As someone who has
long believed in the importance of private-sector education, I read with
interest the announcement that one of the sector's leaders, Education
Management Corporation (EDMC), has settled with both the U.S. Department of
Justice (DOJ) and attorneys general from 39 states and the District of
Columbia.
Private-sector
opponents position the agreements as a victory for students. I agree — but for
reasons that are very different from the sector's critics.
While the DOJ
settlement was substantial, it largely related to the past. I find the consent
judgment with the state attorneys general much more interesting — that one
looks forward.
Opponents see the agreement as a weakening of the
sector. But if you read the judgment, you see that the agreements that EDMC and
its academic institutions have worked out with the various states are good for
students, will strengthen the company's schools and, I believe, provide a
template for all institutions of higher education to follow.
As presented in
various news releases, the agreement outlines important areas of change.
First, there will be
improved transparency. For students, from the very beginning, EDMC's academic
institutions will provide a one-page, easy-to-understand, clearly worded
overview of costs, loan default rates, job placement rates and the relationship
between debt and earnings for the programs offered. EDMC says that it will also
build an interactive website to allow students to plug in their own financial
information to personalize their decision.
That information will
help all students answer the critical questions: Is this program really for me?
Should I make the commitment? Answering those questions in advance is going to
dramatically lessen the mismatches between expectations and the realities of
educational decisions.
EDMC will also take
steps to make sure that, where relevant, programs are aligned with local market
demand and licensure requirements. Since most students are from and remain in
the areas where schools are located, they will only be enrolled in programs
that lead to licenses in their home states.
Further, EDMC
institutions will offer a no-cost orientation program to help students
determine for themselves if they can make the commitment and handle the
requirements of the course work.
Finally, EDMC commits
to stepped-up enforcement of its recruiting policies — particularly, increased
scrutiny on their recruitment practices as well as those of third-parties who
assist the institutions in their recruitment efforts.
These changes are not
general statements of good intentions; they are binding. They are going to
create fundamental improvements in transparency and accountability, and all of
higher ed should sit up and take notice!
But there is also a
bigger picture here.
EDMC is one of the
private sector's largest, most visible companies. What they have called their
"blueprint for change" will certainly have influence. And it is all
happening at a particularly important time.
Pick any survey, in
virtually any industry, and it will say that America is experiencing a growing
shortage of workers trained and ready to fill open positions. Now, compare that
with the fact that private-sector institutions award the majority of all allied
health and culinary arts credentials earned. They provide 38 percent of all
electrician credentials and 40 percent of all vehicle maintenance and repair
technology credentials. The list goes on.
Can the private
sector do a better job of matching students and educational opportunities?
Experience says: absolutely. Should we tear down the infrastructure and replace
it with something else? Reality asks: why?
Based on recent
political rhetoric and talking points, some would have you believe that the
go-to solution would be to replace the private sector with free community
college education — often pointing out the community college programs already
offer many of the same programs as the private-sector schools. I would happily
wrap my arms around that argument if the community college system was able to
take on that responsibility. It's not.
Writing in the Sept.
17 issue of U.S. News and World Report, Judah Bellin, a higher-education policy
researcher at the Manhattan Institute, said that the president's plan
"mostly ignores an unfortunate truth about America’s community colleges.
They're in bad shape. Without serious reform, it makes little sense to send
more students to these institutions."
Administration
estimates put the bill for strengthening the system at upward of $60 billion —
a budget item you won't get from petty cash. The plan would cover 75 percent of
student tuitions, with the states asked to kick in the rest. Those two facts
alone, in a time of stretched state budgets, make the plan a long shot at best.
As an observer with a
rooting interest in providing students with an education that enables jobs that
change lives, it makes much more sense to allow the private-sector institutions
to do their good work, making corrections where necessary and building on the
innovation and nimbleness that is characteristic of the sector.
I believe EDMC should
be commended for leading the sector in establishing greater accountability and
transparency, and in doing a better job of helping students pursue the right Education loan to enable the
careers they choose and the lives they want to lead.
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