Congress Votes on Amendment that Would De-Fund Yet-to-Be Implemented Gainful Employment Rule

Today the House of Representatives will be voting on an amendment to the continuing resolution budget bill that would de-fund a relatively obscure regulation on the for-profit higher education industry that hasn’t yet been implemented. The fight is over something called the “gainful employment” rule, which would cut off funding to for-profit career education programs that leave students in a disproportionate amount of debt or whose graduates can’t earn enough compared to their debtload.

The amendment [PDF], which was proposed by Rep. John Kline (R-Minn.) and is supported by Rep. Virginia Foxx (R-N.C.), Rep. Alcee L. Hastings (D-Fla.), and Rep. Caroline McCarthy (D-N.Y.), seeks to eliminate funding to enforce a measure that supporters have called an attempt to weed out “waste, fraud, and abuse” in the for-profit education industry.

One of the groups that support the gainful employment rule, Campus Progress, along with its partner, the United States Student Association (USSA), held a press event in the Cannon office building on Capitol Hill to bring attention to the real-world stories of some students’ experiences with for-profit schools that engaged in questionable practices. The Institute for College Access and Success and the Council for Opportunity in Education (COE) also had representatives present.

Adam Gonyea, a former student of ITT Technical Institute, is one of the students they highlighted at the event. Gonyea explained that, despite the fact that he was a veteran and qualified for federal Pell grant funding, he was still charged a high price for a low-quality education.

“My cost for a year and a half of enrollment was over $36,000. I received $19,000 in federal loans, $7,000 for the Pell grant, $250 a month for a military scholarship*, and of course $1,300 a month from GI Bill benefits,” Gonyea said. “The expense of tuition did not seem to go toward the quality of the education, however.”

Gonyea went on to say that while some of his instructors were engaged, even bringing adequate software and materials to teach the class from home, ITT was routinely in the habit of providing outdated materials—some even clearly pirated software. Gonyea never completed his education with ITT Tech, and is still in the same job he was when he first enrolled, but now with much more debt.

ITT Tech, when reached for comment said that the Federal Education Rights and Privacy Act prevents them from discussing an individual student’s financial records without his consent. Their corporate communications manager, Lauren Littlefield, said Gonya’s “claim that we used ‘outdated or pirated material’ in some of his courses, however, is false and untrue.” 

Rashidah Smallwood, a former financial aid administrator with both the University of Phoenix and ITT Technical Institute, also spoke at Campus Progress’ event. She told the audience of egregious practices by ITT Tech of gaming the financial aid system.

“At ITT Tech, I learned just how far some for-profit schools will go to obtain as much federal student aid money as possible,” Smallwood said.

Smallwood also noted that she was encouraged to falsify letters from students saying their parents were missing or dead so students could be awarded larger aid packages. She refused to complete an application for two students who told her their parents were undocumented. She said her supervisor then completed a false financial aid application under her employee ID so the students could be classified as independent. When Smallwood filed a complaint with ITT’s corporate office, she was suspended, supposedly until they completed the investigation into her complaint.

Smallwood said she later learned the investigation was closed the next day and no action was taken against her former supervisor. Now, Smallwood is unemployed and prevented from obtaining unemployment benefits because she is technically still on suspension from ITT Tech. “All because I just wanted to do what was right,” Smallwood said.

ITT Tech said they were also prohibited from commenting on Smallwood’s characterization of her employment without her prior written consent.

Such practices are slowly getting documented in comments sections, on private listservs, and in the media. The Government Accountability Office documented similar questionable recruiting practices last year, which helped prompt other regulations from the Department of Education to curb such practices.

But the Department has yet to implement the final “gainful employment” definition, which has been scheduled to be released sometime “early this year.” Meanwhile, many for-profit colleges and universities have engaged in massive lobbying efforts and ad campaigns to put pressure on the Department of Education, even filing a lawsuit against the Department for its earlier attempts to curb bad practices.

Supporters of the regulation suspect the proposed Kline amendment is simply another attempt to put pressure on the Department not to implement the gainful employment regulation. “At a time of tightening federal budgets federal aid should go directly to programs that help students learn and succeed in the economy not programs that ruin students’ lives,” said Angela Peoples, manager of Campus Progress’ policy and advocacy department.

Lindsay McCluskey, president of USSA, echoed a similar sentiment. “We feel as if the abuses of the for-profit college industry are gross disservice to students and low-income families and must be better regulated by the Department of Education,” she said at Campus Progress’ event today.

Even if the House does pass the Klein amendment today, its future is unclear. The Senate’s chair of the education committee, Sen. Tom Harkin (D-Iowa), has been at work over the past several months holding hearings on the abuses of the for-profit education industry. The rule also seems to have strong support from President Barack Obama, who could veto select portions of the continuing budget resolution bill.

In the meantime, students like Gonyea and administrators like Smallwood will await a final decision from the Department of Education. 

Dr. Arnold Mitchem, President of the COE, said at the event today that students will suffer. And “to see colleges and universities who exploit this desperate need to improve one’s circumstance is really a perversion of opportunity,” he said.

You can view the complete testimony online of Adam Gonyea, Rashidah Smallwood, and Angela Peoples.

Watch the full event:

*The article originally said "$25" and has been changed to "$250 a month" for a military scholarship. We regret the error.