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For-profit higher ed company opens national ad campaign

"I don't count?" asks Pamela, the licensed vocational nurse pictured in a full-page ad in Tuesday's Washington Post. "Some in Washington think I don't."

The national ad campaign by for-profit higher education provider Corinthian Colleges Inc. seeks to draw decision-makers and the broader public into a long-simmering debate over whether the federal government should tighten regulations on colleges that operate for profit.

The Obama administration has proposed 14 rules to overhaul the for-profit sector. The most contentious proposal requires programs to demonstrate that they yield "gainful employment" for their graduates and restricts or eliminates federal loan funds to programs that do not.

The campaign, linked to a Web site launched last weekend, includes ads in The Post, New York Times, Los Angeles Times, Chicago Tribune, San Francisco Chronicle, San Jose Mercury News, Contra Costa Times, Miami Herald, Atlanta Journal-Constitution, Dallas Morning News, Seattle Times and New Jersey Star-Ledger, according to a release from Corinthian.

Peter Waller, chief executive of Corinthian Colleges, said it will run for several weeks at a cost of "several million dollars."

The industry's practices have been under particular scrutiny since the Government Accountability Office reported last month that recruiters at 15 for-profit colleges allegedly encouraged investigators posing as prospective students to commit fraud on financial aid applications or misled them about such matters as tuition costs and potential salaries after graduation. Among those named were Corinthian and Kaplan College, part of the 119,000-student Kaplan Higher Education operation owned by The Washington Post Co.

Federal data suggest that perhaps 36 percent of graduates of for-profit colleges are actively repaying their loans, compared to about 55 percent in not-for-profit colleges.

For-profit providers have fought hard against the gainful employment rule, although industry leaders say they have few or no objections to many of the other proposed regulations. The Education Department netted about 80,000 comments on the rules, according to an account in InsideHigherEd, many of them filed in bulk as part of a massive lobbying campaign from the industry. Donald E. Graham, chairman and chief executive of The Post Co., visited members of Congress to lobby for Kaplan Higher Education. (A Corinthian spokesman said The Post did not charge the company a discounted rate.)

The ad campaign from Corinthian urges readers to call members of Congress and say, "Put the brakes on this bad rule."

The ad states that as many as 100,000 working Americans would lose their jobs if the gainful employment provision took effect, and that up to 1 million students would "lose access to educational opportunities of their choice."

There are widely varying accounts of how the rule would affect the industry.

In a nutshell: The Education Department estimates that about 5 percent of all for-profit higher education programs would be effectively shut down by the rule, because they yield graduates with unacceptable levels of debt, and that about half the sector would face some level of restriction because of high graduate debt loads. For-profit leaders say the true impact is much higher -- somewhere around one-quarter to one-third of all programs effectively shuttered.

(For details on how the gainful employment rule actually works, read this previous post.)

This independent, industry-funded study suggests that about one-third of students might be displaced by the gainful employment rule.

An independent analysis by Education Sector, a nonprofit think tank, comes down closer to the Education Department's findings: "About 4 percent of programs would become ineligible for federal student aid, while 16 percent would remain fully eligible. Another 65 percent of programs would retain eligibility for student aid but have to warn prospective students about the debt levels they are likely to incur. The final 15 percent would fall into the "restricted" category and would have their enrollment capped."

I am quoting Ben Miller, of Education Sector, who blogged on his findings.

The Ed Department will publish final regulatory language Nov.1.

Follow College Inc. on Twitter.

By Daniel de Vise  | September 22, 2010; 6:58 PM ET
Categories:  Aid, Finance, For-profit colleges, Marketing, Public policy, Research  | Tags:  Corinthian Colleges ad, for-profit ad campaign, for-profit colleges, for-profit higher education, for-profit lobbying, gainful employment  
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More spin from the ultimate spin-meisters - Kaplan and WaPo. Keep up the great work - you just continue to really make people angry with this self-righteous drivel.

Posted by: penn6020 | September 22, 2010 10:08 PM | Report abuse

"According to data from Bloomberg, the Post owns approximately seven million shares of Corinthian Colleges’ stock, giving it about an eight percent ownership stake in the company. The newspaper purchased the stock in early 2008, saying that the for-profit college company represented 'an attractive business opportunity.'"

Posted by: transparencyfirst | September 23, 2010 11:07 AM | Report abuse

Another bunch of self serving numbers spun to make your point! Try this simple equation.

Enrolling students who cannot complete courses such as Surg-Tech at CHI Broomall plus government investigations by the PA. Dept. of Ed., U.S. Ed. Dept. and U.S. Dept. of Justice plus a class action lawsuit by damaged students plus an expose by the NY Times equal share prices in the toilet and shareholder lawsuits. Try it and see what you come up with Danny.

Posted by: Youhavegottobekidding1 | September 23, 2010 11:16 AM | Report abuse

Does the Washington Post Have its own Watergate scandal? Should we call it Edugate?

Posted by: penn6020 | September 23, 2010 11:36 AM | Report abuse

Thank you, Penn2020, you actually made me laugh out loud: “Edugate”.

Why don’t you take that up, Daniel? Go for a real Pulitzer, with courage and truth and grace, like we used to hope for from the great Washington Post. “Washington Post Exposes Itself,” could be a headline for the history books. Or, maybe not books anymore, but we’ll still have some kind of twisted and spun version of history, won’t we?

Penn2020, Higher Ed isn’t even the real scandal. They are doing this nation-wide in public elementary and secondary schools with their other arm, Kaplan K12 Learning Services. Yes, beginning in Kindergarten, they have a business plan that allows them to tap right into your local public education budget, without your ever knowing. They call it, “Education Reform” and “Race to the Top.”

Anyway, I logged on to share this morning’s WPO Kaplan Google News Alerts.

Washington Post Co. shares jumped Thursday after the company said it will buy back as many as 750000 of its own shares. From business week. My guess is they hope to shake off all those people who have been betting short on their stock.

“G.I. Jobs Magazine Names Kaplan University One of the Nation's Top Military ...”
is a press release from Kaplan itself.

Turns out they mean “top military FRIENDLY” schools, as in, “come on in and hand over all your education benefits to us”. Remember, it was the situation of all those destitute veterans with exhausted benefits and worthless Kaplan scrip that prompted the GAO investigation in the first place.

If you want to find out who is publishing that garbage, you have to follow the links, like I did. Does anybody speak German?

Posted by: mport84 | September 24, 2010 5:25 AM | Report abuse

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