Workforce Training

Workforce-based skills training has become increasingly vital for putting Americans back to work and ensuring that America remains competitive in the rapidly changing world economy. Our national unemployment rate has risen to its highest level in 20 years and economists predict a shortage of well-educated workers to fill millions of highly skilled jobs.

However, a recent report found the vast majority of federal job training programs fail to teach new skills –only about 4% of those enrolled received classroom-based skills instruction. When federal programs do provide training, it is almost always outsourced to local community colleges or career colleges.

Career colleges have greater flexibility and financial strength to meet the nation’s growing need for such instruction than community colleges.  A recent survey found that fiscal constraints limit the ability of community colleges to meet current and future demand. 27% of community colleges faced mid-year budget cuts in 2010 and 23% report they do not have the capacity to meet current demand.

Unfortunately, regulatory issues, as well as statutory provisions in law such as the ’90-10’ Rule will negatively impact career training programs at a time when our nation most needs a skilled and educated workforce. Among the primary issues are:

Gainful Employment

In June 2011, the Department of Education unveiled its final regulation on ‘gainful employment.’  The rule differs significantly from a first draft that the Department amended amid widespread public opposition.  But it still includes provisions that could deny many students access to career colleges.   And it is not clear that existing law gives the Department authority to take many of the actions included in the regulation.

Under the regulation, private sector colleges (as well as a small number of public and private institutions that offer short-term career training programs) must meet certain standards on student borrowing and loan repayment. The Department contends that the rule measures the value and outcomes of educational programs.  But a bipartisan coalition of policymakers, business leaders and education experts question the link between loan repayment rates and quality of education.

The final regulation gives career colleges three years to bring their instructional programs into compliance with loan repayment standards.  This is a major improvement from the first proposal, which would have immediately disqualified some programs from the federal student loan program.

But the rule creates an unnecessarily complex mechanism for assessing the economic value of individual educational programs.  There are questions about the government’s ability to effectively administer this program and the effect it would have on educational opportunities.  Simpler, more effective approaches that rely on existing data from the U.S. Bureau of Labor Statistics are available.

For more of our analysis of the rule, click here.

Read more about Gainful Employment: The Issue | The Impact

90/10 Rule

The “90-10 Rule,” which dates back to the 1992 congressional session, requires that students at career colleges pay at least 10 percent of their education costs from sources other than federal student loans. Supporters of the 90-10 Rule argue wrongly that this financial requirement serves as an indicator of educational quality. Instead, it will limit educational opportunities for already overburdened low-income students. Over the past four years, federal student aid has been increased by more than 40 percent because spiraling costs have made it harder than ever for students to afford college. For more info on this Rule, click here.

GAO Report

In the summer of 2010, the Government Accountability Office (GAO) released an undercover investigative report that was widely publicized and highly critical of recruiting practices in career colleges.  But since then the GAO has discovered major problems with its investigation that raise serious questions about the report’s findings.

Several months after the report was released, the GAO investigator in charge of the report was demoted and his unit was placed under new management.  The GAO took the unusual step of revising its findings and made more than 60 specific changes, all of which softened allegations of misconduct by private sector colleges.  An independent firm reviewed the findings and found an alarming number of errors, misstatements or statements with no supporting evidence.

Now, information has come to light that the GAO may have been pressured by some in Congress to produce their report in a certain manner in a short period of time.

For more information click here.