A recent report showing many students at for-profit colleges aren't repaying their school loans has prompted the federal government to propose new oversight for these enterprises.
The U.S. Department of Education has proposed rules that would make these for-profit colleges and universities ineligible for government-backed student loans if fewer than 35 percent of students and former students are paying their loans. Schools would also be denied access to federal funds if graduates are spending more than 12 percent of their income to pay back student loans.
But the proposal is getting serious pushback from civil rights groups who say the rule would limit access to career colleges for many minorities.
Among those voicing concerns about the regulations are Rev. Jesse L. Jackson, Founder/CEO of Rainbow PUSH Coalition; Willie Gary, one the nation's leading trial lawyers; Harry Alford, President and CEO of the National Black Chamber of Commerce; Randal Pinkett, Chairman and CEO of BCT Partners; and 12 of the 39 voting members of the Congressional Black Caucus.
Devastating impact
"There are widespread concerns that this regulation will have a devastating impact in African-American communities, where black unemployment is nearly twice as high as whites," said Milton Anderson, President of Virginia College's branch in Jackson, Mississippi. "Schools, such as Virginia College, do an outstanding job teaching skills that are needed for promotions and new jobs. The government should not close the door to opportunities for people willing to learn additional skills and training that will help them better provide for themselves and their families."
Anderson, who is a spokesman for the Coalition for Education Success, noted that 43 percent of the enrollment at career schools, or 1.2 million students, are minorities.
The so-called "Gainful Employment" rule would make entire programs ineligible for federal loans and grants if they fail to meet a broad new standard that black leaders say has little to do with academic quality. The proposal would require all programs offered at career colleges and trade schools to meet a specific definition in order to qualify for federal student financial aid.
It would base eligibility on the ratio of student debt to potential student income following graduation. It does not take into account that most students benefit from the long-term benefits of their careers and not just the immediate increase in income.
In a September 15 letter to Education Secretary Arne Duncan, Jackson wrote that the Department's approach will hinder the access of minority students to higher education and make it even more difficult to realize President Obama's goal of leading the world in the percentage of college graduates by 2020.
"I am concerned that the proposed rule casts too broad and too general a brush on many institutions, some of whom are doing an excellent job at serving economically disadvantaged and minority students," Jackson wrote. "For many of these historically under served students, educational options must be more accessible than those that typically are offered by traditional higher education institutions if they are to be meaningful."
Elitist and racist
Gary says it is "extremely disappointing" that the Education Department seeks to implement this policy.
"The Education Department has proposed rules that will harm all the schools, and all the students who may want to attend these institutions," Gary said. "This is bad public policy. Clearly, the Education Department's approach is elitist, if not outright racist."
Gary asked why the restrictive regulations have not been proposed for the nation's leading liberal arts colleges and universities or even at state colleges where students with the similar socioeconomic backgrounds have similar default rates on their student loans.
"Instead, the proposed regulations are aimed at institutions whose graduates don't often become CEOs, doctors and lawyers," Gary said. "Career schools produce nurses, auto mechanics, computer technicians and other skilled workers, whose services are often overlooked and devalued in our society."
