WASHINGTON, D.C. | March 17, 2011
Good morning and welcome to the fourth hearing in our series to examine federal rules and regulations that undermine the strength of our nation’s education system. I’d like to thank our witnesses for joining us today. Your time is valuable and we appreciate the opportunity to hear from you about the impact of the Department of Education’s proposed gainful employment regulation.
The Higher Education Act states that in order to receive Title IV funding, programs at proprietary colleges must prepare students for “gainful employment in a recognized occupation.” Congress has purposely never defined the term “gainful employment,” despite its presence in the statute for the past 50 years. It was decided that any attempt to define such an evolving concept could have unintended consequences. However, some in the administration seem to believe they know better than Congress. Last year, the Department of Education issued a new regulation that attempts for the first time to define “gainful employment.”
Under the regulation, proprietary colleges would be required to seek preapproval from the federal government before creating new programs and adhere to a confusing formula that utilizes the debt-to-income ratio and loan repayment rates of program graduates to determine eligibility for federal student aid. Additionally, these institutions would face a host of new and unprecedented reporting requirements.
This gainful employment regulation is yet another example of federal overreach into the nation’s colleges and universities that will reduce access to higher education for millions of students, undercut our efforts to reenergize our economy, and destroy jobs.
More than three million students attend proprietary colleges each year. These colleges, also known as for-profit colleges or career colleges, provide students with skills that can be applied immediately to specific jobs in the workforce. As our unemployment rate continues to hover around nine percent and more than thirteen million Americans remain out of work, proprietary colleges address a critical need in today’s economy.
Proprietary colleges are uniquely geared toward underserved, non-traditional students, such as single parents, first-generation college students, and working adults, who require training but are not able to attend traditional colleges or universities. These institutions are flexible and able to adapt to the needs of the American workforce, and they prepare a new generation of job-seekers to meet the demands of a changing local economy. For example, if a community lacks trained nurses or qualified auto mechanics, proprietary colleges can quickly develop programs to fill those needs.
More and more Americans are realizing the value of obtaining an education from a proprietary college. Unfortunately, the proposed gainful employment regulation could force many of these valuable institutions to close their doors, denying millions of potential students access to key job-training programs. This poorly conceived regulation would allow the federal government to control program expansion by restricting financial aid eligibility, limiting initial enrollment, and requiring schools to document the demand for workers with specific skills. According to one report, as many as 5.4 million students could be shut out from higher education by 2020 as a result of the gainful employment regulation.
I should note these are concerns shared by members on both sides of the committee. Last month, an overwhelming bipartisan majority of members in the House of Representatives voted to put an end to the regulation before it hurts students and our economy. I have repeatedly asked Secretary Duncan to withdraw his regulation.
At its heart, this issue is about student choice. We all support transparency and accountability. We realize there are some bad actors that should be rooted out. But we should not deny students the opportunity to attend the college of their choice and gain the valuable skills they need to compete in the workforce. That’s why we’re here today – to have a thoughtful discussion about the gainful employment regulation. This morning, we will hear from one young woman who graduated from a proprietary college and is now a successful professional. Without access to a proprietary college, she would not be where she is today.
Rather than restrict access to an entire sector of colleges, we need to empower individuals to make informed decisions about their education and career goals. The president has laid out a bold vision to lead the world in college graduates by the end of the decade. We cannot meet this goal by launching an assault against an entire sector of higher education. Instead, we should encourage a strong and competitive workforce by providing opportunities for individuals to gain the skills and training they need to succeed in the workplace.
Again, I’d like to thank our witnesses for joining us, and I will now recognize my distinguished colleague George Miller, the senior Democratic member of the committee, for his opening remarks.
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