Northwest Education Law Blog : Northwest Education Lawyer & Attorney : Williams Kastner Law Firm : Tacoma, Seattle, Portland

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On June 24, 2010, the Senate Committee on Health, Education, Labor & Pensions held its first in a series of hearings designed to investigate the practices and virtues of the for-profit education sector. As Chairman Tom Harkin observed: “For many students, attending a for-profit college is a great decision. And when those students succeed, they not only pay off their loans, they also make good on the federal investment in their future.” 

However, Senator Harkin also observed that some students have a “different experience,” ending without a degree but with a heavy load of student debt, causing the Committee to question the wisdom of the federal investment in the industry through federal grants and loans. The Committee’s concerns are set forth in a report entitled, Emerging Risk?: An Overview of Growth, Spending, Student Debt and Unanswered Questions in For-Profit Higher Education.

Following Senator Harkin’s comments, the Committee opened the floor to five witnesses. Full video coverage of the hearing, including senators’ questions and the answers of each witness, is available on the Committee website. In addition, testimony from each witness in written form is included in the links that follow here, attached to each witnesses’ name. The hearing included testimony from Kathleen Tighe, Inspector General of the Department of Education, Yasmine Issa, former student of Sanford Brown Institute, Margaret Reiter, former Supervising Deputy General in the California Attorney General’s Office, and Steven Eisman, hedge fund manager. The hearing also included testimony from the lone representative from the for-profit education sector itself, Sharon Thomas Parrott, Senior Vice President, Government and Regulatory Affairs and Chief Compliance Officer for DeVry, Inc. 

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Michael Bevis, business school chairman at the University of Phoenix, San Diego, is looking forward to a higher enrollment this year compared to last.  “We don’t receive state funding like traditional schools, so we’re not cutting programs and laying off faculty,” he said. “That’s probably why our popularity is growing in comparison to other universities.”   As of June, the student count at the local campus was 5,200 against 4,300 at the same time last year. That number takes into account enrollments at what the private, nationwide university calls “learning centers.”

While the downturn in the economy has prevented some people from entering college for the first time or returning to complete degrees, that number is being offset by those “who want to come back to retool their careers.”

One change observed, however, is that more students are opting to take classes online versus in regular classroom settings. This year, for the first time, more than 50 percent are taking a course online. [San Diego Business Journal]

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The Education Department is preparing to publish new rules governing federal grants to students. The rules, which will appear in the Federal Register in the coming days, largely mirror changes proposed by the department during negotiations that wrapped up in May. Those discussions ended in a stalemate after panelists failed to reach agreement on regulations governing year-round Pell Grants and the reporting of job-placement information. [The Chronicle of Higher Education]

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College participation in U.S. News & World Report's annual rankings increased this year, after reaching its lowest level ever last year. Forty-eight percent of college leaders who were sent the peer-assessment survey responded this year, up from 46 percent.

The peer survey—the most controversial part of the rankings formula—asks presidents, provosts, and admissions deans to rate institutions on a scale of 1 to 5. The response rate has dropped from 68 percent in 1999, amid a steady drumbeat of anti-rankings rhetoric.

A controversy this year over how some public-college presidents filled out the peer survey might affect their participation in future years. Clemson University found itself on the wrong end of bad headlines in June after a staff member publicly accused it of gaming the rankings. In the aftermath, the college handed over its president's survey responses to several newspapers. And a handful of other public colleges had to do likewise, after their local papers filed open-records requests.

In the future, the magazine may add survey responses from high-school counselors into the mix. Last year, it introduced a separate ranking based solely on a survey of 1,600 high-school counselors. The counselors were not surveyed again this year, but Mr. Morse said the magazine plans to survey a larger group, perhaps 2,000, for next year's college guide.  [The Chronicle of Higher Education]

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Financial-aid officials dislike the U.S. House of Representatives' plan to eliminate the Perkins loan's in-school interest subsidy, the proposed allocation formula, and the requirement that colleges provide matching funds, a new survey by the National Association of Student Financial Aid Administrators has found. [The Chronicle of Higher Education]

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A federal judge on Monday rejected one of the first legal attempts to roll back the 2003 ruling by the U.S. Supreme Court upholding the consideration of race and ethnicity, in some circumstances, in admissions decisions by public colleges and universities.

The decision by Judge Sam Sparks strongly upheld the admissions policies at the University of Texas at Austin as consistent with the Supreme Court ruling -- and rejected the argument that Texas had failed to meet the tests set out by the Supreme Court. In so doing, Judge Sparks shut down (for now) one strategy of those who oppose affirmative action -- namely trying to say that colleges' policies go beyond what the Supreme Court permitted. But the legal group that brought the case vowed Monday night to appeal to the U.S. Court of Appeals for the Fifth Circuit and, if necessary, to the Supreme Court.

The arguments in the suit against Texas generally attempted to use the Grutter v. Bolllinger decision, which upheld the use of race at the University of Michigan law school, to limit affirmative action. The Texas lawsuit, filed on behalf of a white high school senior who was rejected by UT Austin, noted that Grutter was premised on a link between diversity goals and educational goals, and that the decision did not envision the consideration of race as open-ended. The suit argued that because Texas didn't define a specific percentage goal and continued to use affirmative action after having success at attracting many minority students, the university was going too far.

But Judge Sparks disagreed. "The court finds both the plaintiffs' arguments unpersuasive and finds UT has a compelling interest in student body diversity as articulated in Grutter. First and foremost, nothing in Grutter suggests a university must establish a specific percentage, or range of percentages, the achievement of which would satisfy critical mass," Sparks wrote. He goes on to say that if UT did establish a specific percentage, it might be creating a quota of the sort barred by Grutter.  [Inside Higher Ed]

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The Federal Reserve Board has published final rules governing private student loans. The "Truth in Lending" rules, which take effect in February 2010, add a series of new disclosure requirements to private loans; give consumers up to three days to cancel a consummated loan; and prohibit lenders from using colleges' names, mascots, or logos in their marketing materials. [The Chronicle of Higher Education]