Education Dive

Dive Brief:

• With a newly won majority in the House of Representatives, Democrats have their sights set on challenging U.S. Education Department Secretary Betsy DeVos on her rollback of several Obama-era policies and guidance, Politico reported.
• DeVos faces opposition from several corners, including the House education, financial services and oversight committees, whose presumptive leaders have been vocal critics of the current Education Department’s policies, particularly its deregulation of for-profit colleges.
• Democrats will also have the help of several left-of-center watchdog groups that have emerged in the last few years, several of which have filed lawsuits against the department.

Dive Insight:

DeVos continued her department’s deregulation of the for-profit sector last week, when she permanently reinstated federal recognition for the Accrediting Council for Independent Colleges and Schools (ACICS). The accreditor oversaw the for-profit chains Corinthian Colleges and ITT Technical Institute, whose collapses were spurred by the Education Department’s crackdown on the sector under the Obama administration and led to ACICS being stripped of federal recognition in December 2016. Federal recognition gives the accreditor’s colleges access to Title IV funding, which lets it offer students federal financial aid.

The collapse of those institutions raised the profile of existing borrower defense to repayment regulations, which the Obama administration strengthened. The Education Department under DeVos has attempted to delay implementation of those updates and plans to revise the rules to make them less stringent. In October, a federal judge rejected a request to halt implementation of the Obama-era version by a group representing for-profits after he struck down previous delay attempts as illegal.

Politico called the ruling “a victory” for Democratic state attorneys general who have been fighting efforts to stop implementation of the rules, originally scheduled for July 2017. The Education Department said in a statement that it accepted the decision, but now faces litigation alleging it has not yet implemented the new regulations.

The Education Department missed a Nov. 1 deadline for its rewrite of borrower defense, meaning the earliest its rules could go into effect is July 2020. Department data obtained by The Century Foundation, a left-leaning think tank, shows the number of fraud complaints against colleges was up 29% from November 2017 to May 2018, with more than 98% concerning for-profit colleges. DeVry University, which is being acquired in a contentious sale, saw the biggest increase in claims among institutions in the report at its online college.

As the Education Department works to pull back the red tape on for-profits, several individual for-profit colleges and operators are looking to recast themselves ahead of the political uncertainty expected with the presidential election in 2020. For example, Grand Canyon University earlier this year had its conversion to a nonprofit approved on its second attempt. The nonprofit GCU will contract educational and related services to the for-profit entity, Grand Canyon Education.

And Purdue University acquired the for-profit Kaplan University for $1 with the intent to make it the basis of the new Purdue Global online college. As with Grand Canyon, Purdue will contract to its for-profit partner Kaplan for services such as technology and admissions support, marketing and advertising, and other administrative services. That has caught the university flak from those who claim it is giving a for-profit cover to operate as a nonprofit.

Senate Democrats, too, have been outspoken critics of for-profit colleges, including in a January 2018 letter to an Ed Department advisory committee urging members to consider the implications for accreditation brought by the shift of for-profits to nonprofit status, saying such a change “raises additional alarms and should be approached with extreme caution by accreditors.” The letter was signed by Sens. Elizabeth Warren, D-Mass.; Sherrod Brown, D-Ohio; Patty Murray, D-Wash.; Richard Durbin, D-Ill.; and Richard Blumenthal, D-Conn.