The Association of National Advertisers, along with a coalition of marketing and media groups, has urged the U.S. Senate to oppose a provision in the education funding bill that would prohibit universities that get federal education funding from using that funding to advertise their programs.
The legislation, introduced in April, was sponsored by Democratic Senators Tom Harkin of Iowa and Kay Hagan of North Carolina. The bill was recently approved by the Senate Appropriations Committee. The provision would bar colleges and universities from using funds derived from federal aid such as Pell Grants for marketing, advertising and recruiting, though it's unclear how universities would suss out where money used for advertising is coming from.
The move is largely seen as taking aim at for-profit institutions for luring students to the colleges and encouraging them to enroll with government loans without delivering on what's promised in the marketing. Dan Jaffe, exec VP at the ANA, said that while he understands that Congress has raised questions about the marketing tactics of some for-profit colleges, the provision is overly broad and acts as a "meat axe when the precision of a scalpel" is needed.
For the marketing industry, the issue is also a First Amendment one. In a letter urging Senate Majority Leader Harry Reid to oppose the provision, Jim Davidson, exec director of the Advertising Coalition, said that the provision would "restrict constitutionally protected commercial speech, while failing to correct the asserted problem that certain for-profit colleges and universities encourage students to enroll using government-supported tuition without delivering the promised education programs."
According to language in the provision, "on average, 86% of revenue at 15 large, publicly traded companies that operate for-profit institutions of higher education came from the Federal Government through student financial assistance programs." It also said that in 2009, for-profit university students received some $30 billion in Pell Grants and student loans.
Mr. Davidson told Ad Age: "The U.S. Supreme Court has said that before the government may restrict advertising, it must show that the restriction would directly advance the substantial interest of the government, and that the government has examined all other options and determined that nothing else will work to solve the perceived probe. Neither question has been answered by the proponents of the restriction."
At the time the bill was introduced, the Association of Private Sector Colleges and Universities, the main lobbyist for the for-profit education industry, lambasted it. "While the bill introduced by Senators Hagan and Harkin applies to all sectors of higher education, it is clearly another attempt by some policy makers to try and put private-sector colleges and universities out of business," said Steve Gunderson, a former congressman and chief executive of the APSCU. "It also reflects a fundamental misunderstanding of the students we serve and the public service we provide. Many of our students (79% of 4-year program students and 47% of 2-year program students) are adult, non-traditional students that can't be reached through a high-school guidance counselor."