by Kerri Toloczko • Investor’s Business Daily
In a fit of political pique and campaign considerations, President Obama’s Department of Education is proposing higher education regulations that would deny access to degree programs to nontraditional, low-income and minority students attending for-profit colleges and universities during a time of job scarcity.
The administration has been swinging a sword at this sector since Obama took office, striking through “Gainful Employment” regulations restricting federal student loans based on arbitrary post-graduation employment rates only at private-sector institutions. In 2010, the department proposed similar severe funding restrictions for students attending career colleges and technical schools such as Strayer University, ITT Tech, Kaplan College and University of Phoenix. Two years ago, a federal judge struck down the first round of Gainful Employment regulations as baseless, noting, “no expert study or industry standard” supported such punitive restrictions.
The administration is now at it again with the next iteration of its scheme to destroy for-profit colleges for the students who chose them.
The regulation reeks with ripe irony as it is proposed at time when the Obama economy has created the worst job market for college graduates in modern history.
Obama’s pen and phone surely ignore “fair share” guidelines and established law when it comes to college choices.
Job growth is anemic, and most new jobs are low-paying, non-professional and part-time. The labor participation rate, counting those who have ceased job hunting (thus artificially shrinking the “official” unemployment rate), hovers around 63% — a 36-year high. The government’s own statistics peg “real” unemployment above 11%.
A 2013 study by McKinsey & Company showed that 48% of recent university graduates could not find jobs in their fields. The Bureau of Labor Statistics recently reported unemployment in job seekers under 25 as double the national rate.
In early 2014, it found that 260,000 of 2013’s college graduates with bachelor’s degrees were working in jobs at or below minimum wage — double 2007’s numbers. In April 2014, the BLS noted that unemployment for 2013 graduates was 11%, without quantifying how many of those with jobs were in degree fields versus “do you want fries with that?”
Despite continuing under-employment for college grads, a degree does contribute significantly to long-term financial security.
According to Pew Research Center, only 6% of college graduates live in poverty, versus 22% of those with only high-school diplomas. The Federal Reserve says that a person with a bachelor’s degree earns nearly $1 million more than a high school graduate over a lifetime.
A critical component in analyzing for-profit colleges is student demographics. Most are mature students — 68% are 24 or above. Nearly 70% are women; many are single moms digging out of poverty as non-traditional students in traditional fields.
More than half their students are minorities. African-Americans comprise 20% of private-sector college enrollment — nearly double that of traditional colleges. They provide technical training for in-demand fields such as auto repair, electrical work and construction.
Most students are low-income — nearly 80% qualify for federal aid. These schools cater to part-time and online learning, a necessity for students who cannot afford full-time education and have no prayer of attending Columbia or Harvard.
In October 2010, President Obama telegraphed his policy direction in a radio interview. “We’re gonna punish our enemies and reward our friends,” he said. One of the friends he was referring to were teachers’ unions.
In 2012, the National Education Association rewarded him with all its presidential campaign contributions and Democrats in general with 95% of NEA donations. It also contributed $4 million in negative ads against the GOP.
In that cycle, the American Federation of Teachers contributed 98% of its campaign funds ($19 million) to Democrats. The American Association of University Professors’ direct donations favored Democrats over Republicans by 99%.
Particularly with the growth of online learning, teachers’ unions have eyed expanding their collegiate presence for many years as a way to expand their overall influence and prosperity.
So what does this have to do with for-profit colleges?
They don’t hire union teachers. Instead, they hire qualified ones. It’s just that simple. These institutions seek professionals experienced in their fields as mature instructors. Many still work as nurses, accountants or auto mechanics, teach part-time and have no desire to join a union.
Dumping college graduates into a weak jobs market is rough enough. Tying taxpayer-funded federal student loans to post-graduate job placement (for one critical sector) when it is historically difficult to immediately attain degree-related employment is outrageous.
Based on political interests alone, the administration is manipulating its own economic failures to create an impenetrable border between future earnings and low-income, minority students with few educational options.
The president should stand isolated on the wrong side of that fence.
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Kerri Toloczko is a senior fellow at Frontiers of Freedom, a public policy institute dedicated to promoting individual freedom, limited government and free enterprise.