The requirements were scaled back slightly after the first proposal last July was met with heavy criticism from for-profit advocates. In addition, instead of losing federal aid upon the first violation, programs would have to fail three times in four years before their funding would be cut. Tighter regulations would be phased in over four years to allow institutions to adapt. A provision to block the initial regulations was successful in the House, but Senate Health, Education, Labor and Pensions Committee Chair Tom Harkin (D-IA) is a fierce advocate of the new rules and has promised to kill any measure which would block them. Sen. Harkin plans to hold the fifth in a series of hearings on for-profit colleges on June 7, with Education Secretary Arne Duncan as the primary witness.

The Education Department estimated that about 8% of all vocational programs will fail the new measures at some point, with 2% ultimately losing their federal support. For programs at for-profit institutions, those estimates rise to 18% failing at one time and 5% losing federal student aid. Secretary Duncan said that the requirements were very reasonable considering the high percentage of federal student aid making up for-profit colleges' income. "We're asking companies that get up to 90% of their profits and their revenue from taxpayer dollars to be at least 35% effective," he said. Opponents of the new rules say that it will disproportionately affect underserved and low-income students and restrict their access to higher education and skill-building programs. The rules are scheduled to go into effect in July 2012.

On Tuesday, the Education Department announced that it is inviting state and nonprofit guarantors to propose cost-effective methods to help reduce student loan default and delinquencies. Guarantee agencies would enter into "voluntary flexible agreements" with the Education Department, which serves as the official originator of federal student loans since a restructuring of the Federal Family Education Loan (FFEL) program last year. That restructuring largely cut guarantors out of the federal student loan process in an effort to streamline the system and cut costs, but now they are being offered a new opportunity to participate. The Education Department hopes that the voluntary agreements with guarantors will "improve services to students, schools and lenders; use federal resources more cost-effectively and efficiently; and enhance the integrity and stability of the FFEL Program."

From the New England Council's Weekly Washington Report Higher Education Update, June 6, 2011. NEBHE is a member of the Council and will publish this column each week.

Founded in 1925, the New England Council is a nonpartisan alliance of businesses, academic and health institutions, and public and private organizations throughout New England formed to promote economic growth and a high quality of life in the New England region. The Council's mission is to identify and support federal public policies and articulate the voice of its membership regionally and nationally on important issues facing New England. For more information, please visit www.newenglandcouncil.com.

On May 16, the U.S. Chamber of Commerce's Institute for a Competitive Workforce released a report on ways to foster innovation in higher education, particularly among for-profit institutions. The report encourages colleges to "embrace private sector-led innovation to transform learning, dramatically lower costs, or improve overall institutional productivity." In order to reach President Obama's goal of having the most educated population in the world by 2020, the report argues, institutions of higher education should collaborate with organizations and businesses "outside the education establishment" to incorporate new ideas and technologies. It also warned that progress in the higher education arena could be "stifled through restrictive regulations on e-learning, discouraged through funding that fails to reward quality and outcomes, or simply thwarted by complacency within traditional intuitions." Among the named restrictive regulations were the "gainful employment" rules on for-profit colleges proposed by the Education Department. The rules, which would withdraw federal funding from programs at for-profit colleges whose graduates were having difficulty repaying their student loan debt, have been heavily criticized by industry advocates and some members of Congress. Other pending rules concerning accreditation procedures and recruiting practices were also criticized in the report for potentially stifling progress in higher education. The U.S. Chamber of Commerce held a forum discussing innovation and regulation in the for-profit sector to coincide with the release of the report. Scrutiny of for-profit colleges has been increasing since last year. The state of Massachusetts recently sent a request for information on recruitment and financial practices to several major for-profit colleges, including the University of Phoenix, which is the largest in the country.

The YouthBuild workforce development program will receive almost $76 million in grants from the U.S. Department of Labor to help at-risk youth earn high school degrees and receive job training in the construction and clean-energy fields. The funds will be distributed to programs throughout the country, with the following amounts going to New England programs:
-    Maine: LearningWorks will receive $1.08 million
-    Massachusetts: Training Resources of America Inc. will receive $808,200
-    Rhode Island: The Providence Plan will receive $1.1 million
-    Vermont: ReSOURCE will receive $1.02 million

From the New England Council's Weekly Washington Report Higher Education Update, May 23, 2011. NEBHE is a member of the Council and will publish this column each week.

Founded in 1925, the New England Council is a non-partisan alliance of businesses, academic and health institutions, and public and private organizations throughout New England formed to promote economic growth and a high quality of life in the New England region. The Council's mission is to identify and support federal public policies and articulate the voice of its membership regionally and nationally on important issues facing New England. For more information, please visit www.newenglandcouncil.com.

The U.S. Department of Justice is joining a whistle-blower lawsuit against Education Management Corp. for alleged illegal student recruitment practices at its for-profit colleges. The suit, brought in federal court in Pittsburgh, PA, alleges that Education Management paid incentives to its college recruiters based on how many students they enrolled. Education Management is the second-largest operator of for-profit colleges, covering more than 148,000 students around the country. The Education Department has been pursuing stricter regulations on for-profit colleges since 2009, and new rules are scheduled to go into effect in July. These rules would, among other measures, remove 12 exceptions to the prohibition against incentive payment to college recruiters.

The Government Accountability Office (GAO) released a report on Thursday detailing problems with the implementation of the Post-9/11 GI Bill. The Department of Veterans Affairs was charged with implementing the program which was expanded significantly in its last authorization, and the GAO report concluded that it could have worked more closely with the Education Department and other parties. College officials have noted several of the issues address in the GAO report, including the long delays often involved in processing a veteran's benefits.

A survey of correctional facilities in 43 states found that only 6% of prisoners were enrolled in vocational or postsecondary academic programs during the 2009-10 school year, and 86% of those enrolled were concentrated in 13 states. The survey, conducted by the Institute for Higher Education Policy (IHEP) and funded by the Bill & Melinda Gates Foundation, argued that increasing prison access to educational programs could reduce recidivism and in turn reduce the country's prison costs—around $52 billion per year for 2.3 million prisoners, according to the survey. It also recommends that "federal and state statutes should be amended to make specific categories of incarcerated persons eligible for financial aid." Prisoner enrollment in continuing education dropped off sharply following a 1994 law making federal and state prisoners ineligible for Pell Grants.

In a proposal for a new national security and prosperity strategy, Captain Wayne Porter of the U.S. Navy and Colonel Mark Mykleby of the U.S. Marine Corps argued that supporting education is critical to maintaining our national security. They contend that investment in education, workforce development, and economic competitiveness is tantamount to investment in future international influence. "Our first investment priority, then, is intellectual capital and a sustainable infrastructure of education, health, and social services."

From the New England Council's Weekly Washington Report Higher Education Update, May 9, 2011. NEBHE is a member of the Council and will publish this column each week.

Founded in 1925, the New England Council is a non-partisan alliance of businesses, academic and health institutions, and public and private organizations throughout New England formed to promote economic growth and a high quality of life in the New England region. The Council's mission is to identify and support federal public policies and articulate the voice of its membership regionally and nationally on important issues facing New England. For more information, please visit www.newenglandcouncil.com.