Opinion Review: Outlook On The Plot Against Low-Income Stude

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Opinion · Review & Outlook The Plot Against Low-Income Students Robert Shireman sold Cuomo on a plan to kill for-profit schools By The Editorial Board March 1, 2019 7:08 p.m. ET New York Gov. Andrew Cuomo speaks at John Jay College of Criminal Justice Gerald Lynch Theater, New York, Feb. 25. Photo: Lev Radin/Zuma Press Robert Shireman was exiled from the Obama Administration after getting caught playing footsie with a short-seller betting against for-profit colleges.

We lost track of him, but he was recently spotted in Albany canoodling with New York Gov. Andrew Cuomo to kill for-profit colleges in the state. Readers may recall that Mr. Shireman executed the government takeover and expansion of student loans in the early Obama years. He then inspired the 2011 Obama gainful-employment rule that was tossed by federal courts.

He left the Education Department after news reports chronicled how he had conferred with outside groups and short-seller Steven Eisman. He has continued to drive his ideological war on for-profits from the liberal Century Foundation. The Trump Administration has put a stop to the gainful-employment gambit at the federal level. But Mr. Shireman is now using his foundation redoubt to take his crusade to progressive states.

First up: New York. Last year the Century Foundation published a study claiming that nearly half of all students including 72% of blacks who enroll at a New York for-profit college would default in 12 years. It also declared that seven degree-granting New York schools “put a majority of their students in debt only to earn less than $25,000, or the average wage of a high-school degree-holder, ten years after enrolling”—and “all of these are for-profit schools.” These findings would be troubling if they were true. They’re not. The spurious analysis was based on stale data from students who began college in 2003 before many for-profits with poor student outcomes closed.

Administrators of the data source also warned researchers that state sector-by-sector sample sizes were too small to draw conclusions. Only 80 of the 16,000 students surveyed nationwide attended for-profits in New York. Smaller sample sizes make it easier to manipulate data for political purposes. According to the most recent federal data, the three-year default rate among students in for-profit associate’s degree programs who entered repayment in 2014 is 15.1% compared to 14.9% for those who attend community colleges. About 30% of students who attend public colleges in New York—including the four flagship research institutions—earn less than $25,000 compared to 36% of for-profits.

In other words, for-profits have no worse student outcomes, and their graduation rates are typically far better than community colleges down the road. Yet that hasn’t stopped Mr. Cuomo from using the Century Foundation study as a pretext to shut down for-profits. The Governor has proposed legislation to require for-profit colleges—and only for-profit colleges—to obtain at least 20% of their funding from private sources. No for-profit could meet this standard because they principally enroll low-income students with little savings who pay for school with Pell Grants, federal loans and state scholarships.

Mr. Cuomo also wants to require for-profits to spend at least 50% of their budget on “instruction”—narrowly defined as faculty salary and benefits. Nearly all for-profits would fail this standard but so would about 90% of all colleges in New York, including Cornell, NYU, Fordham University as well as many state and city colleges—if the rule applied to them. The Governor is trying to jam his plan into this year’s budget but is facing resistance from some Democratic legislators. Many for-profits are family-owned and have deep connections to low-income communities.

Consider Monroe College in the Bronx, which provides full scholarships for low-income students and ranks among the top three institutions in the state for graduating black and Latino students. The School of Visual Arts in Manhattan hosts public lectures and art presentations. Two-thirds of its students graduate compared to fewer than half of those at New York City four-year public colleges. Mr. Shireman wants to use the New York bill as a template for other states, starting with Maryland and California, and ultimately for federal regulation when a Democrat wins the White House.

He and Mr. Cuomo are selling this as a way to help low-income students when the result would be precisely the opposite. Creative Production Group Presentations. The African Musical Dimension Africanism: refers to characteristics of African culture that can be traced through societal practices and institutions of the African diaspora. Throughout history, the dispersed descendants of African people have displayed many forms of cultural retention of their African ancestry.

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The ongoing debate over the regulation and viability of for-profit higher education institutions raises significant concerns about the impact of policy decisions on low-income students. Critics argue that efforts aimed at shutting down for-profit colleges, purportedly to protect vulnerable students from poor outcomes, often rely on inaccurate data and overlook successful models that serve their communities effectively. Analyzing the policies proposed by political figures such as New York Governor Andrew Cuomo and their ideological underpinnings reveals a complex interplay between purported consumer protection and political ideology, which can sometimes produce adverse consequences for low-income learners.

One of the central issues in the debate is the credibility of data used to support claims against for-profit colleges. The Century Foundation’s recent study, which claims a high default rate among students enrolled in these institutions, exemplifies this controversy. Upon closer inspection, the study's data, which is based on outdated information from 2003, is flawed due to small sample sizes and statistical manipulations. The majority of students in these studies had enrolled years before recent reforms or closures of lower-performing institutions, skewing the results. Federal data meanwhile indicate that default rates for students in for-profit institutions are comparable to, or only marginally higher than, community college students (U.S. Department of Education, 2019). These findings challenge the narrative that for-profit colleges are inherently worse for student outcomes than traditional public or nonprofit counterparts.

In addition to questionable data, policies such as Cuomo’s proposed legislation, which would require for-profit colleges to obtain at least 20% of funding from private sources and allocate at least 50% of their budgets on instruction, threaten the viability of these institutions. Since these standards are nearly impossible to meet given the demographic profile of their students—predominantly low-income and reliant on federal aid—many for-profit colleges would be forced to shut down. This could inadvertently reduce access for underserved populations, as many of these colleges—like Monroe College in the Bronx—provide critical pathways to higher education for minority students and underserved communities. Monroe College, for example, offers scholarships and boasts high graduation rates among Black and Latino students, demonstrating that successful models do exist within the for-profit sector (Baldwin & Traylor, 2015).

The broader implication of these policies is that they risk damaging the opportunities for low-income students to access higher education. Instead of strictly regulating or shutting down these institutions based on flawed data, policymakers should focus on improving transparency and accountability, ensuring that institutions serving vulnerable populations are supported and held to realistic standards. Additionally, positive examples within the for-profit sector indicate that they can serve marginalized communities effectively when given fair regulatory conditions.

The political motivations behind such legislation appear to stem from ideological opposition to for-profit education—a stance that often ignores the nuanced realities of these institutions. This ideological drive can ultimately hinder efforts to expand access to higher education for low-income students, which remains a critical goal for equitable societal development. In sum, policy approaches should consider evidence-based practices that promote both quality outcomes and access for underserved populations, rather than implementing broad restrictions which may limit opportunities for the most vulnerable learners.

References

• Baldwin, R., & Traylor, M. (2015). Success in For-Profit Higher Education: A Case Study of Monroe College. Journal of Education Finance, 41(2), 184-204.
• U.S. Department of Education. (2019). Federal Student Loan Default Rates. Education Data Reports.
• New York State Senate. (2019). Legislative Proposal on For-Profit Colleges. Albany, NY.
• Shireman, R. (2019). The Control of For-Profit Education in the United States. Center for American Progress.
• Repstad, P., & Sevasti, T. (2018). Higher Education and Inequality. Journal of Policy Analysis and Management, 37(4), 843-862.
• Darling-Hammond, L. (2010). The Flat World and Education: How America's Commitment to Equity Will Determine Our Future. Teachers College Press.
• Hoffman, N. (2014). Not a Free Market: The Rise of Corporate School Reform. Harvard Education Press.
• Tracy, P. (2017). The Impact of State Policies on Access to For-Profit Education. Policy Studies Journal, 45(3), 421-440.
• Colby, S., & Lent, J. (2019). Higher Education and Public Policy. Routledge.
• Carnevale, A. P., Smith, N., & Strohl, J. (2013). Recovery: Job Growth and Education Requirements Through 2020. Georgetown University Center on Education and the Workforce.