Stephen Burd
Senior Writer & Editor, Higher Education
The Association for Private Sector Colleges and Universities (APSCU) has tried twice 鈥 but failed 鈥 to convince federal judges to strike down a U.S. Department of Education regulation that has forced for-profit colleges to overhaul their recruiting policies.
But apparently the lobbying group won鈥檛 take 鈥渘o鈥 for an answer. APSCU is once again over the rule.
The regulation in question eliminated the 鈥渟afe harbors鈥 that Bush administration officials put in place in 2002 to that prohibits colleges from compensating recruiters based on their success in enrolling students. In it released in October 2010, the Department wrote that its 鈥渆xperience has demonstrated that unscrupulous actors routinely rely upon these safe harbors to circumvent the law.鈥
In in 2011, APSCU portrayed its members as innocent victims of an administration on a crusade against their institutions for no apparent reason. 鈥淭he final regulations are not the product of a reasoned decision-making process,鈥 the career college group wrote in its initial complaint. 鈥淭heir adoption dramatically affects private sector schools and their students, yet they are unsupported by factual evidence or logical reasoning.鈥
Both the and the rejected APSCU鈥檚 arguments 鈥 which the appellate court said were mostly 鈥渟pecious and unworthy of serious discussion.鈥 The judges defended the Department鈥檚 decision to eliminate the safe harbors, saying that the agency acted appropriately in the face of 鈥渒nown鈥 recruiting abuses.
The appellate court did require the Department to further address two aspects of the incentive compensation regulation 鈥渢hat are lacking for want of adequate explanations.鈥 The court said that the Department had to provide 鈥渁 better explanation鈥 for why it chose to eliminate a safe harbor that allowed colleges to compensate recruiters based upon students successfully completing their educational programs. It also said that the Department needed to 鈥渙ffer a reasoned response鈥 to concerns brought up during the rule-making process that the incentive compensation regulation could have a negative impact on minority enrollment. 鈥淚t will be a simple matter for the Department to address these matters on remand,鈥 the appeals court stated.
In response, the Department revised to address these concerns.
But APSCU was not satisfied with those changes. In a new lawsuit that APSCU filed in the U.S. District Court for the District of Columbia in March, the organization argued that 鈥渢he Department鈥檚 response does not take the remand seriously, and its approach is so legally flawed that APSCU is compelled to return to this Court for relief.鈥
In APSCU鈥檚 opinion, the Department should have conducted 鈥渁 full rule-making proceeding with notice and comment in order to comply with the Court鈥檚 remand order.鈥 In other words, despite its previous failures in court to have the rule struck down, the lobbying group wants the Department to open up the incentive compensation regulation to negotiation again, with the hope of undermining it.
The rightfully argues that APSCU鈥檚 interpretation goes far beyond what the appellate court ordered. 鈥淭he court did not vacate the compensation regulations or any portion of the regulations. Nor, contrary to the plaintiff鈥檚 suggestion, did the court require 鈥 or even suggest 鈥 that the Department solicit further public comment or amend the text of the regulations,鈥 the Department wrote.
There鈥檚 no mystery why APSCU wants to gut the incentive compensation regulation. It has been by far the most effective action that the Department has taken to rein in the for-profit higher education industry.
The rule has forced the largest chains of for-profit colleges to fundamentally alter the way they recruit students and shape their student bodies. Both the and , for example, have created tuition free orientation programs that are designed to give new students a risk-free opportunity to decide whether these institutions are the right fit for them before they commit to the programs.
But other for-profit college companies are . Many have not figured out how to move away from the old model 鈥 which led schools to deliberately recruit and admit unqualified students who ended up taking on large amounts of debt for training from which they were unlikely to benefit.
With this lawsuit, APSCU is once again trying to protect the very worst players and practices, instead of helping its member institutions better serve their students.