ofstudents who depend on us and who find considerable value in what we have to offer.Respectfully.

DMC- Art Institute, Inland EmpireThe University of Phoenix, Southern California22422 Glenwood Dr# 2200Crestline CA 92325Email: [email protected]


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T A Y D ~ N A P. GA&HuUgis/Ati Diltria 22Prill George's CountyAppropriations Commiu

ChttirTraNportaUon and the EnvironmentS u b c o m m i ~

Ovcnigl\t C o m m i ~ on Pcn;oond THE MARYLAND HOUSE OF DELEGATES.ANNAPOUS, MARYLAND 11401

September 28, 2010

The Honorable Arne DuncanSecretary oftbe DepartmentofEducation400 Maryland Avenue, S.W.Washington, OC 20202Dear Secretary Duncan:I write on behalfof the Maryland campuses of the University ofPhoenix.

1"be Maryland HoU$C of D e l ~ t e ~ 6 Bbden s ~ e t Room ..16Annapolis. Muyland uoro8.4l,c>si ) O l . $ J 8

7 1 ~ ~ Ext. ,os8F ~ ~ ~ t 30tSf83llso

T a w a n N . G a i ~ h o u s e . s u ~

-; .

I proudly represent the 2200 Legislative District in which tbe Prince George's campusis located. The University ofPhoenix offers our working adults an opportunity toobtain their undergraduate or an advanced degree which ultimately helps them in theircurrent occupation or prepares them for career advancement.In the State ofMaryland, there are almost I 000 students attending classes at our four campusesand over 11 ,000 Maryland studen:ts taking courses online from the University. The Universityprovides important jobs in our County in terms of faculty, administrative and support staff aswell as paying thousands ofdollars in taxes making it a very important and contributingcorporate citizen.As we are all well aware, our country witnesses a difficult economic time and I applaud theUniversity ofPhoenix in supporting President Obama's goal to help educate and graduate agreater number of citizens who will be better prepared for the challenges oftoday's society.1sincerely hope your department will join me in recognizing the University's contribution tohigher education and its importance lo our county and state.

Sincerely,

Tawanna P. Gaines


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NANCY J. KlNti.1Yrb l . t ; ~ i J I . z t i DistriaM o n r g . o m ~ ( o u n t ~

f h x i ~ : c t ~ n d 1:uation Counniucc( [ > i l ; ~ l l l l < d g n S n h c o m m i r r c ~ Health, I:Ouc.Hir>n, andHum.m Rr.:.ult\ '> SuhturJolnr CHmnlicte4' onChnJ tt>l!l!f>J ! ~ l l , 6 8 ( > Fmc J 0 1 9 ( ; ~ < > 6 7 1

As the Department ofEducation works to finalize its regulations on "gainfulemployment", I wanted to share with you some information about one for-profit school inMaryland - The University ofPhoenix.The University ofPhoenix has over 11,000 Maryland students studying online and closeto 1000 students attending classes at four campuses situated throughout Maryland. As aState Senator in Montgomery County, Maryland, I am very aware of he positive role thatthe University plays in our community in providing jobs for faculty, administrative andstaff support as well as paying thousands ofdollars in both state and local taxes. 1am alsoaware of the positive impact the University has had in providing working adults in ourcommunity the ability to obtain degrees which will prepare them for careers or careeradvancement.During these difficult economic times, I hope that all proposed regulations will carefullyconsider the impact that the regulations will have on employment in our states. I applaudthe Department for their work on behalfof higher education in our country and appreciateyour consideration ofmy concerns.

Documents

CREW: Department of Education: Regarding For-Profit Education: 8/16/2011 - OS Additional Docs 11-00026 Weismann III