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    "Companies seek rollback of tough Obama-era regulations that threaten to lead to school closures" "Investors, in turn, have poured hundreds of millions of dollars into education stocks since the election, hopeful that a change of regime would spur a resurgence in the for-profit college sector"
    6 years ago by @prophe
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    "In early 2015, 15 students at Corinthian Colleges, then one of the largest for-profit college chains, formed a group called the Corinthian 15 and pledged to strike until their student loans were discharged. Corinthian Colleges shuttered its doors just months later, displacing roughly 16,000 students."
    6 years ago by @prophe
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    Laureate Education just became the first IPO of a company that's legally allowed to sacrifice profit in exchange for purpose, though the for-profit education industry has had a hard time finding any purpose at all. On February 1, Douglas Becker made history when he rang the opening bell of the Nasdaq. His company, Laureate Education, Inc.—the world’s largest for-profit college network, with more than 1 million students enrolled at over 200 campuses in 28 countries—had just launched an initial public offering. IPO filings happen every day, but this is the first public benefit corporation to ever be publicly traded. Laureate is listed on the exchange as LAUR and raised $490 million by offering 35 million shares at a price of $14, slightly lower than expectations. Benefit corporations are distinct from a traditional corporation. Rather than a singular focus on creating financial value, a benefit corporation is explicitly mandated to pursue positive social and environmental impact along
    6 years ago by @prophe
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    Dive Brief: Career training programs will have until July 1 to appeal the U.S. Department of Education for reconsideration of compliance under current gainful employment and revenue reporting guidance enacted by the Obama administration, a signal that the Trump administration is holding to promises of massive deregulation in the federal education agency. The extended review period will allow schools the chance to prove they were unfairly assessed in previous years, under rules requiring that graduates' loan payments do not exceed 20% of their discretionary income or 8% of total earnings, metrics that many for-profit college advocates say was an unfair rule designed to disrupt for-profit impact in higher education. For-profit leaders applauded the extension, but opponents say the delays will allow more students to potentially be defrauded by predatory recruitment schemes and false information about postgraduate outcomes. Dive Insight: The extended review of the gainful employment policies will have impact throughout the higher education sector, as community colleges and schools which disproportionately serve poorer students will now have time to provide more context about graduation rates and employment outcomes which previously may not have been possible due to time constraints. Additionally, the extension signals the first sign of regulatory repeals for higher education, one of the only signature details of President Trump's higher education platform during the campaign season, and a recurring theme shared by Congressional higher education leaders. For most institutions, this is a positive sign towards reducing costs and manpower committed to compliance efforts, but for smaller institutions with missions to serve underrepresented populations, it may be a lifeline.
    6 years ago by @prophe
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    The Trump administration is delaying implementation of one of the signature policies of the Obama-era crackdown on for-profit colleges. The Department of Education announced Monday night it was targeting the Obama administration rule aimed at holding career-training programs accountable for getting students decent jobs and earnings. To be in compliance with the regulations, career-training programs, which are largely at for-profit colleges, need to graduate students whose loan payments don’t exceed 20% of their discretionary income or 8% of their total earnings. Programs that don’t fit this criteria for multiple years could lose access to federal financial aid. Career-training schools will now have until July 1 to file appeals to the program debt-to-earnings ratios published by the Department earlier this year, as part of the enforcement of the gainful employment (GE) rule. Originally, their appeals were due Friday, March 10. The schools will also now have until July 1 to publish disclosures about their debt-to-earnings ratio that are required by the new law. Before this decision, the programs had until April 3 to post those disclosures. The gainful employment rules were a long fought victory for the Obama administration in its quest to crack down on for-profit colleges, which officials and advocates have accused of loading students up with high debt loads for questionable outcomes. The for-profit college industry fought the regulations in court and the Obama administration ultimately prevailed. But the Trump administration’s embrace of an increased role for the private sector in education has had supporters of efforts to crack down on for-profit colleges worried that the new rules could be in jeopardy — and investors betting on for-profit schools. The delay is the first signal that that speculation may be correct. “This is a sign that does nothing to dispel concerns that this administration will be sufficiently aggressive in protecting students,” said Ben Miller, the senior director of postsecondary educati
    6 years ago by @prophe
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    The Trump administration has taken its first shot at rules designed to protect students from expensive, low-quality colleges and career training programs. Less than a month after Betsy DeVos was sworn in as its top official, the U.S. Department of Education announced Monday evening that it would delay until July 1 an effort to crack down on career training programs that load students up with unpayable debt. The biggest winners: the more than 800 higher educational programs that claim to lead to “gainful employment” but flunked the department’s January excessive debt test—mostly for-profit art and cosmetology schools. These programs can now continue to recruit applicants (at least until July 1) without having to warn them about alumni’s oppressively high debt loads. The schools can also take this extra time to seek data showing that their graduates’ student loan bills are actually below the official “excessive debt” cutoff. That means bills must be no more than 12% of the average student’s gross earnings, as reported to the Social Security Administration, and no more than 30% of their discretionary income. That means, for example, that students considering entering, say, the Art Institute of Pittsburgh’s two-year Associate’s program in graphic design won’t necessarily be warned that the typical graduate of the program has taken on about $40,000 in debt, but finds a job paying only about $22,000 a year. The monthly financial reality for such graduates is grim. Their before-tax monthly salary works out to about $1,900. The monthly payments on a standard 10-year student loan repayment plan top $400 – or more than 20% of their gross earnings. The department said it would use the extra time to “further review the [Gainful Employment] regulations and their implementation.” The action puts the brakes on one of many last-minute moves by the Obama administration. In January, the Department of Education issued an analysis of the earnings and student debt levels of more than 8,600 higher education programs that offer pr
    6 years ago by @prophe
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    The Trump administration just handed an olive branch to the battered industry. he Trump administration appears poised to undo one of its predecessor’s most ambitious attempts to rein in for-profit college rapacity. The Department of Education is delaying the so-called “gainful employment” rule, in place since 2015, the Wall Street Journal’s Josh Mitchell reports. Under the Obama-era rule, the Department of Education would shut off the financial-aid spigot for higher education institutions if their typical graduate reported spending more than 30 percent of after-tax cash or 12 percent of total income on student loan payments. In other words, if a college saddles too many of its students with debt and shabby job prospects — if graduating classes debt-to-income ratios don’t look good for a few consecutive years — it will be barred from receiving Stafford loans, Pell grants, and other forms of taxpayer funding for higher education. The more than 800 schools that the Department of Education threatened in January with sanctions under the rule—98 percent of which are for-profit institutions like Full Sail University and University of Phoenix — will now have until July 1st to hire independent auditors to investigate whether the government’s damning data on their students career outcomes is wrong or flawed. Since most for-profit colleges derive most of their revenue from students’ federal financial aid packages, thousands of the schools may have eventually had to close their doors without reconsideration by the Department. The extended timeline to appeal, and the department’s promise to review the rule, could be a lifeline for an industry that was facing an unprecedented crackdown via states attorneys general lawsuits and federal enforcement actions. But, as Pacific Standard reported in 2015, this wouldn’t be the first time the industry has bounced back from a regulatory beating. For-profit college parent companies stocks have surged since Donald Trump’s election in November. Now, shareholder faith looks like it could g
    6 years ago by @prophe
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    President Trump’s postelection agreement to pay $25 million appeared to settle the fraud claims arising from his defunct for-profit education venture, Trump University. But a former student is now asking to opt out of the settlement, a move that, if permitted, could put the deal in jeopardy. Lawyers for the student, Sherri Simpson of Fort Lauderdale, Fla., on Monday asked a federal judge in San Diego to reject the settlement unless former students are given an opportunity to be excluded from the deal so they can sue Mr. Trump individually. If the judge, Gonzalo Curiel, decides that Ms. Simpson and potentially others should have that chance, legal experts say it could disrupt the settlement because Mr. Trump and his lawyers saw the deal as a way to resolve all of the claims, once and for all, to avoid a trial and distractions to his presidency. “If even one person could opt out of the settlement and force a trial, that might, in fact, crater the deal,” said Shaun Martin, a professor at the University of San Diego School of Law. “I’m sure Judge Curiel will be aware of that.” The agreement, announced in November, appeared to resolve years of hotly contested litigation, including two federal class-action cases in San Diego and a separate suit by Eric T. Schneiderman, the New York attorney general. Students maintained that they were cheated out of tuition through high-pressure sales tactics and misleading claims about what they would learn. At one point during the contentious case, Mr. Trump questioned Judge Curiel’s impartiality based on his Mexican heritage. Mr. Trump, who has rejected the claims and did not acknowledge fault in the settlement, posted on Twitter after the settlement announcement that he “did not have the time to go through a long but winning trial on Trump U.” Patrick Coughlin, a lawyer representing the class-action plaintiffs, said that it was a “terrific settlement” and that the objection seemed “politically motivated.” He said he feared that the objection could result in delays for students
    6 years ago by @prophe
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    Buoyed by the ascendancy of Donald Trump, America’s predatory for-profit colleges are renewing their multi-front fight to destroy a key measure to hold them accountable: the gainful employment rule. The new battle plan includes pushes in Congress and before the Betsy DeVos Department of Education, plus two new lawsuits aimed at the regulation, including one, in Arizona, that has not been previously reported. It looks like this harmful effort is rapidly gaining traction. It took the Obama administration nearly eight years of battling well-paid for-profit college lobbyists and lawyers to finally enact and implement this regulation, which has a simple, common sense premise: Career training programs that, year-after-year, leave graduates mired in overwhelming debt should lose eligibility for taxpayer-funded student grants and loans. Career education should make people financially better off, not worse off, and the rule aims to channel money away from programs that do harm — and channel it toward those honest, effective colleges that are genuinely helping students build careers. For decades, many for-profit colleges, through a toxic mix of high prices, low quality, and weak job placement, have promised more than they could deliver, and yet have been getting billions annually in federal aid, much of it spent on advertising and profits, rather than education. Many veterans, single moms, displaced factory workers and miners, and others struggling to build a better future have been deceived and abused by unscrupulous college owners, whose offices are in Wall Street suites as well as strip malls. The final gainful employment rule does not demand much; only the worst programs flunk its test comparing graduate earnings with debt levels. The first round of results, reported in January, showed that 98 percent of the flunking programs were at for-profit colleges. The for-profit colleges have never stopped trying to overturn the rule, even after federal courts decisively rejected two separate industry lawsuits. Now, however,
    6 years ago by @prophe
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    Alums of a disgraced for-profit college chain have spent years trying to cancel their federal student loans. For three years in federal court, the Obama Department of Education told them to keep on paying. Improbably, the Trump administration is poised to say differently. Under a preliminary accord, the federal government would invite tens of thousands of former students, who more than 20 years ago attended beauty and secretarial schools owned by defunct Wilfred American Education Corp., to petition the Education Department to cancel their unpaid debt and receive refunds on past payments, according to four people familiar with the case, who spoke on condition of anonymity because they were discussing confidential settlement negotiations. The applications are almost certain to be approved, these people said, and the government would foot the bill. The deal-which is not complete and may change-would resolve a 2014 class-action lawsuit against the Education Department brought by seven former Wilfred students who claimed the feds for decades had been wrongfully collecting on debt that students needn't repay. Federal law allows borrowers to cancel their loans when their schools violate certain rules, and Wilfred routinely flouted the law by falsely certifying that its students were eligible for government loans, according to the complaint. The lawsuit claimed the department knew the loans were eligible to be forgiven, yet it made no effort to inform debtors of this right. If finalized, the settlement would represent one of the largest debt-forgiveness schemes undertaken by the Education Department. That it didn't happen under Obama, who championed student debt relief measures, and instead could happen under Trump, who in November agreed to pay $25 million to settle several lawsuits tied to his own foray into for-profit education, could upend expectations that a Trump-overseen Education Department would favor the interests of for-profit schools over those of allegedly defrauded students. Jim Margolin, a spokesman f
    6 years ago by @prophe
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    President Donald Trump’s administration has begun relaxing restrictions on for-profit colleges, and traders in shares of companies like Strayer Education Inc. (STRA) and Capella Education Co. (CPLA) have taken note. For-profit college stocks soared in the week after the Department of Education announced a delay in the implementation of a regulation finalized in October 2014 by former President Barack Obama. Shares of Strayer Education, a holding company for Strayer University, climbed 2.5 percent in the week following the March 6 announcement, hitting a high of $81.40 shortly after Monday market open, while Capella Education, the parent of Capella University, grew 1.8 percent over the same period, surpassing $78 Monday morning. Grand Canyon Education Inc. (LOPE), the parent of Grand Canyon University, rose 3.5 percent over the past week to an all-time high of $67.49, and Laureate Education Inc. (LAUR), which counts Walden University as one of its for-profit institutions and was formerly known as Sylvan Learning Systems, saw its shares rise 0.6 percent to nearly $13 Monday. DeVry Education Group Inc. (DV), known for its DeVry University, saw a more modest 0.4 percent rise over the past week. The Department of Education initially required for-profit colleges, along with some nonprofit and public schools, to report data on the success of their job training programs by April 3, but under new Education Secretary Betsy DeVos, the date was pushed to July 1. The rule, which was originally slated for implementation on July 1, 2015, would cut back on federal funding for institutions whose programs did not lead to "gainful employment"— meaning graduates’ annual loan payments exceeded 20 percent of their income. For-profit colleges, whose attendees tend to be disproportionately female, minority and low-income, have long faced criticism for their role in the student debt crisis. Data released from the Department of Education in September linked more than 35 percent of student debt defaults in 2013 to the institutions, des
    6 years ago by @prophe
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    Senate Democrats want Education Secretary Betsy DeVos to explain why she’s delaying the implementation of an Obama-era rule aimed at ensuring career-training programs, specifically those at for-profit colleges, actually prepare students for good-paying jobs. In a letter to DeVos this week, Sens. Dick Durbin (Ill.), Patty Murray (Wash.) and Elizabeth Warren (Mass.) called the department’s gainful employment rule a critical protection for both students and taxpayers. On Jan. 9, the department released final debt-to-earning rates for career training programs required by the rule finalized under Obama in October 2014. Under the rule, the estimated annual loan payment of a typical graduate would have to be at or below 20 percent of his or her discretionary income or 8 percent of his or her total earnings to be considered a program that leads to gainful employment. Programs that exceed these levels would be at risk of losing their ability to participate in taxpayer-funded federal student aid programs. Late last week the department gave schools more time to appeal their ratings, which are generated using earnings data from the Social Security Administration and debt information from the department’s records and the school. Final appeals, originally due March 10, are now due July 1. But Democrats argue the rule was generous to begin with, giving schools three opportunities to appeal their rates. “According to a Department spokesperson, the delay was also due to ‘a question about whether schools can provide data to a third party,’” the senators wrote. “It is unclear how this question could not have been solved through follow-up guidance rather than a delay.” DeVos is also giving Gainful Employment Programs until July 1 to switch to a new format in meeting the requirement to disclose information about their programs, including graduation rates, tuition and fee amounts, typical student debt upon graduation and what a graduate is likely to earn. The senators asked DeVos how long
    6 years ago by @prophe
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    Students who were scammed by a for-profit college back in the '80s could get their money back under the Trump administration. The Wilfred American Education Corp. used to run beauty and secretarial schools that primarily attracted low-income students, usually women. In 1988, Wilfred had 58 schools and more than 11,000 students, making it one of the largest for-profit college chains in the country. Many of those students used federal loans to pay for their education. But in 1991, Wilfred was found guilty of fraud in two different federal court cases. By law, the Department of Education should have canceled the student loans after the school was shut down. That didn't happen. Seven former Wilfred students sued President Obama's Education Department, demanding their student debt be canceled and the loan payments they made over the years be reimbursed. They were among 60,000 people who took out government-backed loans to go to Wilfred. That lawsuit was originally dismissed on a technicality. The decision was overturned when a judge said the Education Department was required to tell students if they're eligible to cancel a loan. Now, four people familiar with the case told Bloomberg the federal government is considering a deal. It would allow students to petition to cancel their debt and get refunds on past payments. The outlet notes a lawyer for the students said in a March 9 filing that they "have made substantial progress toward a final settlement," but no official agreement has been submitted to the court yet.
    6 years ago by @prophe
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    President Donald Trump´s threat to deport millions of illegal immigrants – half of them Mexicans – has triggered an unprecedented campaign by the Mexican government and universities. A raft of measures announced in recent weeks seek to reincorporate returning migrants into the country´s education system and labour force while defending those who wish to remain in the United States. Trump has vowed to deport as many as three million illegal immigrants, with those with criminal records at the front of the queue. However, there is growing fear among the hundreds of thousands of university students and workers who are beneficiaries of the Deferred Action for Childhood Arrivals or DACA programme – which grants temporary legal status to certain immigrants who arrived as minors – following the detention of several DACA holders in recent weeks. A recent series of menacing tweets by the Immigration and Customs Enforcement, suggesting that even DACA holders could be subject to deportation, has sparked further alarm. Mexicans represent roughly 5.8 million of the estimated 11 million illegal immigrants in the United States. They include an estimated 400,000 Mexicans known as Dreamers, for the proposed federal Dream Act that sought to provide legal status for young immigrants. Many have little or no support system in Mexico and some don´t even speak Spanish. In response, the Mexican government is seeking to ease the repatriation process for hundreds of thousands of migrants, particularly students. New legislation On 17 March, the Mexican Congress approved new legislation that streamlines the application process to schools and universities for returning migrants. The changes to the federal Education Law empower private colleges to revalidate transcripts from other Mexican or foreign institutions. Even more significant, students who studied abroad no longer need to present an apostille – a diplomatic notarised seal – along with their transcripts, a process that can take weeks and cost hundreds of dollars. The feder
    6 years ago by @prophe
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    The Trump administration’s plan to cut billions of dollars in research spending by eliminating indirect cost reimbursements would devastate university science, especially at public institutions, experts warned. [This is an article from The Chronicle of Higher Education, America’s leading higher education publication. It is presented here under an agreement with University World News.] The US secretary for health and human services, Tom Price, told Congress this week that the idea is to save taxpayers money while giving them the same amount of research activity. Indirect cost payments are funds spent on "something other than the research that’s being done," Dr Price told a House of Representatives subcommittee on health appropriations on Wednesday. But university representatives made clear on Thursday that it simply does not work that way. Indirect costs reflect the legitimate expenses of providing scientists with labs and complying with a host of essential services that somehow will still need to be paid, the representatives said. Under current law, a researcher who receives a federal grant to conduct research cannot simply be billed by his or her university for those costs, said Tobin L Smith, vice president for policy at the Association of American Universities, which represents major research institutions. And universities absolutely won't force students to cover the difference, Smith said. "The reality is we don't have other revenue sources to pay for those things, because let's face it, we are not going to rob tuition to pay for those costs," he said. "It just is not going to happen." It's not clear what universities would do if Congress actually accepted the administration's proposal to end indirect cost payments, said David Kennedy, director of costing policy and studies at the Council on Governmental Relations, another association of research universities and affiliated medical centres. State institutions probably would suffer first and hardest, Kennedy said, because they would have virtually no ab
    6 years ago by @prophe
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    Remember when candidate Trump promised to make college affordable for everyone? Yeah, that’s not happening.  Instead, Trump is turning to the notorious corporateers who have been pouring McDiplomas on the nation’s steaming trillion-dollar student debt pyre to shake up higher education. Education Secretary Betsy DeVos’s controversial pick for a special assistant—for-profit college corporate lawyer Robert Eitel, may be a portent. As counsel for Bridgepoint, the parent company of the now-tainted brands of Ashford University and University of the Rockies, was forced by the Obama administration last year to refund $24 million in tuition and debt costs to students, plus civil damages, after the Consumer Financial Protection Bureau found that its heavy marketing scheme for its online programs, and “deceived its students into taking out loans that cost more than advertised.” Bridgepoint is just one player in a sector of for-profit institutions that are known for exploiting millions in federal loans and grants, providing substandard academics and granting worthless diplomas. While many companies were reined in by regulators under Obama, the industry as a whole has survived, and is now poised for revival under Trump. In fact, even those companies penalized for defrauding students have not been held fully accountable over federal student debts; Bridgepoint’s sanction, for example, did not encompass federal loans, even though graduates are typically chained to about $33,000 in taxpayer-subsidized debt. But the for-profit college companies hobbled by financial crisis under Obama might see a major resurrection under Trump’s and DeVos’s deregulatory agenda. One tactic may be for belly-up for-profits to reinvent themselves as nonprofits, in order to skirt future regulations and wriggle out of liability for financial abuses. The Corinthian college chain, for example, following bankruptcy, was placed under the control of a nominal “nonprofit” called Zenith (which was later exposed for having compromising financial entangle
    6 years ago by @prophe
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    It might just be career government lawyers doing their jobs, and doing them well, until the Trump Administration can catch up and work its malevolence, but in court papers filed today, the Trump Justice Department defended the Obama Administration’s gainful employment rule, a measure aimed at curbing predatory abuses by for-profit colleges. The rule penalizes expensive career college programs that, year after year, leave graduates with debts that, based on their earnings, they cannot afford to repay. “The public interest is served by allowing the Department to go forward with implementing the GE regulations,” Justice Department lawyers wrote on behalf of their client, Secretary of Education Betsy DeVos, who is being sued by an association of cosmetology schools. The association’s somewhat risque argument is that many hairdressers and other beauty professionals do not report all their tip income to the IRS, and thus their graduates actually are doing better than the gainful employment calculations give them credit for. Revised under pressure from industry lobbyists, the Obama Administration’s rule is not very strong, but it does endanger some of the worst-of-the-worst college programs. The operators of those programs, who have been raking in billions in taxpayer money, want to make sure they can still act with impunity, even though their abuses have ruined the lives of countless veterans, single moms, and other students. There are good cosmetology schools, as well as other types of career schools. The gainful employment rule aims to channel resources and students to those quality, affordable schools, and away from the kind of for-profit colleges that law enforcement agencies are investigating or prosecuting for fraud. But given: that Donald Trump was previously the proprietor of his own predatory for-profit real estate “university”; that Trump crony Newt Gingrich and congressional Republicans have aggressively advocated for the for-profit college industry; that DeVos has been invested in for-profit education
    6 years ago by @prophe
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