Posted on 09/18/2014 7:11:59 AM PDT by Academiadotorg
The U.S. Department of Education’s latest rule, which mandates that for-profit colleges cannot saddle students with debt at an arbitrary rate, affects only for-profit colleges such as Kaplan, DeVry and University of Phoenix, representatives of Kaplan claimed during a Washington, D.C. briefing recently. kaplan university
Former Dallas mayor Thomas Leppert, now the CEO of Kaplan, explained how the rule itself is not fair to for-profit colleges. Non-profit and state colleges and universities have similar debt problems for their students and yet are exempt from this rule. “A regulation should apply to any institution,” said Leppert, and noted “it only applies and targets the for-profit sector.” He also pointed out that U.S. courts threw out the rule in 2011. “It says a lot to target just one institution” such as Kaplan, he said. However, the Department of Education will most likely put this rule into effect by November 1st of this year.
The rule will disband any college program offered by for-profit institutions if the debt-to-student ratio is above 8%. Leppert said the number behind the rule came from the secretive Social Security Administration (SSA), “[it] is not good data,” he argued and alleged that with the SSA, “transparency is bad.” The rule, Leppert said, does not measure the quality of the programs that the administration is targeting and the numbers measure a two-year investment in education, compared to completing a four-year degree. If the rule was fair and was applied equally, public and non-profit colleges would also be forced out of business.
Typically, there is a public comment period on proposed regulatory rules, but the Department of Education managed to keep this one a big secret. Moreover, when more than one student from a university or institution writes a comment to the department, the department now counts all comments from that university as one single comment. Kaplan estimated the rule generated 90,000 public comments, which they said was astonishingly high and unexpected. The administration, lamented Leppert, “may not care if they win or lose in court” over the rule.
A public four-year college, on average, has a 12% debt-to-student ratio, with private non-profits at 13% and for-profits 16%. And, if one applies the rule to the University of Texas, 54% of classes would fail the standard including English, geography, Russian studies, public health education and women’s studies courses.
On average, enrolling at Kaplan costs $9,162 in tuition, and for public institutions $5,161 per semester. But, the advantage for taxpayers is that for-profit students, on average, receive only $2,405 from taxpayers compared to $15,540 in loans for students at public universities.
The problem surrounding student debt is that this is “walking debt,” where students enter Kaplan or other for-profit institutions with pre-existing student debt or debt from non-education purchases and expenses. Walking debt does not include taxpayer investment in student loans. Average debt for Kaplan students is $28,583 for four years, while at the University of Iowa it is $28,554 and $30,374 at Iowa State. 94% of Kansas grads meet loan obligations, Leppert pointed out, even with their average debt of defaulting students at $8,000.
Another issue is that the traditional full-time student who takes on student loan debt and works part-time jobs, is a disappearing demographic. Today, traditional students make up 20% of the students in the U.S. For-profit schools like Kaplan are “addressing the needs of a new demographic,” which is an older student body which is working, married and has children at home. Kaplan offered “a product that was much more flexible and met the needs of their student.”
Delayed enrollment students make up 95% of Kaplan’s student body, compared to 20% for the rest of U.S. colleges both public and private non-profit. 85% of Kaplan students are 25 years or older, compared to 21% for other colleges, and 39% of Kaplan students are single parents compared to just 8% for other colleges. Fifty-six percent of Kaplan students are Pell grant-eligible versus 47% for non-profit or public colleges, and 83% of Kaplan students are financially independent. Only 26% of not-for-profit college students are financially independent. At Kaplan, 60% of students have dependents (i.e. children) compared to 17% for non-Kaplan institutions.
Thirty-one percent of black graduates have graduated from career colleges such as Kaplan, along with 28% of Hispanic graduates. Thus, the implementation of the rule will hurt minorities and their chances to achieve higher education.
Directly responding to a question about President Obama’s State of the Union address, which blasted for-profit colleges for saddling students with debt, Leppert said that it was most likely due to non-education-related expenses and previously accumulated debt, which is a common issue among students.
Leppert estimated about 33% of revenue at Kaplan comes from student debt for Kaplan compared to about 76% for public or private non-profit institutions. The government is the lender and Kaplan and other for-profit institutions are merely the middle man, which Leppert surmised if the role of government in debt and loans should be re-examined.
“We will live with what the rules are, as long as they are across the board,” Leppert reiterated, “it’s going to make a real [negative] difference…this rule isn’t fair…it’s an oxymoron.” He added, “It’s unfair because it’s targeting an industry [which has given a] meaningful contribution” to American society. According to their estimates, approximately 7.58 million students will be impacted over the next decade and have no alternative to turn to for an education. Of those 7.58 million, 5.03 million are Pell grant recipients, more than four million are female, one million are black, one million are Hispanic, and half a million are military veterans.
“We work with the low income student [because] it’s the student that we deal with,” Leppert said, “We tend to be [U.S.] Army-centric” in student enrollments and he noted Kaplan “give[s] significant discounts to veterans” and their family members.
The rule will not help build a better American society, Leppert admonished that, “Today we’re 12th and are not moving” in rankings in higher education. “Attainment of higher education declines” is a reality that America has to grapple with. But eliminating for-profit institutions like Kaplan, he felt, it “is not the way to continue to build a country.”
For the most part ...
public/state universities and colleges are unionized
private schools are not
Thou shalt not have Universities that are not government run?
Well I know somebody who’s cashed their last student aid check...
Also, it seems that the targeted schools may not have traditional campuses with traditional lecture halls, so there is a lower likelihood of in-depth liberal indoctrination of the students by the faculty. I can see where 0bama and the dems don’t want to allow this situation to continue.
I think the Washington Post owns Kaplan University.
True as of August 2013: http://www.bloomberg.com/news/2013-08-07/washington-post-co-s-future-tied-to-for-profit-kaplan-business.html I do not know if Graham Holdings (WaPo parent organization) still own it.
that was the original plan but with the latter making all the profits....
I thought Angus Podgorney was the only Scotsman to win Wimbledon.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.