WASHINGTON, D.C.—U.S. Senator Tom Harkin (D-IA), Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee, Senators Dick Durbin (D-IL) and Chris Murphy (D-CT), and Representative Elijah Cummings (D-MD) today released the following statement regarding the Department of Education’s final gainful employment rule:
“As Chairman of the HELP Committee, I led a two-year investigation to determine if students attending for-profit colleges were being offered a path to gainful employment as required by law,” Harkin said. “The investigation showed that high-cost, for-profit colleges are leaving millions of students with high debt but questionable earning power, and that more than half of those students were left with no degree or diploma and no improved prospect of gainful employment. Today’s action by the Department of Education seeks to address the first problem, but does little to ensure that colleges stop offering poor quality programs where most of the students drop out. While I commend the Administration for finalizing this rule that holds accountable those career education programs that graduate students with high debt without the earning power to pay it, this rule does nothing to stop schools from offering, and our most at-risk students from enrolling in, programs where most students fail and default.
Continued Harkin, “This rule is a first step, but much more needs to be done to ensure that colleges put the interest of students above shareholders. While this rule and the decision to formalize a task force are steps in the right direction, Congress must strengthen the laws on the books to better protect students and taxpayers. In the meantime, I urge the Administration to use all available resources at hand to preserve the integrity of our federal student financial aid system.”
“The collapse of Corinthian Colleges was the canary in the coal mine for the for-profit college industry. I hope today’s announcement of a federal task force on for-profit colleges, like the one we proposed in our legislation, signals a new level of commitment from this Administration to take on serious oversight of this industry before another company reaches the breaking point,” said Durbin, author of the Proprietary Education Oversight Coordination Improvement Act. “Information sharing and better coordination between federal agencies and state attorneys general will help regulators prevent the ongoing fraudulent and abusive practices of this industry. While not as strong as I would have written, the final gainful employment rule, along with measures like the task force, will bring badly needed additional scrutiny to this industry.”
“For-profit colleges need to wake up and start thinking as much about the quality of education they deliver as they do about their profits,” said Murphy. “As a member of the HELP Committee, I have worked with the Chairman and Senator Durbin to ensure that students get value for the money that they pay. This rule is a step in the right direction, but a lot more needs to be done, especially to prevent schools from offering programs that are designed to create profits for investors instead of real job skills for students. Predatory, profit-first practices are far too rampant within the industry, and the federal government can’t sit back and let for-profit colleges get away with these practices. This step toward accountability and oversight is a welcome change, but Congress needs to assure it's only a first step.”
“For-profit colleges should prepare students for success in their careers and provide a high-quality education, not just boost profits for their shareholders,” Cummings said. "When I attended the final rulemaking session for this rule, I emphasized the importance of firm but fair oversight, and while today's rule represents progress, it does not go far enough. These companies are quick to pat themselves on the back for their professed support of low-income and minority students but all too often send them out the door with huge debt, no degree and diminished hope for what they thought was a bright future.
“I applaud the Department of Education for taking action to shine a light on this sector, and I am hopeful that the task force also announced today will foster best practices and provide clarity for all of these schools and those that attend them,” Cummings added. “Stronger oversight of for-profit colleges is long overdue.”
Harkin, as Chairman of the HELP Committee, released a report on the findings of a two-year investigation of the for-profit higher education industry, which would be subject to the gainful employment rule along with other career training programs. The 2012 report showed that for-profit colleges accounted for approximately 12 percent of students, yet consumed almost 25 percent of the federal financial aid budget and accounted for almost half of all student loan defaults.
Durbin and Harkin have been working together since 2009 to protect students from the predatory practices of the for-profit college industry. In November 2013, they reintroduced legislation in the Senate that would help put an end to the for-profit industry’s predatory marketing campaigns and aggressive recruiting of veterans, servicemembers and their families. The Protecting Our Students and Taxpayers (POST) Act, which U.S. Representative Steve Cohen (D-TN) introduced in the House of Representatives, would eliminate the loophole that allows these publicly traded companies to receive more than 90% of their revenue from the federal government. More information on that legislation can be found HERE.
As Ranking Member of the House Oversight and Government Reform Committee, Cummings has worked diligently to encourage better protections and educational outcomes for students at these institutions, including launching an investigation into the compensation packages of top executives at several schools, and leading a letter in May in support of the Department’s efforts to strengthen regulation of career education programs.
In addition to Harkin and Durbin, the Proprietary Education Oversight Coordination Improvement Act is co-sponsored in the Senate by Senators Sherrod Brown (D-OH), Jack Reed (D-RI), Brian Schatz (D-HI), and Barbara Boxer (D-CA). In addition to Cummings, the Protecting Our Students and Taxpayers (POST) Act is co-sponsored in the House by Representative Steve Cohen (D-TN).