Certainly there is a lot of "drama" taking place in Washington regarding whether or not there will be a deal to lift the debt ceiling. Of course this is a critical issue, but Congress remains hard at work conducting oversight hearings regarding government regulations and actions that could be harmful to private sector efforts to get the economy back on a strong, growth track. Last week, for example, there was a hearing on the "Gainful Employment" regulation -- a misguided and controversial effort by the U.S. Department of Education (DOE) to regulate for-profit career colleges.
SBE Council applauds the efforts of U.S. House Reps. Darrell Issa (R-CA) and John Kline (R-MI) who probed the inept and shady rulemaking process that produced the DOE's "gainful employment" rule. The rule has drawn harsh criticism from the business community, small business groups and minority leaders for unfairly targeting for-profit institutions whose students are predominantly minorities.
SBE Council has also been critical of the rulemaking, and has expressed its concern to Congress regarding the harmful effect that the rule could have on America’s small business workforce, entrepreneurship, and economic opportunities for the minority community and individuals in transition – that is, workers who need additional training and skills to compete in the competitive 21st century economy.
On July 8, the Committee on Education and the Workforce's Subcommittee on Higher Education and Workforce Training conducted a joint hearing with the House Committee on Oversight and Government Reform's Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending. The hearing -- "The Gainful Employment Regulation: Limiting Job Growth and Student Choice," featured testimony from an array of stakeholders, including: Harry Alford, President of the National Black Chamber of Commerce; Dr. Dario Cortes, President of Berkeley College, NY; Karla Carpenter, a graduate of Herzing University in Madison, WI; and Dr. Anthony P. Carnevale, Director of Georgetown University Center on Education and the Workforce.
The take-away from expert stakeholder testimony remains clear: "Gainful Employment" will hurt the economy and kill jobs through excessive government intrusion into the for-profit college sector, which fills a market niche by providing college opportunities to non-traditional students. This niche has not been filled by private and overcrowded public institutions, especially community colleges. The rule is anti-entrepreneurial and anti-business to the core.
The "Gainful Employment" rule demands that students who graduate from for-profit colleges earn high enough salaries in their careers to justify ongoing federal student aid to attend that college. With unemployment figures topping 9.2 percent, this "Gainful Employment" regulation could affect thousands of programs at proprietary institutions and block postsecondary education opportunities for millions of Americans.
Congress cannot stand by and watch yet another regulation destroy jobs -- it must immediately move to reverse this misguided regulation. Congress can do that by using its "congressional review" authority. SBE Council hopes they use this tool to not only reverse a bad rule but also to save educational opportunities for America's workforce. In addition, pressure is growing for the SEC to probe possible "insider trading" activity that may have occurred during the rulemaking process. Such allegations erupted as the regulation was moving through the DOE, yet -- and incredibly -- they were ignored. Congress has the last say on "gainful employment" and they must take the opportunity to bring some accountability to the federal regulatory system.
Karen Kerrigan, President and CEO, Small Business & Entrepreneurship Council
Showing posts with label Gainful employment regulation. Show all posts
Showing posts with label Gainful employment regulation. Show all posts
Thursday, July 14, 2011
Thursday, June 02, 2011
Education Finalizes Controversial Rule: America’s Small Businesses and Its Workforce will be Harmed
After much secrecy and backroom shenanigans, public protest and bipartisan opposition from Congress, the Department of Education (DoE) released its draconian “Gainful Employment” rule today, June 2. The regulation appears aimed at killing career colleges. For many in the business community, the rule is anti-competitive and anti-entrepreneurial. It must be overturned or stopped, and SBE Council hopes the Congress will do just that.
Under the rule issued today, career schools will be heavily penalized if graduates fail to meet arbitrary debt-to-income ratios. Some students will no longer be able to secure federal student aid to attend a program that would give them the skills and credentials to advance their marketability in the workplace.
For-profit colleges have grown exponentially over the last decade because they are filling a significant market demand for training America’s workforce. The for-profits have moved into this niche, developed online courses that outstrip the capacity of their not-for-profit competitors, and are now being made to pay for their success because they have out-performed the "competition."
Keep in mind that nearly half of all students at for-profit colleges and universities are African American and Latinos. Thanks to this misguided “Gainful Employment” regulation, many minority students will be put at risk for losing access to institutions that help to enhance their skills in the labor market. “Solving” the student debt crisis by targeting students who face the highest unemployment levels and restricting their access to post-secondary education -- especially during a challenging and competitive economic period -- is irresponsible and shortsighted.
Biased government regulation is never fair or wise. In this instance, it may also be illegal. Certainly a rule that targets a single business sector to the exclusion of the competition is almost certainly suspect. Over the last year, government watchdog groups such as CREW have pointed to the Department’s lack of transparency and its obfuscation. CREW repeatedly called for a Security and Exchange Commission (SEC) investigation into an array of improprieties during the rulemaking process, among them a discredited Government Accountability Office (GAO) report and suspicious collaboration between Wall Street short-sellers and policymakers. Others have raised deep concerns about the DoE’s legal authority to regulate in such a sweeping manner. Indeed, the DoE has broken new ground and set new precedent by regulating career colleges to the extent outlined in “Gainful Employment.”
Congress needs to move immediately to block the rule. The process and circumstances by which the DoE advanced the rule just plain smells, and the burden this intrusive regulation imposes on career colleges, students and our economy is just too great.
Karen Kerrigan, President & CEO
Under the rule issued today, career schools will be heavily penalized if graduates fail to meet arbitrary debt-to-income ratios. Some students will no longer be able to secure federal student aid to attend a program that would give them the skills and credentials to advance their marketability in the workplace.
For-profit colleges have grown exponentially over the last decade because they are filling a significant market demand for training America’s workforce. The for-profits have moved into this niche, developed online courses that outstrip the capacity of their not-for-profit competitors, and are now being made to pay for their success because they have out-performed the "competition."
Keep in mind that nearly half of all students at for-profit colleges and universities are African American and Latinos. Thanks to this misguided “Gainful Employment” regulation, many minority students will be put at risk for losing access to institutions that help to enhance their skills in the labor market. “Solving” the student debt crisis by targeting students who face the highest unemployment levels and restricting their access to post-secondary education -- especially during a challenging and competitive economic period -- is irresponsible and shortsighted.
Biased government regulation is never fair or wise. In this instance, it may also be illegal. Certainly a rule that targets a single business sector to the exclusion of the competition is almost certainly suspect. Over the last year, government watchdog groups such as CREW have pointed to the Department’s lack of transparency and its obfuscation. CREW repeatedly called for a Security and Exchange Commission (SEC) investigation into an array of improprieties during the rulemaking process, among them a discredited Government Accountability Office (GAO) report and suspicious collaboration between Wall Street short-sellers and policymakers. Others have raised deep concerns about the DoE’s legal authority to regulate in such a sweeping manner. Indeed, the DoE has broken new ground and set new precedent by regulating career colleges to the extent outlined in “Gainful Employment.”
Congress needs to move immediately to block the rule. The process and circumstances by which the DoE advanced the rule just plain smells, and the burden this intrusive regulation imposes on career colleges, students and our economy is just too great.
Karen Kerrigan, President & CEO
Friday, May 06, 2011
Students, Employers, Career Colleges Getting Shafted by Controversial DOE Regulation
On May 4, after a year of obfuscation, the Department of Education (DoE) released its highly controversial “Gainful Employment” rule to the Office of Management and Budget (OMB) for final review. For many in the business community, the rule is considered both anti-competitive and anti-entrepreneurial to its core. It is a misguided rule that unfairly singles out for-profit colleges.
These career schools stand to be sharply penalized if graduates fail to meet arbitrary debt-to-income ratios. For-profit colleges have grown exponentially over the last decade because they are filling a huge market demand for training our workforce -- teaching specific skills required by the marketplace, meaning employers. The for-profits have moved into this market niche, developed online courses that far outstrip the capacity of their not-for-profit competitors, and are now being made to pay for their success because they have out-performed the "competition."
Along its circuitous route, the "Gainful Employment" rule has drawn fire from many across the political spectrum, but especially from leaders in minority communities. Nearly 40% of students at for-profit colleges and universities are African American and Latinos, and these students will be most at risk for losing their access to federal financial aid under the new rule.
The House, in an uncharacteristic display of bi-partisan unity, voted overwhelming to defund the rule, anticipating its dire consequences for workers and the economy. Why then is DoE rushing to release a rule that will result in a loss of jobs in a successful business sector while potentially killing college AND job options for hundreds of thousands of (especially, minority) students?
Further, why is DoE ramming through a rule that has been riddled with procedural problems? And why have questions about the rule-making process been stonewalled? Good government groups such as CREW have repeatedly called for an SEC investigation into an array of improprieties, among them a discredited Government Accountability Office (GAO) report and highly suspicious collaboration between a group of Wall Street short-sellers and proponents of "Gainful Employment" at the DoE. Senators Burr and Coburn called for an IG investigation into the DoE, which was initiated last week.
Plagued by charges of cover-up and lack of transparency, the DoE has now released the rule to the OMB without making the language public, although there are concerns that key financial analysts have been made privy. Is this any way to run a U.S. regulatory agency?
To be sure, there are many questions that need answers before the rule is finalized. At a minimum, the rule needs to be publicly posted so that affected stakeholders can develop their responses. Secretary Duncan and his agency continue to defy the call for full transparency. This closed-door process must be challenged. It’s no way to do business.
Karen Kerrigan, President & CEO
These career schools stand to be sharply penalized if graduates fail to meet arbitrary debt-to-income ratios. For-profit colleges have grown exponentially over the last decade because they are filling a huge market demand for training our workforce -- teaching specific skills required by the marketplace, meaning employers. The for-profits have moved into this market niche, developed online courses that far outstrip the capacity of their not-for-profit competitors, and are now being made to pay for their success because they have out-performed the "competition."
Along its circuitous route, the "Gainful Employment" rule has drawn fire from many across the political spectrum, but especially from leaders in minority communities. Nearly 40% of students at for-profit colleges and universities are African American and Latinos, and these students will be most at risk for losing their access to federal financial aid under the new rule.
The House, in an uncharacteristic display of bi-partisan unity, voted overwhelming to defund the rule, anticipating its dire consequences for workers and the economy. Why then is DoE rushing to release a rule that will result in a loss of jobs in a successful business sector while potentially killing college AND job options for hundreds of thousands of (especially, minority) students?
Further, why is DoE ramming through a rule that has been riddled with procedural problems? And why have questions about the rule-making process been stonewalled? Good government groups such as CREW have repeatedly called for an SEC investigation into an array of improprieties, among them a discredited Government Accountability Office (GAO) report and highly suspicious collaboration between a group of Wall Street short-sellers and proponents of "Gainful Employment" at the DoE. Senators Burr and Coburn called for an IG investigation into the DoE, which was initiated last week.
Plagued by charges of cover-up and lack of transparency, the DoE has now released the rule to the OMB without making the language public, although there are concerns that key financial analysts have been made privy. Is this any way to run a U.S. regulatory agency?
To be sure, there are many questions that need answers before the rule is finalized. At a minimum, the rule needs to be publicly posted so that affected stakeholders can develop their responses. Secretary Duncan and his agency continue to defy the call for full transparency. This closed-door process must be challenged. It’s no way to do business.
Karen Kerrigan, President & CEO
Friday, April 01, 2011
Keep the Kline Amendment in the Final Budget: Defunds Harmful Reg that will Undercut Skilled Workforce
The SBE Council has been closely following the Department of Education's proposed regulations on “Gainful Employment.” If implemented, these disastrous new regulations will hurt the ability of our workforce to obtain the training they need to be employed in a competitive, skill-based economy. Small business owners need skilled workers in order to grow and stay competitive, and SBE Council has strongly opposed these misguided regulations.
On February 18th, the U.S. House of Representatives passed the Kline Amendment as part of a Continuing Resolution on the budget. The amendment defunds the Department of Education’s proposed regulations on “Gainful Employment.”
Members of Congress are currently in budget negotiation talks and will likely work through the weekend to finalize the budget. If the "Gainful Employment" rule is implemented, it would deny federal financial aid to hundreds of thousands of students who attend for-profit career colleges. These institutions have been critical in adapting training and learning environments that meet the ever-changing needs of American business. They provide America's workforce with critical skills to obtain better jobs.
SBE Council encourages you to call your Representatives today and urge them to support the amendment. Please call 202-225-3121 to contact your Congressman and Senators.
Karen Kerrigan, President & CEO
On February 18th, the U.S. House of Representatives passed the Kline Amendment as part of a Continuing Resolution on the budget. The amendment defunds the Department of Education’s proposed regulations on “Gainful Employment.”
Members of Congress are currently in budget negotiation talks and will likely work through the weekend to finalize the budget. If the "Gainful Employment" rule is implemented, it would deny federal financial aid to hundreds of thousands of students who attend for-profit career colleges. These institutions have been critical in adapting training and learning environments that meet the ever-changing needs of American business. They provide America's workforce with critical skills to obtain better jobs.
SBE Council encourages you to call your Representatives today and urge them to support the amendment. Please call 202-225-3121 to contact your Congressman and Senators.
Karen Kerrigan, President & CEO
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