MN-02 : Lobbyists Fete Kline Before Budget Hearing

The work pace at the House Education and Workforce Committee under John Kline’s (R-MN-02) has been … oh, how can we say it kindly … as slow as molasses in January (and that can be deadly ).

Mr. Kline assumed the Chairmanship in January and he called one committee meeting that month … in February there were four … but finally this month, Mr. Kline is beginning to pick up the pace.

Yesterday, Mr. Kline invited Secretary of Education Arne Duncan to attend the Hearing on the Budget and Policy Proposals of the U.S. Department of Education.

Secretary Duncan had concerns … the problems with the No Child Left Behind program.

But Mr. Kline seemed to be more concerned about the Education Department’s activism in higher education, specifically the gainful employment regulations. Mr. Kline strongly urged the Secretary “to withdraw this job-destroying proposal.

Hmmm … why would Mr. Kline push so hard on “gainful employment regulations” ?

Well, maybe he got an “earful” the night before … and pats on the back for denying funding for work on the regulation as part of HR 1. “Pats on the back” are nice, but money in your pocket can buy a lot of friends.

So where was Mr. Kline the previous evening ?
On Tuesday night, career college leaders and lobbyists hosted a dinner reception for Mr. Kline (R-MN) at a familiar place for Mr. Kline – the Capitol Hill Club, which is the premiere social club and restaurant for Republicans in the nation’s capital and a place where Mr. Kline held “breakfast meetings” as recently as last September.
Breakfast only costs $1,000 for a PAC and $500 Individual but Dinner is a little more expensive. Those who wished to attend were required to make a donation to Kline’s re-election campaign of either $2,500 to be considered a “sponsor” of the event, or $1,000 to be a “patron”. Now, since Mr. Kline never ran a television commercial and did not bother to participate in public debates during the 2010 election, most likely these monies will be spread around to other members of Congress … who he can count on for their votes.

So who is concerned about “gainful employment regulations” ?
Well, that would primarily be the For-Profit educational industry … who has been Mr. Kline’s cash cow. See the For-Profit “schools” have been found to have deceptive practices by the General Accounting Office.
If you feel that you are TaxEnoughAlready, well guess what, For-Profit schools benefit from government funds.

Mr. Kline won the debate to deny funding (heck the Republicans have a majority and only four members dissented), but not without some Democrats trying to “educate” the new members.

They made some good points … here are the highlights.

Rosa DeLauro (D-CT-03)

I rise in opposition to the Kline amendment, which would prevent the Department of Education from moving forward on a rule that would deny Federal financial aid to career education programs that leave students in too much debt and without gainful employment.
The new gainful employment rule will hold career education employment programs responsible through a simple proposition: A career education program should only receive Federal financial assistance if, upon graduation, students can earn enough money to pay off the debt that they accrue. In short, a program is worth the Federal investment only if the price of the education is justified by its outcome. Isn’t this exactly what responsible budgeting is all about?
This rule would apply to both for-profit and nonprofit colleges, but the for-profit sector has mounted an aggressive lobbying campaign in opposition. Why? The average tuition in a for-profit college is several times greater than at a community college. For-profit college students account for only 10 to 12 percent of college students, but they receive 23 percent of all Federal student loans and grants. Graduation rates at for-profit colleges are at or below 50 percent while their profit margins are as high as 30 percent. Twenty-five percent of for-profit school students default on their loans after 3 years.
If we are going to build the workforce of the future, we need to increase the number of Americans with college degrees. But students should not have to mortgage their futures to pay for college, and they should be secure in knowing that when they graduate, they will have a degree or a credential that will help them to secure a job and to repay their student loans. Leaving college without a credential or with one that is of little value in the job market can leave students unable to climb out of debt. And that is what happens to far too many students who have been taken in by the aggressive marketing tactics of for-profit colleges.
Why would any college contest the idea that an education should be worth its price tag? Colleges are in a business to educate students, not simply to take their money.

George Miller (D-CA-07)

I say this as a supporter of proprietary colleges and career colleges–some classes that only leave them in debt, don’t leave them better prepared for the workforce, don’t leave them better prepared for the career. There is substantial evidence that that’s the case. High default rates, students not completing, students ending up in a lot of debt. They are doing this with almost 90 percent of taxpayer dollars.
I think we have an obligation to the students and to the taxpayers. That’s what the administration is trying to do with this regulation.
Students from these schools in many instances graduate with much higher debt. Some of these schools, they default. In excess of 40, 45 percent of them end up in default, and, as you know, that is not debt that you can discharge in a bankruptcy. So these students start out in big trouble if these schools are not providing the kind of educational atmosphere and, hopefully, the success ratio that they should. That should be a concern to every Member of this Congress. That should be a concern to the taxpayers, and it is a concern to this administration.

Jared Polis (D-CO-02)

Taxpayers have been paying the cost for excessive loan default rates of poorly performing for-profit colleges. Specifically, for-profit higher education institutions received $24 billion in title IV loans and Pell Grants in 2009, accounting for about a quarter of the Federal college loan dollars, despite them comprising only about 10 percent of the higher education institutions.
Meanwhile, students from the for-profit colleges have loan default rates after 3 years about twice the rate of all college defaults and rising to 25 percent. Now, these are averages. That doesn’t matter. What matters is: Does it work? Does it work for kids? Are they getting their money’s worth? Are taxpayers getting their money’s worth by helping people attend these institutions, or are we graduating students with a mountain full of debt, no more employable than the day they walked into that door.
To make the matter even worse, in 2009, the average tuition of the for-profit institution is $14,000 per year, compared to $7,000 per year for average 4-year universities and $2,500 for community colleges. Now, again, what I would look at would be the return on investment. Are they providing twice the value of a 4-year or community college? The data says no. Are they providing six times the value of community colleges and making somebody employable in the future? The answer, by and large, again is no.
GAO has detailed the issues in its report last summer, and the Leadership Conference on Civil and Human Rights wrote to the U.S. Education Department a couple of weeks ago that the rule will benefit minority students, as they disproportionately enroll at for-profit schools, overpaying for poorer quality education, as compared to the public counterparts.

Keith Ellison (D-MN-05)

Mr. Chair, I would like to point out a few important facts about the for-profit educational sector, and that is that the low-income students make up about half of the enrollment for for-profit colleges and minorities comprise about 37 percent. So this really is a matter of low-income and minority students facing what are high-cost loans for students, and often 90 percent of the money comes from the Federal Government. Now, as I listen to my friends in the Republican caucus, I would think that they would want the best value for the public dollar. This rule means that some money spent will result in the outcome that is sought in the beginning, which is gainful employment.
Too many of the students who go to these schools are coming out with nothing other than big debt, and no education, no gainful employment at all. And this is a problem. And I’m surprised that we would not say that, look, we are going to make sure that when the Federal dollar is put forward, there will be value coming back for it.

Danny Davis (D-IL-07)

I support career colleges, yet I am resolute in my belief that the Federal Government has the responsibility to protect students and hold institutions of higher education accountable–especially those that access public dollars. I stand with over 50 civil rights groups, Historically Black Colleges and Universities, and student groups who support strong gainful employment protections for students, including key civil rights groups such as the NAACP, the Leadership Conference on Civil and Human Rights, and the Children’s Defense Fund; the three HBCU advocacy groups–NAFEO, the United Negro College Fund, and the Thurgood Marshall; and key education groups such as the American Federation of Teachers, the NEA, and the Council for Opportunity in Education.
Let’s be clear and make no mistake. The Kline-Foxx amendment is not about protecting low-income minority students. If that was the case, then those concerns would have been expressed by not cutting Pell Grants for over a million students by approximately $845 per student. If the goal was truly to support low-income minority students, the CR would not have cut $200 million in institutional aid from nonprofit HBCUs, predominantly black colleges and universities, and Hispanic-Serving Institutions. If the goal was truly to help low-income minority students, the CR would not have cut $44 million from GEAR UP and TRIO–programs that are designed to help first-generation students prepare and succeed in college.
The reality is that this amendment completely stops the Department of Education from any form of oversight of career colleges that educate 10 percent of higher education students, receive approximately 24 percent of Federal grants and loans, and account for 48 percent of loan defaults.

When Congress is looking to save money everywhere, why can’t Mr. Kline buy his own dinner and stop permitting For-Profit educational industry to profit off the taxpayers … and duped clients.

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