Administration targets working-adult degree programs

Whether a president actually claims the mantel of being the “Education President,” as did George W. Bush, or simply declares education a “top priority,” every recent occupant of the White House has felt the need to tout their education credentials.  In his very first speech to a joint session of the Congress in early 2009, President Barack Obama promised that within a decade the U.S. will “have the highest proportion of college graduates in the world.”

Strange it is, then, that this administration is moving to dramatically curtail the ability of a major segment of the country’s post-secondary schools to meet the needs of many students often underserved by traditional colleges and universities; namely, working adults and minorities.

In the crosshairs of a new Department of Education proposed regulation are America’s proprietary private colleges and universities.

The variety of degrees offered by proprietary schools, and the number and size of such schools, have grown dramatically in recent years; largely because they fill an important niche in higher education – offering flexible hours and course programs that meet the needs of working adults.  As noted recently by Mark Schneider, visiting scholar at the American Enterprise Institute, four-year, for-profit schools represent the fastest-growing segment of higher education in the country.

Considering the avowed desire by the president to significantly increase the number of citizens graduating from college, and seeing the success proprietary colleges have enjoyed in helping fulfill that goal, one might conclude that the Obama Administration would be working to ensure such schools are not unduly harmed by federal policies.  Unfortunately, and somewhat inexplicably however, the administration’s recently proposed regulation would make it extremely difficult, if not impossible, for proprietary schools to continue competing financially with their traditional and more numerous cousins.

The vehicle, by which the administration is proceeding in what appears to be a move to drive a stake through the heart of for-profit colleges and universities, is something called the “gainful employment” rule issued by the Department of Education. Under this proposal, colleges would be prohibited from participating in Title IV financial aid programs (a key source of loans for post-secondary students) if the average debt load carried by their students is greater than 8 percent of the average starting salary those students could be expected to earn.

This essentially arbitrary figure would dramatically and disproportionately affect proprietary schools, because these institutions traditionally attract students who already are in the work force, and who often already have other financial obligations, such as children, not yet burdening younger students who attend public or non-profit private schools.

The net effect of this proposed rule would be to greatly reduce the chances for lower-income students, mainly women, minorities and working adults, to obtain college degrees and substantially increase their long-term earning potential.  It would also drive many proprietary schools out of business by significantly reducing the pool of potential students; many of whom must rely on loans, including Title IV loans, in order to meet tuition costs.

The government’s proposal ostensibly is designed to prevent students from incurring post-graduate loan repayment obligations beyond what the federal bureaucrats consider reasonable.  However, the government’s reliance on a sterile, statistics-based formula fails to take into account the reasons why many working adults are attracted to proprietary colleges and universities.  In addition to questioning the reasoning on which the Department has based its punitive proposal, advocates for the schools argue the government has no authority to issue regulations such as these in the first place.

A top official in the Education Department, who reportedly has served as its point man for anti-proprietary school actions, is stepping down next month.  But the battle lines already have been drawn.  If working American adults wish to continue enjoying the unique advantages proprietary schools offer for standard degrees as well as specialized degrees like law and nursing, they will have to mount a multi-pronged attack, including legal and political challenges, to defeat what the administration is proposing.

42 comments Add your comment


June 14th, 2010
6:36 am

People do need to be saved from their financial bad habits, like incurring too much debt. It’s just a fact. Most people commit financial suicide without thinking. It’s like Americans’ default mode is defaulted loans. And it’s all W’s fault.


June 14th, 2010
6:54 am

So wait… he’s eliminating an entitlement and this is bad?


June 14th, 2010
7:07 am

If the government is providing loans for private college tuition, it would make sense to consider the debt structure (given how expensive private schools are!). There’s also the question of whether a higher-paying job is even after graduation. I had thoughts of going into a physical therapy degree (nearly $80k tuition over three years), but balked at the uncertainty of job market. Maybe the government is doing people a favor. Still, I do see what Mr. Barr is saying as well–here’s yet another example of government deciding what people can and can’t do. Maybe is all about, “Buyer Beware!”


June 14th, 2010
7:13 am

These schools are extremely profitable, I recommend their stock.


June 14th, 2010
7:31 am

We need more people to be reliant on the government. Folks getting a higher education will be able to support themselves…and won’t need government assistance. The more reliant people become on the government to take care of their needs, then the more likely they are to re-elect me and keep paying my room and board.


June 14th, 2010
7:54 am

What we need first is more high school graduates. Tuition assists for post-high school students is too easy. People who take on too much debt for too little return have not learned basics of ROI. It should not take longer to pay back tuition than it took to learn the new skills in the first place. There needs to be a job at the end of that with real improved income. My niece has become a professional student in a profession that is seeing cuts across the country. Her response to that is to consider changing to another profession that is getting cuts across the country. I don’t think paying back the student loan is even in her plan.


June 14th, 2010
8:03 am

I agree with Gale. We need to slow the drop out rate in high school, and get more high school graduates. More importantly, they need to be taught something in school, rather than simply kept herded and “under control”. The caliber of our teachers must have sunk to a new low too, because most college graduates I run into don’t have the reasoning skills or logic, that I had in high school.

Ragnar Danneskjöld

June 14th, 2010
8:26 am

Shocking, that leftists would use political judgments to try to pick winners and select losers for a segment of the economy. Much as they tilt tax dollars into windmills. Everyone knows the leftists are smarter than the rest of us, and thus have to tell us how our resources must be used under penalty of law.


June 14th, 2010
8:46 am

Paul, you missed the point, eliminating and entitlement for only for the people he does not like, but continuing to give it to his unionized friends…

One Voice

June 14th, 2010
8:56 am

Many of those for-profit schools, particularly the online ones, are simply diploma mills. Students pay a ton of money, earn a “degree” in a year or two (when it would take 4-6 years to earn the same degree at a real school), and when they graduate they don’t have the essential skills or knowledge to fulfill the requirements of their new profession. Employers know this and will immediately dispose of those graduates’ resumes in the “circular file” because they don’t see their degree as legitimate. So you end up with people who are $75k in debt, don’t have the prerequisite skills for their field, and can’t get a job because employers know it and don’t respect those for-profit institutions or the products of their education system.

It would beneficial to all if the private, for-profit system was revamped to ensure that their graduates were held to the same rigorous standards as public research universities. But as is, the administration’s goals on this are valid. The students are trying to take the quick, easy way out and attempting to buy a worthless degree while the for-profit colleges are only too happy to give that to them in return for a lifetime of debt.


June 14th, 2010
9:05 am

The ads for these schools alone shows that they are a stupid place for government subsidized student loans. Wars are better rat holes for our tax dollars.

Raymond Huffman

June 14th, 2010
10:16 am

I agree with Gale, One Voice, and GEORGE AMERICAN. We need to work on our public education, not an expanded student loan program! All the past 3 presidents have talked about are “community colleges.” With the growth of community colleges and the massive layoffs of public teachers nationwide, I can’t help but think there is a larger agenda to privatize education. That’s another issue, but the for profit-schools which the last 3 presidents refer to as “community colleges” certainly seem to be gaining influence. Community colleges are nothing like what they used to be. Quality of their degrees notwithstanding, University of Phoenix is NOT part of the metro “community.” It is a for-profit business based out of Arizona with a franchise in the area.

Herzing, ITT Tech, the cavalcade of “community colleges” (which I totally agree with George Americans remark) give “diplomas” to people without actually making them learn a skill, or improving their rudimentary skills. Many of these schools are unaccredited and their credit hours are “proprietary.” IOW, if someone goes to ITT Tech, for example and makes straight A’s, Ga Tech may not accept those grades or credit hours. So that person basically has entered into a business agreement, not an education plan, for their large, tax-subsidized debt. The admissions counselors at these schools make cold-calls and solicit business. Their job is to maximize income for the community college, not educate the student or make sure they are financially qualified for the federal loan.

Call me naive, but I think any tax-funded education should be 100% transferable. A loan for an unaccredited, proprietary degree offers no guarantees is very very risky. Often student loan debt is insurmountable, even when it’s a traditionally high paying degree. For example, I have a friend who is a pharmacist. Has been working hard for a big retail drug store for about 4 years. The student loan debt for a 4 year, private, accredited school plus graduate school, owes $250,000.00. Student expenses are among the fastest growing. That was a debt this person took in starting in 2000, from a student who go the Hope Scholarship. This person pays off the debt regularly, has bought a car, and a house, But isn’t even 30 yet. I find it outrageous that our students who get good jobs enter the working world with a quarter-million debt. Add the car and the house, there’s a person with about $600,000.00 debt. This person does not live beyond their means or make lavish purchases.

There is no liberty in being straddled with student loan debt. But being straddled with student loan debt from a for profit, proprietary school that offers no real education value is particularly nefarious. I think the government owes a duty to the borrower to prevent them from taking loans for education that is not worth the risk of the loan. Community colleges are almost entirely unregulated. Google “community college rip” off for some very believable horror stories on familiar schools. I personally only apply caveat emptor to a person’s own money, not their loan money, unless they clearly qualify for said loan. Many students in their early 20s don’t have the credit rating for a loan of that amount, unless they take a student loan. Loans and finance should become required teaching at our public schools.

Student loans for community college diplomas should be considered highest risk and the government owes its citizens a duty to regulate these loans. They should not be given to people who will get a degree where there is a low chance the degree will enable them to pay back the loan. It makes perfect sense that these kinds of schools are growing. It should also never be forgotten that these schools are for-profit businesses. They are not comparable to the accredited state, HBCU’s, or private, 4-year nationally accredited schools with centuries of service and loyal alumni bases. It was for those schools that SALLIE MAE came into existence.

Kudos to the Obama administration for regulating these loans. If the regulation is taken out by those who share Bob Barr’s opinion, don’t blame Sallie Mae like you did Freddie Mac and Fannie Mae for giving out high risk loans for houses. Those loans are sold, not bought. There is nothing fiscally conservative about making a high risk loan.

David S

June 14th, 2010
10:17 am

The loan guarantees and government subsidies are what keep this education option so expensive in the first place. The Lotto monies, federally guaranteed loans, grants and otherwise that got their big push back in the 80’s have driven the cost of higher education through the roof and have directly led to the rising debt among college graduates.


June 14th, 2010
10:20 am



June 14th, 2010
10:35 am

99-percent of liberals are morons….

Al Gore

June 14th, 2010
12:29 pm

Raymond Huffman ….if you have the time to type all that dribble, then you need to get a life buddy. Anyone who thinks that people are going to read a post as long as that can’t be smart enough to have anything worthwhile to say.


June 14th, 2010
1:02 pm

I went to a community college my first two years to get all my lower level classes done. After that i transferred to a “second choice” or maybe even a “third choice” LOL college to get my B.S. in business administration. The colleges i went to didnt have any fancy buildings or amazing sports teams but i received a good education from them. I now have a successful career as a hotel manager. I dont make millions of dollars a year but i make a good living, have a nice house, nice things in it, a nice car, disposable income, etc etc etc. Thats all you need out of an education.

Alvin Greene for SC Senate seat

June 14th, 2010
1:13 pm

Since the guvmint now controls all student loans what did you expect?

Promote the less qualified and ensure everybody has to nurse the teet of Uncle Sam.

Alvin Greene for SC Senate seat

June 14th, 2010
1:16 pm

off topic – did a little searching.

not one story on ajc or about the boxing congressman. They think that if they just ignore a story so will you. LMAO.

Alvin Greene for SC Senate seat

June 14th, 2010
1:21 pm

addition to my post at 1:16 – Please include The NY Times.

At least The Washington Post and MSNBC have pieces on the story.

Who’s irrelevant now?


June 14th, 2010
1:22 pm

When I saw this article, I had a thought that degrees would target the workplace. You know instead of going to law school and then become a journalist. Receiving a degree in psycology and working as a lab tech is not education in my mind. The degrees out there are a bust as far as the discipline is concerned. I rather have a person with a C average in the discipline than a A+ student crossing over. Education most times is hyped.


June 14th, 2010
1:33 pm

Alvin Greene for SC Senate seat

June 14th, 2010
1:21 pm
I thought is was great you beat out a career politician. Everyone, especially the liberals are having a hissy fit about the man. No one cares about the voters and what they wanted. Yep the democrats have let the progressive liberals steal their party and voters are making a statement. I say “hip hip hooray for Mr. Greene and to the voters of SC.


June 14th, 2010
1:38 pm

Alvin: Please stop posting things to this blog that have no relevancy to it. Noone cares about that young punk college brat who cant respect his elders. Mr. Barr…can you please delete his posts?


June 14th, 2010
1:58 pm


Lighten up!


June 14th, 2010
2:02 pm

Well, another democrat displayed violence again. Grabbing a young man by the hand and neck because he did not like the question. College sure does not turn out tolerate liberals anymore. Maybe if they would make tuition more difficult or college more expensive this behavior would end…naaaaah


June 14th, 2010
2:45 pm

The Georgia Department of Higher Education is no longer providing funding for these types of schools. Why not fit that in there Barr?

Sam ( The Cool 1 )

June 14th, 2010
3:01 pm

The Cisco and Poncho never took any federal money. They did pretty good.

Prof. Mark Ellingsen

June 14th, 2010
3:03 pm

Dept. of Education staff with whom I spoke today say they never heard of the Gainful Employment Rule. Please give me a source in the Department to verify your allegation. Am I correct in assuming that if your allegation is correct it would also impact seminary students receiving government loans, and so be bad news to seminaries that are tuition- driven? If the info checks out, together we might be able to begin to marshall a coalition of academic colleagues. Thanks for your response.


June 14th, 2010
3:35 pm

I guess I just ain’t gone get no more money fur lurnin lessin I learn a trade. maybe i kin jez be a polytician. that dont take much lurnin and ya dont halfta be all that busy

Shark Punch!

June 14th, 2010
3:45 pm

Bob, exactly what are these “unique advantages proprietary schools offer”? Higher tuition? Lack of accreditation? Less rigorous classes?

The least expensive proprietary school I could find in ten minutes with Google was Capella University, with a per-credit tuition rate of $265. By comparison, the USG schools still on a per-credit model max out at $203 per credit hour (UGA), with most schools charging less than $150.

Allowing proprietary schools to use government funds unchecked is just asking for something like the sub-prime mortgage fiasco: for-profit entities making risky investments and expecting a bailout, this time in the form of federally-guaranteed student loans. Thanks, but no thanks.


June 14th, 2010
5:02 pm

College is not and should not be for everyone. The government programs that exist to finance so many things, including education, have lowered values so much that most people will make almost no personal effort to pay for their desires. If you want a college degree pay for it out of your pocket or labors not mine. I worked five part-time jobs during school years and over 65 hours per week during summers to pay college bills with some parental help. There now exists a myriad of ways of financing college but the “Gimmee Crowd”, want just that. This is the reason that people say: I don’t want a debt when I finish, I’m not serving four years even if they do pay for my degree, I can’t go party or to games if I work, any excuse not to take responsibility for what will benefit you. If you want it, earn it on your dime and time. Stay out of my pocket and other taxpayers. Only things that people have worked to achieve through their efforts have values for them. Give things to most people and you see public housing wrecked, free public transportation vehicles ruined, medical facilities abused, a general attitude of the cost did not come out of my pocket, so who gives a sh**!!

Alvin Greene for Senate in SC

June 14th, 2010
7:02 pm

To Will,

Mr Barr does not participate in his blogs. He only censors comments he doesn’t approve.

With all due respect to Mr. Barr he is unfit to administer a bog on

It isn’t difficult to best Bob Barr. He makes himself into an easy target.

While I agree with much of what he says he believes in, I have yet to see him defend a position in a public forum like this blog.

He is the same as Obama.


This is Mrs. Norman Maine

June 14th, 2010
8:12 pm

Did you actually do your research on this topic or are you relying on someone else? If you had done your own thorough research, you would have found out that these for-profit colleges are low on quality and high on expense. They often lure people in with promises of job placement post-graduation only to renege later. They charge as much as Ivy League colleges for some degrees when they can be had for much, much cheaper. I’ve heard of nurses who graduated with an undergraduate degree from some of these places with an $80,000 tuition bill. Who does that benefit other than the college? These stories are not unusual. I’ve heard of chefs qualified to make $7/hr with a $40,000 tuition bill. Medical assistants owing $35,000. How can you defend that?


June 15th, 2010
7:32 am

I think I can translate what Mr Barr is trying to say this day: After giving teachers an apple, Obama is going full William Tell at the teacher’s head.

Hi-yo Silver!

oilly olley

June 15th, 2010
9:44 am

Where are the rich moving to? They are moving to Greene Co. Georgia, 75 miles east of Atlanta. I have no idea where Bob lives but I will bet it is in Greene Co. I would say that far out would put these folks in a lower traffic pattern. I spent a little time in the area around Atlanta, Gwinett County and Alpharetta. All the housing developments had signs, 150,000+, 250,000+ 500,000+. This was 15 yeARS AGO, so it has probably gone up. personally i would like to live at Hickory Hill in Washington, D,C. The home of Justice Jackson and he sold it to Jack Kennedy and he sold it to Bobby and Ethel. Now, that I think about it, maybe that would not be the best idea. The heat down south is out of sight, today the heat index in Atlanta is 106, that is a bit much. The stock market is up and my stock is down. i took one of those small planes up around Stone Mountain, that was something Stone Mountain, it looked like a bald mans head.

John K

June 15th, 2010
11:34 am

I prefer Federal money go to education, not diploma mills. Bob of course, thinks it’s fine to throw taxpayer money down the drain with sorry excuses of colleges.


June 15th, 2010
1:45 pm

Paul…You said: “So wait… he’s eliminating an entitlement and this is bad?” Think you need to look up the definition of “entitlement” student “”LOANS” that must be repaid are by their very nature NOT entitlements…Freebies given away with no repayment due.


June 15th, 2010
4:42 pm

If the only purpose of the private institution is to enrich themselves rather than improve their students ability to have a better life, then these institutions should go out of business. If the value is not there, do not allow these institutions to engage in nothing more than a scam.


June 15th, 2010
4:44 pm

As Dave Ramsey says, it isn’t going to college that is important to getting a job, it is going to college for the purpose of being able to make money and support yourself. All these kids spending a career in college taking art history and the like are a waste of valuable teaching space and advanced degrees. Most of them can’t even reason their way in a stable life style.


June 15th, 2010
5:46 pm


Shut up.


June 22nd, 2010
12:54 pm

Raymond, you really should do a bit of research before you start typing away on that keyboard of yours. Everything you had to say about “community colleges” was completely wrong, in that you didn’t say one thing about community colleges. You’ve labeled as community college private institutions that have nothing to do with community college.

Community colleges are public two year institutions available to anyone 18 years of age or older in a community possessing a high school diploma or equivalent. There may be more to that definition, but it’s a good place to start, and one that pretty much disqualifies for consideration the entities against which you rail so mightily. They are colleges in the community. Oftentimes they have names like (insert county or city here) Community College.

Straddled with debt? Do you know what a 12 credit semester at my local community college costs? When I last attended, it didn’t even cost $800 with books. The government and high schools should be encouraging students to attend community colleges. They are low cost and effective, especially if you’re unsure of what you want to do after high school. Let’s face it, how many 18 year olds know what they want and stick to it right out of high school?

Next time you go to post, have the slightest idea about which you type.


June 28th, 2010
11:08 am

University of Phoenix (and their ilk) simply collect your money and hand you a ‘diploma’. As long as the tuition is paid, you’re in. When I see a degree from there, the resume goes in the circular file.