Boehner Backed Deregulation Of Online Learning, Leading To Explosive Growth At For-Profit colleges

[The Straight Story]

Boehner Backed Deregulation Of Online Learning, Leading To Explosive Growth At For-Profit colleges

With a mere eight lines buried in an 82,000-word budget bill passed in 2006, Congress eliminated legislation that had for more than a decade limited how many students colleges could enroll in online courses -- rules aimed at protecting students against dubious programs. Those eight lines have proven a potent fertilizer for a for-profit college industry that has since grown to enormous proportions, collecting most of its profits via federal student aid dollars.

In the five years since Congress deregulated online education, enrollments at for-profit colleges have doubled. Six major corporations owning for-profit institutions have enjoyed initial public offerings on Wall Street, with each promoting the rapid growth of online classes to investors and netting millions in compensation for executives. Revenues have doubled at the University of Phoenix and Kaplan University, two of the largest players -- so has the rate at which its students have defaulted on their federal loans.

The story of how this single snippet of legislation became law, propelling a collection of for-profit colleges into a full-scale industry, presents a classic case of the workings of power in Washington. It reveals the degree to which for-profit colleges -- now confronting accusations that they have preyed on students and cheated taxpayers -- owe their growth to a sophisticated lobbying effort that has cultivated powerful allies in Congress and in the administration of President George W. Bush. The lobby has played a crucial role in fighting off consumer protection rules that limited the companies' expansion opportunities.

Such was the case with the 2006 removal of a law known as the 50 Percent Rule, which had previously limited enrollment numbers at universities with online course offerings. That stricture was eliminated at the insistence of current House Speaker John Boehner, then the chairman of the House Education and Workforce committee -- now the prime public negotiator in a high-stakes clash over raising the nation's debt ceiling -- and Sen. Mike Enzi, a Wyoming Republican who headed the Senate Education committee. Their legislative handiwork opened the floodgates to online enrollment, while enabling for-profit colleges to more aggressively tap Wall Street for the capital they have used to expand.

http://www.huffingtonpost.com/2011/07/29/john-boehner-for-profit-colleges_n_909589.html?ncid=edlinkusaolp00000008

[sammytko]

1. Gonna get bigger in the fall with GI BIll now paying stipend for on-line courses.

The Post 9/11 GI bill is changing to allow students to collect a "housing" stipend while taking on-line courses. You could take an on-line course before and receive your allowance, but the majority of your courses had to be in class. Now you will be able to receive 50% of the stipend alloted for your locale if you are attending on-line only. The stipend is based on the "housing" allowance rate for an E-5. In San Antonio the rate is $1230.00 a month. The online schools are going to get bigger!

You can see this in another way. Our new university is finally opening its first building in the fall - Texas A&M - San Antonio. This is the first university the city has ever had on the south side of the town. This is the area that is 80% mexican american and african american. It has been and continues to be a huge impact to the whole area - new housing, businesses, and even helped bring in the Toyota Tundra plant. Its practically in the back yard of the new university. The whole area is changing for the better.

[FarCenter]

2. Stiffer admission requirements, better acreditation and better loan underwriting

would seem to be the solution. Not going back to the 50% rule.