A look at a gainful-employment e-mail scuffle

I'm used to following education debates in the news media, but until know I haven't been privy to back channels.

This week, though, I've been watching a minor PR offensive (and counter-offensive) being waged via e-mail to reporters, commentators and others involved in the coverage of the proposed federal gainful employment rules.

(Those regulations were prompted, at least in part, by the spate of for-profit-college scandals of the last 12 months or so.)

It all started when I got this on Monday from Scott  Simpson, press secretary for The Leadership Conference Education Fund:

Good afternoon –

In advance of the expected final gainful employment regulation being issued some time soon, I want to draw your attention to these two stories published last week in Bloomberg/Businessweek and Roll Call highlighting how the for-profit college industry is engaged in a sustained astroturfing campaign to make minority groups appear divided on the issue. ...

As these stories indicate, the industry is trying to create the appearance of division, where it does not exist, among credible organizations who advocate by and for racial and ethnic minorities on this issue. ....

Sure enough, yesterday I received this from Danny Barefoot, who said he was working on behalf of the National Black Chamber of Commerce:

In the next 10 days, the Department of Education will issue a rule on "Gainful Employment" - a rule that would cut off federal funding options for students attending for-profit colleges (for example, Kaplan Higher Education, American Career Institute, ITT Technical Institute, Stratford University, and New Horizons) unless the colleges could demonstrate certain graduation rates or levels of student debt.

These rules would be unique to these colleges (no public or private schools would be required to meet the same standards) and would significantly adversely affect students of color in particular, as these colleges educate a disproportionate percentage of minority students.

This is controversial because it pits different sides of the minority community against each other.  Several organizations (including NCLR and NAACP) have come out in favor of the rule, while others, including our client‚ NBCC have come out against.

Some important elements of the debate you might not be aware of:

*The proposed rule is solely directed at private-sector career colleges and technical schools that offer training, flexible schedules, on-the job experience and marketable skills to prepare students for high demand jobs. At present, African American students account for nearly 18 percent of enrollees in these schools, and many would be unable to pursue their chosen careers if federal financial aid was withdrawn from certain programs.

*After the rule was already written, the Department of Education admitted miscalculating the default rates at for-profit colleges on which the rule was based.

*A key interest group pushing the gainful employment rule is short-sellers on Wall Street, who stand to make millions by forcing for-profit colleges out of business (more details on that here: http://goo.gl/nciA8 and here: http://goo.gl/WDSw5)

Recently Rep. Jesse Jackson Jr. sent a letter to the President opposing this proposed rule (read it here: http://goo.gl/ecQtk) .  The NBCC (our client) released this statement last week: http://goo.gl/GQtcQ

I'm hoping you'll be willing to highlight this issue through a blog post, letting your readers know what's going on in DC over the next week.  We can also provide you a guest-post from leaders at NBCC, or arrange an interview if that would be helpful.

Thanks so much for your consideration.

Which prompted blogger Sherman Dorn to reply:

We're on opposite sites of the policy here -- I'm firmly in favor of the gainful-employment rule. You're ignoring the fact that our taxes are going to support loans that go into your client's pockets, and often it's students who have to pick up the tab after dropping out. At a place like a local community college with low tuition, that's hard enough. For a private entity where students commit themselves to thousands of dollars of debt, there has to be accountability when the private company gets all the upside and none of the risk.

Your clients could choose NOT to participate in federal loans and put the money up front themselves if they believe in the job they're doing. That's usually how capitalism works, and then your clients wouldn't have to worry about the gainful-employment rule.

And Craig Smith of the American Federation of Teachers jumped in:

It should also be pointed out to anyone writing on this topic that Mr. Barefoot’s email below contains several inaccurate statements and implications.

1.        The most egregious is the statement that the gainful employment regulation applies only to for-profit colleges.  Not true. The gainful employment regulation applies to for-profit colleges and not-for-profit public and private colleges with career education programs designed to lead to gainful employment.  In fact, it applies to more not-for-profit programs than for-profit.

2.       Please do read the letter Mr. Barefoot included—you will see that while it raises concerns that students are protected, it does not oppose the rule, but rather anticipates its implementation.  Furthermore both Rep. Jackson and Rep. Cleaver voted AGAINST an amendment in the House to block the gainful employment regulation.

3.       In fact, to describe the minority community as split is a total misrepresentation.  The list of minority advocacy groups supporting the regulation is a mile long including:

a.       NAACP

b.      National Council of La Raza

c.       The Council for Opportunity in Education, which lobbies on behalf of the federal TRIO programs

d.      Education Trust

e.      Rainbow PUSH

f.        The League of United Latin American Citizens

g.       The Leadership Conference on Civil and Human Rights ( a coalition of more than 200 national organizations)

h.      The Hip Hop Caucus

i.         the Hispanic Association of Colleges and Universities

j.        The National Association for Equal Opportunity in Higher Education

k.       The Southern Poverty Law Center

l.         The United Negro College Fund

m.    The United States Hispanic Leadership Institute

n.      American Association of University Women

And on and on

Finally to suggest that short sellers are influencing the process here would be to ignore the long list of Wall Street firms who are “long” on for-profits who have lobbied the Department, Congress and OMB.

I do hope anyone receiving Mr. Barefoot’s email will take up this story, but I hope you will gather all the real facts about this regulation as you write.  We are happy to speak with reporters and put you in touch with many others who are as well.

Recipient Donald Clarke wrote:

I and perhaps many others on this list have no idea why we were sent the original email. Could respondents please reply directly to the sender if they disagree and not cc all recipients? There are a zillion of us.

Thanks.

And Louis Lavelle of Bloomberg added:

Ditto for me.

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