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On July 23, 2010, CREW filed a Freedom of Information Act (FOIA) request with the Department of Education seeking records of communications between Education officials and individuals and entities prominent in the for-profit education industry and individuals who may have publically criticized the industry for personal financial gain. Recent news reports document the efforts of several individuals to garner support for tighter regulation of the for-profit education industry by the Department of Education while at the same time concealing that they stand to reap personal financial gain from more restrictive regulations. Education just proposed new regulations for the industry and CREW seeks to learn, in part, to what extent Education may have been influenced by the efforts of individuals and entities with undisclosed financial conflicts of interest. On September 30, 2010, CREW sent a Freedom of Information Act Request to the Department of Education seeking documents pertaining to four for-profit education companies in light of Education's decision to postpone issuance of new regulations to seek more outside input. CREW seeks to learn the extent to which Education's proposed regulations and policies in this area have been influenced by either the for-profit or non-profit industries
On July 23, 2010, CREW filed a Freedom of Information Act (FOIA) request with the Department of Education seeking records of communications between Education officials and individuals and entities prominent in the for-profit education industry and individuals who may have publically criticized the industry for personal financial gain. Recent news reports document the efforts of several individuals to garner support for tighter regulation of the for-profit education industry by the Department of Education while at the same time concealing that they stand to reap personal financial gain from more restrictive regulations. Education just proposed new regulations for the industry and CREW seeks to learn, in part, to what extent Education may have been influenced by the efforts of individuals and entities with undisclosed financial conflicts of interest. On September 30, 2010, CREW sent a Freedom of Information Act Request to the Department of Education seeking documents pertaining to four for-profit education companies in light of Education's decision to postpone issuance of new regulations to seek more outside input. CREW seeks to learn the extent to which Education's proposed regulations and policies in this area have been influenced by either the for-profit or non-profit industries
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On July 23, 2010, CREW filed a Freedom of Information Act (FOIA) request with the Department of Education seeking records of communications between Education officials and individuals and entities prominent in the for-profit education industry and individuals who may have publically criticized the industry for personal financial gain. Recent news reports document the efforts of several individuals to garner support for tighter regulation of the for-profit education industry by the Department of Education while at the same time concealing that they stand to reap personal financial gain from more restrictive regulations. Education just proposed new regulations for the industry and CREW seeks to learn, in part, to what extent Education may have been influenced by the efforts of individuals and entities with undisclosed financial conflicts of interest. On September 30, 2010, CREW sent a Freedom of Information Act Request to the Department of Education seeking documents pertaining to four for-profit education companies in light of Education's decision to postpone issuance of new regulations to seek more outside input. CREW seeks to learn the extent to which Education's proposed regulations and policies in this area have been influenced by either the for-profit or non-profit industries
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CC: Rosenfelt. Phil Rogers. Margot Date: 4/28/2010 11:11:58 AM Sub,iect: Media reports- background for noon meeting Teresa- (b)(5) Georgia Yuan DeVry leads eel. stocks lower as Credit Suisse downgrades on regulatory, job market concerns Associated Press 04/26/10 9:30 AM PDT NEW YORK -DeVry led decliners in education stocks Monday after a Credit Suisse analyst said the for-profit school could be hurt by proposed regulatory changes and an improving job market that could slow enrollment. The administration has pushed hard for gainful employment regulations, which stipulate that graduates of schools must not spend more than 8 percent of their income on paying student loans. It's meant to help improve school quality- making sure students are qualified and the courses help increase their incomes- as student loan defaults soar. If schools failed to pass this test, the government could block their access to federal loans for students, the bulk of their revenues. In early April, the Education Department said schools with 50 percent graduation rates and 70 percent job placement rates would be exempt from a proposed rule linking graduates' incomes to required debt payments. Analyst Kelly Flynn, however, said Washington sources believe the more lenient proposal might not wind up in a draft of the law that will be posted by mid-'May or June. Flynn downgraded DeVry and ITT Educational Setvices Inc. to "neutral" from "outperf01m," cutting target prices to $65 from $75 and $110 from $135, respectively. Shares ofDeVry Inc. fell $4.59, or 6.6 percent, to $64.87, while ITT stock dropped fell $2.07, or 1.8 percent, to $109.71. Shares of Apollo Group Inc., which runs the largest for-profit school, the University ofPhoenix, also slid 93 cents, or 1.5 percent, to $62.60, while Corinthian Colleges Inc. stock fell 59 cents, or 3.3 percent, to $17.30. Career Education Corp. fell 61 cents, or 1.8 percent, to $33.49 and Strayer Education Inc. dropped $2.54, or 1 percent, to $250.49. Meanwhile, Flynn cited DeVry's warning on slower enrollment growth in one of its divisions and liT's warning on higher advertising spending. For-profit schools have seen big gains in enrollment because of the recession and high unemployment. As the job market improves, people may not feel as much as a need to bolster their resumes. APRIL 26, 2010, 10:57 A.M. ET Debt, Job Rule Uncertainty Hits Shares OfFer-Profit Colleges NEW YORK (Dow Jones)--A goverrunent proposaJ to hold colleges accountable for graduating students with high debt loads and low income levels came front and center, again, after Credit Suisse analysts reversed their assumption that the Department ofEducation had softened its stance on the subject. Monday morning, Credit Suisse issued a note saying the Department of Education has returned to a stiffer set of rules on post-graduation debt and gainful employment levels that colleges must meet. The news hit share prices offor-pro:fit universities that had rallied on expected softer rules. Credit Suisse downgraded ITT EducationaJ Services Inc. (ESI) and DeVry Inc. (DV) to neutraJ from outperform and slashed their price targets, citing the potential fallout from their new take on gainful employment as well as concerns of countercyclicality. ITT recently was off2.9% to $108.53, while DeVry was down 6.5% to $64.96. Credit Suisse had upgraded the schools two weeks ago. Other for-profit schools, including Strayer Education Inc. (STRA), Career Education Corp. (CECO), Corinthian Colleges Inc. (COCO) and Apollo Group Inc. (APOL), were also trading down. The Department of Education originaJly said schools could face scrutiny that could put federaJ assistance--often the primary revenue stream for for-profit colleges--at risk if they did not have at least a 70% graduation rate and 70% job placement in field of study. Two weeks ago, Credit Suisse, and others, sent out notes saying they believe the Department of Education had softened the graduation level to 50%, sending shares higher, with some hitting 52-week highs. "Oddly, we suspect the big upward move the stocks had when the investment community found out about the 50% exemption may have led to pressure on the DOE to remove the 50% exemption," the firm wrote Monday. Some education insiders have had mixed feelings on predicting the gainful-employment measure, arguing that it's improper to say what the Department of Education will put forth and it's best to wait until the official proposaJ is released for public comment. That will happen by mid-June. "I'm not sure who thinks they have what access to what's in this draft," said one for-profit school official, but "I would reaJl y not be jumping to any conclusions just yet." He said there's no way of knowing "whether it's been hardened, softened, pureed, whatever." Representatives from the Department of Education weren't immediately available for comment. http://online. wsj .com/article/BT-C0-201 00426-71 0339.htmJ?mod=rss-'Hot_ Stocks Georgia Yuan Deputy General Counsel Postsecondary Education and Regulatory Service U.S. Department of Education 400 Maryland Avenue SW 6E341 Washington, DC 20202 202-40] -6000 From: Yuan Georgia To: Miller. Tony CC: Date: 3/31/2010 1L27:32AM Subject: Meeting follow-up Attorney-Client Communication ATTORNEY -CLIENT COMMUNICATION PRIVJLEGED AND CONFIDENTIAL (b)(5) Georgia Georgia Yuan Deputy General Counsel Postsecondary Education and Regulatory Service U.S. Department ofEducation 400 Maryland A venue SW 6E341 Washington, DC 20202 202-401-63 99 From: Miller, Tony Sent: Wednesday, March 31, 2010 10:22 AM To: Yuan, Georgia Subject: Gainful Employment follow up (b)(5) Thanks, Tony From: Bergeron, David To: Yum Georgia Kvaa}. James CC: Date: 9/24/2010 8:06:30 AM Sub.iect: Meetings and Public Hearing Oct 2010 dab.docx Thanks. Here are my edits. (b)(S) DRAFT 2 *INTERNAL DOCUMENT* DELIBERATIVE PROCESS CONFIDENTIAL (b)(S) 1 (b)(5) 1 David (b)(5) Georgia From: Yuan Georgia To: Bergeron. David CC: Kvaal. James Date: 9/24/2010 7:36: 12 AM Subject: Meetings Draft (b)(5) DRAFT 2 *INTERNAL DOCUMENT* DELIBERATIVE PROCESS CONFIDENTIAL 1 (b)(5) 1 (b)(5) 1 (b)(S) From: Manheimer Ann To: M.adzelan, Dan Bergeron David CC: Shireman. Bob Yuan Georgia Dannenberg Michael Arsenault Leigh Picoult. Francine Smith. Kathleen Manheimer Ann Date: 4/7/2010 6:07:16PM Subject: Neg Reg Update and Next Steps Attachments: GE2.ppt l(b)(5) From: Hamilton Justin To: Cunningham, Peter Rogers. :.Margot Martin. Ca1mel Gomez, Gabriel.la Miller, Tony Kanter, Martha Weiss Joanne Abrevaya, Sandra Yuan Georgia CC: Date: 6/16/2010 12:40:32 AM Subject: Neg-Reg Press NYT: U.S. Education Dept. Delays Rules on For-Profit Colleges WSJ/DOW JONES: US Education Dept A voids 'Gainful Employment' In Reform Draft AP: Proposed new rules for college recruitment USATODA Y: Education Department takes aim at for-profit colleges Reuters: U.S. to go after deceptive colleges, delays job rule POLITICO: Eyes on for-profit college oversight BLOOMBERG: Obama Targets For-Profit College Recruiting Practices in Proposed Rules U.S. Education Dept. Delays Rules on For-Profit Colleges ByTAMARLEWIN The Education Department said Tuesday that it had split off and delayed a decision on the most controversial part of proposed new student-aid regulations- the treatment of for-profit college programs whose graduates do not earn enough to repay their loans. While a package of proposed new student-aid regulations was released Tuesday, a department official said no decision had been reached about what debt-to-income ratio would make for-profit programs ineligible for federal aid. "This is about accountabili ty, and protecting students," said Education Secretary Arne Duncan . "We have many areas of agreement where we can move forward. But some key issues around gainful employment are complicated, and we want to get it right so we will be coming back with that shortly." In the original draft of the gainful employment rules released this year, the department suggested cutting off federal aid to programs whose graduates could not repay their student loans in 10 years with 8 percent of the income. Consumer advocates and many education groups say that the rules wi ll protect students and taxpayers alike from expensive programs that eat up billions of dollars of federal money, and leave graduates struggling in dead-end jobs. But the Career College Association, which represents the for-profit institutions, aggressively lobbied against that proposal, saying it would not solve any problem but would lead to the closing of important job-training programs for needy students. For-profit colleges get the bulk of their revenues from federal aid, and their students are far more likely to default on their loans than those at nonprofit or public colleges. With for-profit colleges booming, and getting $20 billion in federal aid, the government has been taking a closer look at how that money is used. Last week, Tom Harkin , the Iowa Democrat who is chairman of the Senate Committee on Health, Education, Labor and Pensions, announced that he would hold hearings on the issue. "I am pleased to see the Department ofEducation releasing proposed regulations around for-profit higher education," he said on Tuesday. "For-profit colleges must work for students and taxpayers, not just shareholders." At a briefing on Tuesday, Deputy Under Secretary Robert Shireman said that the department still intended "to hold programs accountable with some metrics that will come in a proposal later this summer' ' - but that to avoid delaying the whole regulatory package, it had decided to go ahead with everything but the specific gainful employment measures. The new regulations, to be published in the Federal Register on Friday, would require for-profit colleges to disclose their programs' job-placement rates and graduation rates, and provide information that would let the department calculate graduates' debt load and income. The new regulations also help protect students from aggressive or misleading recruiting practices and ensure that only eligible students receive aid. The regulations also tighten the prohibition against paying recruiters by the number of students they enroll - a practice that has sometimes led to boiler-room call centers that pressure those with little chance of academic success to enroll. While incentive compensation was already illegal, the current rules allowed some exceptions that the department said had been abused. The new rules would eliminate those exceptions. After a 45-day comment period, the department expects to publish final rules by Nov. 1, to take effect beginning July 2011. WSJ/DOW JONES: US Education Dept Avoids 'Gainful Employment' In Reform Draft NEW YORK (Dow Jones)-The U.S. Department of Education on Wednesday will propose sweeping reforms to a number of issues governing higher education, including attempting to define a credit hour, penalizing schools for misrepresenting their qualifications or offerings and tightening rules governing recruiter compensation. Most notable about the recommendations, known as a Notice ofProposed Rulemaking, is what's absent, as the Education Department chose not to tackle a hotly debated measure that would punish schools for graduating students with high debt-to-income ratios in an attempt to measure how well they prepare students for gainful employment in a recognized occupation. For-profit schools have warned they may need to cut tuition or shut programs if that proposal were pushed through. The Education Department will return to the measure later this summer, the agency said. "Some key issues around gainful employment are complicated and we want to get it right so we will be coming back with that shortly," Education Secretary Arne Duncan said in a statement. The Education Department said it is stilJ developing metrics to hold programs accountable for their ability to prepare students for gainful employment. For now, it is recommending schools disclose graduation and job-placement rates and their students' median debt levels. For months, shares of schooling companies have sighed and swooned with every rumor of what would or wouldn't be included in the draft proposal. Investors have remained anxious since the final of three discussions ended without resolution on a handful of issues, and analysts say continued uncertainty could mean more voJatiJjty. Even without the meatiest gainful-employment measure included in the proposal, a number of schools may face fundamental operational changes. For example, the department recommends tightening oversight of"Ability to Benefit" tests, exams on which many 1nstitutions rely to enroll students who don't have high school diplomas. The tests came under scrutiny last year when a Government Accountability Office found proctors willing to help students cheat. The department also recommends strengthening the metrics by which students must show academic progress so schools can't receive federal-aid funds, from students who continue to post near-failing grades. In addition, the Education Department proposes to eliminate 12 "safe harbors" from a ban on incentive compensation, which an agency official referred to as "loopholes" to the originall992 rule. A number of for-profit schools have been the subject of lawsuits alleging overzealous recruiting tactics. The draft also proposes a new definition of a credit hour, the fundamental measure of a program's rigor. Students are assigned part- or full-time status based on how many credits they take, and some schools have been accused of 1nflating their creclits in order to receive more federal funds. A major accrediting agency was recently slammed by the Education Department's Office oflnspector General for accrediting Career Education Corp.'s (CECO) American Intercontinental University despite having concerns about its credit-hour structure. The House Committee on Education and Labor will hold a hearing Thursday on accreditation and credit hours. The Education Department's draft rules will be open to public comment for 45 days, and the Education Department plans to issue a final rule by Nov. 1. Any changes will take effect beginning July 1, 2011. AP: Proposed new rules for college recruitment By DONNA GORDON BLANKINSHIP
Colleges would no longer be allowed to pay recruiters for students or engage in aggressive or mjsJeading recruitment under proposed new federal regulations that target the practices off or-profit colleges. The proposed new Department ofEducation rules were to be announced Wednesday. They apply to all colleges but are of particular interest to the for-profit world, where some institutions have been accused of misleading students about the cost and value of their programs. "This is about accountability and protecting students," said Education Secretary Arne Duncan, in a statement. The "notice of proposed rulemaking" is set to be published in the Federal Register on Friday and will be open to public comment until Aug. 2. Final rules are scheduled to be announced in November and would take effect in July 2011. Under the proposed new rules, colleges would be required to do the following: -Give prospective students their graduation and job placement rates. - Supply data to the federal government that would allow officials to determine student debt levels and incomes after they graduate. -Make sure only students with valid high school diplomas are enrolled. -Ensure students are making satisfactory academic progress. The new rules would strengthen the federal government's ability to take action against institutions that engage in deceptive advertising, marketing and sales practices. All loopholes in rules that already prohibit colleges from paying recruiters for students would be closed. The role of individual states in monitoring colleges would be clarified. The rules would also more clearly define the courses eligible for financial aid and the amount of aid that is appropriate. Studies show students at for-profit schools- the fastest growing sector of higher education- are much more likely to default on their loans than students at other kinds of colleges. The federal government is paying more attention to these schools as large amounts of federal aid go to these schools in the form of student loans and grants. Sen. Tom Harkin, D-Iowa, chairman of the Senate Health, Education, Labor and Pensions Committee, has said he plans to hold hearings starting June 24 to look at federal education spending at for-profit colleges. The rules were not released until after the stock markets closed Tuesday, but investors have driven down the value of for-profit colleges as concern over the rules mounted. The worry is that schools like the University of Phoenix or ITT Technical Institutes could lose students and revenue ifloans are tougher to come by. "Investors are nervous across the board," said Corey Greendale, an analyst with First Analysis Securities Corp. in Chicago. ''Nobody knows exactly what this is going to do." Shares of Apollo Group Inc., which owns the University of Phoenix, have sunk about 22 percent since April 1, while shares of ITT Educational Services are down 13 percent. Schools most at risk of losing business are those that offer longer programs, which translate into more debt for students, Greendale said. Representatives from for-profit colleges and their business associations were among those who negotiated the new rules during meetings this past winter. One major area of contention was left out of the proposed regulations. To qualify for financial aid, most career colleges and vocational training programs need to show they are giving students the skills they need for "gainful employment." The definition of gainful employment will be set in another set of proposed rules to be issued later this summer, the department said. Harris Miller, president of the Career College Association, said he was glad to hear the federal government plans to keep negotiating about gainful employment, but noted one other area of contention in the rules proposed this week. The plan to eliminate all kinds of recruitment pay instead of a more subtle reform of the practice does not make sense and will hurt students and legitimate institutions, Miller said. Miller said he assumes his organization and the Obama administration are in agreement on the other proposed rules. USATODA Y: Education Department takes aim at for-profitcolleges By Mary Beth Marklein The Education Department is proposing a number of rules today designed to protect college students and taxpayers from abusive or fraudulent practices, inducting aggressive recruitment tactics and allowing ineligible students to enroll and receive aid. Though all colleges that receive federal aid would be affected by the changes, the most controversial proposals are aimed at for-profit colleges, which have come under more scrutiny as their enrollments have increased. In an effort to rein in student debt and high default rates, for example, one proposal would require colleges to disclose graduation and job placement rates and information about the effectiveness of their career and technical programs. Federal data show that 44% of2007 graduates who defaulted on loans within three years attended for-profit institutions. Most of the 14 key issues, outlined in a 503-page document shown to reporters Tuesday, were developed through negotiations over the past year with the higher education community. A final version of the rules would take effect in July 2011. Education officials will follow up this summer with details on a proposal that would cut off federal aid to for-profit colleges whose graduates can't earn enough to repay their loans. The issues are complicated "and we want to get it right," Education Secretary Arne Duncan says. "This is about accountability, and protecting students." Next week, a Senate education committee will examine federal spencting at for-profit schools. Advocates of stricter regulations are encouraged by a preliminary review of the proposals. "There's a real concern that taxpayers are subsidizing programs that are overpromising and under-delivering," says Pauline Abernathy of the California-based Institute for College Access & Success. Harris Miller , president of the Career College Association, which represents about 1,450 for-profit institutions, said the group doesn't agree with all the proposals, but "we agree that students need to be protected at all times from schools that color outside the lines." REUTERS: U.S. to go after deceptive colleges, delays job rule Diane Bartz Under proposals unveiled on Tuesday, the department partially addressed the issue by requiring for-profit schools to release data to students on graduation and job placement rates. But it stopped short of requiring for-profit institutions to demonstrate that they prepare students for jobs before students would be eligible for federal grants and loans, a step advocated by Robert Shireman, a deputy undersecretary at the Department ofEducati on. Education Secretary Arne Duncan said in a statement that the gainful employment issue was complicated: "we want to get it right so we will be coming back with that shortly." Proposals affecting all colleges and universities would tighten rules against deceptive advertising and would dose loopholes on paying recruiters in hopes of removing incentives for them to enroll unqualified people or deceive prospective students. The institutions would be required to ensure that their students have a valid high school diploma or otherwise show that they are ready for college. Shireman has repeatedly called for tightened regulation of companies such as Corinthian Colleges Inc and Career Education Corp. Shares in the for-profit sector got a boost last month on word that Shireman plans to step down on July 1, although he will remain an advisor to the department. Jeff Silber, a stock analyst with BMO Capital Markets, said a delay in the gainful employment rule should be welcomed cautiously. "If this thing is being delayed, it doesn't mean that it's going away," he said. "I don't think it's bad news. (But) I wouldn't declare victory here." Corinthian Colleges spokesman Kent Jenkins called the announced rules and the delay on gainful employment "a step in the right direction." "We don't know where they will come down (on gainful employment) but the fact that they are being very careful and very cautious speaks well for them," he said. Efforts to reach other for-profit schools for a reaction to the proposed rules were unsuccessful. The schools, which offer higher education programs in fields like healthcare and criminal justice, have been criticized for their student loan practices and the quality of the education students receive. The for-profit industry has also been criticized because students, who tend to be low-income, are most likely to end up with outsized -- and sometimes unpayable -- debt. Fifty-three percent ended up owing more than $30,500, compared with 12 percent for students who attended a public four -year college, according to a study by the College Board. U.S. Senator Tom Harkin, an Iowa Democrat, said he was pleased with the announced rules. "The federal governrnent must ensure that the more than $20 billion in student aid that these schools receive is being well spent and students are being well informed and well served," he said. "For-profit colleges must work for students and taxpayers, not just shareholders." The draft regulations will be put out for public comment on Friday. There will be a 45-day comment period. The goal is to issue a final rule by November l , which would go into effect on July l , 20 ll. POLITICO: Eyes on for-profit college oversight The Obama administration will propose tightening oversight offer-profit colleges on Wednesday to thwart misleading recruiting and reign in federal funding. The new rules will be released for public comment after a year of negotiations between the Education Department and higher education community. While the regulations encompass all higher education institutions, for-profit universities like Kaplan, DeVry and University ofPhoenix are likely to bear the brunt of the changes. "This is about accountability, and protecting students," said Education Secretary Arne Duncan, who aims to finalize the rules by November, in a statement. The rules will go after aggressive recruiting practices. It will grant the department new powers to take action against deceptive advertising. marketing and sales. [t also will end the practice of schools compensating admissions recruiters based on securing student enrollment. The proposed regulations will ensure only eligible students - those that have a high school diploma or pass an equivalence test- receive federal funds. And they will clarify what courses are eligible for federal aid and how much taxpayer money they can obtain. But the department only partially addresses the much-debated "gainful employment" proposal that would cut off federal funding to programs whose graduates don't earn enough to pay off their student loans. The new rules order institutions to provide their prospective students graduation and job placement rates, as well as hand over data on student debt and incomes after graduation. But the department won' t unveil the metrics to hold them accountable until later this summer. "Given controversy, we want to make sure we get it right," a department official told reporters. Fighting the proposal is already the top cause of Students for Academic Choice, a grassroots-sounding group backed by the Career College Association, a lobbying group for 1,400 for-profit schools. More than 32,000 people signed a petition saying it would "treat career college students as separate and inherently unequal," as well as limit vocational and technical programs for more than 300,000 students who want to go into fields like health care. Enrollment in for-profit universities is on the rise, jumping from 673,000 students nationwide in 2000 to 1.8 million in 2008. And federal aid to students at for-profit colleges soared to $26.5 billion in 2009 from $4.6 billion in 2000. While these schools offer people an educational alternative, they often come with a mountain of debt, observers say. A recent College Board study concluded that students who attend for-profit colleges graduate on average with bigger student loans than those who attended private nonprofit or public schools. More than half of bachelor' s degree recipients left school at least $30,500 in debt . Harris Miller, president of the Career College Association, has repeatedly rejected the idea that for-profit schools leave students will unmanageable debt. He said the default rate on loans for students at for-profit institutions is about the same as students who attend community colleges and other non profits. "Let's try to tum this into a fact-based conversation," he said. Meanwhile Congress is also jumping into the conversation. Beginning next week Sen. Torn Harkin (D-Iowa) will hold a series of hearings to examine federal education spending at these institutions. Read more: http://www.politico.com/news/stories/0610/38598.html#ixzz0qzFnXDyJ BLOOMBERG: Obarna Targets For-Profit College Recruiting Practices in Proposed Rules By JohnHechinger- Jun 16,2010 The Obarna administration proposed banning for-profit colleges from tying recruiters' pay to the number of people they enroll, saying high-pressure sales tactics induced students to take out government loans they can' t afford. The rules would prohibit paying sales incentives at Apollo Group &ticker=APOL:US> lnc., liT Educational Services &ticker=ESI:US> Inc., Career Education Corp &ticker=CECO:US> . and other for-profit colleges, according to a copy of the proposal by the U.S. Department ofEducation to be made public today. At for-profit colleges, recruiters contact potential students, often after they express interest over the Internet. U.S. Secretary ofEducation Arne Duncan &client=wnews&proxystylesheet=enl 0 _ wnews&output=xrnl_no _ dtd&ie=UTF-8&oe=UTF- 8&filter=p&getfields=wnnis&partialfi el ds=-wnni s:NO A VSYND&sort=date:D: S :d 1 &I r=-langja&q= Arne%20Duncan> is seeking to protect taxpayers from loan defaults and to stop students from taking on debt for programs that don' t lead to higher incomes. For-profit colleges can receive up to 90 percent of their revenue from federal grants and loans. Federal aid to for-profit colleges jumped to $26.5 billion last year from $4.6 billion in 2000, according to the Education Department. "This is about accountability and protecting students," Duncan said in a statement. The Obama administration delayed the release of a proposed rule that would disqualify for-profit colleges from receiving federal aid if their graduates spend more than 8 percent of their starting salaries repaying student loans. The Education Department is still analyzing the proposal and expects to release the rule, known as gainful employment, between now and August, the agency said in a statement. Industry Opposition For-profit colleges lobbied against the gainful-employment rule, which could disqualify programs enrolJing 300,000 students, according to an April study commissioned by the Washington-based Career CoiJege Association, which represents more than 1,400 for-profit colleges. Education stocks last week rallied on analysts' reports citing the potential delay of the gainful employment rule. Apollo, based in Phoenix, rose 70 cents, or 1.5 percent, to close at $48.30 in Nasdaq Stock Market composite trading yesterday. Career Education, based in Hoffman Estates, lllinois, rose 71 cents, or 2.7 percent, to $26.91. ITT, based in Carmel, Indiana, rose $1.39, or 1.5 percent, to $97.18 in New York Stock Exchange Composite trading. Colleges would no longer be allowed to tie recruiters' pay to enrollment under any circumstances, according to the new rules. The current regulations prohibit the practice while allowing exceptions, or "safe harbors." 'Unscrupulous Actors' "Unscrupulous actors routinely rely on these safe harbors" to get around the law, the Education Department said. While the proposed rules apply to all colleges, they are designed to target abuses among for-profits, the department said. The Education Department's description of recruiting violations among for -profits amounts to "a lot of hyperbole," Hanis Miller &client=wnews&proxystylesheet=en 10 _ wnews&output=xml_ no_ dtd&ie=UTF-8&oe=UTF- 8&ftlter=p&getfields=wnnis&partialfields=-wnnis:NOA VSYND&sort=date:D: S: d l&lr=-langja&q=Harris%20Miller> , the Career College Association's president, said in an interview. Colleges should be allowed to continue taking enrollment into account among other factors in compensating recruiters, Miller said. The new rule on recruiter pay could have a broad impact on the industry, Matt Snowling &client=wnews&proxystylesheet=enl 0 _ wnews&output=xml_ no_ dtd&ie=UTF-8&oe=UTF- 8&filter=p&getfields=wnnis&partialfields=-wnnis:NOAVSYND&sort=date:D:S:d1&1r=- langja&q=Matt>/o20Snowling>, an analyst with FBR Capital Markets in Arlington, Virginia, said in a phone interview. "The incentive compensation rule is probably a bigger threat to the industry than gainful employment," Snowling said. "By limiting the schools ability to market themselves, it takes away some of their ability to grow." Apollo Settlements Apollo' s University of Phoenix last December agreed to pay $67.5 million to the U.S. and $11 million in legal fees to plaintiffs to settle a wrustleblower suit arising from allegations from former employees that that company improperly paid recruiters based on enrollment numbers. Apollo admitted no wrongdoing. The company, without admitting fault, paid $9.8 million in 2004 to the Department of Education to settle similar claims. Apollo started reviewing recruiter compensation 18 months ago, with a focus on "enhancing student satisfaction and student experience," spokeswoman Sara Jones said in an e-mail. "We anticipate that our new compensation will be in compliance with the forthcoming regulations by the U.S. Department ofEducation but cannot confirm until the rules are finalized," Jones said. Today's proposed rules also would require colleges to disclose information about employment prospects to students and strengthen the Education Department's authority to take action against institutions engaging in "deceptive, marketing and sales practices," the department said in a statement. The proposed rules, being issued for public comment, could be made final November 1 and take effect in July 2011. (b)(S) From: Yuan Georgia To: Rose, Charlie CC: Date: 4/27/2010 4:49:56 PM Subject: NPRM DeVry leads ed. stocks lower as Credit Suisse downgrades on regulatory, job market concerns Associated Press 04/26/10 9:30AM PDT NEW YORK- DeVry led decliners in education stocks Monday after a Credit Suisse analyst said the for-profit school could be hurt by proposed regulatory changes and an improving job market that could slow enrollment. The administration has pushed hard for gainful employment regulations, which stipulate that graduates of schools must not spend more than 8 percent of their income on paying student loans. It's meant to help improve school quality- making sure students are qualified and the courses help increase their incomes- as student loan defaults soar. If schools failed to pass this test, the government could block their access to federal loans for students, the bulk of their revenues. In early April, the Education Department said schools with 50 percent graduation rates and 70 percent job placement rates would be exempt from a proposed rule linking graduates' incomes to required debt payments. Analyst Kelly Flynn, however, said Washington sources believe the more lenient proposal might not wind up in a draft of the law that will be posted by mid-May or June. Flynn downgraded De Vry and ITT Educational Services Inc. to "neutral" from "outperform," cutting target prices to $65 from $75 and $110 from $135, respectively. Shares ofDeVry Inc. fell $4.59, or 6.6 percent, to $64.87, while ITT stock dropped fell $2.07, or 1.8 percent, to $109.71. Shares of Apollo Group Inc., which runs the largest for-profit school, the University ofPhoenix, also slid 93 cents, or 1.5 percent, to $62.60, while Corinthian Colleges Inc. stock fell 59 cents, or 3.3 percent, to $17.30. Career Education Corp. fell 61 cents, or 1.8 percent, to $33.49 and Strayer Education Inc. dropped $2.54, or 1 percent, to $250.49. Meanwhile, Flynn cited DeVry's warning on slower enrollment growth in one of its divisions and liT's warning on higher advertising spending. For-profit schools have seen big gains in enrollment because of the recession and high unemployment. As the job market improves, people may not feel as much as a need to bolster their resumes. -----Original Message----- From: Rose, Charlie Sent: Tuesday, April 27, 2010 4:29PM To: Yuan, Georgia Subject: l(b)(S) Charlie Sent using BlackBerry (b)(5) Harold From: Babel, Tom [mailto:Tbabel@devry.com] Sent: Friday, February 19, 2010 10:55 AM To: Shireman, Bob Subject: Meeting follow-up Bob, From: Jenkins Harold To.: Rose. Charlie CC: Yuan, Georgia Date: 2/25/2010 6:53:30 PM Subject: Our 9:30 meeting Friday Thanks for making the time to talk Tuesday morning. I appreciate the opportunity, especially given the impact the weather had to have on your schedule. I also appreciate the insight into the Department' s timeline in putting together draft regulations for the Notice ofProposed Rulemaking and appreciate the urgency in providing input into that process. As I mentioned, we (DeVry) are working with other institutions and within CCA to develop "guidance" on regulations for both the definition and measurement of Gainful Employment and prohibitions of Incentive Compensation. We are part of a small group that has a meeting tentatively scheduled with Michael Drumenberg next week to discuss the Gainful Employment objectives and solutions and hope to have a recommendation that we can share with you shortly after that meeting. With regard to Incentive Compensation, as I mentioned, the issue with the proposed regulation is less the actual language (although some of it is certainly contentious among our colleagues), than the clarification provided by the general counsel' s office in the quad following the Department's last iteration of the proposed rules. Specifically, his remarks extended the prohibition to include: o Pro hi bi tion of incentive compensation applies to merit increases provided as part of an employee's annual performance evaluation, if they contain any quantitative measurements related to enrollment of students or awarding of financial aid. o Prohibition of compensation based on success in securing student enrollments is meant to read "in whole or in part". o Prohibition of incentive compensation to persons and entities includes supervisory and management personnel and 3rd parties. The Department did not dispute examples that included Presidents ofUniversities. o "Indirectly" reference can be extended to prohibit incentive compensation determined on factors such as revenue if it can be shown that revenue is derived from successfully enrolling students. o Success in securing enrollment extends to any quantification of enrollment objectives and performance, including minority recruiting, specific academic programs and athletics. o Quantitative metrics related to the recruiting or enrolling of a student or the awarding of financial aid may not be used for merit-based adjustments. This extends to scheduling appointments, attending college nights, making telephone calls and number of financial aid awards in addition to counting applications and enrollments. o Prohibition includes measuring the performance of an admissions officer in contributing to a non-profit institution's enrollment growth goal. o 40'1K/403B contributions may be prohibited. The assumption is that the OGC official was referring to a discretionary contribution made from revenue received from success in enrolling students. o Prohibition extends to compensation based on successful persistence or graduation. We think this extension of the prohibitions goes far beyond and is even contrary to Congressional intent and makes problematic the actual performance evaluation of people involved in recruiting and financial aid functions as well as some very legitimate enrollment programs specifically designed to diversifY higher education by addressing underrepresented students. DeVry looks forward to working with the Department to assure that students receive accurate and clear information as they choose the institution and program that best serves their educational goals. Tom Thomas Babel Vice President Student Finance Policy and Industry Relations DeVry Inc. 3005 Highland Parkway Downers Grove, 1L 60515 p: 630.515.3133 m: 630.776.4614 f: 630.353.9903 e: tbabel@devry.com www.devry.edu From: Fine Stephanie To: Yale, Matt CC: Yuan Georgia Martin Carmel Date: 4114/2010 11:40:24 AM Sub.iect: Participants in tomorrow's Gainful Employment Meeting Kaplan: Andrew Rosen, Chairman and CEO, and Rebecca Campoverde, VP, Government Relations US Chamber of Commerce: Arthur Rothkopf, Senior Vice President and Counselor to the President EDMC: Governor Jock McKernan, Chairman of the Board of Directors, and Anthony Guida, Senior Vice President, Todd Nelson, CEO Corinthian Colleges: Mark Pelesh, Executive Vice President, and Jack Massimino, Executive Chairman of the Board Rasmussen: Michael Locke, CEO DeVry: Daniel Hamburger, President and CEO, and either Sharon Thomas Parrott, Sr. VP, Government and Regulatory Affairs, or Tom Babel , Vice President, Student Finance Policy and Industry Relations From: Yale, Matt Sent: Wednesday, April 14, 2010 11:38 AM To: Fine, Stephanie Subject: Can you send me the list of attendees for the gainful employment mtg? Thanks, my Matthew A. Yale Deputy Chief of Staff U.S. Department ofEducation Washington, D.C. From: Kvaal James To.: Duncan. Arne Bergeron. David Kanter, Martha Martin Carmel Mi11er.Ton.y Ochoa, Eduardo Rose. Charlie Weiss. Joanne Yua.n, Georgia Ferguson, Keith Arsenault Leigh Broin. Allie Schmidt, Greg Muenzer:. Melanie Sova. Alexandra Friedlander Rob Ham. Adrian DayY.Earl Powell, James Roppel, Robert Tucci, Richard White Malachi Wilson. Lennie Finley, Steve Smith Zakiya CC: Duran, Matibel Salk Sam Myers Sam Shelton Betsy Date: 9/15/2010 4:36:06 PM Subject: RE: 8:00-9:00 September 16th Gainful Employment Prep Attachments: 09'14'10 GE slidesl(b)(S) I ppt pptx (b)(5) -----Original Appointment----- From:Duncan, Arne Sent: Tuesday, September 14, 2010 12:17 PM To: Duncan, Arne; Bergeron, David; Kanter, Martha; Kvaal, James; Martin, Carmel; Miller, Tony; Ochoa, Eduardo; Rose, Charlie; Weiss, Joanne; Yuan, Georgia; Ferguson, Keith; Arsenault, Leigh; Brain, Allie; Schmidt, Greg; Muenzer, Melanie; Sova, Alexandra; Friedlander, Rob; Haro, Adrian; Davy, Earl; Powell, James; Rappel, Robert; Tucci, Richard; White, Malachi; Wilson, Lennie; Finley, Steve; Smith, Zakiya Cc: Duran, Maribel ; Salk, Sam; Myers, Sam; Shelton, Betsy Subject: 8:00-9:00 September 16th Gainful Employment Prep When: Thursday, September 16, 2010 8:00AM-9:00AM (GMT-05:00) Eastern Time (US & Canada). Where: Secretary's Conference Room (OS Managed) When: Thursday, September 16, 2010 8:00AM-9:00AM (GMT-05:00) Eastern Time (US & Canada). Where: Secretary's Conference Room (OS Managed) Note: The GMT offset above does not reflect daylight saving time adjustments. Internal Staff Attending: David Bergeron Steve Finley Martha Kanter JamesKvaal Carmel Martin Tony Miller Eduardo Ochoa Charlie Rose Zakiya Smith Joanne Weiss Georgia Yuan POC: Briefing Materials- James K vaal Scheduling- Tia Borders 205.4595 Conference Room -Hannah Update as of9/15/10: The date and time of this meeting has been changed from today to tomorrow at 8:00am. Thank you, Tia Update as of9/14/l0 at 4:15pm: The time of this meeting has been changed from 5:00-6:00 pm to 5:15-6:15 pm. Thank you, Tia Update as of 9/14110 at 1 :01 pm: Zakiya and Steve were added. Thank you, Tia From: Finley Steve To: K vaal, James Kanter, :.Martha Ochoa, Eduardo Beuwron David Kolotos, John Sellers Fred Yuan, Georgia Chesley, Susan CC: Date: 9/2/2010 7:40:30 PM Subject: RE: A Message from Dr. John Sperling, Founder- University ofPhoenix (b)(5) From: Kvaal, James Sent: Thursday, September 02, 2010 6:31PM To: Kanter, Martha; Ochoa, Eduardo; Bergeron, David; Kolotos, John; Sellers, Fred; Yuan, Georgia; Finley, Steve; Chesley, Susan Subject: FW: A Message from Dr. John Sperling, Founder- University ofPhoenix The powerpoint is worth a read September 2, 201 0 Attn. Legislative Director Dear Congress Member, As founder of the University ofPhoenix, I am writing to you and to every Member of Congress concerning recent actions by the U.S. Department ofEducation and the Senate Committee on Health, Education, Labor and Pensions. The Department ofEducation, seconded by the HELP Committee, has proposed new rules that will seriously undercut the ability of the nation to remain globally competitive by undermining a vital sector of our higher education system-for- profit colleges and universities. I am writing to you because I am confident that every Member of Congress, whether or not they are a member of a committee that deals with higher education, would like quality higher education to be available to every American who seeks to earn a college degree. That is the stated goal of President Obama. However, we will not be able to reach the President's goals without for-profit colleges. The states do not have the funding needed to increase capacity whereas private sector colleges like ours can provide the necessary capacity. For-profit colleges already provide flexibili ty and access for millions ofunderserved and nontraditional students who could not complete their education in a traditional institution. The attached power point has been prepared by NEXUS, a research and policy institute whose primary focus is the for- profit sector of higher education. Given its commitment to fact based research, not spec1al pleading, the power point presents a rationale for the need to rethink the reforms proposed by USDOE and the HELP Committee using as an example the case of the University ofPhoenix, whose massive database on its operations and its academics has been made available to NEXUS researchers. As the largest institution in the sector--465,000 students with 90,000 graduates last year-the University ofPhoenix illustrates the strengths and weaknesses of for-profit colleges and universities. The NEXUS study documents the financial system that sustains it, the quality of the University' s programs, the 1nnovations it has brought to higher education and where it has failed to meet regulatory standards and its own code of conduct. It also documents the steps the University has taken to insure future compliance with all regulatory standards. Perhaps the most important finding of the case study is the fact that for-profit institutions operate at no cost to taxpayers because the interest students pay on their federal loans plus the taxes paid by the institutions is greater than the Pel! Grants and all of the other state and federal subsidies received by the students and the institutions. Further, the study shows that not only will the proposed reforms require a mcYor increase in Department ofEducation oversight staff, they will greatly lower the efficiency and raise the costs of the institutions in the sector-all at the expense of taxpayers. It would seem wiser to restore the status quo ante when the Department ofEducation was pursuing a reform that would truly benefit taxpayers, namely to require all institutions of higher education to measure the learning outcomes of their students and to publish those results on an annual basis. Overseeing the measurement protocols used by institutions in order to expose cheating on the tests, would be a far more productive use of Department of Education resources than what is presently contemplated. Only when learning outcomes are measured and published will taxpayers know what they are getting for their money and the "bad actors" be easily identified-namely the institutions whose students are low performers. When you have finished reviewing the power point, we hope you will be persuaded that for-profit colleges and universities are a vital sector of the American higher education system that deserve the support of the Department of Education and the Congress, along with responsible oversight, rather than a set of regulations that will instead inhibit their efficiency, their growth, their culture of innovation and, most impmtantly, their ability to deliver a quality education to millions of! ow-income Americans now denied access to the education they need to give them a chance to join the middle class. The worst of these regulations concerns the definition of"gainful employment" and a new regulation that sets the minimum rates at which students in a program must be repaying on the principal of their student loans. The new definition of gainful employment is so onerous it would make it impossible for the sector to offer many programs that prepare students for certification in such occupations as teachers, nurses, counselors and public safety officers. The repayment percentage requirements, apparently arrived at with insufficient attention to their potential negative consequences, would have a devastating impact on institutions that enroll low-income students who often require several years in the workforce before they can begin repaying the principal on their student loans. For example, if these requirements were applied to Historically Black Colleges and Universities, over 90% of them would have to close their doors. Representative Robert Andrews (New Jersey - 01) has proposed a definition of gainful employment that would correct the many faults of the definition proposed by the Department ofEducation. He has written to Education Secretary Arne Duncan setting forth the negative consequences resulting from the Department' s definition while proposing an alternative which would remove these negative consequences and still gain the same objectives. Many of the institutions in the for- profit sector support Congressman Andrews' s initiative and we are asking all Members of the Congress to lend their support as well. I have attached a draft of a letter of support which we hope you will use as a model for a letter from you to Secretary Duncan with copies to Speaker Nancy Pelosi and to Congressman Andrews. The University and every institution in the sector would very much appreciate your support. Thank you for your time and consideration of this important issue. [cid:image001 .git] John G. Sperling Founder University ofPhoenix From: Sellers, Fred To: K vaal, James Kanter, :.Martha Ochoa, Eduardo Beuwron David Kolotos, John Yuan, Georgia FinJ ey, Steve Chesley, Susan CC: Date: 9/2/2010 7:07:42 PM Subject: RE: A Message from Dr. John Sperling, Founder- University ofPhoenix Nonresponsive From: ICvaaJ, James Sent: Thursday, September 02, 2010 6:32PM To: Kanter, Martha; Ochoa, Eduardo; Bergeron, David; Kolotos, John; Sellers, Fred; Yuan, Georgia; Finley, Steve; Chesley, Susan Subject: FW: A Message from Dr. John Sperling, Founder- University ofPhoenix The powerpoint is worth a read September 2, 2010 Attn. Legi sl ati ve Director Dear Congress Member, As founder of the University ofPhoenix, I am writing to you and to every Member of Congress concerning recent actions by the U.S. Department ofEducation and the Senate Committee on Health, Education, Labor and Pensions. The Department ofEducation, seconded by the HELP Committee, has proposed new rules that will seriously undercut the ability of the nation to remain globally competitive by undermining a vital sector of our higher education system-for- profit colleges and universities. I am writing to you because I am confident that every Member of Congress, whether or not they are a member of a committee that deals with higher education, would like quality higher education to be available to every American who seeks to earn a college degree. That is the stated goal of President Obama. However, we will not be able to reach the President's goals without for-profit colleges. The states do not have the funding needed to increase capacity whereas private sector colleges like ours can provide the necessary capacity. For-profit colleges already provide flexibility and access for millions ofunderserved and nontraditional students who could not complete their education in a traditional institution. The attached power point has been prepared by NEXUS, a research and policy institute whose primary focus is the for- profit sector of higher education. Given its commitment to fact based research, not special pleading, the power point presents a rationale for the need to rethink the reforms proposed by USDOE and the HELP Committee using as an example the case of the University ofPhoenix, whose massive database on its operations and its academics has been made available to NEXUS researchers. As the largest institution in the sector--465,000 students with 90,000 graduates last year-the University ofPhoenix illustrates the strengths and weaknesses of for-profit colleges and universities. The NEXUS study documents the financial system that sustains it, the quality of the University' s programs, the innovations it has brought to higher education and where it has failed to meet regulatory standards and its own code of conduct. It also documents the steps the University has taken to insure future compliance with all regulatory standards. Perhaps the most important finding of the case study is the fact that for-profit institutions operate at no cost to taxpayers because the interest students pay on their federal loans plus the taxes paid by the institutions is greater than the Pel! Grants and all of the other state and federal subsidies received by the students and the institutions. Further, the study shows that not only will the proposed reforms require a m ~ o r increase in Department ofEducation oversight staff, they will greatly lower the efficiency and raise the costs of the institutions in the sector-all at the expense of taxpayers. It would seem wiser to restore the status quo ante when the Department ofEducation was pursuing a reform that would truly benefit taxpayers, namely to require all institutions of higher education to measure the learning outcomes of their students and to publish those results on an annual basis. Overseeing the measurement protocols used by institutions in order to expose cheating on the tests, would be a far more productive use of Department of Education resources than what is presently contemplated. OnJy when learning outcomes are measured and published will taxpayers know what they are getting for their money and the "bad actors" be easily identified-namely the institutions whose students are low performers. When you have finished reviewing the power point, we hope you will be persuaded that for-profit colleges and universities are a vi tal sector of the American higher education system that deserve the support of the Department of Education and the Congress, along with responsible oversight, rather than a set of regulations that will instead inhibit their efficiency, their growth, their culture of innovation and, most importantly, their ability to deliver a quality education to millions of low-income Americans now denied access to the education they need to give them a chance to join the middle class. The worst of these regulations concerns the definition of"gainful employment" and a new regulation that sets the minimum rates at which students in a program must be repaying on the principal of their student loans. The new definition of gainful employment is so onerous it would make it impossible for the sector to offer many programs that prepare students for certification in such occupations as teachers, nurses, counselors and public safety officers. The repayment percentage requirements, apparently arrived at with insufficient attention to their potential negative consequences, would have a devastating impact on institutions that enroll low-income students who often require several years in the workforce before they can begin repaying tl1e principal on their student loans. For example, if these requirements were applied to Historically Black Colleges and Universities, over 90% of them would have to close their doors. Representative Robert Andrews (New Jersey - 0 l) has proposed a definition of gainful employment that would correct the many faults of the definition proposed by the Department ofEducation. He has written to Education Secretary Arne Duncan setting forth the negative consequences resulting from the Department's definition while proposing an alternative which would remove these negative consequences and still gain the same objectives. Many of the institutions in the for- profit sector support Congressman Andrews' s initiative and we are asking all Members of the Congress to lend their support as well. I have attached a draft of a letter of support which we hope you will use as a model for a letter from you to Secretary Duncan with copies to Speaker Nancy Pelosi and to Congressman Andrews. The University and every institution in the sector would very much appreciate your support. Thank you for your time and consideration oftlUs important issue. John G. Sperling Founder University ofPhoenix From: Finley Steve To: Yum Georgia CC: Date: 9/8/2010 7:50:26PM Subject: RE: A Message from Dr. John Sperling, Founder- University ofPhoenix Nonresponsive From: Yuan, Georgia Sent Wednesday, September 08, 2010 6:42PM To: Finley, Steve Cc: Kanter, Martha Subject: FW: A Message from Dr. John Sperling, Founder- University ofPhoenix l(b)(S) -----Ori gi nat Message----- From: Kanter, Martha Sent Tuesday, September 07, 2010 11:36 PM To: Yuan, Georgia Subject FW: A Message from Dr. John Sperling, Founder- University ofPhoenix l(b)(S) From: Kvaal, James Sent: Tuesday, September 07, 2010 7:35PM To: Cunningham, P e t e r ~ Kanter, Martha; Hamilton, Justin Subject: RE: A Message from Dr. John Sperling, Founder- University ofPhoenix (b)(S) (b)(5) -----Original Message----- From: Cunningham, Peter Sent: Friday, September 03, 2010 7:40AM To: Kanter, Martha Cc: Kvaal, James Subject: RE: A Message from Dr. John Sperling, Founder- University ofPhoenix (b)(5) From: Kanter, Martha Sent: Thursday, September 02, 2010 9:27PM To: Cunningham, Peter Subject: FW: A Message from Dr. John Sperling, Founder- University ofPhoen.ix From: Kanter, Martha Sent: Thursday, September 02, 2010 10:24 PM To: Weiss, Joanne; Martin, Cannel ; Yuan, Georgia; Rose, Charlie; Gomez, Gabriella; Ochoa, Eduardo; Miller, Tony; peter.cunn.igham@ed.gov Subject: FYI: A Message from Dr. John Sperling, Founder- University ofPhoenix September 2, 2010 Attn. Legislative Director Dear Congress Member, As founder of the University ofPhoen.ix, I am writing to you and to every Member of Congress concerning recent actions by the U.S. Department ofEducation and the Senate Committee on Health, Education, Labor and Pensions. The Department ofEducation, seconded by the HELP Committee, has proposed new rules that will seriously undercut the ability of the nation to remain globally competitive by undermining a vital sector of our higher education system-for- profit colleges and universities. I am writing to you because I am confident that every Member of Congress, whether or not they are a member of a committee that deals with higher education, would like quality higher education to be available to every American who seeks to earn a college degree. That is the stated goal ofPresident Obama. However, we will not be able to reach the President's goals without for-profit colleges. The states do not have the funding needed to increase capacity whereas private sector colleges like ours can provide the necessary capacity. For-profit colleges already provide flexibility and access for millions ofunderserved and nontraditional students who could not complete their education in a traditional institution. The attached power point has been prepared by NEXUS, a research and policy institute whose primary focus is the for- profit sector of higher education. Given its commitment to fact based research, not special pleading, the power point presents a rationale for the need to rethink the reforms proposed by USDOE and the HELP Committee using as an example the case of the University ofPhoenix, whose massive database on its operations and its academics has been made available to NEXUS researchers. As the largest institution in the sector-465,000 students with 90,000 graduates last year-the University of Phoenix illustrates the strengths and weaknesses of for-profit colleges and universities. The NEXUS study documents the financial system that sustains it, the quality of the University' s programs, the innovations it has brought to higher education and where it has failed to meet regulatory standards and its own code of conduct. It also documents the steps the University has taken to insure future compliance with all regulatory standards. Perhaps the most important finding of the case study is the fact that for-profit institutions operate at no cost to taxpayers because the interest students pay on their federal loans plus the taxes paid by the institutions is greater than the Pell Grants and all of the other state and federal subsidies received by the students and the institutions. Further, the study shows that not only will the proposed reforms require a major increase in Department of Education oversight staff, they will greatly lower the efficiency and raise the costs of the institutions in the sector-all at the expense of taxpayers. It would seem wiser to restore the status quo ante when the Department of Education was pursuing a reform that would truly benefit taxpayers, namely to require all institutions of higher education to measure the learning outcomes of their students and to publish those results on an annual basis. Overseeing the measurement protocols used by institutions in order to expose cheating on the tests, would be a far more productive use ofDepartment ofEducation resources than what is presently contemplated. Only when learning outcomes are measured and published will taxpayers know what they are getting for their money and the "bad actors" be easily identified-namely the institutions whose students are low performers. When you have finished reviewing the power point, we hope you will be persuaded that for-profit colleges and universities are a vital sector of the American higher education system that deserve the support of the Department of Education and the Congress, along with responsible oversight, rather than a set of regulations that will instead inhibit their efficiency, their growth, their culture of innovation and, most importantly, their abitity to deliver a quality education to millions oflow-income Americans now denied access to the education they need to give them a chance to join the middle class. The worst of these regulations concerns the definition of"gainful employment'' and a new regulation that sets the minimum rates at which students in a program must be repaying on the principal of their student loans. The new definition of gainful employment is so onerous it would make it impossible for the sector to offer many programs that prepare students for certification in such occupations as teachers, nurses, counselors and public safety officers. The repayment percentage requirements, apparently arrived at with insufficient attention to their potential negative consequences, would have a devastating impact on institutions that enroll low-income students who often require several years in the workforce before they can begin repaying the principal on their student loans. For example, if these requirements were applied to Historically Black Colleges and Universities, over 900/o of them would have to close their doors. Representative Robert Andrews (New Jersey- 01) has proposed a definition of gainful employment that would correct the many faults of the definition proposed by the Department ofEducation. He has written to Education Secretary Arne Duncan setting forth the negative consequences resulting from the Department' s definition while proposing an alternative which would remove these negative consequences and still gain the same objectives. Many of the institutions in the for- profit sector support Congressman Andrews' s initiative and we are asking all Members of the Congress to lend their support as well. I have attached a draft of a letter of support which we hope you will use as a model for a letter from you to Secretary Duncan with copies to Speaker Nancy Pelosi and to Congressman Andrews. The University and every institution in the sector would very much appreciate your support. Thank you for your time and consideration of this important issue. [ cid:imageOO l .gif] John G. Sperling Founder University ofPhoenix From: Finley Steve To: Yum Georgia CC: Date: 9/9/2010 11:14:30 AM Subject: RE: A Message from Dr. John Sperling, Founder- University ofPhoenix Non responsive From: Yuan, Georgia Sent: Wednesday, September 08, 20'10 6:42PM To: Finley, Steve Cc: Kanter, Martha Subject: FW: A Message from Dr. John Sperling, Founder- University of Phoenix l(b)(S) -----Original Message----- From: Kanter, Martha Sent: Tuesday, September 07, 2010 11:36 PM To: Yuan, Georgia Subject: FW: A Message from Dr. John Sperling, Founder- University ofPhoenix l(b)(S) From: Kvaal, James Sent: Tuesday, September 07, 2010 7:35PM To: Cunningham, Peter; Kanter, Martha; Hamilton, Justin Subject: RE: A Message from Dr. John Sperling, Founder- University ofPhoenix (b)(S) (b)(S) -----Original Message----- From: Cunningham, Peter Sent: Friday, September 03, 2010 7:40AM To: Kanter, Martha Cc: Kvaal, James Subject: RE: A Message from Dr. John Sperling, Founder- University ofPhoenix (b}(S} From: Kanter, Martha Sent: Thursday, September 02, 2010 9:27PM To: Cunningham, Peter Subject: FW: A Message from Dr. John Sperling, Founder- University ofPhoenix From: Kanter, Martha Sent: Thursday, September 02, 2010 10:24 PM To: Weiss, Martin, Yuan, Rose, Gomez, Ochoa, Miller, Tony; peter.cunnigham@ed.gov Subject: FYI: A Message from Dr. John Sperling, Founder- University of Phoenix September 2, 201 0 Attn. Legi sl ati ve Director Dear Congress Member, As founder of the University of Phoenix, I am writing to you and to every Member of Congress concerning recent actions by the U.S. Department of Education and the Senate Committee on Health, Education, Labor and Pensions. The Department ofEducation, seconded by the HELP Committee, has proposed new rules that wi ll seriously undercut the ability of the nation to remain globally competitive by undermining a vital sector of our higher education system-for- profit colleges and universities. I am writing to you because I am confident that every Member of Congress, whether or not they are a member of a committee that deals with higher education, would like quality higher education to be available to every American who seeks to earn a college degree. That is the stated goal of President Obama. However, we will not be able to reach the President' s goals without for-profit colleges. The states do not have the funding needed to increase capacity whereas private sector colleges like ours can provide the necessary capacity. For-profit colleges already provide flexibili ty and access for millions of underserved and nontraditional students who could not complete their education in a traditional institution. The attached power point has been prepared by NEXUS, a research and policy institute whose primary focus is the for- profit sector of higher education. Given its commitment to fact based research, not spec1al pleading, the power point presents a rationale for the need to rethink the reforms proposed by USDOE and the HELP Committee using as an example the case of the University ofPhoenix, whose massive database on its operations and its academics has been made available to NEXUS researchers. As the largest institution in the sector--465,000 students with 90,000 graduates last year-the University ofPhoenix illustrates the strengths and weaknesses of for-profit colleges and universities. The NEXUS study documents the financial system that sustains it, the quality of the University' s programs, the 1nnovations it has brought to higher education and where it has failed to meet regulatory standards and its own code of conduct. It also documents the steps the University has taken to insure future compliance with all regulatory standards. Perhaps the most important finding of the case study is the fact that for-profit institutions operate at no cost to taxpayers because the interest students pay on their federal loans plus the taxes paid by the institutions is greater than the Pel! Grants and all of the other state and federal subsidies received by the students and the institutions. Further, the study shows that not only will the proposed reforms require a mcYor increase in Department ofEducation oversight staff, they will greatly lower the efficiency and raise the costs of the institutions in the sector-all at the expense of taxpayers. It would seem wiser to restore the status quo ante when the Department ofEducation was pursuing a reform that would truly benefit taxpayers, namely to require all institutions of higher education to measure the learning outcomes of their students and to publish those results on an annual basis. Overseeing the measurement protocols used by institutions in order to expose cheating on the tests, would be a far more productive use of Department of Education resources than what is presently contemplated. Only when learning outcomes are measured and published will taxpayers know what they are getting for their money and the "bad actors" be easily identified-namely the institutions whose students are low performers. When you have finished reviewing the power point, we hope you will be persuaded that for-profit colleges and universities are a vital sector of the American higher education system that deserve the support of the Department of Education and the Congress, along with responsible oversight, rather than a set of regulations that will instead inhibit their efficiency, their growth, their culture of innovation and, most impmtantly, their ability to deliver a quality education to millions of! ow-income Americans now denied access to the education they need to give them a chance to join the middle class. The worst of these regulations concerns the definition of"gainful employment" and a new regulation that sets the minimum rates at which students in a program must be repaying on the principal of their student loans. The new definition of gainful employment is so onerous it would make it impossible for the sector to offer many programs that prepare students for certification in such occupations as teachers, nurses, counselors and public safety officers. The repayment percentage requirements, apparently arrived at with insufficient attention to their potential negative consequences, would have a devastating impact on institutions that enroll low-income students who often require several years in the workforce before they can begin repaying the principal on their student loans. For example, if these requirements were applied to Historically Black Colleges and Universities, over 90% of them would have to close their doors. Representative Robert Andrews (New Jersey - 01) has proposed a definition of gainful employment that would correct the many faults of the definition proposed by the Department ofEducation. He has written to Education Secretary Arne Duncan setting forth the negative consequences resulting from the Department' s definition while proposing an alternative which would remove these negative consequences and still gain the same objectives. Many of the institutions in the for- profit sector support Congressman Andrews' s initiative and we are asking all Members of the Congress to lend their support as well. I have attached a draft of a letter of support which we hope you will use as a model for a letter from you to Secretary Duncan with copies to Speaker Nancy Pelosi and to Congressman Andrews. The University and every institution in the sector would very much appreciate your support. Thank you for your time and consideration of this important issue. [cid:image001 .git] John G. Sperling Founder University ofPhoenix (b)(5) From: Wanner, Sarah Sent: Friday, Aprill6, 2010 9:40AM To: Finley, Steve Subject: RE: Application of GE (b)(5) From: Finley, Steve Sent: Friday, Aprill6, 2010 9:27AM From: Finley Steve To: Wanner, Sarah CC: Date: 4/16/2010 9:45:24 AM Subject: RE: Application ofGE To: Wanner, Sarah; Yuan, Georgia; Jenkins, Harold Subject: RE: Application of GE (b)(5) (b)(S) From: Wanner, Sarah Sent: Friday, April16, 2010 8:45AM To: Fin]ey, Steve; Yuan, Georgia Cc: Jenkins, Harold Subject: RE: Application of GE (b)(S) (b)(S) From: Finley, Steve Sent: Thursday, April 15, 2010 4:28PM To: Wanner, Sarah; Yuan, Georgia Cc: Jenkins, Harold Subject FW: Application ofGE (b)(S) From: Manheimer, Ann Sent: Thursday, April 15, 2010 9:47AM To: Finley, Steve Subject: FW: Application ofGE (b)(5) From: Kolotos, John Sent: Thursday, Aprill5, 2010 9:16AM To: Manheimer, Ann Subject: RE: Application of GE (b)(5) From: Manheimer, Ann Sent: Thursday, Aprill5, 2010 8:52AM To: Kolotos, John Subject FW: Application ofGE (b)(5) From: Pauline Abernathy [mailto:pabernathy@ticas.org] Sent: Thursday, Aprill5, 2010 8:47AM To: Manheimer, Ann Subject: RE: Application of GE Right. My understanding is that HEOA was intended to exempt UofPhoenix'sLiberal Arts BA only. The question is did it only exempt their liberal arts BA or did it incorrectly exempt all Phoenix programs? And, can you also confirm that if a nonprofit is purchased by a for -profit, all of the school's programs would be subject to GE because it is now for-profit, regardless of whether it used to be regionally accredited and was offering a BA in liberal arts before it was purchased? Thank you. From: Manheimer, Ann [ mailto:Ann.Manheimer@ed.gov] Sent: Thursday, April 15,2010 8:41AM To: Pauline Abernathy Cc: Manheimer, Ann Subject: RE: Application of GE Pauline - hang on - I want to double check on an exception for liberal arts programs in the HEOA 2008 From: Manheimer, Ann Sent: Wednesday, Aprill4, 2010 5:00PM To: Pauline Abernathy Subject FW: Application ofGE Here is what l have come up with- is this helpful? Enough info (1 have boiled it down)? GE applies to certificate programs at all schools and to all programs offered at for-profit schools. In the case where a proprietary school buys a nonprofit, the BA programs (which were not previously subject to GE) would now be subject to GE. From: Pauline Abernathy [mailto:pabernathy@ticas.org] Sent Monday, April12, 2010 11:00 AM To: Manheimer, Ann Cc: Debbie Franlde Deanne Loonin Subject: Application ofGE Ann, Per our conversation, it would help to understand to which entities the GE standard currently applies. The confusion appears to stem in part from the provisions added in the HEOA and in part from reported differences among the FSA Handbook, regs and statute. I wrote up the questions and issues based on information from Deanne and Debbie, but any inaccuracies are my own. Thank you! The FSA Handbook, I am told, says in order to be considered an 'institution of higher education' for title IV purposes, an institution has to offer programs no Jess than one year in length, along with being non-profit. Other institutions are in a separate category, as proprietary or vocational institutions. But once the institution is eligible, each individual program may or may not be eligible. Gainful employment pertains solely to program eligibility, not institutional eligibility (we believe). This would suggest that gainful employment would apply to everything at proprietary and vocational colleges, and all sub-degree (less than two year programs) at institutions of higher education. The HEOA added a category that allows a proprietary institution to offer programs leading to a baccalaureate degree in liberal arts if the school previously provided such programs and is regionally accredited. There is no gainful employment requirement here. Questions: *If a proprietary school like Univ. of Phoenix meets the HEOA provision standards, are then none of its programs subject to the GE requirement, or is just their BA in liberal arts not subject to GE? I believe Congress intended the latter but is this how ED interprets it as well? *If a proprietary school buys a nonprofit that has previously offered a BA in liberal arts and is regionally accredited, are all of the proprietary school's programs now exempt from GE? I don' t believe Congress ever intended this to apply to for-profits that purchased a nonprofit, but is this how ED interprets it? For the nonprofit schools, there could be an argument that a general eligibility stamp of approval would flow to all of their programs, even non-degree programs. However, the FSA handbook reportedly states that a school's eligibility does not necessarily extend to all of its programs. The school must ensure that a program is eligible before awarding FSA funds. There is, however, another distinction that may be important. The provisions in 101 (b) state that a non-profit may be an eligible institution of higher education if it provides not less than a one-year program of training to provide students for gainful employment. This section does not say that it must be an eligible program. The same issue arises in the regulations at 34 C.F.R. 600.4. The regs say only that these institutions must provide an educational program, not an eligible educational program. However, the eligible program regulations at 668.8(c) use the term "eligible program" in referring to non-profit institutions of higher education, but do not specify time requirements as is the case for proprietary institutions. Clearly non-profits may offer non-degree programs that by definition must prepare students for gainful employment. This should be sufficient to conclude that the definition of gainful employment would apply here. However, there is some ambiguity because the statute does not specifically say that the program must be "eligible." Does this just mean that they do not have to refer to the definitions in 1088 re: clock hours? One would think that the school cannot qualify to offer non-degree programs based on their eligibility qualifications offering degree programs and so they must independently ensure that each program is eligible. This would mean that if it is a non-degree program at an institution of higher education (meaning a non-profit), the program must be independently eligible and so must prepare students for gainful employment. Is this how ED sees it? Margaret Reiter asked this question in an e-mail to Fred Sellers during the neg reg. In contrast, in order to be an eligible PROPRIETARY institution of higher education, the school must provide an ELIGIBLE program of training to prepare students for gainful employment in a recognized occupation. It is therefore clear that the proprietary institutions must also offer "eligible" programs. These are defined in section 1 088(b). As Margaret pointed out, this section does not explicitly refer back to section 1002. These are mostly time- related categories. Pauline Abernathy Vice President The Institute for College Access & Success www.ticas.org and www.projectonstudentdebt.org We moved! TICAS' main number is now 510.318.7900. My direct line is 510.318.7903. (b)(5) From: Pinley, Steve To: Wanner Sarah Yuan. Georgia Jenkins, Harold CC: Date: 4/16/2010 9:26:36 AM Subject: RE: Applicati on ofGE Steve From: Wanner, Sarah Sent: Friday, April 16, 2010 8:45AM To: Finley, Steve; Yuan, Georgia Cc: Jenkins, Harold Subject: RE: Application of GE (b)(5) From: Finley, Steve Sent: Thursday, April 15, 2010 4:28PM To: Wanner, Sarah; Yuan, Georgia Cc: Jenkins, Harold Subject: FW: Application ofGE (b)(5) (b)(5)
Sent: Thursday, April15, 2010 9:47 To: Finley, Steve Subject: FW: Application ofGE (b)(5) From: Kolotos, John Sent: Thursday, April15, 2010 9:16 To: Manheimer, Ann Subject: RE: Application ofGE (b)(5) From: Manheimer, Ann Sent: Thursday, April15, 2010 8:52AM To: Kolotos, John Subject: FW: Application ofGE (b)(5) From: Pauline Abernathy [mailto:pabernathy@ticas.org] Sent: Thursday, April 15, 2010 8:47AM To: Manheimer, Ann Subject: RE: Application of GE Right. My understanding is that HEOA was intended to exempt UofPhoenix's Liberal Arts BA only. The question is did it only exempt their liberal arts BA or did it incorrectly exempt all Phoenix programs? And, can you also confirm that if a nonprofit is purchased by a for-profit, all of the school's programs would be subject to GE because it is now for-profit, regardless of whether it used to be regi onally accredited and was offering a BA in liberal arts before it was purchased? Thank you. From: Manheimer, Ann [mailto:Ann.Manheimer@ed.gov] Sent: Thursday, April IS, 2010 8:41AM To: Pauline Abernathy Cc: Manheimer, Ann Subject: RE: Application of GE Pauline- hang on- I want to double check on an exception for liberal arts programs in the HEOA 2008 From: Manheimer, Ann Sent: Wednesday, April 14, 2010 5:00PM To: Pauline Abernathy Subject: FW: Application ofGE Here is what I have come up with- is this helpful? Enough info (I have boiled it down)? GE applies to certificate programs at all schools and to all programs offered at for-profit schools. In the case where a proprietary school buys a nonprofit, the BA programs (which were not previously subject to GE) would now be subject to GE. From: Pauline Abernathy [mailto:pabemathy@ticas.org] Sent: Monday, Aprill2, 2010 11:00 AM To: Manheimer, Ann Cc: Debbie Frankle Cochrane; Deanne Loonin Subject Application ofGE Ann, Per our conversation, it would help to understand to which entities the GE standard currently applies. The confusion appears to stem in part from the provisions added in the HEOA and in part from reported differences among the FSA Handbook, regs and statute. I wrote up the questions and issues based on information from Deanne and Debbie, but any inaccuracies are my own. Thank you! The FSAHandbook, I am told, says in order to be considered an 'institution of higher education' for title IV purposes, an institution has to offer programs no less than one year in length, along with being non-profit. Other institutions are in a separate category, as proprietary or vocational institutions. But once the institution is eligible, each individual program may or may not be eligible. Gainful employment pertains solely to program eljgibility, not institutional eligibility (we believe). This would suggest that gainful employment would apply to everything at proprietary and vocational colleges, and all sub-degree (less than two year programs) at institutions of higher education. The HEOA added a category that allows a proprietary institution to offer programs leading to a baccalaureate degree in liberal arts if the school previously provided such programs and is regionally accredited. There is no gainful employment requirement here. Questions: * If a proprietary school like Univ. ofPhoenix meets the HEOA provision standards, are then none of its programs subject to the GE requirement, or is just their BA in liberal arts not subject to GE? I believe Congress intended the latter but is this how ED interprets it as well? * If a proprietary school buys a nonprofit that has previously offered a BA in liberal arts and is regionally accreilited, are all of the proprietary school' s programs now exempt from GE? I don't believe Congress ever intended this to apply to for-profits that purchased a nonprofit, but is this how ED interprets it? For the nonprofit schools, there could be an argument that a general eligibility stamp of approval would flow to all of their programs, even non-degree programs. However, the FSA handbook reportedly states that a school's eligibility does not necessarily extend to all of its programs. The school must ensure that a program is eligible before awarding FSA funds. There is, however, another distinction that may be important. The provisions in 101 (b) state that a non-profit may be an eligible institution of higher education if it provides not less than a one-year program of training to provide students for gainful employment. This section does not say that it must be an eligible program. The same issue arises in the regulations at 34 C.P.R. 600.4. The regs say only that these institutions must provide an educational program, not an eligible educational program. However, the eligible program regulations at 668.8(c) use the term "eligible program" in referring to non-profit institutions of higher education, but do not specifY time requirements as is the case for proprietary institutions. Clearly non-profits may offer non-degree programs that by definition must prepare students for gainful employment. This should be sufficient to conclude that the definition of gainful employment would apply here. However, there is some ambiguity because the statute does not specifically say that the program must be "eligible." Does this just mean that they do not have to refer to the definitions in 1088 re: clock hours? One would think that the school cannot quality to offer non-degree programs based on their eligibility qualifications offering degree programs and so they must independently ensure that each program is eligible. This would mean that if it is a non-degree program at an institution of higher education (meaning a non-profit), the program must be independently eligible and so must prepare students for gainful employment. Is this how ED sees it? Margaret Reiter asked this question in an e-mail to Fred Sellers during the neg reg. In contrast, in order to be an eligible PROPRJET AR Y institution of higher education, the school must provide an ELIGIBLE program of training to prepare students for gainful employment in a recognized occupation. It is therefore clear that the proprietary institutions must also offer "eligible" programs. These are defined in section 1 088(b ). As Margaret pointed out, this section does not explicitly refer back to section 1002. These are mostly time- related categories. Pauline Abernathy Vice President The Institute for College Access & Success www.ticas.org and www.projectonstudentdebt.org We moved! TICAS' main number is now 510.318.7900. My direct line is 510.318.7903. thanks From: Wanner, Sarah Sent: Friday, Aprill6, 2010 9:46AM To: Finley, Steve Subject: RE: Application of GE From: Finley, Steve Sent: Friday, Aprill6, 2010 9:45AM To: Wanner, Sarah Subject: RE: Application of GE (b){5) From: Wanner, Sarah Sent: Friday, April16, 2010 9:40AM To: Finley, Steve Subject: RE: Application of GE From: Finley Steve To: Wanner, Sarah CC: Date: 4/16/2010 9:46:38 AM Subject: RE: Application ofGE (b)(5) From: Finley, Steve Sent: Friday, Aprill6, 2010 9:27AM To: Wanner, Sarah; Yuan, Georgia; Jenkjns, Harold Subject: RE: Application of GE (b)(5) (b)(S) From: Wanner, Sarah Sent Friday, Apri116, 2010 8:45AM To: Finley, Steve; Yuan, Georgia Cc: Jenkins, Harold Subject: RE: Application of GE (b){S) From: Finley, Steve Sent: Thursday, Apri115, 2010 4:28PM To: Wanner, Sarah; Yuan, Georgia Cc: Jenkins, Harold Subject: FW: Application ofGE (b)(5) From: Manheimer, Ann Sent: Thursday, April15, 2010 9:47AM To: Finley, Steve Subject FW: Application ofGE (b)(5) From: Kolotos, John Sent: Thursday, April 15, 2010 9:16AM To: Manheimer, Ann Subject: RE: Application of GE (b)(5) From: Manheimer, Ann Sent: Thursday, April15, 2010 8:52AM To: Kolotos, John Subject: FW: Application ofGE (b)(S) From: Pauline Abernathy [mailto:pabernathy@ticas.org] Sent: Thursday, April 15, 2010 8:47AM To: Manheimer, Ann Subject: RE: Application of GE Right. My understanding is that HEOA was intended to exempt UofPhoenix's Liberal Arts BA only. The question is did it onJy exempt their liberal arts BA or did it incorrectly exempt all Phoenix programs? And, can you also confirm that if a nonprofit is purchased by a for-profit, all of the school's programs would be subject to GE because it is now for-profit, regardless of whether it used to be regionally accredited and was offering a BA in liberal arts before it was purchased? Thank you. From: Manheimer, Ann [mailto:Ann.Manheimer@ed.gov] Sent: Thursday, April15, 2010 8:41AM To: Pauline Abernathy Cc: Manheimer, Ann Subject: RE: Application of GE Pauline - hang on- I want to double check on an exception for liberal arts programs in the HEOA 2008
Sent: Wednesday, April 14, 2010 5:00PM To: Pauline Abernathy Subject: FW: Application ofGE Here is what I have come up with- is this helpful? Enough info (I have boiled it down)? GE applies to certificate programs at all schools and to all programs offered at for-profit schools. In the case where a proprietary school buys a nonprofit, the BA programs (which were not previously subject to GE) would now be subject to GE. From: Pauline Abernathy [mailto:pabernathy@ticas.org] Sent: Monday, April 12, 2010 11:00 AM To: Manheimer, Ann Cc: Debbie FrankJe Cochrane; Deanne Loonin Subject: Application of GE Ann, Per our conversation, it would help to understand to which entities the GE standard currently applies. The confusion appears to stem in part from the provisions added in the HEOA and in part from reported differences among the FSA Handbook, regs and statute. I wrote up the questions and issues based on information from Deanne and Debbie, but any inaccuracies are my own. Thank you! The FSA Handbook, I am told, says in order to be considered an 'institution of higher education' for title IV purposes, an institution has to offer programs no less than one year in length, along with being non-profit. Other institutions are in a separate category, as proprietary or vocational institutions. But once the institution is eligible, each individual program may or may not be eligible. Gainful employment pertains solely to program eligibility, not institutional eligibility (we believe). This would suggest that gainful employment would apply to everything at proprietary and vocational colleges, and all sub-degree (less than two year programs) at institutions of higher education. The HEOA added a category that allows a proprietary institution to offer programs leading to a baccalaureate degree in liberal arts if the school previously provided such programs and is regionally accredited. There is no gainful employment requirement here. Questions: * If a proprietary school like Univ. ofPhoenix meets the HEOA provision standards, are then none of its programs subject to the GE requirement, or is just their BA in liberal arts not subject to GE? I believe Congress intended the latter but is this how ED interprets it as well? * If a proprietary school buys a nonprofit that has previously offered a BA in liberal arts and is regionally accredited, are all of the proprietary school' s programs now exempt from GE? I don' t believe Congress ever intended this to apply to for-profits that purchased a nonprofit, but is this how ED interprets it? For the nonprofit schools, there could be an argument that a general eligibility stamp of approval would flow to all of their programs, even non-degree programs. However, the FSA handbook reportedly states that a school's eligibility does not necessarily extend to al l of its programs. The school must ensure that a program is eligible before awarding FSA funds. There is, however, another distinction that may be important. The provisions in 101(b) state that a non-profit may be an eligible institution of higher education if it provides not less than a one-year program of training to provide students for gainful employment. This section does not say that it must be an eligible program. The same issue arises in the regulations at 34 C.F .R. 600.4. The regs say only that these institutions must provide an educational program, not an eligible educational program. However, the eligible program regulations at 668.8(c) use the term "eligible program" in refening to non-profit institutions of higher education, but do not specify time requirements as is the case for proprietary institutions. Clearly non-profits may offer non-degree programs that by definition must prepare students for gainful employment. This should be sufficient to conclude that the definition of gainful employment would apply here. However, there is some ambiguity because the statute does not specifically say that the program must be "eligible." Does this just mean that they do not have to refer to the definitions in 1088 re: clock hours? One would think that the school cannot qualifY to offer non-degree programs based on their eligibility qualifications offering degree programs and so they must independently ensure that each program is eligible. This would mean that if it is a non-degree program at an institution of higher education (meaning a non-profit), the program must be independently eligible and so must prepare students for gainful employment. Is this how ED sees it? Margaret Reiter asked this question in an e-mai l to Fred Sellers during the neg reg. In contrast, in order to be an eligible PROPRIETARY institution of higher education, the school must provide an ELIGIBLE program of training to prepare students for gainful employment in a recognized occupation. It is therefore clear that the proprietary institutions must also offer "eligible" programs. These are defined in section 1 088(b). As Margaret pointed out, this section does not explicitly refer back to section 1002. These are mostly time- related categories. Pauline Abernathy Vice President The Institute for Coll ege Access & Success www.ticas.org and www.projectonstudentdebt.org We moved! TICAS' main number is now 510.318.7900. My direct line is 510.318.7903. Thanks. From: Wanner, Sarah Sent: Friday, April 16, 2010 11:48 AM To: Finley, Steve Subject: RE: Application of GE (b)(5) From: Finley, Steve Sent: Friday, April16, 2010 9:47AM To: Wanner, Sarah Subject: RE: Application of GE thanks From: Wanner, Sarah Sent: Friday, April16, 2010 9:46AM To: Finley, Steve Subject: RE: Application of GE From: Finley Steve To: Wanner, Sarah CC: Date: 4/16/2010 12:00:28 PM Subject: RE: Application ofGE From: Finley, Steve Sent: Friday, April 16, 2010 9:45AM To: Wanner, Sarah Subject: RE: Application of GE (b)(5) From: Wanner, Sarah Sent: Friday, Apri116, 2010 9:40AM To: Finley, Steve Subject: RE: Application of GE (b)(5) From: Finley, Steve Sent: Friday, Aprill6, 2010 9:27AM To: Wanner, Yuan, Jenkins, Harold Subject: RE: Application of GE (b)(5) (b)(5) Steve From: Wanner, Sarah Sent Friday, Apri1 16, 2010 8:45AM To: Finley, Steve; Yuan, Georgia Cc: Jenkins, Harold Subject: RE: Application of GE (b)(S) From: Finley, Steve Sent: Thursday, April 15, 2010 4:28 PM To: Wanner, Sarah; Yuan, Georgia Cc: Jenkins, Harold Subject: FW: Application ofGE (b)(5) (b)(S) From: Manheimer, Ann Sent: Thursday, Aprill5, 2010 9:47AM To: Finley, Steve Subject: FW: Application ofGE (b)(S) From: Kolotos, John Sent: Thursday, April15, 2010 9:16AM To: Manheimer, Ann Subject: RE: Application of GE (b)(S) From: Manheimer, Ann Sent: Thursday, April15, 2010 8:52AM To: Kolotos, John Subject: FW: Application ofGE (b)(S) From: Pauline Abernathy [mailto:pabemathy@ticas.org] Sent: Thursday, April 15, 2010 8:47AM To: Manheimer, Ann Subject: RE: Application of GE Right. My understanding is that HEOA was intended to exempt UofPhoenix's Liberal Arts BA only. The question is did it only exempt their liberal arts BA or did it incorrectly exempt all Phoenix programs? And, can you also confirm that if a nonprofit is purchased by a for-profit, all of the school's programs would be subject to GE because it is now for-profit, regardless of whether it used to be regionally accredited and was offering a BA in 1 iberal arts before it was purchased? Thank you. From: Manheimer, Ann [mailto:Ann.Manheimer@ed.gov] Sent: Thursday, April 15, 2010 8:41 AM To: Pauline Abernathy Cc: Manheimer, Atm Subject: RE: Application of GE Pauline - hang on- I want to double check on an exception for liberal arts programs in the HEOA 2008
Sent: Wednesday, April14, 2010 5:00PM To: Pauline Abemathy Subject FW: Application ofGE Here is what I have come up with- is this helpful? Enough info (I have boiled it down)? GE applies to certificate programs at all schools and to all programs offered at for-profit schools. In the case where a proprietary school buys a nonprofit, the BA programs (which were not previously subject to GE) would now be subject to GE. From: Pauline Abernathy [mailto:pabemathy@ticas.org] Sent: Monday, April 12, 2010 11:00 AM To: Manheimer, Ann Cc: Debbie FrankJe Cochrane; Deanne Loonin Subject: Application of GE Ann, Per our conversation, it would help to understand to which entities the GE standard currently applies. The confusion appears to stem in part from the provisions added in the HEOA and in part from reported differences among the FSA Handbook, regs and statute. I wrote up the questions and issues based on information from Deanne and Debbie, but any inaccuracies are my own. Thank you! The FSA Handbook, I am told, says in order to be considered an 'institution of higher education' for title N purposes, an institution has to offer programs no less than one year in length, along with being non-profit. Other institutions are in a separate category, as proprietary or vocational institutions. But once the institution is eligible, each individual program may or may not be eligible. Gainful employment pertains solely to program eligibility, not institutional eligibility (we believe). This would suggest that gainful employment would apply to everything at proprietary and vocational colleges, and all sub-degree (less than two year programs) at institutions of higher education. The HEOA added a category that allows a proprietary institution to offer programs leading to a baccalaureate degree in liberal arts if the school previously provided such programs and is regionally accredited. There is no gainful employment requirement here. Questions: *If a proprietary school like Univ. ofPhoenix meets theHEOA provision standards, are then none of its programs subject to the GE requirement, or is just their BA in liberal arts not subject to GE? I believe Congress intended the latter but is this how ED interprets it as well? *If a proprietary school buys a nonprofit that has previously offered a BA in liberal arts and is regionally accredited, are all of the proprietary school' s programs now exempt from GE? I don't believe Congress ever intended this to apply to for-profits that purchased a nonprofit, but is this how ED interprets it? For the nonprofit schools, there could be an argument that a general eligibility stamp of approval would flow to all of their programs, even non-degree programs. However, the FSA handbook reportedly states that a school's eligibility does not necessarily extend to all of its programs. The school must ensure that a program is eligible before awarding FSA funds. There is, however, another distinction that may be important. The provisions in lOl(b) state that a non-profit may be an eligible institution of higher education if it provides not less than a one-year program of training to provide students for gainful employment. This section does not say that it must be an eligible program. The same issue arises in the regulations at 34 C.F .R. 600.4. The regs say only that these institutions must provide an educational program, not an eligible educational program. However, the eligible program regulations at 668.8(c) use the term "eligible program" in referring to non-profit institutions of higher education, but do not specify time requirements as is the case for proprietary institutions. Clearly non-profits may offer non-degree programs that by definition must prepare students for gainful employment. This should be sufficient to conclude that the definition of gainful employment would apply here. However, there is some ambiguity because the statute does not specifically say that the program must be "eligible." Does this just mean that they do not have to refer to the definitions in 1088 re: clock hours? One would think that the school cannot qualifY to offer non-degree programs based on their eligibility qualifications offering degree programs and so they must independently ensure that each program is eligible. This would mean that if it is a non-degree program at an institution of higher education (meaning a non-profit), the program must be independently eligible and so must prepare students for gainful employment. Is this how ED sees it? Margaret Reiter asked this question in an e-mail to Fred Sellers during the neg reg. In contrast, in order to be an eligible PROPRIETARY institution of higher education, the school must provide an ELIGIBLE program of training to prepare students for gainful employment in a recognized occupation. It is therefore clear that the proprietary institutions must also offer "eligible" programs. These are defined in section 1 088(b ). As Margaret pointed out, this section does not explicitly refer back to section l 002. These are mostly time- related categories. Pauline Abernathy Vice President The Institute for College Access & Success www.ticas.org and www.projectonstudentdebt.org We moved! TICAS' main number is now 510.318.7900. My direct line is 510.318.7903. (b)(5) From: Finley Steve To: N.lanheimer Ann CC: Date: 4/16/2010 12:20:52PM Subject: RE: Application of GE l(b)(5) Steve Steve From: Manheimer, Ann Sent: Thursday, April15, 2010 9:47AM To: Finley, Steve Subject: FW: Application ofGE (b)(5) From: Kolotos, John Sent: Thursday, Aprill5, 2010 9:16AM To: Manheimer, Ann Subject: RE: Application of GE (b)(5)
Sent: Thursday, April IS, 2010 8:52AM To: Kolotos, John Subject FW: Application ofGE (b)(5) From: Pauline Abernathy [ mailto:pabernathy@ticas.org] Sent: Thursday, April15, 2010 8:47AM To: Manheimer, Ann Subject: RE: Application of GE Right. My understanding is that HEOA was intended to exempt UofPhoenix's Liberal Arts BA only. The question is did it onJy exempt their liberal arts BA or did it incorrectly exempt all Phoenix programs? And, can you also confirm that if a nonprofit is purchased by a for -profit, all of the school's programs would be subject to GE because it is now for -profit, regardless of whether it used to be regionally accredited and was offering a BA in liberal arts before it was purchased? Thank you. From: Manheimer, Ann [mailto:Ann.Manheimer@ed.gov] Sent: Thursday, April 15, 2010 8:41AM To: Pauline Abernathy Cc: Manheimer, Ann Subject: RE: Application of GE Pauline - hang on- I want to double check on an exception for liberal arts programs in the HEOA 2008 From: Manheimer, Ann Sent: Wednesday, Apri114, 2010 5:00PM To: Pauline Abernathy Subject: FW: Application ofGE Here is what I have come up with- is this helpful? Enough info (I have boiled it down)? GE appljes to certificate programs at all schools and to all programs offered at for-profit schools. In the case where a proprietary school buys a nonprofit, the BA programs (which were not previously subject to GE) would now be subject to GE. From: Pauline Abernathy [mailto:pabemathy@ticas.org] Sent: Monday, April 12, 2010 11:00 AM To: Manheimer, Ann Cc: Debbie Frankie Deanne Loonin Subject: Application ofGE Ann, Per our conversation, it would help to understand to which entities the GE standard currently applies. The confusion appears to stem in part from the provisions added in the HEOA and in part from reported differences among the FSA Handbook, regs and statute. 1 wrote up the questions and issues based on information from Deanne and Debbie, but any inaccuracies are my own. Thank you I The FSA Handbook, I am told, says in order to be considered an 'institution of higher education' for title IV purposes, an institution has to offer programs no less than one year in length, along with being non-profit. Other institutions are in a separate category, as proprietary or vocational institutions. But once the institution is eligible, each individual program may or may not be eligible. Gainful employment pertains solely to program eligibility, not institutional eligibility (we believe). This would suggest that gainful employment would apply to everything at proprietary and vocational colleges, and all sub-degree (less than two year programs) at institutions of higher education. The HEOA added a category that allows a proprietary institution to offer programs leading to a baccalaureate degree in liberal arts if the school previously provided such programs and is regionally accredited. There is no gainful employment requirement here. Questions: * If a proprietary school like Univ. ofPhoenix meets the HEOA provision standards, are then none of its programs subject to the GE requirement, or is just their BA in liberal arts not subject to GE? I believe Congress intended the latter but is this how ED interprets it as well? *If a proprietary school buys a nonprofit that has previously offered a BA in liberal arts and is regionally accredited, are all of the proprietary school' s programs now exempt from GE? I don't believe Congress ever intended this to apply to for-profits that purchased a nonprofit, but is this how ED interprets it? For the nonprofit schools, there could be an argument that a general eligibility stamp of approval would flow to all of their programs, even non-degree programs. However, theFSA handbook reportedly states that a school's eligibility does not necessarily extend to all of its programs. The school must ensure that a program is eligible before awarding FSA funds. There is, however, another distinction that may be important. The provisions in 101 (b) state that a non-profit may be an eligible institution of higher education if it provides not less than a one-year program of training to provide students for gainful employment. This section does not say that it must be an eligible program. The same issue arises in the regulations at 34 C.F.R. 600.4. The regs say only that these institutions must provide an educational program, not an eligible educational program. However, the eligible program regulations at 668.8(c) use the term "eligible program" in referring to non-profit institutions of higher education, but do not specify time requirements as is the case for proprietary institutions. Clearly non-profits may offer non-degree programs that by definition must prepare students for gainful employment. This should be sufficient to conclude that the definition of gainful employment would apply here. However, there is some ambiguity because the statute does not specifically say that the program must be "eligible." Does this just mean that they do not have to refer to the definitions in 1088 re: clock hours? One would think that the school cannot qualify to offer non-degree programs based on their eligibility qualifications offering degree programs and so they must independently ensure that each program is eligible. This would mean that if it is a non-degree program at an institution of higher education (meaning a non-profit), the program must be independently eligible and so must prepare students for gainful employment. Is this how ED sees it? Margaret Reiter asked this question in an e-mail to Fred Sellers during the neg reg. In contrast, in order to be an eligible PROPRIETARY institution of higher education, the school must provide an ELIGIBLE program of training to prepare students for gainful employment in a recognized occupation. It is therefore clear that the proprietary institutions must also offer "eligible" programs. These are defined in section 1 088(b). As Margaret pointed out, this section does not explicitly refer back to section 1002. These are mostly time- related categories. Pauline Abernathy Vice President The Institute for College Access & Success www.ticas.org and www.projectonstudentdebt.org We moved! TICAS' main number is now 510.318.7900. My direct line is 510.318.7903. (b)(S) From: Finley, Steve Sent: Friday, April 16, 2010 9:47AM To: Wanner, Sarah Subject: RE: Application of GE thanks From: Wanner, Sarah Sent: Friday, Aprill6, 2010 9:46AM To: Finley, Steve Subject: RE: Application of GE From: Wanner, Sarah To.: Finley, Steve CC: Date: 4/16/2010 11:48:00 AM Subject: RE: Application ofGE We need to find this out to finalize your points. I will ask. From: Finley, Steve Sent: Friday, Aprill6, 2010 9:45AM To: Wanner, Sarah Subject: RE: Application of GE (b)(5) From: Wanner, Sarah Sent: Friday, Aprill6, 2010 9:40AM To: Finley, Steve Subject: RE: Application of GE (b)(5) From: Finley, Steve Sent: Friday, Aprill6, 2010 9:27AM To: Wanner, Sarah; Yuan, Georgia; Jenkins, Harold Subject: RE: Application of GE (b)(5) (b)(5) Steve From: Wanner, Sarah Sent: Friday, Aprill6, 2010 8:45AM To: Finley, Steve; Yuan, Georgia Cc: Jenkins, Harold Subject: RE: Application of GE (b)(5) (b)(S) From: Finley, Steve Sent: Thursday, April15, 2010 4:28PM To: Wanner, Sarah; Yuan, Georgia Cc: Jenkins, Harold Subject: FW: Application ofGE (b)(5) From: Manheimer, Ann Sent: Thursday, April 15, 2010 9:47AM To: Finley, Steve Subject: FW: Application ofGE (b)(5) From: Kolotos, John Sent: Thursday, Aprill5, 2010 9:16AM To: Manheimer, Ann Subject: RE: Application of GE (b)(5) From: Manheimer, Ann Sent: Thursday, April15, 2010 8:52AM To: Kolotos, John Subject: FW: Application ofGE (b)(5) From: Pauline Abernathy [ mailto:pabernathy@ticas.org] Sent: Thursday, April 15, 2010 8:47AM To: Manheimer, Ann Subject: RE: Application of GE Right. My understanding is that HEOA was intended to exempt UofPhoenix's Liberal Arts BA only. The question is did it only exempt their liberal arts BA or did it incorrectly exempt all Phoenix programs? And, can you also confirm that if a nonprofit is purchased by a for-profit, all of the school's programs would be subject to GE because it is now for-profit, regardless of whether it used to be regionally accredited and was offering a BA in liberal arts before it was purchased? Thank you. From: Manheimer, Ann [mailto:Ann.Manheimer@ed.gov] Sent: Thursday, April15, 2010 8:41AM To: Pauline Abernathy Cc: Manheimer, Ann Subject: RE: Application of GE Pauline - hang on- I want to double check on an exception for liberal arts programs in the HEOA 2008
Sent: Wednesday, April 14, 2010 5:00PM To: Pauline Abemathy Subject: FW: Application ofGE Here is what I have come up with- is this helpful? Enough info (I have boiled it down)? GE applies to certificate programs at all schools and to all programs offered at for-profit schools. In the case where a proprietary school buys a nonprofit, the BA programs (which were not previously subject to GE) would now be subject to GE. From: Pauline Abernathy [mailto:pabemathy@ticas.org] Sent: Monday, April 12, 2010 11:00 AM To: Manheimer, Ann Cc: Debbie Frankie Cochrane; Deanne Loonin Subject: Application of GE Ann, Per our conversation, it would help to understand to which entities the GE standard currently applies. The confusion appears to stem in part from the provisions added in the HEOA and in part from reported differences among the FSA Handbook, regs and statute. I wrote up the questions and issues based on information from Deanne and Debbie, but any inaccuracies are my own. Thank you! The FSA Handbook, I am told, says in order to be considered an 'institution of higher education' for title IV purposes, an institution has to offer programs no less than one year in length, along with being non-profit. Other institutions are in a separate category, as proprietary or vocational institutions. But once the institution is eligible, each individual program may or may not be eligible. Gainful employment pertains solely to program eligibility, not institutional eligibility (we believe). This would suggest that gainful employment would apply to everything at proprietary and vocational colleges, and all sub-degree (less than two year programs) at institutions of higher education. The HEOA added a category that allows a proprietary institution to offer programs leading to a baccalaureate degree in liberal arts if the school previously provided such programs and is regionally accredited. There is no gainful employment requirement here. Questions: *If a proprietary school like Univ. ofPhoenix meets theHEOA provision standards, are then none of its programs subject to the GE requirement, or is just their BA in liberal arts not subject to GE? I believe Congress intended the latter but is this how ED interprets it as well? * If a proprietary school buys a nonprofit that has previously offered a BA in liberal arts and is regionally accredited, are all of the proprietary school' s programs now exempt from GE? I don't believe Congress ever intended this to apply to for-profits that purchased a nonprofit, but is this how ED interprets it? For the nonprofit schools, there could be an argument that a general eligibility stamp of approval would flow to all of their programs, even non-degree programs. However, the FSA handbook reportedly states that a school's eligibility does not necessarily extend to all of its programs. The school must ensure that a program is eligible before awarding FSA funds. There is, however, another distinction that may be important. The provisions in 1 Ol(b) state that a non-profit may be an eligible institution of higher education if it provides not less than a one-year program of training to provide students for gainful employment. This section does not say that it must be an eligible program. The same issue arises in the regulations at 34 C.F .R. 600.4. The regs say only that these institutions must provide an educational program, not an eligible educational program. However, the eligible program regulations at 668.8(c) use the term "eligible program" in referring to non-profit institutions of higher education, but do not specify time requirements as is the case for proprietary institutions. Clearly non-profits may offer non-degree programs that by definition must prepare students for gainful employment. This should be sufficient to conclude that the definition of gainful employment would apply here. However, there is some ambiguity because the statute does not specifically say that the program must be "eligible." Does this just mean that they do not have to refer to the definitions in 1088 re: clock hours? One would think that the school cannot qualify to offer non-degree programs based on their eligibility qualifications offering degree programs and so they must independently ensure that each program is eligible. This would mean that if it is a non-degree program at an institution of higher education (meaning a non-profit), the program must be independently eligible and so must prepare students for gainful employment. Is this how ED sees it? Margaret Reiter asked this question in an e-mail to Fred Sellers during the neg reg. In contrast, in order to be an eligible PROPRIETARY institution of higher education, the school must provide an ELIGIBLE program of training to prepare students for gainful employment in a recognized occupation. It is therefore clear that the proprietary institutions must also offer "eligible" programs. These are defined in section 1 088(b). As Margaret pointed out, this section does not explicitly refer back to section 1002. These are mostly time- related categories. Pauline Abernathy Vice President The Institute for College Access & Success www.ticas.org and www.projectonstudentdebt.org We moved! TICAS' main number is now 510.318.7900. My direct line is 510.318.7903. (b)(5) From: Finley, Steve Sent: Friday, April16, 2010 9:27AM From: Wanner, Sarah To.: Finley, Steve CC: Date: 4/16/2010 9:40:14 AM Subject: RE: Application ofGE To: Wanner, Sarah; Yuan, Georgia; Jenkjns, Harold Subject: RE: Application of GE (b){5) s (b)(5) Steve From: Wanner, Sarah Sent: Friday, Aprill6, 2010 8:45AM To: Finley, Steve; Yuan, Georgia Cc: Jenkins, Harold Subject: RE: Application of GE (b)(5) From: Finley, Steve Sent: Thursday, April 15, 2010 4:28PM To: Wanner, Sarah; Yuan, Georgia Cc: Jenkins, Harold Subject: FW: Application ofGE (b)(S)
Sent: Thursday, April 15, 2010 9:47AM To: Finley, Steve Subject: FW: Application ofGE (b)(S) From: Kolotos, John Sent: Thursday, Aprill5, 2010 9: 16AM To: Manheimer, Ann Subject: RE: Application of GE (b)(S) ) (b)(5) From: Manheimer, Ann Sent: Thursday, April 15, 2010 8:52AM To: Kolotos, John Subject: FW: Application ofGE (b)(5) From: Pauline Abernathy [mailto:pabemathy@ticas.org] Sent: Thursday, April 15, 2010 8:47AM To: Manheimer, Ann Subject: RE: Application of GE Right. My understanding is that HEOA was intended to exempt UofPhoenix's Liberal Arts BA only. The question is did it on1y exempt their liberal arts BA or did it incorrectly exempt all Phoenix programs? And, can you also confirm that if a nonprofit is purchased by a for-profit, all of the school's programs would be subject to GE because it is now for-profit, regardless of whether it used to be regionally accredited and was offering a BA in liberal arts before it was purchased? Thank you. From: Manheimer, Ann [ mailto:Ann.Manheimer@ed.gov] Sent: Thursday, April IS, 2010 8:41AM To: Pauline Abernathy Cc: Manheimer, Ann Subject: RE: Application of GE Pauline- hang on- I want to double check on an exception for liberal arts programs in the HEOA 2008 From: Manheimer, Ann Sent Wednesday, April 14, 2010 5:00PM To: Pauline Abernathy Subject: FW: Application ofGE Here is what I have come up with- is this helpful? Enough info (I have boiled it down)? GE applies to certificate programs at all schools and to all programs offered at for-profit schools. In the case where a proprietary school buys a nonprofit, the BA programs (which were not previously subject to GE) would now be subject to GE. From: Pauline Abernathy [mailto:pabernathy@ticas.org] Sent Monday, April 12, 2010 11:00 AM To: Manheimer, Ann Cc: Debbie Frankle Deanne Loonin Subject: Application ofGE Ann, Per our conversation, it would help to understand to which entities the GE standard currently applies. The confusion appears to stem in part from the provisions added in the HEOA and in part from reported differences among the FSA Handbook, regs and statute. I wrote up the questions and issues based on information from Deanne and Debbie, but any inaccuracies are my own. Thank you! The FSA Handbook, I am told, says in order to be considered an 'institution of higher education' for title IV purposes, an institution has to offer programs no Jess than one year in length, along with being non-profit. Other institutions are in a separate category, as proprietary or vocational institutions. But once the institution is eligible, each individual program may or may not be eligible. Gainful employment pertains solely to program eligibility, not institutional eligibility (we believe). This would suggest that gainful employment would apply to everything at proprietary and vocational colleges, and all sub-degree Qess than two year programs) at institutions ofhigher education. The HEOA added a category that allows a proprietary institution to offer programs leading to a baccalaureate degree in liberal arts if the school previously provided such programs and is regionally accredited. There is no gainful employment requirement here. Questions: * If a proprietary school like Univ. ofPhoenix meets the HEOA provision standards, are then none of its programs subject to the GE requirement, or is just their BA in liberal arts not subject to GE? I believe Congress intended the latter but is this how ED interprets it as well? * If a proprietary school buys a nonprofit that has previously offered a BA in liberal arts and is regionally accredited, are all of the proprietary school' s programs now exempt from GE? I don't believe Congress ever intended this to apply to for-profits that purchased a nonprofit, but is this how ED interprets it? For the nonprofit schools, there could be an argument that a general eligibility stamp of approval would flow to all of their programs, even non-degree programs. However, the FSA handbook reportedly states that a school's eligibility does not necessarily extend to all of its programs. The school must ensure that a program is eligible before awarding FSA funds. There is, however, another distinction that may be important. The provisions in 101(b) state that a non-profit may be an eligible institution of higher education if it provides not less than a one-year program of training to provide students for gainful employment. This section does not say that it must be an eligible program. The same issue arises in the regulations at 34 C.F .R. 600.4. The regs say only that these institutions must provide an educational program, not an eligible educational program. However, the eligible program regulations at 668.8(c) use the term "eligible program" in referring to non-profit institutions of higher education, but do not specify time requirements as is the case for proprietary institutions. Clearly non-profits may offer non-degree programs that by definition must prepare students for gainful employment. This should be sufficient to conclude that the definition of gainful employment would apply here. However, there is some ambiguity because the statute does not specifically say that the program must be "eligible." Does this just mean that they do not have to refer to the definitions in 1088 re: clock hours? One would think that the school cannot qualify to offer non-degree programs based on their eligibility qualifications offering degree programs and so they must independently ensure that each program is eligible. This would mean that if it is a non-degree program at an institution of higher education (meaning a non-profit), the program must be independently eligible and so must prepare students for gainful employment. Is this how ED sees it? Margaret Reiter asked this question in an e-mail to Fred Sellers during the neg reg. In contrast, in order to be an eligible PROPRIETARY institution of higher education, the school must provide an ELIGJBLE program of training to prepare students for gainful employment in a recognized occupation. It is therefore clear that the proprietary institutions must also offer "eligible" programs. These are defined in section 1 088(b ). As Margaret pointed out, this section does not explicitly refer back to section 1002. These are mostly time- related categories. Pauline Abernathy Vice President The Institute for College Access & Success www.ticas.org and www.projectonstudentdebt.org We moved! TICAS' main number is now 510.318.7900. My direct line is 510.318.7903. l(b)(S) From: Finley, Steve Sent: Friday, Aprill6, 2010 9:45AM To: Wanner, Sarah Subject: RE: Application of GE (b)(S) From: Wanner, Sarah Sent: Friday, April16, 2010 9:40AM To: Finley, Steve Subject: RE: Application of GE (b)(S) From: Finley, Steve Sent: Friday, April 16, 2010 9:27AM From: Wanner, Sarah To.: Finley, Steve CC: Date: 4/16/2010 9:46:24 AM Subject: RE: Application ofGE To: Wanner, Sarah; Yuan, Georgia; Jenkins, Harold Subject: RE: Application of GE (b)(5) Steve From: Wanner, Sarah Sent: Friday, Aprill6, 2010 8:45AM To: Finley, Steve; Yuan, Georgia Cc: Jenkins, Harold Subject: RE: Application of GE (b)(5) From: Finley, Steve Sent: Thursday, April 15, 2010 4:28PM To: Wanner, Sarah; Yuan, Georgia Cc: Jenkins, Harold Subject: FW: Application ofGE (b)(5) (b)(S) From: Manheimer, Ann Sent: Thursday, April 15, 2010 9:47AM To: Finley, Steve Subject: FW: Application ofGE (b)(S) From: Kolotos, John Sent: Thursday, April 15, 2010 9:16AM To: Manheimer, Ann Subject: RE: Application of GE (b)(S) From: Manheimer, Ann Sent: Thursday, Aprill5, 2010 8:52AM To: Kolotos, John Subject FW: Application ofGE {b)(S) From: Pauline Abernathy [mailto:pabernathy@ticas.org] Sent: Thursday, April 15, 2010 8:47AM To: Manheimer, Ann Subject: RE: Application ofGE Right. My understanding is that HEOA was intended to exempt UofPhoenix's Liberal Arts BA only. The question is did it only exempt their liberal arts BA or did it incorrectly exempt all Phoenix programs? And, can you also confirm that if a nonprofit is purchased by a for-profit, all of the school's programs would be subject to GE because it is now for-profit, regardless of whether it used to be regionally accredited and was offering a BA in liberal arts before it was purchased? Thank you. From: Manheimer, Ann [ mailto:Ann.Manheimer@ed.gov] Sent: Thursday, April15, 2010 8:41AM To: Pauline Abernathy Cc: Manheimer, Ann Subject: RE: Application of GE Pauline - hang on - I want to double check on an exception for liberal arts programs in the HEOA 2008 From: Manheimer, Ann Sent Wednesday, April 14, 2010 5:00PM To: Pauline Abernathy Subject FW: Application ofGE Here is what I have come up with - is this helpful? Enough info (I have boiled it down)? GE applies to certificate programs at all schools and to all programs offered at for-profit schools. In the case where a proprietary school buys a nonprofit, the BA programs (which were not previously subject to GE) would now be subject to GE. From: Pauline Abernathy [mailto:pabernathy@ticas.org] Sent: Monday, April 12, 2010 11:00 AM To: Manheimer, Ann Cc: Debbie Frankle Cochrane; Deanne Loonin Subject: Application of GE Ann, Per our conversation, it would help to understand to which entities the GE standard currently applies. The confusion appears to stem in part from the provisions added in the HEOA and in part from reported differences among the FSA Handbook, regs and statute. I wrote up the questions and issues based on information from Deanne and Debbie, but any inaccuracies are my own. Thank you! The FSA Handbook, I am told, says in order to be considered an 'institution of higher education' for title IV purposes, an institution has to offer programs no Jess than one year in length, along with being non-profit. Other institutions are in a separate category, as proprietary or vocational institutions. But once the institution is eligible, each individual program may or may not be eligible. Gainful employment pertains solely to program eligibility, not institutional eligibility (we believe). This would suggest that gainful employment would apply to everything at proprietary and vocational colleges, and all sub-degree (less than two year programs) at institutions of higher education. The HEOA added a category that allows a proprietary institution to offer programs leading to a baccalaureate degree in liberal arts if the school previously provided such programs and is regionally accredited. There is no gainful employment requirement here. Questions: *If a proprietary school like Univ. of Phoenix meets the HEOA provision standards, are then none of its programs subject to the GE requirement, or is just their BA in liberal arts not subject to GE? I believe Congress intended the latter but is this how ED interprets it as well? * If a proprietary school buys a nonprofit that has previously offered a BA in liberal arts and is regionally accredited, are all of the proprietary school's programs now exempt from GE? I don't believe Congress ever intended this to apply to for-profits that purchased a nonprofit, but is this how ED interprets it? For the nonprofit schools, there could be an argument that a general eligibility stamp of approval would .flow to all of their programs, even non-degree programs. However, the FSA handbook reportedly states that a school's eligibility does not necessarily extend to all of its programs. The school must ensure that a program is eligible before awarding FSA funds. There is, however, another distinction that may be important. The provisions in 101(b) state that a non-profit may be an eligible institution of higher education if it provides not less than a one-year program of training to provide students for gainful employment. This section does not say that it must be an eligible program. The same issue arises in the regulations at 34 C.F.R. 600.4. The regs say only that these institutions must provide an educational program, not an eligible educational program. However, the eligible program regulations at 668.8(c) use the term "eligible program" in referring to non-profit institutions of higher education, but do not specify time requirements as is the case for proprietary institutions. Clearly non-profits may offer non-degree programs that by definition must prepare students for gainful employment. This should be sufficient to conclude that the definition of gainful employment would apply here. However, there is some ambiguity because the statute does not specifically say that the program must be "eligible." Does this just mean that they do not have to refer to the definitions in 1088 re: clock hours? One would think that the school cannot qualify to offer non-degree programs based on their eligibility qualifications offering degree programs and so they must independently ensure that each program is eligible. This would mean that if it is a non-degree program at an institution of higher education (meaning a non-profit), the program must be independently eligible and so must prepare students for gainful employment. Is this how ED sees it? Margaret Reiter asked this question in an e-mail to Fred Sellers during the neg reg. In contrast, in order to be an eligible PROPRIETARY institution of higher education, the school must provide an ELIGIBLE program of training to prepare students for gainful employment in a recognized occupation. It is therefore clear that the proprietary institutions must also offer "eligible" programs. These are defined in section 1 088(b). As Margaret pointed out, this section does not explicitly refer back to section 1002. These are mostly time- related categories. Pauline Abernathy Vice President The Institute for College Access & Success www.ticas.org and www.projectonstudentdebt.org We moved! TICAS' main number is now 510.318.7900. My direct line is 510.318.7903. (b)(5) From: Finley, Steve Sent: Thursday, April 15, 2010 4:28PM To: Wanner, S a r a h ~ Yuan, Georgia Cc: Jenkins, Harold Subject FW: Application ofGE (b)(5) From: Wanner Sarah To: Finlev, Steve . Yuan. Georgia CC: Jenkins. Harold Date: 4/ 16/2010 8:44:52 AM Sub.iect: RE: Application ofGE (b)(5) From: Manheimer, Ann Sent: Thursday, April 15, 201 09:47AM To: Finley, Steve Subject: FW: Application of GE (b)(5) From: Kolotos, John Sent: Thursday, April15, 201 0 9:16AM To: Manheimer, Ann Subject RE: Application of GE (b)(5) From: Manheimer, Ann Sent: Thursday, April 15, 201 08:52AM To: Kolotos, John Subject: FW: Application of GE From: Pauline Abernathy [mailto:pabernathy@ticas.org] Sent: Thursday, April 15, 2010 8:47AM To: Manheimer, Ann Subject: RE: Application of GE Right. My understanding is that HEOA was intended to exempt UofPhoenix's Liberal Arts BA only. The question is did it only exempt their liberal arts BA or did it incorrectly exempt all Phoenix programs? And, can you also confirm that if a nonprofit is purchased by a for-profit, all of the school's programs would be subject to GE because it is now for-profit, regardJess of whether it used to be regionally accredited and was offering a BA in liberal arts before it was purchased? Thank you. From: Manheimer, Ann [mailto:Ann.Manheimer@ed.gov] Sent: Thursday, April IS, 2010 8:41AM To: Pauline Abernathy Cc: Manheimer, Ann Subject: RE: Application of GE Pauline - hang on- I want to double check on an exception for liberal arts programs in the HEOA 2008 From: Manheimer, Ann Sent: Wednesday, April 14, 2010 5:00PM To: Pauline Abernathy Subject: FW: Application ofGE Here is what I have come up with- is this helpful? Enough info (I have boiled it down)? GE applies to certificate programs at all schools and to all programs offered at for-profit schools. In the case where a proprietary school buys a nonprofit, the BA programs (which were not previously subject to GE) would now be subject to GE. From: Pauline Abernathy [mailto:pabernathy@ticas.org] Sent Monday, April 12, 2010 11:00 AM To: Manheimer, Ann Cc: Debbie Frankie Cochrane; Deanne Loonin Subject Application of GE Ann, Per our conversation, it would help to understand to which entities the GE standard currently applies. The confusion appears to stem in part from the provisions added in the HEOA and in part from reported differences among the FSA Handbook, regs and statute. I wrote up the questions and issues based on information from Deanne and Debbie, but any inaccuracies are my own. Thank you! The FSA Handbook, I am told, says in order to be considered an 'institution of higher education' for title IV purposes, an institution has to offer programs no less than one year in Iengtl1, along with being non-profit. Other institutions are in a separate category, as proprietary or vocational institutions. But once the institution is eligible, each individual program may or may not be eligible. Gainful employment pertains solely to program eligibility, not institutional eligibility (we believe). This would suggest that gainful employment would apply to everything at proprietary and vocational colleges, and all sub-degree (less than two year programs) at institutions of higher education. The HEOA added a category that allows a proprietary institution to offer programs leading to a baccalaureate degree in liberal arts if the school previously provided such programs and is regionally accredited. There is no gainful employment requirement here. Questions: * If a proprietary school like Univ. ofPhoenix meets the HEOA provision standards, are then none of its programs subject to the GE requirement, or is just their BA in liberal arts not subject to GE? I believe Congress intended the latter but is this how ED interprets it as well? * If a proprietary school buys a nonprofit that has previously offered a BA in liberal arts and is regionally accredited, are all of the proprietary school' s programs now exempt from GE? I don't believe Congress ever intended this to apply to for-profits that purchased a nonprofit, but is this how ED interprets it? For the nonprofit schools, there could be an argument that a general eligibility stamp of approval would flow to all of their programs, even non-degree programs. However, the FSA handbook reportedly states that a school's eligibility does not necessarily extend to all of its programs. The school must ensure tl1at a program is eligible before awarding FSA funds. There is, however, another distinction that may be important. The provisions in lOl(b) state that a non-profit may be an eligible institution of higher education if it provides not less than a one-year program of training to provide students for gainful employment. This section does not say that it must be an eligible program. The same issue arises in the regulations at 34 C.F .R. 600.4. The regs say only that these institutions must provide an educational program, not an eligible educational program. However, the eligible program regulations at 668.8(c) use the term "eligible program" in referring to non-profit institutions of higher education, but do not specify time requirements as is the case for proprietary institutions. Clearly non-profits may offer non-degree programs that by definition must prepare students for gainful employment. This should be sufficient to conclude that the definition of gainful employment would apply here. However, there is some ambiguity because the statute does not specifically say that the program must be "eligible." Does this just mean that they do not have to refer to the definitions in 1088 re: clock hours? One would think that the school cannot qualifY to offer non-degree programs based on their eligibility qualifications offering degree programs and so they must independently ensure that each program is eligible. This would mean that if it is a non-degree program at an institution of higher education (meaning a non-profit), the program must be independently eligible and so must prepare students for gainful employment. Is this how ED sees it? Margaret Reiter asked this question in an e-mail to Fred Sellers during the neg reg. In contrast, in order to be an eligible PROPRIETARY institution of higher education, the school must provide an ELIGIBLE program of training to prepare students for gainful employment in a recognized occupation. It 1s therefore clear that the proprietary institutions must also offer "el1gible" programs. These are defined in section 1088(b ). As Margaret pointed out, this section does not explicitly refer back to section 1002. These are mostly time- related categories. Pauline Abernathy Vice President The Institute for College Access & Success www.ticas.org and www.projectonstudentdebt.org We moved! TICAS' mainnumberisnow 510.318.7900. My direct line is 510.318.7903. (b)(5) From: Finley, Steve Sent: Friday, April16, 2010 12:21 PM To: Manheimer, Ann Subject: RE: Application of GE (b)(5) From: Manheimer, Ann To.: Finley, Steve CC: Date: 4/20/2010 9:58:40 AM Subject: RE: Application ofGE (b)(5) Steve Steve From: Manheimer, Ann Sent: Thursday, April15, 2010 9:47AM To: Finley, Steve Subject: FW: Application ofGE (b)( 5) From: Kolotos, John Sent: Thursday, April15, 2010 9:16AM To: Manheimer, Ann Subject: RE: Application of GE (b)(5) From: Manheimer, Ann Sent: Thursday, April 15, 2010 8:52AM To: Kolotos, John Subject: FW: Application ofGE (b)(5) From: Pauline Abernathy [mailto:pabernathy@ticas.org] Sent: Thursday, April 15, 2010 8:47AM To: Manheimer, Ann Subject: RE: Application of GE Right. My understanding is that HEOA was intended to exempt UofPhoenix's Liberal Arts BA only. The question is did it onJy exempt their liberal arts BA or did it incorrectly exempt all Phoenix programs? And, can you also confirm that if a nonprofit is purchased by a for-profit, all of the school's programs would be subject to GE because it is now for-profit, regardless of whether it used to be regionally accredited and was offering a BA in liberal arts before it was purchased? Thank you. From: Manheimer, Ann [mailto:Ann.Manheimer@ed.gov] Sent: Thursday, April15, 2010 8:41AM To: Pauline Abernathy Cc: Manheimer, Ann Subject: RE: Application ofGE Pauline - hang on- I want to double check on an exception for liberal arts programs in the HEOA 2008 From: Manheimer, Ann Sent: Wednesday, April 14, 2010 5:00PM To: Pauline Abernathy Subject: FW: Application ofGE Here is what I have come up with- is this helpful? Enough info (I have boiled it down)? GE applies to certificate programs at all schools and to all programs offered at for-profit schools. In the case where a proprietary school buys a nonprofit, the BA programs (which were not previously subject to GE) would now be subject to GE. From: Pauline Abernathy [mailto:pabernathy@ticas.org] Sent: Monday, April 12, 2010 11:00 AM To: Manheimer, Ann Cc: Debbie Frank:le Deanne Loonin Subject: Application ofGE Ann, Per our conversation, it would help to understand to which entities the GE standard currently applies. The confusion appears to stem in part from the provisions added in the HEOA and in part from reported differences among the FSA Handbook, regs and statute. 1 wrote up the questions and issues based on infonnation from Deanne and Debbie, but any inaccuracies are my own. Thank you! The FSA Handbook, I am told, says in order to be considered an 'institution of higher education' for title IV purposes, an institution has to offer programs no less than one year in length, along with being non-profit Other institutions are in a separate category, as proprietary or vocational institutions. But once the institution is eligible, each individual program may or may not be eligible. Gainful employment pertains solely to program eligibility, not institutional eligibility (we believe). This would suggest that gainful employment would apply to everything at proprietary and vocational colleges, and all sub-degree (less than two year programs) at institutions of higher education. The HEOA added a category that allows a proprietary institution to offer programs leading to a baccalaureate degree in liberal arts if the school previously provided such programs and is regionally accredited. There is no gainful employment requirement here. Questions: * If a proprietary school like Univ. ofPhoenix meets the HEOA provision standards, are then none of its programs subject to the GE requirement, or is just their BA in liberal arts not subject to GE? I believe Congress intended the latter but is this how ED interprets it as well? * If a proprietary school buys a nonprofit that has previously offered a BA in liberal arts and is regionally accredited, are all of the proprietary school' s programs now exempt from GE? I don' t believe Congress ever intended this to apply to for-profits that purchased a nonprofit, but is this how ED interprets it? For the nonprofit schools, there could be an argument that a general eligibility stamp of approval would flow to all of their programs, even non-degree programs. However, the FSA handbook reportedly states that a school's eligibility does not necessarily extend to all of its programs. The school must ensure that a program is eligible before awarding FSA funds. There is, however, another distinction that may be important. The provisions in lOl(b) state that a non-profit may be an eligible institution of higher education if it provides not less than a one-year program of training to provide students for gainful employment. This section does not say that it must be an eligible program. The same issue arises in the regulations at 34 C.F.R. 600.4. The regs say only that these institutions must provide an educational program, not an eligible educational program. However, the eligible program regulations at 668.8( c) use the term "eligible program" in refening to non-profit institutions of higher education, but do not specifY time requirements as is the case for proprietary institutions. Clearly non-profits may offer non-degree programs that by definition must prepare students for gainful employment. This should be sufficient to conclude that the definition of gainful employment would apply here. However, there is some ambiguity because the statute does not specifically say that the program must be "eligible." Does this just mean that they do not have to refer to the definitions in 1088 re: clock hours? One would think that the school cannot qualifY to offer non-degree programs based on their eligibility qualifications offering degree programs and so they must independently ensure that each program is eligible. This would mean that if it is a non-degree program at an institution of higher education (meaning a non-profit), the program must be independently eligible and so must prepare students for gainful employment. Is this how ED sees it? Margaret Reiter asked this question in an e-mail to Fred Sellers during the neg reg. In contrast, in order to be an eligible PROPRIETARY institution of higher education, the school must provide an ELIGIBLE program of training to prepare students for gainful employment in a recognized occupation. It is therefore clear that the proprietary institutions must also offer "eligible" programs. These are defined in section 1 088(b). As Margaret pointed out, this section does not explicitly refer back to section 1002. These are mostly time- related categories. Pauline Abernathy Vice President The Institute for College Access & Success www.ticas.org and www.projectonstudentdebt.org We moved! TICAS' main number is now 510.318.7900. My direct line is 510.318.7903. From: Finley Steve To: Woodward, Jennifer Wolff Russell CC: Date: 5/29/2009 1:11:06 PM Sub.iect: RE: CONFERENCE CALL FOR ANALYSTS and INVESTORS with Bob Shireman (b)(5) -----Origi nat Message----- From: Woodward, Jennifer Sent: Friday, May 29, 2009 1:04PM To: Finley, Steve; Jenkins, Harold; Wolff, Russell Cc: Marinucci, Fred Subject: RE: CONFERENCE CALL FOR ANALYSTS and INVESTORS with Bob Shireman (b)(5) From: Finley, Steve Sent: Friday, May 29, 2009 11:27 AM To: Jenkins, Harold; Woodward, Jennifer; Wolff, Russell Cc: Marinucci, Fred Subject: RE: CONFERENCE CALL FOR ANALYSTS and INVESTORS with Bob Shireman glad you were already in the loop. -----Origi nat Message----- From: Jenkins, Harold Sent: Friday, May 29, 2009 11:23 AM To: Finley, Steve; Woodward, Jennifer; Wolff, Russell Cc: Marinucci, Fred Subject: RE: CONFERENCE CALL FOR ANALYSTS and INVESTORS with Bob Shireman Fred and I will be there. From: Finley, Steve Sent: Friday, May 29, 2009 11:21 AM To: Jenkins, Harold; Woodward, Jennifer; Wolff, Russell Subject: CONFERENCE CALL FOR ANALYSTS and INVESTORS with Bob Shireman In case you have not heard about this, I just found out that ED is holding a conference calJ for the investment community this afternoon to discuss the upcoming negotiated rulemaking --- The Department ofEducation announced a conference call at 12:30 ET tomorrow, Friday, May 29, to discuss the recently announced upcoming negotiated rulemaking sessions. Please find the details below: **CONFERENCE CALL FOR ANALYSTS and INVESTORS: UPCOMING HIGHER EDUCATION RULEMAKING SESSIONS** The U.S. Department of Education' s Office ofPostsecondary Education published a notice in the Federal Register on Tuesday, May 26th regarding three upcoming negotiated rulemaking sessions and forums. The Department will host a conference call for analysts and investors who monitor the career college and education industry on Friday, May 29th at 12:30 PMET. Deputy Undersecretary Robert Shireman will discuss the purpose and nature of these sessions. We invite you or a representative to participate in this call. CALL DATE: Friday, May 29, 2009 CALL TIME: 12:30PMET CALL INSTRUCTIONS: Dial-in: 888-469-0789 Passcode: 4732472 We recommend dialing in a few minutes beforehand to sign in with the operator. You can read more about the issues that the upcoming rulemaking sessions will address in the Federal Register: http://edocket.access.gpo.gov/2009/E9-12092.htm From: Macias, Wendy [mailto:Wendy.Macias@ed.gov] Sent Friday, May 29, 2009 10:54 AM To: Yang, Bruno (Annalex Capital) Subject: RE: email distribution list Mr. Yang, I'm not sure what list you are referring to. If you can provide me with a little more specific1ty I can track it down and have you added. Thanks, Wendy From: Yang, Bruno (Annalex Capital) [byang@annalexcap.com] Sent: Friday, May 29, 2009 9:47 AM To: Mac1as, Wendy Subject: email distribution ljst Wendy, I would like to get on the postsecondary DOE email distribution list,? Can you put the following people on the list? byang@annalexcap.com jyang@annalexcap.com Thank you for your help. Regards, Bruno Annalex Capital Management 1666 Fifth Avenue I 27th Floor I New York, NY 10103 I phone: 212-708-46421 email: byang@annalexcap.com The information contained in this communication is confidential, may be subject to legal privilege, and is intended only for the individual named. If you are not the named addressee, please notify the sender immediately and delete this email from your system. The views expressed in this email are the views of the sender only. Outgoing and incoming electronic communications to this address are electronically archived and subject to review and/or disclosure to someone other than the recipient. The information contained in this communication is confidential, may be subject to legal privilege, and is intended only for the individual named. If you are not the named addressee, please notify the sender immediately and delete this email from your system. The views expressed in this email are the views of the sender only. Outgoing and incoming electronic communications to this address are electronically archived and subject to review and/or disclosure to someone other than the recipient. From: Yuan Georgia To: Shireman. Bob Jenkins. Harold CC: Date: 2/5/201 o 5:35:34 PM Sub.iect: RE: CONFIDENTIAL attorney communication From: Shireman, Bob Sent: Friday, February 05, 2010 4:29PM To: Jenkins, Harold; Yuan, Georgia Subject CONFIDENTIAL attorney communication Harold, Georgia: (b)(5) -Bob Robert Shireman, Deputy Undersecretary U.S. Department ofEducation 400 Maryland Ave., S.W. Room 7E310 Washington, D.C. 20202 (202) 260-0101 Fax: 202-205-0063 bob .shireman@ed.gov From: Shireman Bob To: Yum Georgia Jenkins. Harold CC: Date: 2/1 9/2010 10:06:08 PM Sub,iect: RE: CONFIDENTIAL attorney communication (b)(5) From: Shireman, Bob Sent: Friday, February 05, 2010 4:29PM To: Jenkins, Harold; Yuan, Georgia Subject: CONFIDENTIAL attorney communication (b)(5) (b)(5) -Bob Robert Shireman, Deputy Undersecretary U.S. Department ofEducation 400 Maryland Ave., S.W. Room 7E310 Washington, D.C. 20202 (202) 260-0101 Fax: 202-205-0063 bob .shireman@ed.gov From: Jenkins, Harold To: Shireman. Bob Yuan Georgia CC: Date: 2/20/2010 11:42:40 AM Sub.iect: RE: CONFIDENTIAL attorney communication From: Shireman, Bob Sent: Friday, February 19, 2010 8:06PM To: Yuan, Georgia; Jenkins, Harold Subject: RE: CONFIDENTIAL attorney communication (b)(S) From: Shireman, Bob Sent: Friday, February 05, 2010 4:29PM To: Jenkins, Harold; Yuan, Georgia Subject: CONFIDENTIAL attorney communication (b)(S) (b)(S) -Bob Robert Shireman, Deputy Undersecretary U.S. Department ofEducation 400 Maryland Ave., S.W. Room 7E310 Washington, D.C. 20202 (202) 260-0101 Fax: 202-205-0063 bob.shireman@ed.gov From: Yuan Georgia To: Minor, Robin CC: Date: 9/7/2010 3:59:20 PM Subject: RE: Confidential Memorandum on l(b)(5) l<b)(5) I L__ ______________ ____J (b)(5) Georgia -----Original Message----- From: Minor, Robin Sent Tuesday, September 07, 2010 9:10AM To: Yuan, Georgia Subject: FW: Confidential Memorandum onl(b)(5) l<b)(5) I ,_ ______________ _, (b)(5) Robm -----Original Message----- From: Holland, Linda Sent: Tuesday, September 07, 2010 8:48AM To: Minor, Robin Subject: FW: Confidential Memorandum onl(b)(5) ~ 5 : \ ~ ~. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~ Re: Apollo meeting ... -----Original Message----- From: Yuan, Georgia Sent Friday, September 03, 2010 5:33PM To: Holland, Linda Subject: FW: Confidential Memorandum on meetings during the period between the publication of proposed rules and final rules (b)(S) Thanks, Georgia From: Yuan, Georgia Sent: Wednesday, August 11, 2010 4:25PM To: Rose, Charlie; Weiss, Joanne; Kanter, Martha; Kvaal, James; Miller, Tony; McFadden, Elizabeth; Gomez, Gabriella; Ochoa, Eduardo; Bergeron, David; Martin, Carmel Cc: Arsenault, Leigh; Adams, Kristen; Miceli, Julie
[lli}[] (b)(S) (b)(5) Georgia Georgia Yuan Deputy General Counsel Postsecondary and Regulatory Service LBJ 6E341 202-401-6399 From: Chesley Susan To: Bergerm David Kvaal James Kolotos John Sellers Fred CC: Madzelan Dan Yuan, Georgia Finley. Steve Date: 8/14/2010 638:22 PM Subject: RE: Data request related to repayment rate (b)(5) From: Bergeron, David Sent: Saturday, August 14, 2010 4:26PM To: Chesley, Susan; Kvaal, James; Kolotos, John; Sellers, Fred Cc: Madzelan, Dan; Yuan, Georgia; Finley, Steve Subject: FW: Data request related to repayment rate (b){5) Thanks! David From: Kelly Bozarth [Kelly.Bozarth@strayer.edu] Sent Saturday, August 14, 2010 4:24PM To: Bergeron, David Subject: Data request related to repayment rate Dave, Thank you for your time on the call today. Per your request, I'm forwarding this data request to your attention. We are requesting the following items to assist us in reconstructing the published rate repayment calculation. Please contact me with any questions regarding this request. 1. Please confirm the date ranges used in the FY09 calculation * Numerator: repayments during 10/1/08-9/30/09 *Denominator: loans entering repayment 10/1/04-3/31/08 1. Numerator: Please provide the Date Entered Repayment (DER001) reports as of October 1, 2008 and as of September 30, 2009 so that we can calculate the RPL using the same reports used in the Department's calculation. These reports are not available at this point in time via NSLDS. 1. Denominator: Please provide the data or reports used to calculate the denominator in the published calculation. When we pull the School Cohort Default Rate History (DRC 035) reports for the last four federal fiscal years, we calculate a different denominator (even after removing in-school deferments). l. Repayment Rate excluding consolidations- per your suggestion, please provide our repayment rate calculation excluding the impact of all consolidation loans. This will help us reconcile our pre-consolidation calculations. 1. Infonnation on consolidated loans *The percentage of consolidated loans with one vs multiple consolidations *The repayment detail of consolidation loans (showing repayments by consolidated loan, ideally by student) 1. Consolidation Loan Question: Please confinn that the numerator of the published calculation includes the OOPB of all underlying loans that were subsequently consolidated. In our analysis, we found it difficult to isolate each underlying loan for a student that was subsequently consolidated. Given the significant impact to our calculation, please provide the detail on consolidation repayments: a. Please provide data that would allow us to verify that the OOPB's of all underlying loans were included in the numerator when a repayment was made b. Specifically, please provide (1) the list of consolidated loans by student name, (2) reduced principle payments (RPL) on these loans for the period measured, and (3) the OOPB of the original loan added back to the numerator related to these RPL' s. Please contact me directly, or feel free to have your team contact me directly, if we can provide further clarifications on these requests. We appreciate your attention to this request. Regards, Kelly Kelly Bozarth Strayer Education, Inc. SVP & Corporate Controller Direct: 703-248-6775 Mobile: 571-289-1457 Kelly .Bozarth@strayer. edu From: Finley Steve To: Chesly. Susan Bergeron. David Kvaal, James Kolotos John Sellers, Fred CC: Madzelan Dan Yuan, Georgia Date: 8/14/2010 8:11:48 PM Subject: RE: Data request related to repayment rate (b)(S) From: Chesley, Susan Sent: Saturday, August 14, 2010 6:38PM To: Bergeron, David; K vaal, James; Kolotos, John; Sellers, Fred Cc: Madzelan, Dan; Yuan, Georgia; Finley, Steve Subject: RE: Data request related to repayment rate (b)(S) From: Bergeron, David Sent: Saturday, August 14, 2010 4:26PM To: Chesley, Susan; Kvaal, James; Kolotos, John; Sellers, Fred Cc: Madzelan, Dan; Yuan, Georgia; Finley, Steve Subject: FW: Data request related to repayment rate (b)(S) (b)(5) Thanks! David From: Kelly Bozarth [Kelly.Bozarth@strayer.edu] Sent: Saturday, August 14, 2010 4:24PM To: Bergeron, David Subject: Data request related to repayment rate Dave, Thank you for your time on the call today. Per your request, I'm fOiwarding this data request to your attention. We are requesting the following items to assist us in reconstructing the published rate repayment calculation. Please contact me with any questions regarding this request. 1. Please confirm the date ranges used in the FY09 calculation * Numerator: repayments during 1 0/1/08-9/30/09 * Denominator: loans entering repayment 10/1/04-3/31/08 1. Numerator: Please provide the Date Entered Repayment (DEROO!) reports as of October 1, 2008 and as of September 30, 2009 so that we can calculate the RPL using the same reports used in the Department' s calculation. These reports are not available at this point in time via NSLDS. 1. Denominator: Please provide the data or reports used to calculate the denominator in the published calculation. When we pull the School Cohort Default Rate History (DRC 03 5) reports for the last four federal fiscal years, we calculate a different denominator (even after removing in-school deferments). 1. Repayment Rate excluding consolidations- per your suggestion, please provide our repayment rate calculation excluding the impact of all consolidation loans. This will help us reconcile our pre-consolidation calculations. 1. Information on consolidated loans * The percentage of consolidated loans with one vs multiple consolidations *The repayment detail of consolidation loans (showing repayments by consolidated loan, ideally by student) 1. Consolidation Loan Question: Please confirm that the numerator of the published calculation includes the OOPB of all underlying loans that were subsequently consolidated. In our analysis, we found it difficult to isolate each underlying loan for a student that was subsequently consolidated. Given the significant impact to our calculation, please provide the detail on consolidation repayments: a. Please provide data that would allow us to verify that the OOPB' s of all underlying loans were included in the numerator when a repayment was made b. Specifically, please provide (1) the list of consolidated loans by student name, (2) reduced principle payments (RPL) on these loans for the period measured, and (3) the OOPB of the original loan added back to the numerator related to these RPL' s. Please contact me directly, or feel free to have your team contact me directly, if we can provide further clarifications on these requests. We appreciate your attention to this request. Regards, Kelly Kelly Bozarth Strayer Education, Inc. SVP & Corporate Controller Direct: 703-248-6775 Mobile: 571-289-1457 Kelly.Bozarth@strayer.edu (b)(5) Martha From: Cunningham, Peter Sent: Thursday, May 06, 2010 5:51PM From: Kanter, Martha To.: Cunningham,Peter CC: Yuan. Georgia Date: 5/6/2010 11 :33:54PM Subject: RE: devry speech To: Hoff, David; Whitman, David; Martin, Carmel ; Kanter, Martha; Shireman, Bob; Gomez, Gabriella Cc: Rogers, Margot; MilJer, Tony; Rose, Charlie Subject: devry speech (b)(5) Peter Cunningham Assistant Secretary for Communications and Outreach U S. Department ofEducation peter.cunningham@ed.gov 202-401-2563 (office) 202-230-2404 (cell) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(S) From: Rogers, Margot Sent: Monday, May 10, 2010 1:28PM From: Qmningham, Peter To: Rogers Margot Rose, Charlie Gomez. Gabriella Martin Cannel Kanter. Martha Shireman. Bob Miller Tony Yuan. Georgia CC: Date: 5/10/2010 2:28:04 PM Subject: RE: devty speech To: Rose, Charlie; Gomez, Gabriella; Martin, Cannel; Cunningham, Peter; Hoff, David; Whitman, David; Kanter, Martha; Shireman, Bob Cc: Miller, Tony Subject: Re: devty speech (b)(S) From: Rose, Charlie To: Gomez, Gabriella; Martin, Carmel; Cunningham, Peter; Hoff, David; Whitman, David; Kanter, Martha; Shireman, Bob Cc: Rogers, Margot; Miller, Tony Sent Mon May 10 12:18:38 2010 Subject: Re: devty speech (b)(S) Charlie Sent using BlackBerry From: Gomez, Gabriella To: Martin, Carmel ; Cunningham, Peter; Hoff, David; Whitman, David; Kanter, Martha; Shireman, Bob Cc: Rogers, Margot; Miller, Tony; Rose, Charlie Sent: MonMay 1012:16:55 2010 Subject: Re: devty speech (b)(S) Gabriella Gomez, Assistant Secretary Office ofLegislation and Congressional Affairs U.S. Department ofEducation (202) 401-0020 From: Martin, Carmel To: Cunningham, Peter; Hoff, David; Whitman, David; Kanter, Martha; Shireman, Bob; Gomez, Gabriella Cc: Rogers, Margot; Miller, Tony; Rose, Charlie Sent: MonMay 1012:03:312010 Subject: RE: devty speech (b)(S) (b)(5) From: Cunningham, Peter Sent: Thursday, May 06, 2010 5:52PM To: Hoff, David; Whitman, David; Martin, Carmel; Kanter, Martha; Shireman, Bob; Gomez, Gabriella Cc: Rogers, Margot; Miller, Tony; Rose, Charlie Subject: devry speech (b}(5) << File: Devry.doc >> Peter Cunningham Assistant Secretary for Communications and Outreach U. S. Department of Education peter.cunningham@ed.gov 202-401-2563 (office) 202-230-2404 (cell) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b){S) From: Bergeron, David From: Adams, Kristen To: Bergeron. David Arsenault. Leigh Yuan Georgia Kvaaf, .Tames Smith Kathleen CC: Date: 9/29/2010 5:08:32 PM Subject: RE: draft list of invitees Sent Wednesday, September 29, 2010 8:30AM To: Arsenault, Leigh; Yuan, Georgia; Adams, Kristen; K vaal, James; Smith, Kathleen Subject: RE: draft list of invitees l(b)(S) From: Arsenault, Leigh Sent: Tuesday, September 28, 2010 3:32 PM To: Bergeron, David; Yuan, Georgia; Adams, Kristen; Kvaal, James; Smith, Kathleen Subject: draft list of invitees (b)(S) Thanks! Leigh (b)(5) DRAFT 1 *INTERNAL DOCUMENT* DELIBERATIVE PROCESS CONFIDENTIAL 2 (b)(S) 2 l(b)(S) From: Arsenault, Leigh Sent: Tuesday, September 28, 2010 3:32PM From: Bergeron David To: Arsenault. LeiW Yuan, Georgia Adams, Kristen Kvaal James Smith, Kathleen CC: Date: 9/29/2010 8:30:02 AM Subject: RE: draftlistofinvitees To: Bergeron, David; Yuan, Georgia; Adams, Kristen; K vaal, James; Smith, KathJeen Subject draft list of invitees (b)( 5) Thanks! Leigh (b)(5) DRAFT 1 *INTERNAL DOCUMENT* DELIBERATIVE PROCESS CONFIDENTIAL (b)(5) 1 (b)(5) From: Woodward, Jennifer Sent: Tuesday, June 23, 2009 10:47 AM To: Wolff, Russell; Finley, Steve Subject: FW: Fallout from speech l(b)(5) From: Finley Steve To: Woodward, Jennifer Wolff Russell CC: Date: 6/23/2009 3:15:30PM Subject: RE: Fallout from speech From: rob@al tresearch [ mai lto:rmacarthur@al tresearch .com] Sent: Tuesday, June 23, 2009 10:08 AM To: rob@altresearch Subject Fall out from speech Chronicle ofHigher Education Article today ...... . "Later, Robert Collins, vice president for student financial aid for the Apollo Group, accused short-sale investors, who would profit if the share price of the company's stock fell , of spreading misinformation about his company to deflate the value of its stock. "It' s unfortunate that many short-sellers make their living by sh01ting Apollo stock," he said, before addressing issues raised in a 2004 Education Department program review and an inspector general' s report." It will be interesting to see exactly which statement I made that is "misinformation." Bring it on ... I referred to the for-profit institution as the next Countrywide Credit. This is where that thought came from: Below this message is theCA State AG's official press release re their initial complaint against Countrywide. "The company sold ever-increasing numbers of complex and risky home loans, as quickly as possible. Countrywide was, in essence, a mass-production loan factory, producing ever-increasing streams of debt without regard for borrowers. Today's lawsuit seeks relief for Californians who were ripped off by Countrywide's deceptive scheme." Also from the Chronicle Article: "Competitive team environments encourage recruiters to think of students as points to be earned," said Jill ian L. Estes, a lawyer who is representing students in a case against Westwood College, which has campuses in six states. "They toe the line of propriety while ignoring the impact on students." Officials from two for-profit institutions used the hearing as an oppmtunity to defend their institutions against allegations of impropriety. M. Lauck Walton, a regional vice president of Westwood College, said he was deeply offended by Ms. Estes' s "frivolous" claims and vowed to disprove them "in the appropriate forum. " ...... this jerk was fairly senior at Computer Learning Centers. I still have my employee list. It's not the first time I have found other f01mer employees of CLCXQ working for other for profit schools. The Department should ban people from working at other schools. JoAnn Meron, eg, was named as a defendant in a case against Career Education a few years back, also a CLCX employee. Robert MacArthur Alternative Research Service, Inc. Rmacarthur@altresearch.com 203-244-5174 This material has been prepared by Alternative Research Services Inc., a Connecticut-registered Investment Adviser, employing appropriate expertise, and in the belief that it is fair and not misleading. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. We do not guarantee its accuracy. This information is not to be used as the primary basis of investment decisions. Copying, faxing, replicating, or quoting from this report without the express written consent of Alternative Research Services Inc. is forbidden. This is not an offer or solicitation of an offer to buy or sell any security or investment. Any opinion or estimates constitute our best, and are subject to change without notice. This material is intended for use only by professional or institutional investors and not the general investing public. The firm does not make a market or hold positions in the securities mentioned herein, nor does the firm maintain any investment banking relationships in such securities. From: To: CC: Date: Subject: (b)(S) Finley Steve :Martin, Phil 7/28/2010 12:20:00 PM RE: FAQ -final edit http :1 /www .ibj .com/senator -forprofit-colleges-require-tougher -oversight/P ARAMS/articl e/20728 For-profit colleges need tougher oversight, according to a report from a Democratic Senate committee chairman that questions the industry's advertising spending, tuition costs and reliance on taxpayer dollars. The criticism of higher-education companies was made in a 17-page report released Thursday by Sen. Tom Harkin, the Iowa Democrat who chairs the US. Senate Health, Education, Labor and Pensions Committee. Harkin's report called for the government to require disclosure of for-profits' spending of federal money. The Senate oversight inquiry is part of the growi ng scrutiny of the education companies, including Carmel-based ITT Educational Services Inc., Apollo Group Inc.'s University of Phoenix and Career Education Corp. President Barack Obama's administration on June 16 proposed regulation of the industry because of concern that recruiters are signing up unqualified students and leaving them with loans they may be unable to repay. "There are growing questions about whether all students-and taxpayers by extension-are receiving value for their educational dollar," Harkin said at the hearing. Concerns about student debt and academic quality apply to nonprofit and public colleges, not just for-profits, Sharon Thomas Parrott, senior vice president and chief compliance officer with Devry Inc., a for-profit based in Oakbrook Terrace, TIL, said in her testimony. For-profit colleges serve students who don' t have access to traditional schools: minorities, recent immigrants and working adults, she said. "Institutions like ours grow for a reason," Parrott told the committee. "There is an enormous unmet need." The for-profit industry contains "bad actors," such as those who recruit in homeless shelters and misrepresent education quality and job placement, Sen. Michael Enzi of Wyoming, the ranking Republican on the committee, said in his testimony. "In combating this behavior, it is essential that we use a scalpel and not a machete," he said. "Whatever protections are put in place must eliminate bad actors and ensure that we do not unintentionally harm students in legitimate programs." The committee entered into the record a Bloomberg News article about for-profit college recruiting in homeless shelters, as well as stories about targeting the military and the growth of Apollo' s University ofPhoenix. The number of students attending for-profit colleges rose to 1.8 million in 2008, from 550,000 in 1998, according to Harkin' s report. Federal aid to for-profit colleges jumped to $26.5 billion in 2009 from $4.6 billion in 2000, according to the Education Department. The five largest publicly traded for-profit companies received 77 percent of their revenue from federal financial aid programs in 2009, up from 63 percent in 2002, the report said. Harkin' s report said one unnamed company had 2009 operating profit of$489 million on revenue of$1.3 billion, a 37 percent operating margin-almost double that of Apple Inc. liT reported those revenue and profit figures in securities filings, but liT spokeswoman Lauren Littlefield declined to comment. Eight publicly traded companies-those that break out such data-spent half their budgets on education, 31 percent on recruiting and marketing and 15.7 percent on undefined administrative expenses, Harkin' s report said. At least one company spent more on marketing than on education, the report said. Bridgepoint Education Inc., based in San Diego, spent $145.7 million on marketing and promotional expenses last year, compared with $120.1 million on instructional costs and services, according to a securities filing. A Bridgepoint spokeswoman, Shari Rodriguez, didn' t respond to messages seeking comment. For-profit colleges are more expensive than comparable non-profit schools and leave students with heavier debts, the report said. "Staggering" numbers of student leave for-profits each year, presumably without degrees, according to Harkin's report. Default rates on government loans in the industry are also higher than similar public and nonprofit institutions, the report said. The disparities reflect the lower socioeconomic background of students, Harris Miller, president of the Career College Association, which represents more than 1,400 for-profit colleges, said in an interview Wednesday. The hearing featured testimony from Steven Eisman, a hedge-fund manager whose bet against the housing market was chronicled in a best-selling book. Eisman compared for-profit colleges with the sellers of subprime mortgages. Both industries leave customers with heavy debts they can' t repay, yet don't bear the risk of defaults, he said. Eisman, who is shorting, or betting against, education stocks, made a similar presentation at a May 26 investment conference. "If nothing is done, then we are on the cusp of what I believe is a new social disaster," Eisman told the committee. The analogy between the two industries is "as silly as it is simplistic" because degrees from for-profits benefit the economy, and the institutions must provide value to protect their reputations, the Career College Association's Miller said in a speech Wednesday at the National Press Club in Washington. Two other witnesses, Margaret Reiter, former supervising California deputy attorney general, and Department of Education Inspector General Kathleen S. Tighe, criticized industry marketing practices, including the recruiting of the homeless. Recruiters from Career Education' s Sanford-Brown Institute in White Plains, N.Y., pressured former student Yasmine Issa to enroll, then left her with $20,000 in debt and unable to find a job as an ultrasound technician, the mother of two said in her testimony. "It's hard to find work without a marketable skill , but going to Sanford-Brown to get one has left my family and me worse off than ifl had never gone back to school," she said. Career Education can' t discuss an individual student's experience because of privacy laws, a company spokesman, Jeff Leshay, said in an interview Wednesday. The comments at the hearing about Career Education "don' t reflect a full understanding and appreciation for the quality of education we provide," he said. From: Martin, Phil Sent: Wednesday, July 28, 2010 11 :24 AM To: Kolotos, John Cc: Finley, Steve Subject: RE: F AQ- final edit l(b)(5) From: Kolotos, John Sent: Wednesday, July 28, 2010 11 :05 AM To: Martin, Phil Cc: Finley, Steve Subject: RE: F AQ -final edit l(b)(5) From: Martin, Phil Sent: Wednesday, July 28, 2010 9:59AM To: Kolotos, John Cc: Finley, Steve Subject: RE: F AQ- final edit (b)(5) From: Finley, Steve Sent: Wednesday, July 28, 2010 9:28AM To: K vaal, James; Martin, Phil; Bergeron, David; Kolotos, John Cc: Yuan, Georgia Subject: RE: F AQ -final edit (b)(5) Fron1: FCvaal, Jan1es Sent: Tuesday, July 27, 2010 5:32PM To: Finley, Steve; Martin, Phil; Bergeron, David; FColotos, John Cc: Yuan, Georgia Subject: RE: F AQ- final edit (b)(5) Fron1: Finley, Steve Sent: Tuesday, July 27, 2010 4:53PM To: Martin, Phil ; Bergeron, David; Kolotos, John; K vaal, Jan1es Cc: Yuan, Georgia Subject: RE: F AQ- fmal edit (b)(5) From: Martin, Phil Sent: Tuesday, July 27, 2010 4:08PM To: Bergeron, David; Kolotos, John; Finley, Steve; Kvaal, James Cc: Yuan, Georgia Subject: RE: F AQ -final edit Thanks, Phil (b)(S) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) -----Original Message----- From: Bergeron, David Sent: Tuesday, July 27, 2010 12:53 PM To: Kolotos, John; Finley, Steve; Martin, Phil ; Kvaal, James Cc: Yuan, Georgia Subject: RE: F AQ- fmal edit http :1/www. career. org/iMISPublid AM/CM/ContentDisplay. cfm? ContentFil eiD= 123 92&MicrositeiD=O&FusePreview= Yes l(b)(S) -----Original Message----- From: Kolotos, John Sent: Tuesday, July 27, 2010 11:41 AM To: Bergeron, David; Finley, Steve; Martin, Phil ; Kvaal, James Cc: Yuan, Georgia Subject: RE: F AQ- final edit (b)(S) From: Bergeron, David Sent: Tuesday, July 27, 2010 11:17 AM To: Finley, Steve; Martin, Phil; Kvaal, James Cc: Yuan, Georgia; Kolotos, John Subject Re: F AQ - final edit l(b)(S) David A Bergeron Sent using BlackBerry From: Finley, Steve To: Martin, Phil; Bergeron, David; K vaal, James Cc: Yuan, Georgia; Kolotos, John Sent: Tue Jul2710:16:16 2010 Subject: RE: F AQ -final edit (b)(5) From: Martin, Phil Sent: Monday, July 26, 2010 11:09 AM To: Bergeron, David; Kolotos, John; Finley, Steve Cc: Kvaal, James Subject: RE: F AQ- final edit (b)(5) Thanks, Phil From: Martin, Phil Sent: Thursday, July 22, 2010 3:58PM To: Bergeron, David; Kolotos, John; Finley, Steve Cc: Kvaal, James Subject: F AQ - final edit (b)(5) Many thanks, Phil [(b)(5) -----Original Message----- From: Yuan, Georgia Sent: Tuesday, April27, 2010 12:20 PM To: Bergeron, David; Shireman, Bob Subject: FYI From: Bergeron David To: Yuan. Qeorgia Shireman. Bob CC: Date: 4/27/2010 12:22:08 PM Sub.iect: RE: FYI http://online.wsj.com/article/BT-C0-20100426-710339.html?mod=rss_Hot_Stocks APRIL 26, 2010, 10:57 A.M. ET Debt, Job Rule Uncertainty Hits Shares OfF or-Profit Colleges NEW YORK (Dow Jones)--A government proposal to hold colleges accountable for graduating students with high debt loads and low income levels came front and center, again, after Credit Suisse analysts reversed their assumption that the Department ofEducation had softened its stance on the subject. Monday morning, Credit Suisse issued a note saying the Department ofEducation has returned to a stiffer set of rules on post-graduation debt and gainful employment levels that colleges must meet. The news hit share prices of for-profit universities that had rallied on expected softer rules. Credit Suisse downgraded liT Educational Services Inc. (ESI) and DeVry Inc. (DV) to neutral rrom outperform and slashed their price targets, citing the potential fallout rrom their new take on gainful employment as well as concerns of countercyclicality. ITT recently was off2.9% to $108.53, while DeVry was down 6.5% to $64.96. Credit Suisse had upgraded the schools two weeks ago. Other for-profit schools, including Strayer Education Inc. (STRA), Career Education Corp. (CECO), Corinthian Colleges Inc. (COCO) and Apollo Group Inc. (APOL), were also trading down. The Department of Education originally said schools could face scrutiny that could put federal assistance--often the primary revenue stream for for-profit colleges--at risk if they did not have at least a 70% graduation rate and 70% job placement in field of study. Two weeks ago, Credit Suisse, and others, sent out notes saying they believe the Department of Education had softened the graduation level to 50%, sending shares higher, with some hitting 52-week highs. "Oddly, we suspect the big upward move the stocks had when the investment community found out about the 50% exemption may have led to pressure on the DOE to remove the 50% exemption," the firm wrote Monday. Some education insiders have had mixed feelings on predicting the gainful-employment measure, arguing that it's improper to say what the Department of Education will put forth and it's best to wait until the official proposal is released for public comment That will happen by mid-June. "I'm not sure who thinks they have what access to what's in this draft," said one for -profit school official, but "I would really not be jumping to any conclusions just yet." He said there's no way of knowing "whether it's been hardened, softened, pureed, whatever." Representatives from the Department of Education weren't immediately available for comment. JBD Industry Themes Rumors Swirl, Lift And Sink School Stocks By VICTOR REKLAlTIS, INVESTOR'S BUSINESS DAILY Posted 04/26/201 0 06:23 PM ET News of a regulatory exemption provided a big boost on April l3 to De Vry (DV), ITT Educational Services (ESI) and other school stocks. So much for that exemption. On Monday, DeVry and ITT tumbled amid reports that they might not get a pass in new Education Department rules after all. The Education Department is working on regulations that would link graduates' income to their student-loan payments. Creclit Suisse said on April 13 that there could be an exemption for schools with a 50% completion rate and a 70% job- placement rate. That exemption likely would help DeVry and liT, the bank said two weeks ago as it upgraded those two school stocks to outperform. But on Monday, Credit Suisse said its Washington sources think the exemption may not make it in the new regulations. The bank downgraded DeVry and ITI to neutral. Credit Suisse also expressed concern about a recent De Vry warning about slowing enrollment in one unit, as well as an ITT warning about increased advertising expenses. Enrollment has been rising for for-profit educators, but that trend could end as the job market improves. DeVry slid 5.8% to 65.45 on Monday, dropping below its 10-week moving average in heavy turnover. It had climbed as high as 74.36 after a rebound off its 10-week line. ITT Educational also fell hard and sliced through its 1 0-week line, though it recovered to end the day down just 1.2%. Another school stock that slid was top-rated Grand Canyon Education (LOPE), down 1.1% in below-average volume. The stock stands 9% below a high reached on April l3. It has not been in a proper buying range for several weeks, but it may be nearing its 1 0-week moving average. DeVry falls after analyst downgrade BloombergNewsPublished: 4/26/2010 12:13 m Educational Services Inc. and De Vry Inc. fell in New York trading after a Credit Suisse Group analyst said the U.S. government may make it harder for the companies' students to get financial aid. DeVry, based in Oakbrook Terrace, fell $4.58, or 6.6 percent, to $64.88 at 12:01 p.m. in New York Stock Exchange composite trading after the Boston-based analyst, Kelly Flynn, cut her rating to "neutral" from "outperform." ITT Educational, based in Carmel, Indiana, fell $2.37, or 2.1 percent, to $109.41 after it was also cut to "neutral." Department of Education rules may require education companies to show that graduates earn enough to afford repayment of their student loans. An exemption to the regulations that would have eased restrictions on students' access to loans may be dropped from the proposal, which may be made public in May or June, Flynn said today. "We expect sector to remain volatile in coming weeks as regulatory process plays out," Flynn wrote in a note to clients. The recovering economy may also hurt the for-profit colleges if students can get jobs rather than sign up for classes, Flynn said. Great Sent using BlackBeny From: Kvaal, James From: Qmningham, Peter To: KvaaJ, James N.liller. Tony Weiss, Joanne Rose Charlie Gomez Gabriella Yuan Georgia CC: Kanter. Martha Ochoa. Eduardo Date: 9/312010 9:51:24 PM Subject: Re: gainful employment To: Miller, Tony; Weiss, Joanne; Rose, Charlie; Cunningham, Peter; Gomez, Gabriella; Yuan, Georgia Cc: Kanter, Martha; Ochoa, Eduardo Sent: Fri Sep 03 17:37:10 2010 Subject gainful employment (b)(5) thanks Nonresponsive From: Kanter, Martha Sent Saturday, September 04, 2010 4:47PM To: Finley, Steve Subject: FW: gainful employment From: Kvaal, James Sent Friday, September 03, 2010 6:37PM From: Pinley, Steve To: Kanter, Martha CC: Date: 9/4/2010 9:03 :48 PM Subject: RE: gainful employment To: Miller, Tony; Weiss, Joanne; Rose, Charlie; Cunningham, Peter; Gomez, Gabriella; Yuan, Georgia Cc: Kanter, Martha; Ochoa, Eduardo Subject: gainful employment (b)(5) From: Kanter Martha To: Ferguson, Keith Ochoa, Eduardo iv!iller. Tony Kvaaf, .Tames Yuan! Georgia Bergeron David CC: Date: 9/4/2010 4:35:14 PM Subject: RE: gainful employment I Nonresponsive From: Ferguson, Keith Sent: Saturday, September 04, 20'1 0 2:12PM To: Ochoa, Eduardo; Kanter, Martha; Miller, Tony; Kvaal, James Subject: RE: gainful employment Hello all, I have set up the following number: Phone: 877-937-6173 I will not be able to activate the line personally. Martha, will you handle the leader code? You should be set Let me know if you have questions. Keith From: Ochoa, Eduardo Sent: Saturday, September 04, 2010 10:45 AM To: Kanter, Martha; Miller, Tony; Kvaal, James Cc: Ferguson, Keith Subject: RE: gainful employment 6 pm it is. Let us know the conference call number and participant code. Eduardo M. Ochoa Assistant Secretary for Postsecondary Education U.S. Department ofEducation 1990 K Street, NW Washington, DC 20006 From: Kanter, Martha Sent: Saturday, September 04, 201 0 10:21 AM To: Miller, Kvaal, James Cc: Ochoa, Ferguson, Keith Subject: Re: gainful employment OK-6pm Sent using BlackBerry From: Miller, Tony To: Kanter, Martha; K vaal, James Cc: Ochoa, Ferguson, Keith Sent: Sat Sep 04 08:01:22 2010 Subject: Re: gainful employment I Nonresponsive Sent using BlackBerry From: Kanter, Martha To: Miller, Kvaal, James Cc: Ochoa, Ferguson, Keith Sent: SatSep0407:36:172010 Subject: Re: gainful employment Sent using BlackBerry From: Miller, Tony To: Kvaal, James Cc: Kanter, Ochoa, Eduardo Sent: Fri Sep 03 21:05:33 2010 Subject: RE: gainful employment (b)(5) Thanks, Tony From: Kvaal, James Sent: Friday, September 03, 2010 6:37PM To: Miller, Tony; Weiss, Joanne; Rose, Charlie; Cunningham, Peter; Gomez, Gabriella; Yuan, Georgia Cc: Kanter, Martha; Ochoa, Eduardo Subject: gainful employment (b)(S) 5:30's best Martha Kanter Under Secretary U.S. Department ofEducation From: Kanter Martha To: Shireman, Bob CC: Yuan. Georgia Date: 3/31/2010 12:25:22PM Subject: Re: Gainful Employment follow up "The future belongs to those who believe in the beauty of their dreams!" --Eleanor Roosevelt On Mar 31, 2010, at 8:39AM, "Shireman, Bob" wrote: 430 or 530? From: Yuan, Georgia To: Shireman, Bob; Kanter, Martha Sent: WedMar3110:16:542010 Subject: FW: Gainful Employment follow up (b)(5) (b)(5) Georgia From: Miller, Tony Sent Wednesday, March 31, 2010 10:22 AM To: Yuan, Georgia Subject: Gainful Employment follow up (b)(5) Thanks, Tony 430 or 530? From: Yuan, Georgia To: Shireman, Bob; Kanter, Martha Sent Wed Mar 31 10: 16:54 2010 Subject: FW: Gainful Employment follow up (b){5) Georgia From: Shireman, Bob To: Yuan, Georgia Kanter. Martha CC: Date: 3/31/2010 11 :39:22 AM Sub.iect: Re: Gainful Emp]oyment follow up From: Miller, Tony Sent: Wednesday, March 31, 2010 10:22 AM To: Yuan, Georgia Subject: Gainful Employment follow up (b)(S) Thanks, Tony I Nonresponsive G From: Shireman, Bob Sent: Wednesday, March 31, 2010 11:39 AM To: Yuan, Georgia; Kanter, Martha Subject: Re: Gainful Employment follow up 430 or 530? From: Yuan, Georgia To: Shireman, Bob; Kanter, Martha Sent Wed Mar 31 10:16:54 2010 Subject: FW: Gainful Employment follow up (b)(5) From: Yuan Georgia To: Shireman, Bob CC: Date: 3/31/2010 12:09:46 PM Subject: RE: Gainful Employment follow up (b)(5) Georgia From: Miller, Tony Sent Wednesday, March 31, 2010 10:22 AM To: Yuan, Georgia Subject: Gainful Employment follow up (b)(5) Thanks, Tony 5:30 it is From: Kanter, Martha Sent: Wednesday, March 31, 2010 12:25 PM To: Shireman, Bob Cc: Yuan, Georgia Subject: Re: Gainful Employment follow up 5:30's best Martha Kanter Under Secretary U.S. Department ofEducation From: Yuan, Georgia To: Kanter, Martha Shireman. Bob CC: Date: 3/31/2010 1:09:56 PM Sub.iect: RE: Gainful Employment follow up "The future belongs to those who believe in the beauty of their dreams!" --Eleanor Roosevelt On Mar 31, 2010, at 8:39AM, "Shireman, Bob" wrote: 430 or 530? From: Yuan, Georgia To: Shireman, Bob; Kanter, Martha Sent: Wed Mar 31 10:16:54 2010 Subject: FW: Gainful Employment follow up (b)(5) Georgia From: Mi ll er, Tony Sent: Wednesday, March 31, 2010 10:22 AM To: Yuan, Georgia Subject: Gainful Employment follow up (b)(5) Thanks, Tony (b)(S) From: Hamilton, Justin Sent: Friday, July 23, 2010 1:18AM From: Weiss Joanne To: Hamilton. Justin Kanter, Martha Yuan, Georgia Kvaal James Gomez, Gabriella. Peter Bergeron David CC: Miller, Tony Private - Duncan Ame Date: 6:32:10 AM Subject: RE: Gainful Employment Press Coverage To: Heather Higginbottom; Roberto Rodriguez; Gavin, Tom; Gannet Tseggai; Robert Gordon; Zelman, Allison L.; Kanter, Martha; Yuan, Georgia; Kvaal, James; Gomez, Gabriell a; Weiss, Joanne; Cunningham, Peter; Bergeron, David Subject: Gainful Employment Press Coverage (b)(S) * WSJ: U.S. to Scrutinize For-Profit Career Colleges (Good) *Bloomberg: Obama Cracks Down on For-Profit Colleges, Links Loans to Income (Good) * AP: Proposed federal rules target for-profit colleges (Evenly mixed review) * NYT: U.S. Releases Rules on For-Profit Colleges (The least flattering quote: Barmak saying "You' re kidding me, 45 percent and you're golden?" ) *Chronicle ofHigher Ed: Education Department Takes Aim at For-Profits With Student-Debt Rule (Good) *Washington Post: Administration proposal aims to tighten oversight of for-profit colleges (Good) *Reuters: U.S. rule would force education companies to show work (Good) *Not online as of midnight: USAToday, Inside Higher Ed WSJ: Department of Education to Scrutinize For-Profit Career Colleges The U.S. Department ofEducation on Friday will propose a measure to penalize for-profit career colleges for graduating students with high debt-to-income ratios. The proposal, which will undergo a 45-day comment period that is expected to include opposition from industry lobbyists, is an effort to ensure schools are training students for gainful employment in a recognized occupation. It comes at a time when for-profits are under new scrutiny as they capture a growing share of federal student-aid dollars. "Some proprietary schools have profited and prospered but their students haven't," Secretary ofEducation Arne Duncan said. "While career colleges play a vital role in training our work force to be globally competitive, some of them are saddling students with debt they cannot afford in exchange for degrees and certificates they cannot use." Under the proposal, training programs would be judged on whether former students are repaying the principal on federal loans, and the relationship between total student loan debt and average earnings upon graduation. The recommendation sets up three tiers of eligibility, with those in the middle tier facing enrollment restrictions and debt-to-income disclosure requirements, and the weakest tier losing access to federal student aid for new students. According to the Education Department, if career colleges made no changes, 5% of all programs would no longer be eligible for federal aid and 55% would be required to warn students about high debt-to-income ratios. Many publicly traded schools derive close to 90% of their revenue from federal aid. The recommendation, known as a Notice of Proposed Rulemaking, has been a long time corning, with federal officials and industry representatives meeting for a year to discuss new higher -education regulations. The government put forth its first proposal in late January and the stocks offer-profit colleges have soared and swooned since, propelled by rumors of how programs could gain exemption from the regulation. The Education Department said that this version is "thoughtful," with income calculations based on actual graduate earnings rather than Bureau of Labor Statistics figures. To give time for program improvement, the agency proposed that the 2012-2013 academic year be the earliest that programs could be found ineligible for federal aid. The Education Department had released 13 other proposals in June but said it needed more time for this one. "Some key issues around gainful employment are complicated and we want to get it right," Mr. Duncan said at the time. The earlier recommendations included proposals on incentive compensation for student recruiters, a clearer definition of a credit hour and a new metrics by which students must show academic progress in order to continue receiving federal aid. The colleges' programs include training for students to work in the culinary arts, as medical assistants, and in criminal justice. Write to Melissa Korn at melissa.korn@dowjones.com Obama Cracks Down on For-Profit Colleges, Links Loans to Income By John Lauerman- Jul23, 2010 The Obama administration released a proposal that would tighten for-profit colleges' access to federal student aid, threatening growth in the industry that received $26.5 billion in U.S. funds last year. The proposed rules released today by the U.S. Department ofEducation would link U.S. student aid eligibility at Apollo Group Inc., ITT Educational Services Inc., Career Education Corp. and other education companies to former students' salaries and debt repayment rates. The rules may cut off access to federal student grants and loans at about 5 percent of all for- profit education programs, Secretary Arne Duncan said in a telephone call with reporters yesterday. Students earning two-year associates' degrees at for-profit colleges had an average student-loan debt of$14,000 in 2007- 2008, about twice that of students at nonprofit colleges, the department said in a statement. While most education companies provide valuable training and skills, high-cost education programs that lead to low-wage jobs are harming students, leaving them with hard-to-pay debts, Duncan said. "We want to hit the ones at the bottom, those that simply aren' t working for students," Duncan said in the press briefmg. "The 5 percent would frankly be the bottom of the barrel ." Tuition Impact If the rules were in effect today, programs enrolling about 8 percent of the students at for-profit colleges nationwide would lose eligibility, the Education Department said. There were about 1.8 million students enrolled in education companies' programs in 2008, according to a June 24 report from Iowa Democratic Senator Tom Harkin, chairman of the Senate Health, Education, Labor and Pensions Committee. The rules may hurt Carmel, Indiana-based ITT Educational, Hoffman Estates, lllinois-based Career Education and Santa Ana, California-based Corinthian Colleges Inc., because they may not meet the repayment standard and they offer high- priced programs, said Trace Urdan, an analyst with Signal Hill Capital Group in San Francisco. Expensive courses of study that lead to relatively low-paying careers, such as those in criminal justice, may begin to disappear, he said yesterday in a telephone interview. "You will see some programs being terminated," Urdan said. "No one' s going to be kicked out into the street, but programs that are no longer profitable at contemplated prices will be ended." Stocks Decline Under the proposed rules, the Education Department would monitor loan repayments and starting salaries among graduates of for-profit colleges. To remain fully eligible for student loans, education companies would have to show the agency that at least 45 percent of their former students are paying off their student loans, or that graduates pay less than 8 percent of their total income or 1 ess than a fifth of their " discretionary income" on student loan payments. When a program' s repayment levels and debt-to-income ratios both miss those targets, its access to federal student aid may be restricted, the statement said. That may mean that the program would have to limit enrollment growth or warn applicants that the program' s graduates have high debt levels. About 55 percent of for-profit college programs would have to issue such warnings if the proposed regulations were now in effect, the statement said. Lose Eligibility Companies would lose their eligibility for aid ifless than 35 percent of former students are repaying and their educational debt is at least 12 percent of their annual total income or 30 percent of discretionary income, the statement said. No more than 5 percent of programs nationally will lose U.S. aid access under the regulations during their first year, the department said. Average annual tuition at for-profit colleges was $14,000 in 2009, compared with $2,500 at community colleges, Harkin' s report said. Education companies have been hurt as investors have waited for the Education Department to write its regulations. The Standard & Poor' s 1500 Education Services Sub-Industry Index, which tracks nine education companies, fel113 percent over the past 12 months as of yesterday' s close. Apollo, the Phoenix- based operator of the University of Phoenix and the biggest U.S. education company, fell 32 percent over the past 12 months in Nasdaq Stock Market composite trading. Industry Reaction Congressional staffers who were briefed on the proposed rules said they expected the education industry to fight them. The Career College Association, a Washington-based industry group, didn' t respond to telephone calls and e-mails requesting comment. Apollo company officials declined to comment because they hadn' t seen the new regulations. "Apollo cautions against policy with the potential for unintended consequences that could restrict educational access, limit students' choices or unfairly disadvantage hundreds of thousands of historically underserved students," Manny Rivera, a spokesman, said in an e-mail. Robert Jaffe, a spokesman for Corinthian, Lauren Littlefield, a spokesman for ITT Educational and JeffLeshay, a spokesman for Career Education, didn't immediately return telephone calls seeking comment. While the proposed rules are a step in the right direction that may eliminate many abuses of the student financial aid system, the government may have set the standard for loan repayment too low, said Bmmak Nassirian, associate executive director of the American Association of Collegiate Registrars & Admissions Officers in Washington. ' Rampant Waste' "I defy anyone to say that an institution with a 45 percent loan-repayment rate represents the gold standard," he said in a telephone intetview. "This says something about how rampant waste and fraud and abuse are in this sector." While the expectations for repayment appear low, the rules appear to have some "real teeth" in them, said Pauline Abernathy, who oversees policy and advocacy for the Institute for College Access and Success in Washington. Her group will urge the administration to strengthen the regulations in the 45- day comment period that starts today. "This regulation is plain common sense," Harkin said in a statement. "If a school can' t show that its students are repaying their college debt and not defaulting, this is a sure sign that the school is failing to prepare its students for gainful employment, as the law requires." An earlier draft of the proposal said that starting salaries would be estimated using data from the U.S. Bureau ofLabor Statistics. The proposed rules instead call for the salary data to come directly from graduating students' Internal Revenue Setvice filings, the Education Department said. ' Actual Wages' "Therein lies the problem for the sector given that actual wages are generally lower than the Bureau ofLabor Statistics data," said Jarrell Price, an analyst with Height Analyti cs in Washington who follows the for -profit education sector. "There' s a lot ofuncertainty about the income levels of graduates of for profit colleges." Federal aid to for-profit colleges jumped to $26.5 billion last year from $4.6 billion in 2000, according to the Education Department. About 96 percent of students who graduated from for- profit colleges in 2008 had taken out student loans, and 24 percent of that graduating class had more than $40,000 in U.S. student loan debt, according to the June report from Harkin. Taxpayers' Right "These schools -- and their investors -- benefit from billions of dollars in subsidies from taxpayers, and in return, taxpayers have a right to know that these programs are providing solid preparation for a job," Duncan said in the statement. "The rules we' ve proposed today will help ensure that career college and training programs use federal student aid to prepare students for success." The government has been determining for-profit programs' eligibility for student grants and loans in part by monitoring default rates. Those rates underestimate the proportion of students who don't pay back loans on time, because many receive postponements known as forbearances or deferments. The new rules link a program' s eligibility for federal aid to the percentage of former students who are repaying principal on their loans three years after leaving school, the department said. To contact the reporter on this story: John Lauerman in Boston atjlauerman@bloomberg.net. Proposed federal rules target for-profit colleges By ERIC GORSKI (AP) - 38 minutes ago The Education Department will propose much-anticipated regulations Friday that would cut off federal aid to for-profit college programs if too many of their students default on loans or don't earn enough after graduation to repay them. "Some proprietary schools have profited and prospered but their students haven't, and this is a disservice to students and to taxpayers," Education Secretary Arne Duncan said Thursday in a briefing with reporters. "And it undermines the valuable work, the extraordinarily important work, being done by the for -profit industry as a whole." To qualify for federal student aid programs, career college programs must prepare students for "gainful employment." The Obama administration, amid intense lobbying from both for-profit college officials and consumer and student advocates, is proposing a complicated formula that would weigh both the debt-to-income ratio of recent graduates and whether all enrolled students repay their loans on time, regardless of whether they finish their studies. Although the rules would provide schools more roads to compliance than an earlier proposal, a senator and for-profit colleges' chief lobbying group warned that it would make college less accessible. Republican Sen. Lamar Alexander of Tennessee, a former Education secretary, ridiculed it as "a surprisingly wacky proposal from one of the president's best cabinet members." The government could in effect "institute price controls on certificate and degree programs at thousands of institutions of higher education," Alexander said in a statement. Underscoring the partisan divide on the issue, Sen. Tom Harkin ofiowa, a Democrat who is holding oversight hearings on for-profit colleges, praised the proposed regulations as "plain common sense." For-profit colleges have faced increased scrutiny in recent months for some questionable recmiting tactics, high loan default rates, and low graduation and job placement rates. The government is taking notice because for-profit colleges are bringing in record amounts of federal aid money -$26.5 billion last year, up from $4.6 billion in 2000. Under the Obama administration proposal , vocational programs would fall into one of three categories: _Programs fully eligible for aid will either have at least 45 percent of their former students paying down the principal on their federal loans- or their graduates will have a debt-to-earnings ratio of less than 20 percent of discretionary income or 8 percent of total income. _Ineligible programs will have less than 3 5 percent of their former students paying down the principal on their federal loans- and their graduates will have a debt-to-earnings ratio above 30 percent of discretionary income and 12 percent oftotal income. _Those programs that don't fit either definition would be restricted- meaning they would be subject to limits on enrollment growth and schools would be required, among other things, to warn of their high debt levels. Duncan said the department estimates that if schools make no changes, 5 percent of for-profit college programs would be ineligible for aid in 2012- affecting 8 percent of all students in the fast-growing sector. If the rules went into effect now, 55 percent of for-profit schools would be required to disclose unflattering loan data in their promotional materials, making for a strong consumer protection tool, the agency said. To give schools time to improve and to target "the bottom of the barrel," Duncan said the administration would cap the number of programs it would strip of aid eligibility at 5 percent in fall 2012, when that penalty would first be available. The Career College Association, the for-profit college sectors main lobbying group, said establishing a ratio between student debt and anticipated graduate earnings is unwise, unnecessary and unproven. "Amounts borrowed today do not indicate what you will be able to repay in five years, ten years or over a working lifetime," the association's president, Harris Miller, said Thursday in a statement. Others who were hoping for tougher rules were disappointed, as well. Pauline Abernathy, vice president of the Institute for College Access & Success, said while the proposal is significant and has teeth, programs could continue to profit from federal aid when more than half their students can't afford to pay down the principal on their loans. "It is not as strong as it should be to protect students and taxpayers from getting ripped off by career education programs that over-promise and under-deliver," she said. The proposed rules will be published Friday in the Federal Register and a 45-day public comment period will follow. The final rules are scheduled to be announced in November and would take effect next year, although enforcement action that would strip schools of aid eligibility would not begin until the 2012-2013 school year. Copyright 2010 The Associated Press. AJI rights reserved. U.S. Releases Rules on For-Profit Colleges ByTAMARLEWlN The Obarna administration on Thursday released its controversial proposed regulations to end federal student aid to for- profit colleges whose graduates do not earn enough to repay their loans. Since most for-profit programs get the vast majmity of their revenues from federal student aid, the regulations could effectively shut down the programs whose students have the most debt and the least likelihood of finding good jobs. The for-profit colleges have lobbied strongly against the new "gainful employmenf' regulations. And in a statement Thursday evening, the Career College Association, which represents the colleges, called the proposed regulations "unwise, unnecessary, unproven" and said they were likely to harm students, employers, institutions and taxpayers. The Department ofEducation estimates that the rules would cut off federal aid to about 5 percent of for -profit college programs, representing about 8 percent of students, and that about 55 percent of the programs would be required to warn applicants and students that they may have trouble repaying their loans. The coalition of education groups, student groups and consumer groups that have pushed for stronger regulations said they were glad to have regulations proposed in time to go into effect next year- but not impressed with their toughness. "We are particularly concerned that programs could continue to profit from federal student aid when half their students with loans can' t afford to pay the principal," said Pauline Abernathy, vice president of the Institute for College Access and Success. Barmak Nassirian of the Amen can Association of Collegiate Registrars and Admissions Officers said the new regulations were a step in the right direction. But like Ms. Abernathy, Mr. Nassirian was particularly unhappy about the standard allowing aid to colleges where 45 percent of the graduates are repaying their principal on their loans. "You're kidding me, 45 percent and you' re golden?" he said. The for -profit sector has mushroomed in the last decade. While overall postsecondary enrollment increased 31 percent from 1998 to 2008, the for-profits' enrollment grew by 225 percent. Although for-profit colleges, which can get up to 90 percent of the revenues from federal student aid, enroll less than 10 percent of the nation' s higher-education students, they get almost a quarter of the federal aid. In 2008-9, for-profit co!Jeges got $4.3 billion in Pell grants and $19.6 billion in Stafford loans. The new regulations essentially create green, yellow and red zones, based on students' debt levels and repayment records. To be in the green zone, fully eligible for federal aid, programs would either have to have at least 45 percent of their former students paying down the principal on their federal loans or graduates with debt-to-earnings ratios ofless than 8 percent of their total income, or 20 percent of their discretionary income. Programs in the red zone, ineligible for federal aid for new students, would have less than 3 5 percent of their former students paying down the principal, with graduates carrying a debt-to-earnings ratio above 12 percent of their total income and 30 percent of discretionary income. Those in between would be subject to limits on enrollment growth, and required to warn applicants and students that they may have difficulty repaying their loans. The proposed regulation will be published Friday for a 45-day comment period, with final rules issued in November. Chronicle of Higher Ed: Education Department Takes Aim at For-Profits With Student-Debt Rule By Kelly Field After a five-week delay, the Education Department will release a rule Friday that would penalize for-profit colleges that saddle students with unmanageable amounts of debt. The proposed "gainful employment" rule, which has been anticipated by for-profit colleges and short-sellers alike, would cut off federal aid to programs whose students have the highest debt burdens and lowest loan-repayment rates, while limiting enrollment growth at hundreds of other programs. For-profit lobbyists are calling the rule "unwise and unnecessary." In a conference call with reporters, the Education Department said it was seeking to protect students and taxpayers from the high costs of student-loan defaults. "While career colleges play a vital role in training our work force to be globally competitive, some of them are saddling students with debt they cannot afford in exchange for degrees and certificates they cannot use," said Secretary of Education Arne Duncan in a written statement. Department officials estimated that 5 percent of programs would become ineligible for student aid under the rule, while 55 percent would be subject to growth restrictions and required to warn consumers and current students about the dangers of excessive borrowing. The share of borrowers defaulting on their student loans in the first two years of repayment has climbed steadily in recent years, reaching a 1 0-year high of7.2 percent this year, according to the Education Department. For-profit colleges, which educate less than 10 percent of students but receive close to a quarter of federal-student-loan dollars, account for a disproportionate share of those defaults. Two years into repayment, roughly 12 percent of borrowers who attended for-profit colleges have defaulted on their federal loans, compared with 6 percent of those who attended public coJJeges and 4 percent who attended private colleges. When the government is unable to collect on defaulted loans, taxpayers are on the hook for the losses. Borrowers, meanwhile, face damaged credit histories, are ineligible for additional federal aid, and may have their wages and tax refunds seized by the government. Though federal law has long required for-profit colleges to demonstrate that they are preparing their students for "gainful employment," that term has never been defined. The Education Department tried to do so late last year, convening a panel that included consumer advocates, for-profit-college officials, and student advocates to re-examine the rule. But the panel was unable to reach agreement, leaving the department free to offer its own definition. Turning Up the Heat The new rule comes as Congress is turning up the heat on the for-profit sector, raising doubts about the cost and quality of some proprietary institutions. In late June, Sen. Tom Harkin, Democrat oflowa, chairman of the education committee, held a hearing in which lawmakers vowed to crack down on "bad actors" in the rapidly growing sector. A second hearing is planned for early August. Still, lawmakers and Education Department officials recognize that for-protit colleges will be critical to achieving President Obama's goal ofleading the world in college completion by 2020, and are wary of taking steps that could cripple the sector. Today's rule does not go as far as the department's original proposal, which would have ended aid to programs in which a majority of students' loan payments exceeded 8 percent of the lowest quarter of graduates' expected earnings, based on a l 0-year repayment plan. For-profit colleges lobbied vigorously against that proposal, warning that it would force them to shutter thousands of program serving millions of students. The colleges have spent hundreds of thousands of dollars pushing an alternative that would require programs to provide prospective students with more information about their graduates' debt levels and salaries. The department's revised rule would replace the 8-percent cap with a tw<rpart test that would take into account the share ofborrowers repaying their federal student loans and the relationship between total student loan debt and average earnings. Under that approach, programs whose graduates carried debt-to-earnings ratios ofless than 20 percent of discretionary income or 8 percent of total income, or where at least 45 percent of former students (graduates and nongraduates) were paying down the principal on their loans, would be fully eligible for aid. Programs whose graduates carried debt-to-earnings ratios above 30 percent of discretionary income and 12 percent of total income, and where fewer than 35 percent of former students were paying down principal on their loans, would be ineligible for aid. Programs that fell somewhere in between would face restrictions on enrollment growth, would be required to demonstrate that employers support their program, and would have to warn consumers and current students of high debt levels. In the press call, department officials said their goal was to separate the "bad actors" from the good. "The many good actors should be protected from being tainted or tarnished by the small minority that are doing a disservice to the industry," Mr. Duncan said. But lobbyists for for-profit colleges say they're unhappy that the department stuck with its "metrics based" approach to measuring gainful employment, rather than simply requiring more disclosures, as the colleges suggested. In a statement, Harris N. Miller, the president of the Career College Association, called the department's proposal"unwise, unnecessary, unproven," and "likely to harm students, employers, institutions, and taxpayers." "Adjusting the numbers in the original gainful-employment formulation is not the issue," he said. Groups representing students and consumers, meanwhile, welcomed the proposal, saying it would protect students and taxpayers from programs that overpromise and underdeliver. "It is encouraging that the administration has proposed a regulation with some teeth," said Pauline Abemathy, vice president of the Institute for College Access and Success. The gainful-employment rule is one of 14 that the department and college stakeholders have been negotiating over the past nine months. The other regulations, including one that would tighten a ban on incentive compensation for college recruiters, were published in mid-June. After a period for public comment, they will likely be combined in a package of final rules due out in November. Administration proposal aims to tighten oversight of for-profit colleges By Daniel de Vise Washington Post StaffWriter Friday, July 23, 2010; A02 Education Secretary Arne Duncan proposed Thursday that for-profit colJeges be required to show through certain new measures that their graduates are not saddled with too much debt, an initiative he said was meant to protect students from "a few bad actors" in the industry. Through the proposal, the Obama administration aims to tighten oversight of the fastest-growing sector of higher education. The for-profit sector enrolled 1.8 million students in 2008, more than triple the number of a decade earlier. Starting in the 2012-13 academic year, for-profit colleges would have to demonstrate that they prepare students for "gainful employment" in order to remain eligible for federal aid. They could do this in two ways. One would be to show that at least 45 percent of former students are paying down the principal on their federal loans. The other would be to show that graduates are paying no more than one-fifth of their discretionary income, or 8 percent of total income, toward student debt. Colleges that fail to meet those tests would face potential limits on enrollment growth and would be required to warn students about potential debt. They would become ineligible for aid ifless than 35 percent offom1er students are paying down their principal and if graduates pay more than 30 percent of discretionary income-- and more than 12 percent of total income-- toward student loans. The rule would become final Nov. 1, after a public comment period. Duncan estimated that it would disqualify 5 percent of the for-profit industty from receiving federal aid. "That 5 percent would be, frankly, the bottom of the barrel," he told reporters in a phone briefing. "The industry as a whole, unfortunately, has been given a black eye by a few bad actors." The Career College Association, an industry group, said in a statement that the proposed regulation was "unwise, unnecessary, unproven and is likely to harm students, employers, institutions and taxpayers." Kaplan University, owned by a subsidiary of The Washington Post Co., belongs to the for-profit sector. A Kaplan spokesman declined to comment pending a review of the proposal . Representatives from other for-profit colleges could not be reached for comment. The Education Department released 13 other regulatory changes related to higher education in mid-June. The agency had delayed action on the last and most controversial rule to settle lingering industry objections. U.S. rule would force education cos to show work Thu Jul22, 2010 I 1:59pm EDT WASHINGTON, June 22 (Reuters)- For-profit education companies could soon have to prove that their former students are either paying off their loans or capable of doing so, the Department ofEducation said on Thursday. The proposal has for months weighed on stocks in the sector including Apollo Group Inc (APOL.O) and DeVry Inc (DV.N ), as it could cut off access to federal funding for some types of training. The proposed rule is part of a broader overhaul of the industry, which has been criticized for producing poorly prepared students with big debts. The Education Department issued on June 15 a series of other rules that required the schools to give prospective students their graduation and job placement rates. The schools are often aimed at lower-income or minority students. But the department left the toughest rule for last-- the monitoring of federal loan default rates -- which could lead to a crippling loss of federal funds, and therefore profits. Education Secretary Arne Duncan predicted that five percent of programs would lose those funds. "Ninety percent of revenues in many for-profit schools come from student loan programs," Duncan told reporters on a conference call, adding that default rates approached 25 percent. "Strong career colleges should welcome our proposal," he said. "Overall I firmly believe that for-profit schools are doing a good job of training their students." The Career College Association, representing 1,500 schools, 95 percent of which are for-profit, said the Department of Education proposal "is unwise, unnecessary, unproven and is likely to harm students, employers, institutions and taxpayers." "Amounts borrowed today do not indicate what you will be able to repay in five years, ten years or over a working lifetime," CCA President Hanis Miller said in a statement. Programs would lose their eligibility if more than 65 percent of former students failed to pay the principal on federal loans, and if their graduates' debt was more than 30 percent of discretionary income and 12 percent of total income, the department said. Schools would be declared fully eligible for loans if they can show that 45 percent of former students are paying down their debt, or that their debt is less than 20 percent of former students' discretionary income or 8 percent of total income, the department said. Other schools would fall into a middle ground and may have to warn students about incuning heavy debts, the department said. The rules are subject to a 45-day comment period, and are slated to go into effect for the 2012-2013 school year, officials said. The schools, which offer higher education programs in fields like healthcare and criminal justice, have come under increased scrutiny for their student loan practices and the quality of their education services. Seventy percent of the Education Department's investigations are into problems at for-profit schools, department inspector general Kathleen Tighe told the Senate's Health, Education, Labor and Pensions Committee recently. Fifty-three percent ended up owing more than $30,500, compared with 12 percent for students who attended a public four-year college, according to a study by the College Board. The for-profit education business can be lucrative. Apollo Group Inc posted better-than-expected quarterly results in late June, helped by 13 percent growth in enrollments at its University ofPhoenix. It forecast revenue growth in the high single digits in fiscal 2011. (b}(5} David A Bergeron Sent using BlackBeny ----- Original Message ----- From: Ochoa, Eduardo From: Bergeron David To: Ochoa, Eduardo Kvaal, James Chesley, Susan Kolotos John Finley, Steve Kanter Martha Baker, Jeff Yuan, Georgia Hamilton, Justin l\tlcFadden, Elizabeth Sellers Fred CC: Madzelan. Dan Date: 8/ 19/2010 8:40:34 AM Subject: Re: gainful employment Q&A To: K vaal, James; Chesley, Susan; Kolotos, John; Finley, Steve; Kanter, Martha; Baker, Jeff; Yuan, Georgia; Hamilton, Justin; McFadden, Elizabeth; Sellers, Fred Cc: Bergeron, David; Madzelan, Dan Sent: Wed Aug 18 17:25:04 2010 Subject: RE: gainful employment Q&A (b)(5) Eduardo M. Ochoa Assistant Secretary for Postsecondary Education Department ofEducation 1990 K Street NW Washington, DC 20005 (202) 502-7750 -----Original Message----- Fron1: FCvaal, Jan1es Sent: Wednesday, August 18,2010 6:17PM To: Chesley, Kolotos, Finley, Kanter, Baker, Jeff; Yuan, Georgia; Ochoa, Eduardo; Hamilton, McFadden, Sellers, Fred Cc: Bergeron, Dav1d; Madzelan, Dan Subject: RE: gainful en1ployn1ent Q&A (b)(S) -----Original Message----- From: Chesley, Susan Sent Wednesday, August 18, 2010 5:02PM To: Kvaal, James; Kolotos, John; Finley, }Canter, Martha; Baker, Yuan, Ochoa, Hamilton, Justin; McFadden, Elizabeth; Sellers, Fred Cc: Bergeron, Madzelan, Dan Subject: RE: gainful en1ployn1ent Q&A (b)(S) (b){5) -----Original Message----- From: Kvaal, James Sent: Wednesday, August 18, 2010 4:28PM To: Kolotos, John; FinJey, Steve; Kanter, Martha; Baker, Jeff; Yuan, Georgia; Ochoa, Eduardo; Hamilton, Justin; Chesley, Susan; McFadden, Elizabeth; Sellers, Fred Cc: Bergeron, David; Madzelan, Dan Subject: RE: gainful employment Q&A l(b)(5) -----Original Message----- From: Kolotos, John Sent: Wednesday, August 18, 2010 7:33AM To: Kvaal, James; Finley, Steve; Kanter, Martha; Baker, Jeff; Yuan, Georgia; Ochoa, Eduardo; Hamilton, Justin; Chesley, Susan; McFadden, Elizabeth; Sellers, Fred Cc: Bergeron, David; Madzelan, Dan Subject: RE: gainful employment Q&A (b)(5) -----Original Message----- From: KvaaJ, James Sent: Tuesday, August 17, 2010 7:25PM To: Finley, Steve; Kanter, Martha; Baker, Jeff; Yuan, Georgia; Ochoa, Eduardo; Hamilton, Justin; Chesley, Susan; McFadden, Elizabeth; Kolotos, John; Sellers, Fred Cc: Bergeron, David Subject: RE: gainful employment Q&A (b)(5) -----Original Message----- From: Finley, Steve Sent: Tuesday, August 17, 2010 8:31 AM To: Kanter, Kvaal, Baker, Yuan, Georgia; Ochoa, Eduardo; Hamilton, Justin; Chesley, McFadden, Elizabeth; Kolotos, John; Sellers, Fred Cc: Bergeron, David Subject: RE: gainful employment Q&A (b)(5) -----Original Message----- From: Kanter, Martha Sent: Monday, August 16, 2010 10:22 PM To: Kvaal, James; Baker, Jeff; Yuan, Ochoa, Hamilton, Chesley, Finley, Steve; McFadden, Kolotos, John; Sellers, Fred Cc: Bergeron, David Subject: RE: gainful employment Q&A J(b)(5) Martha From: Kvaal, James Sent: Monday, August 16, 2010 9:12PM To: Kanter, Martha; Baker, Jeff; Yuan, Georgia; Ochoa, Eduardo; Hamilton, Justin; Chesley, Susan; Finley, Steve; McFadden, Elizabeth; Kolotos, John; Sellers, Fred Cc: Bergeron, David Subject: gainful employment Q&A (b)(5) Thanks From: Kvaal James To.: Speer, Jam in D. CC: Bergeron. David Chesley, Susan Weko Tom Martin, Phil Arsenault Leigh Ochoa. Eduardo Madzelan, Dan Shedd, Jessica Miller, Elise Yuan, Georgia Graham_ William Bustamante. Andres Kahn, LisaB Rouse_ Cecilia E. Date: 9/27/2010 3:53:52 PM Subject: RE: GE discussion with CEA Attachments: Repay Thresholds Summarized Q9242010.xlsm From: Speer, JaminD. [mailto:Jamin_D._Speer@cea.eop.gov] Sent: Monday, September 27, 2010 2:00PM To: Kvaal , James; Bergeron, David; Chesley, Susan; Weko, Tom; Martin, Phil; Arsenault, Leigh; Ochoa, Eduardo; Madzelan, Dan; Shedd, Jessica; Miller, Elise; Yuan, Georgia; Graham, William; Bustamante, Andres; Kahn, Lisa B. ; Rouse, Cecilia E. Subject: RE: GE discussion with CEA (b)(5) Best, Jamin -----Original Appointment----- From: James.K vaal@ed.gov [ mailto:James.K vaal@ed.gov] Sent: Friday, September24, 2010 5:13PM To: Bergeron, Dav1d; Chesley, Susan; Weko, Tom; Martin, Phil ; Arsenault, Leigh; Ochoa, Eduardo; Madzelan, Dan; Shedd, Jessica; Miller, Elise; Yuan, Georgia; Graham, William; Bustamante, Andres; Kahn, Lisa B. ; Rouse, Cecilia E.; Speer, Jarnin D. Subject: GE discussion with CEA When: Monday, September 27, 2010 5:30PM-6:30PM (GMT-05:00) Eastern Time (US & Canada). Where: 1-877-784-4150 participant passcode 2918463 (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) U.S. DEPARTMENT OF EDUCATION AUGUST 2010 NW 2010175 What Is the Price of College? Sticker, Net, and Out -of-Pocket Prices in 2007-08
Christina Chang Wei MPR Associates, Inc. PROJECT OFFICER Tracy Hunt-White National Center for Education Statistics Students and parents see college attendance as a pri ncipal avenue to middle-cl ass life, and, given the risi ng price of postsecondary education, they are apprehensive about their ability to af- ford it. 1 In a recent survey of college freshmen, about two-thirds (66 percent) reported having concerns about bei ng able t o finance thei r educat ion. 2 Many U.S. policymakers and researchers share their concern, and are explori ng ways to make college more affordable. 3 Legislators have required colleges and universities t o pro- vide more extensive information about tuition and prices, and in the 2008 Higher Education Opportuni ty Act mandat ed a host of price-related measures, includi ng institutional disclosure of net prices charged to students, the reporting of net price data to the U.S. Department of Edu- cat ion, and the creation and di sclosure of "tuit ion wat ch li sts." 4 This Statistics in Brief shows the amounts U.S. undergraduates pay on average for postsecondary education, wi th and wi th- out fi nancial aid. Drawi ng upon data f rom the National Postsecondary Student Aid Study (NPSAS), a nat ionally representat ive survey of all postsecondary students, in- cl uded in this report are the average pric- es for public 2-year, public 4-year, privat e nonprof it 4-year, and for- profit institu- tions at all levels. 5 Most of the fi gures in this Brief display da- ta only for f ull-time undergraduates 6 who attended one institution. These students comprised about one-t hird (35 percent) of 00 0 1 e 5 FOR o EDUCATION STATISTICS I nstitute o f Education Sciences STUDY QUESTIONS What are the average prices paid by full-time undergraduate students and how do these prices vary by the type of insti- tution attended? all undergraduates in 2007-08? Of all full-time undergraduates, 18 percent were enrolled in public 2-year institu- tions, 43 percent attended public 4- year institutions, 21 percent were at private nonprofit 4-year institutions, and 8 percent were enrolled in for- profit institutions (table 1). 8 Focusing on full-time students who attended on- ly one institution allows for compari- sons in tuition, price of attendance, and financial aid. Those attending full time generally have higher overall ex- penses than do all students. They also generally qualify for federal aid and other assistance not available to many part-time students (table 2). What factors are re- lated to variations in average sticker and net prices among those attending these institutions? KEY FINDINGS There is a wide range of prices for postsecondary education. This Brief shows the sticker price (total price of attendance including both tuition and living expenses), the net price after grants (total price of atten- dance minus all grants), and the out- of-pocket net price (total price of at- tendance minus all financial aid), for the four major types of postse- condary institutions. Students enrolled at public 2-year institutions had the lowest average sticker price ($12,600). 9 Those at public 4-year institutions had an av- erage sticker price of $18,900, those at for-profit institutions had an av- erage sticker price of $28,600, and those at private nonprofit 4-year in- stitutions had the highest average sticker price ($35,500). After all financial aid is received, (in- cluding grants, loans, and work- 2 How do the net prices paid by under- graduates vary by family income? study), the average out-of-pocket net price ranged from $9,100 at public 2-year institutions to $10,300 at public 4-year institutions, $16,000 at for-profit institutions, and $16,600 at private nonprofit 4-year institutions. Lower sticker prices often mean a lower need-or eligibility-for fi- nancial aid. Those attending private institutions had the highest tuition but they also received the most fi- nancial aid. Undergraduates at pri- vate nonprofit 4-year institutions received the greatest amount of in- stitutional grant aid while those at for-profit institutions had the largest proportion of borrowers. For low-income undergraduates enrol led full time, their average net prices (both after grants and after all aid received) were highest at for- profit institutions. TABLE 1. UNDERGRADUATE ENROLLMENT, TUITION, AND STICKER PRICE for all undergraduates and full-time undergraduates, by type of institution attended: 2007- 08 All undergraduates Full-time 1 Average tuition and average sticker price estimates Average Average are 5hown for those attending one institution only. Percentage Average sticker Percentage Average sticker NOTE: full-time is defined as having been enrolled distribution tuition 1 price' distribution tuition' price 1 in a institution for 9 months or more full time. "Tuition includes all tuition and fees. "Sticker price" is the total prtce of attendance which Total 100.0 $5,800 $14,000 100.0 $10,300 $22,400 includes tuition and fees, books and supplies, hous ing, meals, transportation, and other miscellaneous, or personal, "Forprofit" includes less-than- Type of institution 2-year, 2-year, and 4-year institutions. Estimates Public 2-year 40.0 1,200 7,000 17.8 2,400 12,600 include students enrolled in Title IV eligible postse- condary institutions in the 50 states, District of Co- Public 4-year 29.2 5,500 15,200 42.7 7,100 18,900 lumbia, and Puerto Rico. Detail may not sum to totals because of rounding. Standard error tables are avail Private nonprofit 4-year 13.0 17,800 28,200 20.6 23,400 35,500 a bleat For-profit 9.0 10,200 20,600 8.5 11,900 28,600 SOURCE: U5. DepartmentofEducation, National Cen ter for Education Statistics, 2007-08 National Postse Other, or more than condary Student Aid Study (NPSIIS:08). one institution 8.8 4,800 12,300 10.5 7,000 18,000 TABLE 2. FINANCIAL AID for all undergraduates and full-time undergraduates, by type of institution attended: 2007- 08 Any grants Any loans Any work-study Any aid NOTE: "Grants" include scholarships Percent Average Percent Average Percent Average Percent Average and tuition waivers. "loans include federal, state, institutional, or private received amount received amount received amount received amount student loans, excluding Parent PLUS loans. "Total" aid includes grants, loans, job training, veterans benefits, All undergraduates 51.7 $4,900 38.5 $7,100 7.4 $2,400 65.6 $9,100 employer aid, and Parent PLUS loans. "All undergraduates" include those attending more than one institution. Type of institution "Full -timl'" is defined as having been enrolll'd in one postsecondary institu Public 2-year 39.6 2,200 13.2 4,100 3.3 3,000 47.6 3,400 tion for 9 months or more full time. Public 4-year "forprofit" includes less-than-2- 52.9 5,200 46.2 6,600 7.7 2,500 71.3 9,400 year, 2year, and 4-year institutions. Private nonprofit 4-year 73.6 10,200 58.9 9,100 23.2 2,100 84.7 17,400 Average aid amounts are calculated only for students receiving a particu- For-profit 70.4 3,200 91.6 8,100 2.0 3,500 96.3 10,800 lar type of aid. Those not receiving a specific type of aid (i.e., zero values) are not included in the average for Full-time 65.3 7,200 53.1 8,000 13.7 2,300 80.1 12,900 that aid. Estimates include enrolled in Title IV eligible postsecon- dary institutions In the 50 states, Dis Type of institution trict of Columbia, and Puerto Rico. Sti!ndard error tables are available at Public 2-year 55.7 3,700 22.5 4,900 6.9 2,600 65.7 5,400 bttallom ed reoorts.asp. Public 4-year 60.4 6,100 52.7 7,100 10.5 2,400 78.3 11,000 SOURa: US. Department of Education, National Center for Education Statistics, Private nonprofit 4-year 81.2 12,300 65.0 9,800 31.5 2, 100 89.4 21,100 2007-08 National Postsecondary Sru- For-profit 71.9 4,000 91 .6 9,600 2.0 3,600 96.7 13,100 drot Aid Study (NPSIIS:08). 3 1 What are the average prices paid by full-time undergraduate students and how do these prices vary by the type of institution attended? This Brief discusses three different measures of the price of an undergra- duate education: the sticker price, the net price after grants, and the out-of- pocket net price. The Sticker Price The sticker price is the total price of an undergraduate education including tuition' 0 and all other nontuition and living expenses such as books, sup- plies, and housing. The sticker price va- ried widely by the type of institution attended in 2007-08, ranging from an average of $12,600 among undergra- duates enroll ed full time at public 2- year institutions, to $18,900 at public 4- year institutions, $28,600 at for-profit institutions, and $35,500 at private nonprofit 4-year institutions (figure 1 ). FIGURE 1. THE PRICE OF AN UNDERGRADUATE EDUCATION for full-time undergraduates, by type of institution attended: 2007- 08 Price $40,000 30,000 20,000 10,000 0 Public 2-year Public 4-year For-profit Type of institution Private nonprofit 4year 8Avcrage sticker DAveragc net price DAverageoutof price after grants pocket net price NOTE: The "sticker price" is the total price of attendance which includes tuition, baoks and Slip plies, housing, meals, trans portation, and other miscellaneous, or personal, expenses. The "net price is the price that mustbe paid after receiving grants. The out-of-pocket net price" subtracts from the sticker price all forms of financial aid, including grants, student loans, Parent PLUS loans, work-study, employer aid, job training benefits, veterans benefits, and any other financial aid received. Both the net price after grants and the out-of-pocket net price are calculated for all full-time students, regardless of whether or not they received any financial aid. "Full-time'' is defined as having been enrolled in one postsecondary in stitution for9 months or more full time. for-profit" includeslessthan2year, 2-year, and 4year institutions. Estimates include students enrolled in Title IV eligible postsecondary i n s t ~ u t i o n s in the 50 states, District of Columbia, and Poerto Rico. Standard error tables are available at httol/nces ed goy!das/libr;uyfreoorts aso. SOURCE: U.S. Department of Educatian, National Center for Education Statistics, 2007 -{)8 National Postsecondary Student Aid Study (NPSAS:OS). 4 For some institutions (private nonprofit known in financial aid parlance as the supporting families (Wei 2010, table 4-year institutions in particular), the "student budget." Student budgets 5.1-A), which raises their nontuition tuition is a large component of the vary according to students' attendance expenses as compared with students sticker price. In 2007-08, average tui- and dependency status, family respon- who have no family responsibilities. tion was $2,400 at public 2-year institu- sibilities, and residence (e.g., living at tions, $7,100 at public 4-year home with parents, in an on-campus Students attending public 2-year insti- institutions, $11,900 at for-profit insti- dormitory, or in off-campus housing). tutions-mostly community colleges- tutions, and $23,400 at private non- profit 4-year institutions (figure 2). Nontuition expenses, which include books and supplies, housing and meals, transportation, and personal (or miscellaneous) expenses, also can vary by institution type. College or uni- versity financial aid officers usually de- velop an estimate of the sticker price, In-state vs. tuition At rnost public 4-year institutions, tuition charges are generally higher for qut-of-state students than for in-state residents, reflecting the state subsidies public institutions receive. In 2007- 08, the average in-state tuition was $6,200 and the average out-of-state tuition was $15,100 for full-time undergraduates enrolled in public 4-year institutions.* NPSAS:OS Data Analysis System (data not shown). In 2007-08, students enrolled full time in for-profit institutions had the high- est average nontuition expenses ($16,700), when compared with those at other types of institutions (where average nontuition expenses ranged from $10,200 to $12,1 00). Many stu- dents at for-profit institutions are fi- nancially independent and are FIGURE 2. TUITION AND NON TUITION EXPENSES for full-time undergraduates, had the lowest nontuition expenses. A larger proportion lived at home with their parents, which reduces costs for room and board, as compared with students at for-profit institutions (many of whom are supporting themselves or their own families) and those at 4-year institutions (where a larger proportion lived on campus or in off-campus hous- ing) (Wei 2010, table 5.1-C). by type of institution attended: 2007- 08 Price $40,000 30,000 20,000 10,000 0 Public 2-year Public 4-year For-profit Type of institution Private nonprofit 4-year OAverage nontuition expenses Average tuition NOH: "Full-time is defined as having been enrolled in one postse<ondary institution for 9 months or more full time. "Tui- tion" indudes all tuition and fees. "Non tuition expenses include books, supplies, hoosing, meals, transportation, and mis<ellaneoos or personal expenses. "For-profit" indudes lessthan-2-year, 2-year, and 4-year institutions. Estimates in- dude students enrolled in Title IV eligible postsecondary institutions in the 50 states, District of Columbia, and Puerto Rico. Standard error tables are available at htto:/lnces.ed.gov/dasflibrarv/reports aso. SOURCE: U5. Department of Education, National Center for Education Statistics, 2007-{)8 National Postsecondary Student Aid Study (NPSAS:OS). 5 The Net Price After Grants those at public 4-year institutions, Policymakers and researchers generally grant aid to full -time undergraduates subtract grants from the sticker price lowered the average sticker price of when discussi ng the net price of at- $18,900 to an average net price after tending a postsecondary institution. grants of $15,200. For example, Congress recently re- quired institutions t o make public both the sticker price and the average net price of attendance, calculated as the total price of attendance mi nus all grants received. In this Brief, two measures of net price are discussed: the "net price aft er grants" and the "out-of-pocket net price," which is the price af ter all f inancial aid (including loans, which must be repaid} is t aken into account. 11 Grant aid helped to lower the average st icker price among full-time under- graduates at public 2-year institutions from $12,600 to an average net price after grants of $10,600 (figure 1 ). For For those at private institutions (both for-prof it and nonprofit), the average net price after grants was about $25,700. For those attending for-profit institutions, the di fference between the average sticker price and the net price af ter grants was about $2,800. At private nonprof it 4-year instit utions, however, that difference was $10,000. The Out-of-Pocket Net Price The "out-of-pocket net price," defined as the sticker price less all fi nancial aid received, takes into account all forms of financial aid, incl uding grants, loans, work-study, and other aid (as well as Parent PLUS loans). The out-of-pocket 6 net price represents t he amount that must be paid immediately to enroll in a postsecondary institution for that aca- demic year. 12 Because the out-of- pocket net price subtracts loans f rom the sticker price, it measures the net price only in the short term. Loans off- set immediate costs to students and their families, but they must be repaid overti me. Full-time undergraduates enroll ed at public 2-year institutions had the low- est average out-of-pocket net price ($9,100), ref lecting the already lower sticker price at these institutions (figure 1}. Those at public 4-year institutions had a slightly higher average out-of- pocket net price ($1 0,300). Students at private institutions had the highest av- erage out-of-pocket net prices ($16,000 at for-profit institutions and $16,600 at private nonprof it 4-year inst it utions}. 2 What factors are related to variations in average sticker and net prices among those attending these institutions? Prices vary by institution type for sev- eral reasons. Institutions charge differ- ent levels of tuition (based on whether they are public or private and the amount of state and local subsidies re- ceived); the demographic characteris- tics of students (and thus their non tuition expenses and eligibility for federal and state grant aid) vary by type of institution; and institutional policies for awarding institutional aid differ. As noted previously, the amount of tui- tion charged by institutions is a prima- ry factor in the total price of attendance, but students also incur dif- ferent nontuition expenses depending on their family responsibilities and liv- ing arrangements. Average net prices are further affected by differences in the proportion of aid recipients at each type of institution. For example, the number of students eligible for federal Pel I Grants or state- funded grant aid at a particular school will affect the average net price after grants, as will a school's policies for awarding grants from institutional funds. The out-of-pocket net price fur- ther depends on the level of borrowing among students and their parents and other types of aid received, such as work-study. Public 2-Year Institutions Full-time students attending public 2- year institutions had the lowest aver- age sticker price ($12,600), net price af- ter grants ($1 0,600), and out-of-pocket net price ($9, 1 00) among all undergra- duates (figure 1 ). Because students at public 2-year insti- tutions had a lower average sticker price initially, their average net prices also were lower-even though they had the smallest proportions of grant recipients (56 percent) and students who borrowed (23 percent took out a student loan) (table 2). 7 Public 4-Year Institutions Tuition at public 4-year institutions was higher than at public 2-year institu- tions, but not as high as at the private institutions (figure 2). Students at these institutions also have slightly higher nontuition expenses than those at public 2-year institutions, with a larger proportion living on campus or away from home (see Wei 2010, table 5.1 -C). Among those enrolled full time at pub- lic 4-year institutions, 60 percent re- ceived grant aid, about one-half (53 percent) took out student loans, and 10 percent received work-study support (table 2). Grant aid helped to lower the net price after grants to an average of $15,200, and the addition of loans, work-study, and other aid resulted in an average out-of-pocket net price of $10,300 (figure 1 ). This compares to an average out-of-pocket net price of $9,100 at public 2-year institutions-a difference of $1,200 in the average out- of- pocket net price, even though the difference in the average sticker price was $6,300. For-Profit Institutions For-profit institutions are privately owned and operated and the profits they generate benefit individual own- ers and shareholders. The programs can range from less than 1 year to 4- year bachelor's and graduate degrees. Most undergraduates enrolled in less- than-4-year for-profit institutions are pursuing certificates or associate's de- grees in occupational training pro- grams (Staklis 2010). Undergraduates at for-profit institutions also tend to be older, financially independent, and have family responsibilities. This in- creases their nontuition expenses and hence, their average sticker price. More undergraduates at for-profit institu- tions received federal grants (62 per- cent) than did students in any other type of institution in our analysis (fig- ure 3). However, a smaller percentage of for-profit students received state, in- stitutional, or private grants than stu- dents in other sectors. On average, these students had a net price after grants of $25,800-not measurably dif- ferent than that of private nonprofit 4- year institutions, and higher than that of public institutions (figure 1 ). FIGURE 3. SOURCES OF GRANT AID for full-time undergraduates, by type of institution attended: 2007- 08 Percent 100 80 62 60 40 20 0 Public 2-year Public 4-year For-profit Type of institution 67 Private nonprofit 4year Federal grants OState grants II Institutional grants 0 Privat e source grants NOTE:vGrants'' include scholarships and tuition waivers. full-time" is defined as having been enrolled in one postsecon- dary institution for9 months or more full time. "For-profit" includes lesHhan-2-year, 2-year, and 4-year institutions. Es timates include students enrolled in Title IV eligible postsecondary institutions in the 50 states, District of Columbia, and Puerto Rico. Standard error tables are available at http:l/ncey.ed.gov/dasllib@!vlreoorts.aso. SOURCE: U5. Department of Education, National Education Statistics, 2007-{)8 National Postsecondary Student Aid Study (NPSAS:08). 8 Student loans were critical to reducing Private Nonprofit 4-Year Institutions next highest sticker price: for-profit in- the average out-of-pocket net price for Even though they had the highest av- stitutions ($25,800 and $16,000, re- al I undergraduates, but particularly for erage sticker price ($35,500) of the four spectively) (figure 1 ). those at for-profit institutions. For- profit institutions had the largest pro- portion of full-time undergraduates with at least one loan in their financial aid package: 9 out of 10 (92 percent) received an aid package containing a loan (table 2 and figure 4), compared to 65 percent of those at private non- profit 4-year institutions, 53 percent at public 4-year institutions, and 23 per- cent at public 2-year institutions. The high level of student borrowing at for- profit institutions resulted in an aver- age out-of-pocket net price of $16,000 (figure 1 ). FIGURE 4. TYPE OF AID PACKAGE major sectors, financial aid recipients at private nonprofit 4-year institutions al- so received the largest average amount of total aid ($21,100), when compared with those at for-profit institutions ($13, 1 00}, public 4-year institutions ($11 ,000}, and public 2-year institutions ($5,400) (table 2). In fact, aid received by undergraduates at private nonprofit 4-year institutions resulted in an average net price of $25,500 and an average out-of-pocket net price of $16,600, both of which were not measurably different from undergraduates at schools with the for full-time undergraduates, by aid package received and type of institution attended: 2007- 08 Percent 100 80 60 40 20 0 Percent dimibution receiving aid 16 Public 2-year Public 4-year For-profit Type of institution Private nonprofit 4year Aid package OGrants, work- study, or other aid, with loans II Loans only o Grams, work- study, or other aid, without loans No aid received NOTE: Grants" include scholarships and tuition waivers. "loans include federal, state, ins1itutional, or private student loans, excluding Parent PLUS loans. "Other'' aid includes job training, veterans benefits, employer aid, and Parent pLUS loans. "Full time" is defined as having been enrolled in one postsecondary institution for 9 months or more full time. "For profir includes less-than-2-year, 2-year, and 4-yearinstitutions. Estimates include students enrolled in Title IV eligible postsecondary institutions in the 50 states, District of Columbia, and Puerto Rico. Detail may not sum to totals because of rounding. Standard error tables are available at hno://nces.ed.gov/dasflibrarv/reports.asp. SOURCE: U.S. Department of Education, National Center tot Education Statistics, 2007 ~ 8 National Postsecondary Student Aid Study (NPSAS:08). 9 The receipt of institutional grants, in particular, was critical in lowering the price for those attending private non- profit 4-year colleges and universities. About two-thirds (67 percent) of stu- dents in private nonprofit +year schools received institutional grants or tuition waivers, a larger proportion than at any other type of institution (30 percent at public 4-year institutions, 17 percent at public 2-year institutions, and 7 percent at for-profit institutions) (figure 3). The average institutional grant received by those attending pri- vate nonprofit 4-year institutions was $10,400, 13 which helped reduce the av- erage sticker price to an average net price after grants of $25,500 (figure 1 ). Work-study was also an important source of aid to those at private non- profit 4-year institutions. Nearly one- third (31 percent) of all full-time un- dergraduates at private nonprofit 4- year institutions received work-study aid, the highest percentage among all full-time undergraduates (between 2 and 1 0 percent of undergraduates at other types of institutions received work-study aid) (table 2). With the aid of student loans, work-study, and other types of support, full-time undergra- duates at private nonprofit 4-year insti- tutions had an average out-of-pocket net price of $16,600-not measurably different from those attending for- profit institutions ($16,000) (figure 1 ). 3 How do the net prices paid by undergraduates vary by family income? Figure 5 shows the average net price after grants among dependent under- graduates by their family income and type of institution attended. Among low-income and low middle-income dependent students, those with the highest average net price after grants were enrolled at for-profit institutions. In contrast, among high middle- income and high-income students, the average net price af ter grants for those at for-profit institutions was not mea- surably different from those at private nonprofit 4-year institutions. FIGURE 5. NET PRICE AFTER GRANTS BY INCOME for full-time dependent undergraduates, by family income category and type of institution attended: 2007-08 Price $40,000 30,000 20,000 10,000 0 Low-income Average net price after grants Low middlcincomc High middleincome High-income Public 2-year Cl Public 4-year II For-profit OPrivate nonprofit4-year NOH: The "net price after grants" is the price of attending a postsecondary institutioo after all grants have been received. This amoont is calculated by subtracting total grant aid from the 5ticker price. The sticker price is the total price of atten- dance and includes tuition, books and supplies, housing, meals, transportation, and other miscellaneous, or personal, ex penses. Grant aid indudes grants, scholarships, tuition waivers, and other gift aid that does not need to be repaid. The net price after grants is calculated for all students, regardless of whether or not they received any grant aid. Family income categories were based upon parents' annual income in 2006. Dollar cutoffs are based on the distribution among all depen- dent undergraduates: "Low-income was the lowest 25th percentile (less than ~ 3 6 , 100); "Low middle-income" was the 26th to 50th percentile ( ~ 6 , lOQ-$66,600); "High middle-income was the 51st to 75th percentile($66,600- $104,600); and "High-income was the highest 25th percentile ($104,600 or more). ''Full-time" is defined as having been enrolled in one postsecondary institution for 9 months or more full time. "For-profit' includes lessthan-2-year, 2-year, and 4-year institutions. Estimates include students enrolled in Title IV eligible postsecondary institutions in the 50 states, District of Columbia, and Puerto Rico. Standard error tables are available at htto1/nces ed gov{dasflibrarv/reoorts asp. SOURCE: U.S. OepartmentofEducatioo, National Center for Education Statistics, 200Hl8 National Postsecondary Student Aid Study (NPSAS:08). 10 The average out-of-pocket net price, on the other hand, shows a slightly dif- ferent pattern (figure 6). After borrow- ing, low-income and low middle- income undergraduates enrolled at for- profit institutions continued to have the highest average out-of-pocket net price, when compared with those at other institutions. However, among those with incomes above the median (i.e., high middle-income and high- income students), the average out-of- pocket net price was highest for those enrolled at private nonprofit 4-year in- stitutions. FIGURE 6. OUT-OF-POCKET NET PRICE BY INCOME for full-time dependent undergraduates, by family income: 2007- 08 Price Average outofpocket net price $40,000 30,000 20,000 10,000 0 Low-income Low middle-income High middle-income High-income Public 2-year D Public 4-year For-profit OPrivate nonprofit 4-year NOTE: The "out-of-pocket net price" is the price of attending a postsecondary institulion after all aid has been received. This amount is calculated by subtracting total financial aid from the sticker price. The sticker price is the total price of at- tendance and includes tuition, books and supplies, housing, meals, transportation, and other miscellaneous, or personal, expenses. Financial aid includes grants, student loans, Parent PLUS loans, work-study, employer aid, job training benefits, veterans benefits, and any other type of aid. The out-of-pocket net price is calculated for all students, regardless of wheth er or not they received any aid. Family income categories were based upon parents' annual income in 2006. Dollar cutoffs are based on the distribution among all dependent undergraduates: "Low-income" was the lowest 25th percentile (less than $36,100); ''Low was the 26th to 50th percentile ($36,10Q-$66,600); "High middle-income was the 51st to 75th percentile ($66,60Q-S 104,600); and "High-income" was the highest 25th percentile (S 104,600 or more). "Full time" is defined as having been enrolled in one postsecondary institution for 9 months or more full time. "For-profit" includes lesstban-2-year, 2-year, and 4-yearinstitutions. Estimates include students enrolled in Title IV eligible condary institutions in the 50 states, District of Columbia, and Puerto Rico. Standard error tables are available at htto:{/nces.ed.gov/das/ljbrardreoorts.aso. SOURCE: U.S. Department of Education, National Center for Education Statistics, 2007 -{)8 National Postsecondary Student Aid Study (NPSAS:08). 11 FIND OUT MORE For questions about content, ordering additional copies of this Statistics in Brief, or to view this report online, go to: http:/ /nces.ed.gov/pubsearch/pubsinfo.asp?pubid=201 017 S More detailed information on the price of undergra- duate education and undergraduate financing can be found in Web Tables produced by the National Center for Education Statistics (NCES) using the 2007-08 Na- tional Postsecondary Student Aid Study (NPSAS:08) data. These Web Tables are a comprehensive source of information on financial aid awarded to undergra- duate students during the 2007-08 academic year. In- cluded are estimates of tuition, price of attendance, and financial aid. Additional information on the de- mographic characteristics of 2007-08 undergraduates can be found in a second set of Web Tables. Web Tables-Student Financing of Undergraduate Edu- cation: 2007-08 (NCES 2010-162). (link will be added) Web Tables-Profile of Undergraduate Students in U.S. Postsecondary Institutions: 2007-08 (NCES 2010-205). (link will be added) Readers may also be interested in the following NCES products related to the topic of this Statistics in Brief: 2007-08 National Postsecondary Student Aid Study (NPSAS:08): Student Financial Aid Estimates: First Look (NCES 2009-166). http://nces.ed.gov /pubs2009/2009166.pdf Undergraduate Financial Aid Estimates by Type of Insti- tution in 2007-08 (NCES 2009-201). http://nces.ed.gov/pubs2009/2009201.pdf -------------------------------------- 12 -------------------------------------- TECHNICAL NOTES Survey Methodology The estimates provided in this Statistics in Brief are based on data collected through the 2007-08 National Postse- condary Student Aid Study (NPSAS:08}. NPSAS covers broad topics concerning student enrollment in postsecondary education and how students and their families finance their education. In 2008, students provided data through instruments administered over the In- ternet or by telephone. In addition to student responses, data were collected from the institutions that sampled stu- dents attended and other relevant da- tabases, including U.S. Department of Education records on student loan and grant programs and student financial aid applications. NPSAS:08 is the seventh administration of NPSAS, which has been conducted every 3 to 4 years since 1986-87. The NPSAS:08 target population includes students enrolled in Title IV postsecon- dary institutions in the United States and Puerto Rico at any time between July 1, 2007 and June 30, 2008. 14 This population included about 21 million undergraduates and 3 million graduate students enrolled in over 6,000 institu- tions. The institution sampling frame for NPSAS:08 was constructed from the 2004-05 and 2005- 06 Institutional Characteristics, Fall Enrollment, and Completions files of the Integrated Postsecondary Education Data System (IPEDS). The sampling design consisted of first selecting eligible institutions, then selecting students from these in- stitutions. Institutions were selected with probabi lities proportional to a composite measure of size based on expected 2007- 08 enrollment. With approximately 1,700 institutions partic- ipating in the study, the weighted insti- tution unit response rate was 90 percent. Eligible sampled students were defined as study respondents if at least 11 key data element s were avail- able from any data source. Approx- imately 114,000 undergraduates and 14,000 graduate students were study respondents, and the weighted stu- VARIABLES USED dent unit response rates for both levels were 96 percent. Estimates were weighted to adj ust for the unequal probability of selection into the sample and for nonresponse. Two broad categories of error occur in estimates generated from surveys: sampling and nonsampling errors. Sampling errors occur when observa- tions are based on samples rather than on entire populations. The standard er- ror of a sample statistic is a measure of the variation due to sampling and indi- cates the precision of the statistic. The complex sampling design used in All estimates presented in this Statistics in Brief were produced using the Data Analysis System (DAS}. See "Run Your Own Analysis" for more informa- tion on the DAS and other web-based software applications that enable us- ers to generate tables for most of t he postsecondary surveys conducted by NCES. The program files that generated the statistics presented here can be found at http://nces.ed.gov/lnsert-u_r_ILThe variables used in these analyses include the following: Label Attendance status Family income for dependent students Federal grants Institutional grants Net price after grants Non-tuition expenses Out-of-pocket net price Private grants State grants Sticker price Total financial aid Total grants Total student loans Tuition Type of aid package Type of institution Work-study Name ATINSTAT PODEP TFEDGRT INGRTAMT NETCST3 BUDNONAJ NETCSTl PRJVAID STGTAMT BUDGETAJ TOT AID TOTGRT TOTLOAN TUITION2 AIDTYPE SECTOR4 TOTWKST 13 -------------------------------------- NPSAS:08 must be taken into account when calculating variance estimates such as standard errors. NCES's onllne Data Analysis System (DAS), which generated the estimates in this report, uses the balanced repeated replication (BRR) method to adjust variance esti- mation for the complex sample design. Nonsampllng errors can be attributed to several sources: incomplete informa- tion about all respondents (e.g., some students or institutions refused to par- ticipate, or students participated but answered only certain items); differ- ences among respondents in question interpretation; inability or unwilling- ness to give correct information; mis- takes in recording or coding data; and other errors of collecting, processing, sampllng, and imputing missing data. For more information on NPSAS:08 me- thodology, see appendix B of 2007- 08 National Postsecondary Student Aid Study (NPSAS:08): Student Financial Aid Estimates for 2007- 08: First Look (.b.llJ2;LL nces.ed.gov/pubs2009/2009166.pdt). Item Response Rates NCES Statistical Standard 4-4- 1 states that "[a)ny survey stage of data collec- tion with a unit or item response rate less than 85 percent must be evaluated for the potential magnitude of nonres- ponse bias before the data or any anal- ysis using the data may be released" (U.S. Department of Education 2003). In the case of NPSAS:08, this means that nonresponse bias analysis could be re- quired at any of three levels: (a) institu- tions, (b) study respondents, or (c) items. Because the institutional and study respondent response rates were 90 and 96 percent, respectively, non- response bias analysis was not required at those levels. Although many NPSAS variables were derived exclusively from administrative sources or from both administrative sources and student interviews, there were some variables that came exclu- sively from student interviews. Since the student interview response rate was 71 percent, those variables based solely on student interviews required nonresponse bias analysis. In this re- port, 7 variables required nonresponse bias analysis: AIDTYPE (60 percent), NETCSTl (58 percent), NETCST3 (59 percent), PCTDEP (55 percent}, TOT AID (60 percent), TOTGRT (61 percent), and TOTLOAN (67 percent). For each of these variables, nonresponse bias ana- lyses were conducted to determine whether respondents and non respon- dents differed on the following charac- teristics: institution sector, region, and total enrollment; student type, gender, and age group; whether the student had Free Application for Federal Stu- dent Aid (FAFSA) data, was a federal aid recipient, was a Pel l Grant recipient, or borrowed a Stafford Loan; and the amount, if any, of a student's Pel I Grant or Stafford Loan. Differences between respondents and nonrespondents on these variables were tested for statis- tical significance at the 5 percent level. Non response bias analyses of the va- riables in this report with response rates less than 85 percent indicated t hat respondents differed from non- respondents on 71 to 80 percent of the characteristics analyzed, indicating that there may be bias in these estimates. Any bias due to nonresponse, however, is based upon responses prior to sto- chastic imputation. The potential for bias in these estimates is tempered by two factors. First, potential bias may have been re- duced due to imputation. Because im- putation procedures are designed specifically to identify donors with similar characteristics to those with missing data, the imputation is as- sumed to reduce bias. While item-level bias before imputation is measurable, such bias after imputation is not, so whether the imputation affected the bias cannot be directly evaluated. Therefore, the item estimates bef ore and after imputation were compared to determine whether the imputation changed the biased estimate, thus suggesting a reduction in bias. For continuous variables, the differ- ence between the mean before impu- tation and the mean after imputation was estimated. For categorical va- riables, the estimated difference was computed for each of the categories as the percentage of students in that cat- egory before imputation minus the percentage of students in that catego- ry after imputation. These estimated differences were tested for statistical significance at the 5 percent level. A significant difference in the item means after imputation implies are- duction in bias due to imputation. A 14 ---------------------------------------- nonsignificant difference suggests that imputation may not have reduced bias, that the sample size was too small to detect a significant difference, or that there was little bias to be reduced. Second, for some composite variables, the components of the variables from which the composites are constructed often constitute a very small propor- tion of the total variable, attenuating the potential bias introduced by non- response. For example, most of the components ofTOTAID (total amount of all financial aid received) were ob- tained from federal databases and in- stitutional records and have very high response rates. Some components of TOT AID, however, are types of financial aid that are often disbursed directly to students and not through institutions (e.g., employer aid and private loans). Because the primary source of informa- tion about such types of aid is the stu- dent interview, these variables were missing for interview nonrespondents. In the case of missing information from the student interview, values were sto- chastically imputed and the imputed values were used to construct the composite variables. In the example cited above, both employer aid and private loans were received by relative- ly few students and were smal l compo- nents of the total. For example, 52 percent of all undergraduates received any grants (TOTGRT), a primary com- ponent ofTOTAID, and the average among all undergraduates was $2,500. In comparison, 8 percent received any employer aid (EMPL YAM3), with an av- erage among all undergraduates of $200. Therefore, despite the low re- sponse rates of these components, any bias they contribute is likely to be mi- nimal. For more detailed information on non- response bias analysis and an overview of the survey methodology, see ap- pendix B of the report 2007-08 Nation- al Postsecondary Student Aid Study (NPSAS:08): Student Financial Aid Esti- mates for 2007-08: First Look (1mQ;LL nces.ed.gov/pubs2009/2009166.pdt). Statistical Procedures Comparisons of means and propor- tions were tested using Student's t sta- tistic. Differences between estimates were tested against the probability of a Type I error 15 or significance level. The statistical significance of each compari- son was determined by calculating the Student's tvalue for the difference be- tween each pair of means or propor- tions and comparing the t value with published tables of significance levels for two-tailed hypothesis testing. Stu- dent's tvalues were computed to test differences between independent es- timates using the following formula: where f 1 and E2 are the estimates to be compared and se1 and se2 are their cor- responding standard errors. There are hazards in reporting statistic- al tests for each comparison. First, comparisons based on large t statistics may appear to merit special attention. This can be misleading since the mag- nitude of the t statistic is related not only to the observed differences in means or percentages but also to the number of respondents in the specific categories used for comparison. Hence, a small difference compared across a large number of respondents would produce a large (and thus possibly sta- tistically significant) t statistic. A second hazard in reporting statistical tests is the possibility that one can re- port a "false positive" or Type I error. Statistical tests are designed to limit the risk of this type of error using a val- ue denoted by alpha. The alpha level of .OS was selected for findings in this re- port and ensures that a difference of a certain magnitude or larger would be produced when there was no actual difference between the quantities in the underlying population no more than 1 time out of 20. 16 When analysts test hypotheses that show alpha values at the .OS level or smaller, they reject the null hypothesis that there is no dif- ference between the two quantities. Failing to reject a null hypothesis, i.e., detect a difference, however, does not imply the values are the same or equivalent. -------------------------------------- 15 -------------------------------------- REFERENCES The College Board (2008). Fulfilling the Commitment: Recommendations for Reforming Federal Student Aid: TheRe- port from the Rethinking Student Aid Study Group. Retrieved on January 1 5, 2010, from .b!!J;tiL professionals.collegeboard.com/ profdownload/rethinking-stu-aid- fulfilling-commitment- recom mendations.pdf. The College Board (2009). Trends in College Pricing 2009. Retrieved on February 11, 2010, from http://www.trends-col legeboard. com/college pricing/pdf/ 2009 Trends College Pricing.pdf. Harvey, J., Williams, R.M., Kirshstein, RJ., O'Malley, A.S., and Wellman, J.V. (1998). Straight Talk About College Costs and Prices. Report of the National Commission on the Cost of Higher Edu- cation. Phoenix, AZ: Oryx Press. lmmerwahr, J., Johnson, J., Gasbarra, P., Ott, A., and Rochkind, J. (2009). Squeeze Play 2009: The Public's Views on College Costs Today. New York and San Jose, CA: Public Agenda and The National Center for Public Policy and Higher Education. Lewin, T. (2009, October 20). College Costs Keep Rising, Report Says. The New York Times. Marchand, A. (201 0, January 21 ). Cost of College Is a Big Worry of Freshmen in Nat ional Survey. The Chronicle of High- er Education. Pryor, J.H., Hurtado, S., DeAngelo, L., Pa- lucki Blake, L., and Tran, S. (2009). The American Freshman: National Norms Fa/12009. Los Angeles: Higher Educa- tion Research Instit ute, Universit y of California, Los Angeles. Staklis, S. (201 0). Web Tables- Profile of Undergraduate Students: 2007-08 (NCES 201 0-205). National Center for Educat ion Statistics, Instit ute of Edu- cation Sciences, U.S. Department of Education. Washingt on, DC. U.S. Department of Education, Nat ional Cent er for Educat ion Statistics. (2003). NCES Statistical Standards (NCES 2003- 601 ). Washington, DC. Wei, C. (201 0). Web Tables- Student Fi- nancing of Undergraduate Education: 2007-08 (NCES 201 0-162). National Center for Educat ion Stat ist ics, Insti- tute of Education Sciences, U.S. De- partment of Education. Washington, DC. 16 -------------------------------------- ENDNOTES 1 A recent public opinion poll showed that in- creasing numbers of Americans view college as a necessity for success (lmmerwahr et al. 2009). The College Board (2009) reports that the published, or sticker, price of college has increased more rapidly than the price of other goods and services over the past three dec- ades. See also Marchand (2010), which re- ported on these findings. 2 The Higher Education Research Institute at the University of California, Los Angeles, has conducted a survey offreshmen each year since 1973 (Pryor et al. 2009). See also recent media attention to the issue (Lewin 2009). 3 Both governmental and nongovernmental study commissions have convened to address this. See, for example, The College Board (2008) and Harvey et al. ( 1998). 4 Public Law 110-315, title I, Sec. 132. August 14, 2008. Higher Education Opportunity Act. 5 For-profit institutions include less-than-2- year, 2-year, and 4-year institutions. 6 "Full-time" status is defined as having been enrolled full time in one postsecondary institu- tion for 9 months or more during the academ- ic year. 7 National Postsecondary Student Aid Study (NPSAS:08) Data Analysis System. 8 The remaining students were enrolled in other types of institutions or in more than one institution during the academic year. 9 All comparisons of estimates were tested for statistical significance using the Student's t- statistic, and all differences cited are statistical- ly significant at the p < .OS level. No adjust- ments for multiple comparisons were made. The standard errors for the estimates can be found at http://nces.ed.gov/das/library/ reports.asp. 10 In this report, the term "tuition" includes both tuition and fees. Sometimes institutions treat tuition and fees as a single charge, and sometimes as separate charges. Tuition is de- fined as the price of instruction and fees as the price of other services provided by the school. The tuition amounts shown here include those charged to all undergraduates: both in-state and out-of-state students enrolled in public 4- year institutions, and both in-district and out- of-district students enrolled in public 2-year institutions. 11 Both net price and out-of-pocket net price averages are calculated for all students, re- gardless of whether they received any finan- cial aid. This method of calculating net price averages for all students differs from that used to calculate average aid amounts in this report (see table 2). Average aid amounts are calcu- lated only for students receiving a particular type of aid. Those not receiving a specific type of aid (i.e., zero values) are not included in the average for that aid. The average grant, there- fore, will be greater than the difference be- tween the sticker price and the net price after grants. 17 12 Since 1998, the federal government has also provided postsecondary students and their families with various federal tax benefits. These are not included in the definition of fi- nancial aid and are not used in the calculation of net price in this study. 13 NPSAS:08 Data Analysis System (data not shown). 14 The target population of students was li- mited to those enrolled in an academic pro- gram, at least one course for credit that could be applied toward an academic degree, or an occupational or vocational program requiring at least 3 months or 300 clock hours of instruc- tion to receive a degree, certificate, or other formal award. The target population excluded students who were also enrolled in high school or a high school completion (e.g., GED preparation) program. "Title IV institutions" refers to institutions eligible to participate in federal financial aid programs under Title IV of the Higher Education Act. 15 A Type I error occurs when one concludes that a difference observed in a sample reflects a true difference in the population from which the sample was drawn, when no such differ- ence is present. 16 No adjustments were made for multiple comparisons. RUN YOUR OWN ANALYSIS WITH DATALAB You can replicate or expand upon the figures and tables in this report, or even create your own. Data lab has several different tools that allow you to customize and generate output from a variety of different survey datasets. Visit Data Lab at: ; - ""'It .. lJiJ! "'"'
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P.J-:.lhh ftrn .. ------------------------------ 18------------------------------ www.ed.gov ies.ed.gov (b)(5) Georgia -----Original Message----- From: Bergeron, David Sent: Tuesday, July 20, 2010 8:52PM From: Yuan Georgia To: Bergeron. David K vaal. James Martin. Phil Arsenault L e i ~ h CC: Date: 7/21/2010 9:47:44 AM Subject: RE: GE document control To: Kvaal, James; Yuan, Georgia; Martin, Phil; Arsenault, Leigh Subject: RE: GE document control (b)(5) From: levaal, James Sent: Tuesday, July 20, 2010 8:42PM To: Bergeron, David; Yuan, Georgia; Martin, Phil; Arsenault, Leigh Subject: GE document control (b)(5) (b)(5) (b)(5)
(b)(S) (b)(5) (b)(S) (b)(5) From: Yuan, Georgia Sent: Thursday, September 16, 2010 8:57PM To: Finley, Steve Subject: Fw: GE schedule on a spreadsheet FYI Frorn:lCvaal, James From: Finley, Steve To.: Yuan. Georgia CC: Date: 9/16/2010 9:08:34PM Subject: RE: GE schedule on a spreadsheet To: Yuan, Georgia; Bergeron, David; McFadden, Elizabeth Sent: Thu Sep 16 19:01:57 2010 Subject: RE: GE schedule on a spreadsheet (b)(5) (b)(5) (b)(5) From: Yuan, Georgia Sent: Thursday, September 16, 2010 2:21PM To: Bergeron, D a v i d ~ Kvaal, James; McFadden, Elizabeth Subject: GE schedule on a spreadsheet (b)(5) (b)(S) Georgia Georgia Yuan Deputy General Counsel Postsecondruy and Regulatory Setvice LBJ 6E341 202-401-63 99 Georgia, (b)(5) From: Kyaal James To: Yuan, Georgia Bergeron. David McFadden, Elizabeth CC: Date: 9/16/2010 8:01:58 PM Sub.iect: RE: GE schedule on a spreadsheet (b)(S) From: Yuan, Georgia Sent: Thursday, September 16, 2010 2:21PM To: Bergeron, David; Kvaal, James; McFadden, Elizabeth Subject: GE schedule on a spreadsheet David, Elizabeth and James Attached is a spreadsheet (you can tell I am not an expert at creating spreadsheets!) that displays the various things we (b)(5) Georgia Georgia Yuan Deputy General Counsel Postsecondaty and Regulatoty SeiVice LBJ 6E34l 202-401-6399 From: Kanter Martha To: Yuan, Georgia CC: Date: 8112/2010 11:16:46 PM Subject: RE: Heads up on Gainful Employment He's been added. From: Yuan, Georgia Sent Thursday, August 12, 2010 11:01 PM To: Kanter, Martha Subject: Re: Heads up on Gainful Employment Martha. Do you want to include Eduardo? G ----- Original Message ----- From: Kanter, Martha To: Rose, Charlie; Yuan, Georgia; Kvaal , James Sent: Thu Aug 12 21:24:10 2010 Subject: RE: Heads up on Gainful Employment I sent a calendar request to each of you. Martha From: Rose, Charlie Sent: Thursday, August 12, 2010 1 0:22 PM To: Kanter, Martha; Yuan, Georgia; K vaal, James Subject: Re: Heads up on Gainful Employment Sounds good. Thx. Charlie Sent using BlackBeny -----Original Message----- From: Kanter, Martha To: Rose, Charlie; Yuan, Georgia; Kvaal , James Sent: Thu Aug 12 21:20:43 2010 Subject: RE: Heads up on Gainful Employment Yes- how about right after the 8-8:30 communications meeting? From: Rose, Charlie Sent Thursday, August 12, 2010 10: 18 PM To: Kanter, Martha; Yuan, Georgia; K vaal, James Subject Re: Heads up on Gainful Employment (b)(5) Charlie Sent using BlackBeny -----Original Message----- From: Kanter, Martha To: Weiss, Rose, Cunningham, Martin, Gomez, Miller, Yuan, K vaal , James Sent: Thu Aug 12 21:13:48 2010 Subject FW: Heads up on Gainful Employment From: Hamilton, Justin Sent Thursday, August 12, 2010 5:45PM To: Gannet Tseggai; Dan Pfeiffer; Roberto Rodriguez; Heather Higginbottom; K vaal, James; Kanter, Martha; Cunningham, Peter; Abrevaya, Sandra; Jennifer Psaki Subject Heads up on Gainful Employment (b)(5) From: Kanter Martha To.: Rose. Charlie Yuan, Georgia K vaal, James CC: Date: 8/12/2010 10:20:44 PM Subject: RE: Heads up on Gainful Employment Yes- how about right after the 8 - 8:30 communications meeting? From: Rose, Charlie Sent Thursday, August 12, 2010 1 0:18 PM To: Kanter, Martha; Yuan, Georgia; Kvaal, James Subject Re: Heads up on Gainful Employment (b)(S) Charlie Sent using BlackBeny ----- Original Message ----- From: Kanter, Martha To: Weiss, Joanne; Rose, Charlie; Cunningham, Peter; Martin, Carmel; Gomez, Gabriella; Miller, Tony; Yuan, Georgia; Kvaal, James Sent Thu Aug 12 21:13:48 2010 Subject FW: Heads up on Gainful Employment From: Hamilton, Justin Sent: Thursday, August 12, 2010 5:45PM To: Gannet Tseggai; Dan Pfeiffer; Roberto Rodriguez; Heather Higginbottom; K vaal , James; Kanter, Martha; Cunningham, Peter; Abrevaya, Sandra; Jennifer Psaki Subject Heads up on Gainful Employment (b)(5) (b)(5) From: Kanter Martha To.: Rose. Charlie Yuan, Georgia K vaal, James CC: Date: 8/12/2010 10:24:10 PM Subject: RE: Heads up on Gainful Employment I sent a calendar request to each of you. Martha From: Rose, Charlie Sent: Thursday, August 12, 2010 10:22 PM To: Kanter, Martha; Yuan, Georgia; Kvaal, James Subject: Re: Heads up on Gainful Employment Sounds good. Thx. Charlie Sent using BlackBerry ----- Original Message ----- From: Kanter, Martha To: Rose, Charl ie; Yuan, Georgia; Kvaal, James Sent: Thu Aug 12 21:20:43 2010 Subject: RE: Heads up on Gainful Employment Yes- how about right after the 8 - 8:30 communications meeting? From: Rose, Charlie Sent: Thursday, August 12, 2010 10:18 PM To: Kanter, Martha; Yuan, Georgia; K vaal, James Subject: Re: Heads up on Gainful Employment (b)(5) Charlie Sent using BlackBerry ----- Original Message ----- From: Kanter, Martha To: Weiss, Joanne; Rose, Charli e; Cunningham, Peter; Martin, Carmel; Gomez, Gabriella; Miller, Tony; Yuan, Georgia; Kvaal, James Sent: Thu Aug 12 21: 13 :48 2010 Subject: FW: Heads up on Gainful Employment From: Hamilton, Justin Sent: Thursday, August 12, 2010 5:45PM To: Gannet Dan Roberto Rodriguez; Heather Kvaal, James; Kanter, Cunningham, Abrevaya, Sandra; Jennifer Psaki Subject: Heads up on Gainful Employment (b)(S) From: Kanter Martha To.: Yuan. Georgia CC: Date: 8/12/2010 11:13:46 PM Subject: RE: Heads up on Gainful Employment l(b)(S) From: Yuan, Georgia Sent: Thursday, August 12,2010 11:01 PM To: Kanter, Martha Subject: Re: Heads up on Gainful Employment Martha. L--1 (b_)(_ 5 ) _____ _____JI G -----Original Message----- From: Kanter, Martha To: Rose, Charlie; Yuan, Georgia; Kvaal, James Sent: Thu Aug 12 21:24: 10 2010 Subject: RE: Heads up on Gainful Employment I sent a calendar request to each of you. Martha From: Rose, Charlie Sent: Thursday, August 12, 2010 10:22 PM To: Kanter, Martha; Yuan, Georgia; Kvaal, James Subject: Re: Heads up on Gainful Employment Sounds good. Thx. Charlie Sent using BlackBerry -----Original Message----- From: Kanter, Martha To: Rose, Charlie; Yuan, Georgia; Kvaal, James Sent: Thu Aug 12 21:20:43 2010 Subject: RE: Heads up on Gainful Employment Yes - how about right after the 8 - 8:30 communications meeting? From: Rose, Charlie Sent: Thursday, August 12, 2010 10: 18 PM To: Kanter, Martha; Yuan, Georgia; Kvaal, James Subject: Re: Heads up on Gainful Employment (b)(5) Charlie Sent using BlackBerry ----- Original Message----- From: Kanter, Martha To: Weiss, Joanne; Rose, Charlie; Cunningham, Peter; Martin, Carmel; Gomez, Gabriella; Mi ller, Tony; Yuan, Georgia; Kvaal, James Sent: Thu Aug 12 21:13:48 2010 Subject: FW: Heads up on Gainful Employment From: Hamilton, Justin Sent: Thursday, August 12, 2010 5:45PM To: Gannet Tseggai; Dan Pfeiffer; Roberto Rodriguez; Heather Higginbottom; K vaal, James; Kanter, Martha; Cunningham, Peter; Abrevaya, Sandra; Jennifer Psaki Subject: Heads up on Gainful Employment (b)(5) (b)(5) Charlie Sent using Black:Beny ----- Original Message----- From: Kanter, Martha From: Rose, Charlie To: Kanter, Martha Yuan. Georgia Kvaal, James CC: Date: 8/12/2010 10:18:44 PM Subject: Re: Heads up on Gainful Employment To: Weiss, Joanne; Rose, Charlie; Cunningham, Peter; Martin, Carmel; Gomez, Gabriella; Miller, Tony; Yuan, Georgia; Kvaal, James Sent: Thu Aug 12 21:13:48 2010 Subject: FW: Heads up on Gainful Employment From: Hamilton, Justin Sent: Thursday, August 12, 2010 5:45PM To: Gannet Tseggai; Dan Pfeiffer; Roberto Rodriguez; Heather Higginbottom; K vaal, James; Kanter, Martha; Cunningham, Peter; Abrevaya, Sandra; Jennifer Psaki Subject: Heads up on Gainful Employment (b)(5) From: Rose, Charlie To: Kanter, Martha Yuan. Georgia Kvaal, James CC: Date: 8/12/2010 1022:22 PM Subject: Re: Heads up on Gainful Employment Sounds good. Thx. Charlie Sent using Black:Beny ----- Original Message----- From: Kanter, Martha To: Rose, Charlie; Yuan, Georgia; Kvaal, James Sent: Thu Aug 12 21:20:43 2010 Subject: RE: Heads up on Gainful Employment Yes -how about right after the 8 - 8:30 communications meeting? From: Rose, Charlie Sent: Thursday, August 12, 201 0 10: 18 PM To: Kanter, Martha; Yuan, Georgia; K vaal, James Subject: Re: Heads up on Gainful Employment (b)(5) Charlie Sent using BlackBeny ----- Original Message ----- From: Kanter, Martha To: Weiss, Joanne; Rose, Charlie; Cunningham, Peter; Martin, Carmel; Gomez, Gabriella; Miller, Tony; Yuan, Georgia; Kvaal, James Sent: Thu Aug 12 21:13:48 2010 Subject: FW: Heads up on Gainful Employment From: Hamilton, Justin Sent Thursday, August 12, 2010 5:45PM To: Gannet Tseggai; Dan Pfeiffer; Roberto Rodriguez; Heather Higginbottom; Kvaal, James; Kanter, Martha; Cunningham, Peter; Abrevaya, Sandra; Jennifer Psaki Subject: Heads up on Gainful Employment (b)(5) From: Yuan, Georgia To: Kanter, Martha CC: Date: 8/ 12/2010 11:01:34 PM Subject: Re: Heads up on Gainful Employment Martha. L--1 (b_)(_5) ______ __JIG -----Original Message----- From: Kanter, Martha To: Rose, Charlie; Yuan, Georgia; Kvaal, James Sent: Tbu Aug 12 21:24:10 2010 Subject: RE: Heads up on Gainful Employment I sent a calendar request to each of you. Martha From: Rose, Charlie Sent: Thursday, August 12, 2010 10:22 PM To: Kanter, Martha; Yuan, Georgia; Kvaal, James Subject: Re: Heads up on Gainful Employment Sounds good. Thx. Charlie Sent using Black.Beny -----Original Message----- From: Kanter, Martha To: Rose, Charlie; Yuan, Georgia; Kvaal, James Sent: Thu Aug 12 21:20:43 2010 Subject RE: Heads up on Gainful Employment Yes- how about right after the 8 - 8:30 communications meeting? From: Rose, Charlie Sent: Thursday, August 12, 2010 10:18 PM To: Kanter, Martha; Yuan, Georgia; Kvaal, James Subject: Re: Heads up on Gainful Employment (b)(5) Charlie Sent using Black.Beny ----- Original Message ----- From: Kanter, Martha To: Weiss, Joanne; Rose, Charlie; Cunningham, Peter; Martin, Carmel; Gomez, Gabriella; Miller, Tony; Yuan, Georgia; Kvaal, James Sent Thu Aug 12 21: 13 :48 2010 Subject: FW: Heads up on Gainful Employment From: Hamilton, Justin Sent: Thursday, August 12, 2010 5:45PM To: Gannet Tseggai; Dan Pfeiffer; Roberto Rodriguez; Heather Higginbottom; K vaal, James; Kanter, Martha; Cunningham, Peter; Abrevaya, Sandra; Jennifer Psaki Subject: Heads up on Gainful Employment (b)(5) J ~ e (b)(S) Charli e Sent using BlackBerry -----Original Message----- From: Yuan, Georgia To: Rose, Charlie Sent: Wed Mar 31 18:28:47 2010 Subject: RE: Kaplan and devry meeting (b)(S) Georgia -----Original Message----- From: Rose, Charl ie Sent: Wednesday, March 31, 20 10 5:5 7 PM To: Yuan, Georgia Cc: Borders, Tia Subject: Kaplan and devry meeting (b)(S) From: Rose Charlie To.: Yuan. Georgia CC: Date: 3/3112010 7:32:46PM Subject: Re: Kaplan and devry meeting (b)(5) Charlie Sent using BlackBeny l(b)(S) Georgia -----Original Message----- From: Rose, Charlie Sent: Wednesday, March 31, 2010 5:57PM To: Yuan, Georgia Cc: Borders, Tia Subject: Kaplan and devry meeting (b)(S) Charlie Sent using BlackBeny From: Yuan Georgia To: Rose, Charlie CC: Borders. Tia Date: 3/31/2010 7:22:54 PM Subject: RE: Kaplan and devry meeting (b)(S) Georgia -----Original Message----- From: Rose, Charlie Sent: Wednesday, March 31, 2010 5:57PM To: Yuan, Georgia Cc: Borders, Tia Subject: Kaplan and devry meeting (b)(S) Charlie Sent using BlackBerry From: Yuan Georgia To: Rose, Charlie CC: Date: 3/31/2010 7:28:48 PM Subject: RE: Kaplan and devry meeting From: Yuan Georgia To: Miller. Tony CC: Date: 4/13/2010 5:59:06 PM Subject: RE: Kaplan, DeVry, EDMC Letter to Dep. Sec. Miller From: Miller, Tony Sent: Tuesday, April l3, 2010 5:58PM To: Yuan, Georgia Subject: FW: Kaplan, DeVty, EDMC Letter to Dep. Sec. Miller (b)(5) From: AndrewS. Rosen [mailto:andrew.s.rosen@kaplan.com] Sent: Monday, Aprill2, 2010 11:04 AM To: Miller, Tony Cc: Kanter, Martha; Shireman, Bob; Fine, Stephanie; Rebecca Campoverde Subject: Kaplan, DeVry, EDMC Letter toDep. Sec. Miller Dear Tony: Attached, in advance of our meeting on Thursday, is a letter on behalf of Kaplan, DeVty and Education Management Corp. in response to your request for suggestions regarding the issue of excessive student debt. We look fOiward to discussing these and other issues when we meet. Best regards, Andy Andrew S. Rosen Chairman and CEO Kaplan, Inc. 6301 Kaplan University Avenue Fort Lauderdale, Florida 33309 (954) 515-3888 www.kaplan.com From: Yuan Georgia To: Erce.g. Marta CC: Date: 4/28/2010 Subject: RE: Media reports- background for noon meeting (b)(S) Georgia From: Erceg, Marta Sent: Wednesday, April28, 2010 7:02PM To: Yuan, Georgia; Mitchelson, Mary Subject: Fw: Media reports- background for noon meeting (b)(S) From: Rogers, Margot To: Erceg, Marta Sent: Wed Apr 28 11:02:21 2010 Subject: FW: Media reports- background for noon meeting From: Yuan, Georgia Sent Wednesday, April 28, 2010 11: 12 AM To: Clark, Teresa Cc: Rosenfelt, Phil; Rogers, Margot Subject: Media reports- background for noon meeting (b)(5),(b)(7)(E) Georgia Yuan DeVry leads ed. stocks lower as Credit Suisse downgrades on regulatory, job market concerns Associated Press 04/26/10 9:30AM PDT NEW YORK -DeVry led decliners in education stocks Monday after a Credit Suisse analyst said the for-profit school could be hurt by proposed regulatory changes and an improving job market that could slow enrollment. The administration has pushed hard for gainful employment regulations, which stipulate that graduates of schools must not spend more than 8 percent of their income on paying student loans. It's meant to help improve school quality- making sure students are qualified and the courses help increase their incomes - as student loan defaults soar. If schools failed to pass this test, the government could block their access to federal loans for students, the bulk of their revenues. In early April, the Education Department said schools with 50 percent graduation rates and 70 percent job placement rates would be exempt from a proposed rule linking graduates' incomes to required debt payments. Analyst Kelly Flynn, however, said Washington sources believe the more lenient proposal might not wind up in a draft of the law that will be posted by mid-May or June. Flynn downgraded DeVry and ITT Educational Services Inc. to "neutral" from "outperfonn," cutting target prices to $65 from $75 and $110 from $135, respectively. Shares ofDeVry Inc. fell $4.59, or 6.6 percent, to $64.87, while ITT stock dropped fell $2.07, or 1.8 percent, to $109.71. Shares of Apollo Group Inc., which runs the largest for-profit school, the University ofPhoenix, also slid 93 cents, or 1.5 percent, to $62.60, while Corinthian Colleges Inc. stock fell 59 cents, or 3.3 percent, to $17.30. Career Education Corp. fell61 cents, or 1.8 percent, to $33.49 and Strayer Education Inc. dropped $2.54, or 1 percent, to $250.49. Meanwhile, Flynn cited DeVry's warning on slower enrollment growth in one of its divisions and ITT's warning on higher advertising spending. For-profit schools have seen big gains in enrollment because of the recession and high unemployment. As the job market improves, people may not feel as much as a need to bolster their resumes. APRJL 26,2010, 10:57 A.M. ET Debt, Job Rule Uncertainty Hits Shares Of For-Profit Colleges NEW YORK (Dow Jones)--A government proposal to hold colleges accountable for graduating students with high debt loads and low income levels came front and center, again, after Credit Suisse analysts reversed their assumption that the Department ofEducation had softened its stance on the subject. Monday morning, Credit Suisse issued a note saying the Department of Education has returned to a stiffer set of rules on post-graduation debt and gainful employment levels that colleges must meet. The news hit share prices of for-profit universities that had rallied on expected softer rules. Credit Suisse downgraded ITT Educational Services Inc. (ESI) and DeVry Inc. (DV) to neutral from outperform and slashed their price targets, citing the potential fallout from their new take on gainful employment as well as concerns of countercyclicality. ITT recently was off2.9% to $108.53, while DeVry was down 6.5% to $64.96. Credit Suisse had upgraded the schools two weeks ago. Other for-profit schools, including Strayer Education Inc. (STRA), Career Education Corp. (CECO), Corinthian Colleges Inc. (COCO) and Apollo Group Inc. (APOL), were also trading down. The Department of Education originally said schools could face scrutiny that could put federal assistance--often the primary revenue stream for for-profit colleges--at risk if they did not have at least a 70% graduation rate and 70% job placement in field of study. Two weeks ago, Credit Suisse, and others, sent out notes saying they believe the Department of Education had softened the graduation level to 50%, sending shares higher, with some hitting 52-week highs. "Oddly, we suspect the big upward move the stocks had when the investment community found out about the 50% exemption may have led to pressure on the DOE to remove the 50% exemption," the firm wrote Monday. Some education insiders have had mixed feelings on predicting the gainful-employment measure, arguing that it's improper to say what the Department of Education will put forth and irs best to wait until the official proposal is released for public comment. That will happen by mid-June. "I'm not sure who thinks they have what access to what's in this draft," said one for-profit school official, but "I would really not be jumping to any conclusions just yet." He said there's no way of knowing "whether it's been hardened, softened, pureed, whatever." Representatives from the Department of Education weren't immediately available for comment. http://online.wsj .com/article/BT -C0-201 00426-71 0339.htrnl?mod=rss _Hot_ Stocks Georgia Yuan Deputy General Counsel Postsecondary Education and Regulatory Service U.S. Department of Education 400 Maryland A venue SW 6E341 Washington, DC 20202 202-401-6000 April 13, 2010 Trace Urdan turdan@signalhill.com 415.364.0365 Business Services - Education Services Industry Update Relief: Gainful Employment Gains Alternative Measure Our Call: As anticipated, Department of Education (USDOE) draft regulations went to the Office of Management & Budget (OMB) last Friday 4/9 for review prior to their publication in the Federal Register -- likely 5/15. A credible source close to OMB tells us that while the 8% median debt/income measure, and the 90% student loan repayment measures appear to be essentially unchanged from the terms presented by the USDOE in January, a third alternative measure has been added. This measure would allow programs with a graduation rate of 50% or better and a subsequent job placement (in the relevant field) of 70% or better to qualify out of the other two measures. Though the devil will certainly be in the details, including how these items are to be considered for students that are transferring credits and may be already employed, the new measure effectively removes the significant threat the rules had created for nationally-accredited degree programs with typically high default rates. The new measure, in fact, seems to closely resemble rules already imposed by national accrediting bodies. And while we might anticipate that the terms could be stricter in USDOE's conception, they should be eminently achievable with minimal disruption for all programs. According to USDOE analysis, (in process of being reviewed by OMB,) the rules themselves would only affect 6-8% of all for-profit programs, with culinary, automotive tech, and nursing programs hardest hit. (We note that this seems out of keeping with our knowledge of these programs as represented by publicly-traded schools, but nevertheless appears to represent a conclusion reached by USDOE.) Our contact indicated that the University of Phoenix (NASDAQ: APOL; Buy) was not seen as affected at all in the USDOE analysis. While we expect all post-secondary school stocks to benefit from the news, we believe that the those names that had been most challenged by the existing terms are likely to see the biggest benefit as a result of the change. These include ITT Educational Services (NYSE: ESI ; Buy) , Corinthian Colleges (NASDAQ: COCO; Buy), and Career Education (NASDAQ: CECO; Buy) which recently heralded graduation rates comfortably above 50%. Though some individual programs may still fail all three tests, we believe these are likely to be isolated, rare and fixable. We view this apparent concession as evidence of a desire by Secretary Duncan to defuse what was promising to be an area of real contention, as evidenced by House Republicans, members of the Congressional Black Caucus, and Senator Lamar Alexander all calling out the Secretary on this issue. Secretary Duncan needs, in our opinion, a diverse coalition of supporters to pass his signature issue: K-12 education reform. Because the Secretary's K-12 proposals do not easily fall within typical party boundaries, he really does need a bipartisan coalition in both the House and Senate education committees to pass his version of ESEA (NCLB) . No concession at all would have kicked off a loud and publicized summer of public commentary. Because it is very difficult to argue that a 50% graduation rate and a 70% employment rate is an onerous burden, we think USDOE has effectively neutered the campaign to ditch the rule entirely. We still expect industry to challenge the rule in public and likely later in court, but based on our reli able source, we believe investors need no longer fear that significant revenues could be at risk in the event that the rules are passed. Please see important disclosure information on page 2 of this report. April13, 2010 Important Disclosures Analyst Certification I, Trace Urdan, hereby certify that all of the views expressed in this research report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this research report.Signal Hill does not compensate its equity research analysts based on specific investment banking transactions. Signal Hill Equity research analysts receive compensation based on several factors, including overall profitability and revenues of the firm, which include investment banking revenues. Meaning of Ratings Signal Hill uses a three-tiered rating system defined as follows: BUY: We expect this stock to outperform its peers over the next 12 months: HOLD: We expect this stock to perform in line with its peers over the next 12 months: SELL: We expect this stock to underperform its peers over the next 12 months: Rating BUY HOLD SELL Disclaimer Distribution of Ratings/IS Services Signal Hill Count 77 47 1 Percent 61.6 37.6 0.8 18 Serv./Past 12 Mos. Count 72 38 Percent 93.5 80.9 100.0 This report has been prepared using sources we deem to be reliable but we do not guarantee its accuracy and it does not purport to be complete. This report is published solely for information purposes and is not intended to be used as the primary basis for making investment decisions, which should reflect the investment objectives and financial situation of the investor: The opinions expressed herein are subject to change without notice. This report is not an offer or the solicitation of an offer to buy or sell securities. Additional information is available upon request. Post-Secondary Education 2 From: Erceg_ Marta To: Yum Georgia CC: Date: 4/29/2010 9:30:00 AM Subject: RE: Media reports- background for noon meeting Thanks, Georgia. From: Yuan, Georgia Sent: Wednesday, April 28, 2010 7:06PM To: Erceg, Marta Subject: RE: Media reports- background for noon meeting (b)(5) Georgia From: Erceg, Marta Sent: Wednesday, April 28, 2010 7:02PM To: Yuan, Georgia; Mitchelson, Mary Subject: Fw: Media reports- background for noon meeting (b)(5) From: Rogers, Margot To: Erceg, Marta Sent: Wed Apr 28 11:02:21 2010 Subject: FW: Media reports- background for noon meeting From: Yuan, Georgia Sent: Wednesday, Aptil 28,2010 11:12 AM To: Clark, Teresa Cc: Rosenfelt, Phil; Rogers, Margot Subject: Media reports- background for noon meeting Teresa- (b)(5) Georgia Yuan DeVry leads ed. stocks lower as Credit Suisse downgrades on regulatory, job market concerns Associated Press 04/26/10 9:30AM PDT NEW YORK- De V ry led decliners in education stocks Monday after a Credit Suisse analyst said the for-profit school could be hurt by proposed regulatory changes and an improving job market that could slow enrollment. The administration has pushed hard for gainful employment regulations, which stipulate that graduates of schools must not spend more than 8 percent of their income on paying student loans. It's meant to help improve school quality- making sure students are qualified and the courses help increase their incomes - as student loan defaults soar. If schools failed to pass this test, the government could block their access to federal loans for students, the bulk of their revenues. In early April, the Education Department said schools with 50 percent graduation rates and 70 percent job placement rates would be exempt from a proposed rule linking graduates' incomes to required debt payments. Analyst Kelly Flynn, however, said Washington sources believe the more lenient proposal might not wind up in a draft of the law that will be posted by mid-May or June. Flynn downgraded DeVry and ITT Educational Services Inc. to "neutral" from "outperfonn," cutting target prices to $65 from $75 and $110 from $135, respectively. Shares ofDeVry Inc. fell $4.59, or 6.6 percent, to $64.87, while ITT stock dropped fell $2.07, or 1.8 percent, to $109.71. Shares of Apollo Group Inc., which runs the largest for-profit school, the University ofPhoenix, also slid 93 cents, or 1.5 percent, to $62.60, while Corinthian Colleges Inc. stock fell 59 cents, or 3.3 percent, to $17.30. Career Education Corp. fell61 cents, or 1.8 percent, to $33.49 and Strayer Education Inc. dropped $2.54, or 1 percent, to $250.49. Meanwhile, Flynn cited DeVry's warning on slower enrollment growth in one of its divisions and ITT's warning on higher advertising spending. For-profit schools have seen big gains in enrollment because of the recession and high unemployment. As the job market improves, people may not feel as much as a need to bolster their resumes. APRIL 26, 2010, 10:57 A.M. ET Debt, Job Rule Uncertainty Hits Shares OfF or-Profit Colleges NEW YORK (Dow Jones)-A government proposal to hold colleges accountable for graduating students with high debt loads and low income levels came front and center, again, after Credit Suisse analysts reversed their assumption that the Department ofEducation had softened its stance on the subject. Monday morning, Credit Suisse issued a note saying the Department of Education has returned to a stiffer set of rules on post-graduation debt and gainful employment levels that colleges must meet. The news hit share prices of for-profit universities that had rallied on expected softer rules. Credit Suisse downgraded ITT Educational Services Inc. (ESI) and DeVry Inc. (DV) to neutral from outperform and slashed their price targets, citing the potential fallout from their new take on gainful employment as well as concerns of countercyclicality. ITT recently was off2.9% to $108.53, while DeVry was down 6.5% to $64.96. Credit Suisse had upgraded the schools two weeks ago. Other for-profit schools, including Strayer Education Inc. (STRA), Career Education Corp. (CECO), Corinthian Colleges Inc. (COCO) and Apollo Group Inc. (APOL), were also trading down. The Department of Education originally said schools could face scrutiny that could put federal assistance--often the primary revenue stream for for-profit colleges--at risk if they did not have at least a 70% graduation rate and 70% job placement in field of study. Two weeks ago, Credit Suisse, and others, sent out notes saying they believe the Department of Education had softened the graduation level to 50%, sending shares higher, with some hitting 52-week highs. "Oddly, we suspect the big upward move the stocks had when the investment community found out about the 50% exemption may have led to pressure on the DOE to remove the 50% exemption," the firm wrote Monday. Some education insiders have had mixed feelings on predicting the gainful-employment measure, arguing that it's improper to say what the Department of Education will put forth and irs best to wait until the official proposal is released for public comment. That will happen by mid-June. "I'm not sure who thinks they have what access to what's in this draft," said one for-profit school official, but "I would really not be jumping to any conclusions just yet." He said there's no way of knowing "whether it's been hardened, softened, pureed, whatever." Representatives from the Department of Education weren't immediately available for comment. http://online.wsj .com/article/BT-C0-20100426-710339.html?mod=rss_Hot_Stocks Georgia Yuan Deputy General Counsel Postsecondary Education and Regulatory Service U.S. Department of Education 400 Maryland A venue SW 6E341 Washington, DC 20202 202-401-6000 (b)(5) From: Jenkins, Harold Sent: Tuesday, Apri l 20, 2010 2:32PM To: Finley, Steve; Yuan, Georgia From: Finley, Steve To: Jenkins, Harold Yuan, Georgia CC: Sann. Ronald Wolff Russell Marinucci, Fred Wanner Sarah Date: 4/20/2010 3:15:42 PM Sub,ject: RE: Memo Cc: Sann, Ronald; Wolff, Russell; Marinucci, Fred; Wanner, Sarah Subject: RE: Memo (b)(5) From: Finley, Steve Sent: Tuesday, April 20, 2010 1:08PM To: Yuan, Georgia; Jenkins, Harold Cc: Sann, Ronald; Wolff, Russell Subject: RE: Memo (b)(5) (b)(5) Steve From: Yuan, Georgia Sent: Tuesday, April 20, 2010 12:38 PM To: Finley, Steve; Wolff, Russell; Jenkins, Harold Subject: FW: Memo (b)(5} (b)(5) Georgia From: Gregory Ferenbach [mailto:Gregory.Ferenbach@strayer.edu] Sent: Tuesday, April20, 2010 11:12 AM To: Yuan, Georgia Subject: Memo Attached is the legal piece we discussed in our conversation this morning. As I mentioned, we started to look into this issue many months ago after our outside counsel advised us that the "gainful employment" provision did not apply to Strayer. Please let us know your thoughts after you have had a chance to review. Hope this is helpful. Best. Greg (b)(S) From: Wanner, Sarah Sent: Tuesday, April 20, 2010 3:26PM From: Finley, Steve To: Wanner. Sarah Jenkins. Harold Yuan, Georgia CC: Satm Ronald Wolff Russell Marinucci Fred Date: 4/20/2010 3:59:32 PM Sub.iect: RE: Memo To: Finl ey, Steve; Jenkins, Harold; Yuan, Georgia Cc: Sann, Ronald; Wolff, Russell ; Marinucci, Fred Subject: RE: Memo (b)(S) From: Finley, Steve Sent: Tuesday, April 20, 2010 3:16PM To: Jenkins, Harold; Yuan, Georgia Cc: Sann, Ronald; Wolff, Russell; Marinucci, Fred; Wanner, Sarah Subject: RE: Memo (b)(S) (b)(5) From: Jen}jns, flarold Sent: Tuesday, April20, 2010 2:32PM To: Finley, Steve; Yuan, Georgia Cc: Sann, Ronald; Wolff, Russell ; Marinucci, Fred; Wanner, Sarah Subject: RE: Memo (b)(5) From: Finley, Steve Sent: Tuesday, April20, 2010 1:08PM To: Yuan, Georgia; Jenkins, Harold Cc: Sann, Ronald; Wolff, Russell Subject: RE: Memo (b)(5) (b)(5) Steve From: Yuan, Georgia Sent: Tuesday, April 20, 2010 12:38 PM To: Finley, Steve; Wolff, Russell; Jenkins, Harold Subject: FW: Memo (b)(5) Georgia From: Gregory Ferenbach [mailto:Gregory.Ferenbach@strayer.edu] Sent: Tuesday, April 20, 2010 11:12 AM To: Yuan, Georgia Subject: Memo Attached is the legal piece we discussed in our conversation this morning. As I mentioned, we started to look into this issue many months ago after our outside counsel advised us that the "gainful employment" provision did not apply to Strayer. Please let us know your thoughts after you have had a chance to review. Hope this is helpful. Best. Greg (b)(5) Steve From: Pinley, Steve To: Yuan, Georgia Jenkins, Harold CC: Sann. Ronald Wolff, Russell Date: 4/20/2010 1:07:54 PM Subject: RE: Memo From: Yuan, Georgia Sent: Tuesday, April 20, 2010 12:38 PM To: Finley, Steve; Wolff, Russell; Jenkins, Harold Subject: FW: Memo (b)(5) Georgia From: Gregory Ferenbach [mailto:Gregory.Ferenbach@strayer.edu] Sent: Tuesday, April 20, 2010 11:12 AM To: Yuan, Georgia Subject: Memo Attached is the legal piece we discussed in our conversation this morning. As I mentioned, we started to look into this issue many months ago after our outside counsel advised us that the "gainful employment" provision did not apply to Strayer. Please let us know your thoughts after you have had a chance to review. Hope this is helpful. Best. Greg ................................................................................................................................................................................................................................................................................................. (b)(S) From: Wanner, Sarah Sent: Tuesday, April 20, 2010 3:26PM From: Finley Steve To: Wanner, Sarah CC: Date: 4/20/2010 3:29:16 PM Subject: RE: Memo To: FinJey, Steve; Jenkins, Harold; Yuan, Georgia Cc: Sann, Ronald; Wolff, Russell; Marinucci, Fred Subject: RE: Memo (b)(S) From: Finley, Steve Sent: Tuesday, April20, 2010 3: 16PM To: Jenkins, Harold; Yuan, Georgia Cc: Sann, Ronald; Wolff, Russell ; Marinucci, Fred; Wanner, Sarah Subject: RE: Memo (b)(S) From: Jenkins, Harold Sent: Tuesday, April 20, 2010 2:32PM To: Fin]ey, Steve; Yuan, Georgia Cc: Sann, Ronald; Wolff, Russell; Marinucci, Fred; Wanner, Sarah Subject: RE: Memo (b)(5) From: Finley, Steve Sent: Tuesday, Apri l 20, 2010 1:08PM To: Yuan, Georgia; Jenkins, Harold Cc: Sann, Ronald; Wolff, Russell Subject: RE: Memo (b)(5) Steve From: Yuan, Georgia Sent: Tuesday, April 20, 2010 12:38 PM To: Finley, Steve; Wolff, Russell; Jenkins, Harold Subject: FW: Memo (b)( 5) Georgia From: Gregory Ferenbach [mailto:Gregory.Ferenbach@strayer.edu] Sent: Tuesday, April20, 2010 11:12AM To: Yuan, Georgia Subject: Memo Attached is the legal piece we discussed in our conversation this morning. As I mentioned, we started to look into this issue many months ago after our outside counsel advised us that the "gainful employment" provision did not apply to Strayer. Please let us know your thoughts after you have had a chance to review. s Hope this is helpful. Best. Greg (b)(5) From: Finley, Steve Sent: Tuesday, April 20, 2010 1:08PM To: Yuan, Georgia; Jenkins, Harold Cc: Sa.nn, Ronald; Wolff, Russell Subject: RE: Memo (b)(5) From: Jenkins Harold To: Finley. Steve Yuan, Georgia CC: Sann. Ronald Wolff Russell Marinucci, Fred Wanner Sarah Date: 4/20/2010 2:31:30 PM Sub,ject: RE: Memo (b)(5) Steve From: Yuan, Georgia Sent Tuesday, April 20, 2010 12:38 PM To: Finley, Wolff, Jenkins, Harold Subject: FW: Memo (b)(5) Georgia From: Gregory Ferenbach [mailto:Gregory.Ferenbach@strayer.edu] Sent Tuesday, April20, 2010 11:12 AM To: Yuan, Georgia Subject Memo Attached is the legal piece we discussed in our conversation this morning. As I mentioned, we started to look into this issue many months ago after our outside counsel advised us that the "gainful employment" provision did not apply to Strayer. Please let us know your thoughts after you have had a chance to review. Hope this is helpful. Best. Greg From: Wanner, Sarah To.: Finley, Steve CC: Date: 4/20/2010 3:30:42PM Subject: RE: Memo l(b)(S) From: Finley, Steve Sent: Tuesday, April 20, 2010 3:29PM To: Wanner, Sarah Subject: RE: Memo (b)(5) From: Wanner, Sarah Sent: Tuesday, April20, 2010 3:26PM To: FinJ ey, Steve; Jenkins, Harold; Yuan, Georgia Cc: Sann, Ronald; Wolff, Russell ; Marinucci, Fred Subject: RE: Memo (b)(5) From: Finley, Steve Sent: Tuesday, April20, 2010 3:16PM To: Jenkins, Harold; Yuan, Georgia Cc: Sann, Ronald; Wolff, Russell ; Marinucci, Fred; Wanner, Sarah Subject: RE: Memo (b)(5) l(b)(5) From: Jen}jns, flarold Sent: Tuesday, April20, 2010 2:32PM To: Finley, Steve; Yuan, Georgia Cc: Sann, Ronald; Wolff, Russell ; Marinucci, Fred; Wanner, Sarah Subject: RE: Memo (b)(5) From: Finley, Steve Sent: Tuesday, April20, 2010 1:08PM To: Yuan, Georgia; Jenkins, Harold Cc: Sann, Ronald; Wolff, Russell Subject: RE: Memo (b)(5) (b)(S) Steve From: Yuan, Georgia Sent: Tuesday, April 20, 2010 12:38 PM To: Finley, Steve; Wolff, Russell; Jenkins, Harold Subject: FW: Memo (b)(S) Georgia From: Gregory Ferenbach [mailto:Gregory.Ferenbach@strayer.edu] Sent: Tuesday, April 20, 2010 11:12 AM To: Yuan, Georgia Subject: Memo Attached is the legal piece we discussed in our conversation this morning. As I mentioned, we started to look into this issue many months ago after our outside counsel advised us that the "gainful employment" provision did not apply to Strayer. Please let us know your thoughts after you have had a chance to review. Hope this is helpful. Best. Greg (b)(5) From: Finley, Steve Sent: Tuesday, April 20, 2010 3:16PM To: Jenkins, Harold; Yuan, Georgia From: Wanner Sarah To: Finley. Steve Jenkins. Harold Yuan, Georgia CC: Satm Ronald Wolff Russell Marinucci Fred Date: 4/20/2010 3:25:54 PM Sub.iect: RE: Memo Cc: Sann, Ronald; Wolff, Russell ; Mari nucci, Fred; Wanner, Sarah Subject: RE: Memo (b)(5) From: Jenkins, Harold Sent: Tuesday, April 20, 2010 2:32PM To: Finley, Steve; Yuan, Georgia Cc: Sann, Ronald; Wolff, Russell; Marinucci, Fred; Wanner, Sarah Subject: RE: Memo (b)(5) From: Finley, Steve Sent: Tuesday, April 20, 2010 1:08PM To: Yuan, Georgia; Jenkins, Harold Cc: Sa.nn, Ronald; Wolff, Russell Subject: RE: Memo (b)(5) Steve From: Yuan, Georgia Sent: Tuesday, April20, 2010 12:38 PM To: Finley, Steve; Wolff, Russell; Jenkins, Harold Subject: FW: Memo (b)(S) Georgia From: Gregory Ferenbach [mailto:Gregory.Ferenbach@strayer.edu] Sent Tuesday, April 20, 2010 11 :12 AM To: Yuan, Georgia Subject: Memo Attached is the legal piece we discussed in our conversation this morning. As I mentioned, we started to look into this issue many months ago after our outside counsel advised us that the "gainful employment" provision did not apply to Strayer. Please let us know your thoughts after you have had a chance to review. Hope this is helpful. Best. Greg From: Woodward, Jennifer Sent: Monday, October 26, 2009 9:47AM From: Jenkins Harold To.: Woodward, Jennifer CC: Date: 10/26/2009 9:48: 16 AM Subject: RE: Neg Reg Article To: Jenkins, Harold; Marinucci, Fred; Siegel, Brian; Wanner, Sarah; Wolff, Russell; Morelli, Denise; Finley, Steve; Sann, Ronald Subject: Neg Reg Article In the Crosshairs? October 26, 2009 Share This Story http :1 /www.insi dehighered.com/news/2009/1 0/26/regs# Education Department officials have been insisting for months that, despite the warnings of some Wall Street analysts to the contrary, the federal government is not intent on intensifying its regulation of for-profit higher education. That assertion got a little harder to believe on Friday, when the department announced the composition of a committee charged with negotiating a set of new federal regulations related to the integrity of federal financial aid programs. Given the issues on the panel's agenda, its membership leans notably toward critics of the for-profit sector of higher education, and decidedly short on representatives of the colleges. Department officials, however, reject the idea that the panel they've appointed is unbalanced. As is typically the case in the federal negotiated ruJe making process (which is explained here), the department's September 9 announcement inviting nominations for the committees said it would populate the panels with people who "represent the interests significantly affected by the topics proposed for negotiations." In this case, the topics under the overall rubric of the integrity of federal financial aid programs include such things as incentive compensation for college recruiters and the use oftests to gauge students' "ability to benefit" from a higher education, which are heavily used by for-profit universities, community colleges, and other open-access institutions. The goal of negotiating committees like this one (and another the department is creating to look at foreign institutions) is to try to reach unanimous agreement on a set of recommendations for proposed regulatory changes, to provide to the education secretary. Disapproval from any single negotiator can torpedo the whole process, giving the federal agency that sponsors the session -in this case the Education Department-- free rein to propose whatever it wants. It was inevitable that any group of officials deemed to have an interest in issues related to potential financial aid fraud and abuse would contain some people who don't like for-profit colleges. The institutions have long been viewed with skepticism by consumers' rights groups that (citing many historical examples and a smaller number of high-profile recent ones) accuse some of the institutions of preying on low-income students by charging comparatively high tuitions and underdelivering on their promises of good jobs. So it's no surprise that the committee appointed by the Education Department contains consumer and student advocates with a track record of criticizing for-profit colleges. The student members (one primary representative and an alternate) come from two student groups, US. PIRG and the United States Student Association, that frequently take aim at for- profit colleges. Both groups signed a letter this month, for instance, that urged Congress to toughen its regulation of private student loans made by for-profit colleges. The panel also features two consumer advocates. One, Margaret Reiter, is a lawyer who, as deputy attorney general in California, sued Corinthian Colleges, Inc., for "a persistent pattern of unlawful conduct" that included allegedly inflating job placement data and falsifying government records. (Corinthian settled for $6.5 million in 2007.) Her alternate, Deanne Loonin, represents the National Consumer Law Center, which published a 2005 study called "Making the Numbers Count: Why .Proprietary School .Performance Data Doesn't Add Up and What Can Be Done About It." What's more unexpected, perhaps, is that the group gathered by the department to negotiate a set of issues that relate heavily to for-profit institutions contains so many other members with a clearly stated antipathy toward the sector, and so few members from for-profit institutions themselves. As is common, the financial integrity committee includes one representative (plus an alternate) from each of the major sectors of higher education- public two-year (Richard Heath of Anne Arundel Community College), public four-year (Philip Asbury of the University ofNorth Carolina at Chapel Hill), private four-year (Todd Jones of the Association of Independent Colleges and Universities of Ohio) and for-profit colleges (Elaine Neely ofKaplan Higher Education). Aside from Neely, who can be counted on to advocate for the career college sector, none is known to be particularly a friend or foe of for-profit higher education. But based on their track records or previous statements, it's fair to expect several of the officials selected by the department to represent various other "communities of interest" to take a sharply skeptical view of for-profit colleges. Jim Simpson, associate vice president of workforce development and adult education at Florida State College (formerly Florida Community College at Jacksonville), was appointed to fill a slot designed to represent the interests of"work force development." Simpson traveled to Denver in June to speak at one of three regional hearings the department held to solicit views on the issues it should explore in negotiated rule making, and he closed his presentation (which can be found on Page 35 of this transcript) with a stinging critique of for-profit colleges. He flew to Denver, Simpson said, in part to "put a human face on what happens when schools take advantage oflax regulations." He then recounted the story of a student who applied to his institution after having made the honor roll at an unidentified for-profit university-- "despite later test results .. . that placed the student at an elementary school level in mathematics, language and reading," Simpson said. "This student and their family took out $16,000 in student loans to pay for a two-year degree from a for-profit university that was clearly only interested in tuition money obtained from federally backed student loans," he said. "It is a travesty that they were encouraged to take out huge student loans when their daughter has almost no chance of getting a job that would allow the eventual repayment of those loans." College presidents are represented in the negotiation process by Terry W. Hartle, senior vice president for government and public affairs at the American Council on Education. Hartle typically stays above the fray in the regular political skirmishing between traditional colleges and for-profit higher education. But ACE, as the lead lobbying group for higher education, almost always sides with traditional colleges in policy debates, and the Career College Association, the leading lobbying group for for-profit institutions, withdrew from ACE in a public spat earlier this decade. The Education Department chose David Hawkins, director of public policy at the National Association for College Admission Counseling, to represent the interests of admissions officers on the negotiating team. Like several major higher education associations, NACAC does not let for-profit colleges into its membership. And Hawkins, who writes widely about ethics and other issues in higher education, wrote a 2007 article challenging the notion that for-profit institutions are doing a good job of serving students from low-income backgrounds. "During the long-running debate over the current reauthorization of the Higher Education Act, lobbyists for the for-profit institutions would have you believe that 'traditional' colleges and universities are fighting against the for-profit colleges in a spiteful legislative contest," Hawkins wrote. "In reality, the 'contest' in Washington is one to preserve the integrity of student-aid programs in an environment characterized by increasingly aggressive recruiting, indiscriminate admissions and loan financing-- often with little to no regard for the student's ability to benefit or repay-- and questionable 'return on investment' for many students lured in by the publicly traded for-profit colleges' massive advertisement complex." Apart from Neely, the Kaplan senior vice president of regulatory affairs, and her alternate, David Rhodes, president of the School of Visual Arts, the only other negotiator who appears likely to advocate for for-profit institutions is, by design, is Anthony Mirando, who as president of the National Accrediting Commission of Cosmetology Arts and Sciences was appointed to represent national accrediting agencies. (Other negotiating teams in the recent past contained just one representative of for-profit colleges, too, but they were focused on topics-- such as accreditation and student loans-- that did not disproportionately affect those institutions. The loan team contained multiple lenders, and the accreditation team three or four accrediting officials.) Officials of the for-profit higher education sector had argued-- to no avail-- that given the growth of for-profit colleges and the emphasis in this round of rule making on issues that could directly affect them, the department should consider appointing more than one person from the institutions to the negotiating team. Harris N. Miller, president and CEO of the Career College Association, declined to comment on the makeup of the negotiating panel, which begins its work a week from today. Officials at the Education Department offered only a one-line statement in response. "The make-up of this committee is similar to past committees and we remain committed to ensuring that it reflects key constituencies," said Justin Hamilton, a spokesman. But Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers, vigorously challenged the assertion that the negotiating team appointed by the department is tilted against for- profit colleges, and that the department has it in for the sector. Nassirian specifically disputed the notion that Hawkins and others (including Nassirian himself) who have criticized for- profit colleges in the past are biased against the colleges. Hawkins has criticized the colleges' use of incentive compensation for recruiters, Nassirian said, because he believes such payments "inevitably lead to abuse" in the admissions world that Hawkins's group oversees. "But on the rest of the issues, he is a fairly moderate guy, and I don't know that he is any harsher on the for-profit sector than the nonprofit sector," Nassirian said. Like many experts on financial aid and higher education, Nassirian said, Hawkins believes "it's in everybody's interest that these programs be able to demonstrate accountability and program integrity, or else the billions of dollars that are being devoted to them could be redirected elsewhere." For-profit colleges have "legitimate concems ... that they not be subjected to utterly destructive requirements," Nassirian said. But if the institutions are feeling picked on by the new administration, that may have more to do with the fact that the previous White House and Education Department were soft on the sector, greatly softening the very same regulations on executive compensation that are now under review in the upcoming negotiations. "I can understand why, from the perspective of the last eight years of the Bush administration, any change can only be perceived as a change for the worse" for for-profit colleges, Nassirian said. "But when you judge the matter from the perspective of the taxpayers who fund the system, all the department has asked them to do is to be more reasonable. There is a new mindset in this administration that every dollar needs to be reasonably accounted for, and that money is not being wasted. I don't believe that the good for -profit schools want to contest that view." -Doug Lederman From: Macias, Wendy To: Finley, Steve CC: Date: 5/4/2010 12:32:08 PM Subject: RE: New Bloomberg article today: Obama Plans New Rules as For-Profit Colleges Mobilize Nonresponsive From: Finley, Steve Sent: Tuesday, May 04, 2010 12:01 PM To: Macias, Wendy Subject: FW: New Bloomberg article today: Obama Plans New Rules as For-Profit Colleges Mobilize FYI ********************************************************************* Obama Plans New Rules as For-Profit Colleges Mobilize for Fight 2010-05-04 04:02:00.0 GMT By John Hechinger, Daniel Golden and John Lauerman May 4 (Bloomberg)-- The Obama Administration is gearing up to produce tougher regulations that may reduce the amount of federal financial aid flowing to for-profit colleges, cutting the companies' annual revenue growth by as much as a third. In response, the $29 billion industry and its supporters including Republican Senators have enlisted top Washington lobbyists and are courting black and Hispanic legislators to fight the proposed rules scheduled to be released as early as this month. The companies draw students from low-income and minmity communities. Federal aid to for-profit colleges has become an issue as it has jumped to $26.5 billion in 2009 from $4.6 billion in 2000, according to the Education Department, prompting concern that these students are taking on too much debt. Twelve higher- education stocks fell an average of7.4 percent for the week ended April 30, according to Bloomberg data, following an April 28 speech by an Education Department official critical of for- profit colleges. In the same period, the Standard & Poor' s 500 Index dropped 1.7 percent. "There' s an attempt to manage" for-profit colleges by the Obama administration, Robert Wetenhall, an analyst with BMO Capital Markets in New York, said in a telephone interview. The education companies' influence in Washington has "radically changed," from the years of the Bush administration, he said. The tougher rules, which are expected to be released for public comment in the next several weeks, would require ITT Educational Services Inc., Career Education Corp. and Apollo Group Inc.'s University of Phoenix to show that their graduates earn enough money to pay off their student loans. If for-profit colleges can' t meet the standard, they could lose federal financial aid, which typically makes up three-quarters of their revenue. Tuition Increases The proposed rules may disqualifY for-profits from receiving federal financial aid if their graduates must spend more than 8 percent of their starting salaries on repaying student loans. The regulations may slow or even halt tuition increases at ITT, Education Management Corp., Lincoln Educational Services, Universal Technical Institute, and Career Education because many graduates take low-paying jobs in criminal justice, cooking and medical office work, Trace Urdan, an analyst at Signal Hill Capital Group in San Francisco, said in an interview. Education companies have increased revenue by as much as 15 percent and enrollment by 8 to 10 percent on an annual basis, while raising tuition about 4 to 6 percent a year, Urdan said. The new rules may slow their revenue growth by one third by limiting their ability to raise tuition. Pricing Power "The days of 4 to 6 percent annual tuition price increases are over," Urdan said. "The new proposed rules will bring some school ' s power to increase prices down to zero." Apollo closed at $58.32, up 91 cents, or 1.6 percent, in New York Stock Exchange composite trading yesterday. liT closed at $104.22, up $3.09, or 3 .1 percent. Career Education rose $97 cents or 3.3 percent to $30.24. The Education Department plans to issue the regulations without Congressional approval, unlike student-loan legislation which passed in March. "Congress has not held a single hearing on these new enforcement mechanisms," Alexa Marrero, spokeswoman for John Kline, the ranking Republican on the House education committee, said in an e-mail. "No research has been offered by the department to justify the controversial proposal ." U.S. Senator Lamar Alexander, who chairs the Senate Republican Conference, is trying to persuade U.S. Education Secretary Arne Duncan to reconsider the regulations, said a Republican aide on the education committee. If that doesn' t work, Alexander, who is on the education and appropriation committees, would try to kill the regulations by cutting off funding, the aide said. Enrollment in for-profit colleges increased to 1.8 million in 2008 from 673,000 in 2000. [ndustry revenue will rise to $29.2 billion this year from $9 billion in 2000, said Jeffrey Silber, an analyst for BMO Capital Markets in New York. The industry has grown in part by marketing to low-income students, including the homeless, who qualify for federal grants and loans. Regulations' Impact The new regulations would shut 300,000 students out of classes and eliminate 2,000 educational programs, according to a study commissioned by the Washington-based Career College Association, which represents more than 1,400 for-profit colleges. The proposal would reduce opportunities for women and racial minorities who want to go to college, the group said. For-profit colleges have proposed alternative regulations that would require companies to disclose more information about students' debt and job prospects. The Career College Association has retained the Podesta Group, a Washington lobbying fum headed by Anthony Podesta, whose brother, John, was President Bill Clinton's chief of staff, according to federal filings. Clinton will be a keynote speaker at the association' s annual meeting in June. Podesta's Paul Brathwaite, former executive director of the Congressional Black Caucus, is also lobbying on the association's behalf, records show. Phoenix Scholarships The University ofPhoenix, the largest for-profit college in the US. by enrollment, awarded 25 full-tuition scholarships worth $1.25 million in the fiscal year ended August 31 to the Congressional Black Caucus Foundation, which selects the recipients, Apollo spokeswoman Sara Jones said in an e-mail. More minority students earn degrees from Phoenix than from any other US. university, she said. In March, several members of the Congressional Black Caucus sent a letter to Duncan, saying the regulations would reduce educational opportunity. Regulators need more tools to oversee publicly-traded education companies receiving increasing amounts of federal money, Robert Shireman, deputy undersecretary of the education department, said in a speech on April 28. "I don't think we have the firepower that we need," he said, according to a transcript of his remarks. The speech was "highly negative" and was "drawing inappropriate and unwarranted parallels between developments in higher education and the causes of the recent financial crisis," Harris Miller, president of the Career College Association wrote in an April 29letter to Duncan. For Related News and Information: Stories about education: NI EDU U.S. colleges and universities: USUV Education organizations: EDOR Stories about the Department ofEducation: NIEDN --Editors: Robin D. Schatz,Jonathan Kaufman To contact the reporters on this story: John Hechinger in Boston at + 1-617-210-4614 or
Daniel Go! den in Boston at + 1-617-210-4610 or dlgolden@bloomberg.net; John Lauerman in Boston at +1.-617-210-4630 or jlauerman@bloomberg.net. To contact the editor responsible for this story: Jonathan Kaufman at+ 1-617-210-4638 or Jkaufman17@bloomberg.net. (b)(5) Thanks, Georgia From: Finley, Steve Sent: Tuesday, April 06, 2010 4:09PM To: Yuan, Georgia From: Yuan, Georgia To: Finle.,v, Steve CC: Jenkins, Harold McFadde.n. Elizabeth Higgins Shannan Sann Ronald Date: 4/6/2010 6:07:22 PM Subject: RE: Next steps on gainful employment Attachments: GE 2.ppt Cc: Jenlcins, Harold; McFadden, Elizabeth; Higgins, Shannan; Sann, Ronald Subject: Next steps on gainful employment Georgia-- (b)(5) Steve (b)(5) 1 (b)(5) 1 (b)(5) 1 (b)(5) 1 (b)(5) 1 (b)(S) 1 (b)(5) 1 (b)(5) 1 (b)(5) 1 (b)(5) 1 (b)(5) 1 l(b){S) Charlie Sent using BlackBerry -----Original Message----- From: Yuan, Georgia To: Rose, Charlie Sent: Tue Apr 27 15:49:56 2010 Subject NPRM (b)(5) From: Rose Charlie To.: Yuan. Georgia CC: Date: 4/27/2010 4:52:38PM Subject: Re: NPRM DeVry leads ed. stocks lower as Credit Suisse downgrades on regulatory, job market concerns Associated Press 04/26/10 9:30AM PDT NEW YORK- DeVry led decliners in education stocks Monday after a Credit Suisse analyst said the for-profit school could be hurt by proposed regulatory changes and an improving job market that could slow enrollment. The administration has pushed hard for gainful employment regulations, which stipulate that graduates of schools must not spend more than 8 percent of their income on paying student loans. It's meant to help improve school quality- making sure students are qualified and the courses help increase their incomes- as student loan defaults soar. If schools failed to pass this test, the government could block their access to federal loans for students, the bulk of their revenues. In early April, the Education Department said schools with 50 percent graduation rates and 70 percent job placement rates would be exempt from a proposed rule linking graduates' incomes to required debt payments. Analyst Kelly Flynn, however, said Washington sources believe the more lenient proposal might not wind up in a draft of the law that will be posted by mid-May or June. Flynn downgraded DeVry and ITT Educational Services Inc. to "neutral" from "outperform," cutting target prices to $65 from $75 and $110 from $135, respectively. Shares ofDeVry Inc. fell $4.59, or 6.6 percent, to $64.87, while ITT stock dropped fell $2.07, or 1.8 percent, to $109.71. Shares of Apollo Group Inc., which runs the largest for-profit school, the University ofPhoenix, also slid 93 cents, or 1.5 percent, to $62.60, while Corinthian Colleges Inc. stock fell 59 cents, or 3.3 percent, to $17.30. Career Education Corp. fell61 cents, or 1.8 percent, to $33.49 and Strayer Education Inc. dropped $2.54, or 1 percent, to $250.49. Meanwhile, Flynn cited DeYry's warning on slower enrollment growth in one of its divisions and ITT's warning on higher advertising spending. For-profit schools have seen big gains in enrollment because of the recession and high unemployment. As the job market improves, people may not feel as much as a need to bolster their resumes. -----Original Message----- From: Rose, Charlie Sent: Tuesday, April 27, 2010 4:29PM To: Yuan, Georgia Subject l(b)(5) Charlie Sent using BlackBerry From: Bergeron, David To: Finley, Steve CC: Yuan Georgia McFadden. Elizabeth Kyaal James Date: 8/16/2010 3:22:36PM Subject: RE: Repayment rate data-- WSJ articles and FOIA requests (b)(5) From: Finley, Steve Sent: Monday, August 16, 2010 1:24PM To: Yuan, Georgia; McFadden, Elizabeth; Bergeron, David; Kvaal, James Subject: Repayment rate data-- WSJ articles and FOIA requests (b)(5) Dow Jones Newswires' Melissa Kom reports: A number of for-profit colleges may be in more danger than first believed of running afoul of a regulation proposed by the U.S. Department ofEducation that would force on them harsh penalties for graduating students with high debt loads, according to data the agency released late Friday. The department, in an attempt to show some of the rule' s potential impact were it to be implemented, posted to its website late Friday a listing of the fi scal 2009loan repayment rates at more than 8,000 for-profit schools nationwide. The numbers, disputed by some institutions as being based on faulty or unclear calculations, pushed schools' shares down sharply premarket as investors weighed how it would translate to the program-level figures on which the rule would ultimately be based. Strayer Education Inc.' s stock was off 16%. Shares ofiTI Educational Services Inc. were down 9.6%, DeVry Inc. slid 7.7% and Washington Post- due to its important Kaplan unit -was down about 12% in early trading. Some for-profit colleges are objecting to U.S. Department of Education data that suggest students are paying back loans at surprisingly low rates. Earlier this summer, the department proposed a rule intended to measure how well for-profit schools train students for gainful employment in a recognized occupation. Late Friday, the department issued its calculations on loan- repayment rates for more than 8,000 schools in an attempt to preview the rule's potential impact were it to be implemented. Schools could "pass" based on student loan repayment rates, or by maintaining a debt-to-income ratio below a certain percent. The schools could face tough new regulations stripping them of access to federal funds if their students are found to have heavy debt burdens and if they don't land jobs earning enough to handle the debt. The regulation sets a 45% repayment rate as the threshold to qualify for student aid. Some argue the department is punishing schools for having graduates enroll in loan-deferment programs that the government itself supports. Some of the schools are arguing their internal estimates ofloan repayment rates are better than the department's findings and are expressing frustration with what they say is the agency's unwillingness to share data supporting the calculations. The rule would also apply to non-profit schools with vocational programs, though the government expects for-profit schools to bear the brunt of any penalties. "Community colleges are subject to the rule, but we don't believe that they're going to be impacted by the rule because the vast majority of community college students do not borrow," said David Bergeron, acting deputy assistant secretary for policy, planning and innovation at the Department's Office of Postsecondary Education. Based on Friday's data, Universal Technical Institute Inc., Grand Canyon Education Inc., American Public Education Inc. and Bridgepoint Education Inc. had the highest repayment rates among publicly traded for-profit schools, all above the 45% threshold. Corinthian , Washington Post Co.'s Kaplan and ITT were among the lowest performers. Washington .Post Co., whose Kaplan unit had a weighted average repayment rate of28%, expressed concern Monday about the implications of the department's data. The company said if program-level repayment rates are similar to the data provided Friday, a significant number of Kaplan schools could become ineligible for federal student aid, which "could have a materially adverse effect on the future results of the Company's higher education division." Shares offer-profit schools sank Monday as investors digested the data, with at least two school operators hitting new 52-week lows. Strayer Education Inc., considered among the most shielded from the proposed rule because of its large proportion of students in bachelor's and graduate degree programs and historically low loan default rate, was trading off 15% to $169.78. Corinthian Colleges Inc. was down 24.8% to $5.01 after reaching a year low of$4.94, ITT Educational Services Inc. was off 11.7% to $56.80 after hitting a new 52-week low of $54.75 and Capella Education Co. was down 16.5% to $58.60. Strayer, which late last month said it believed its programs would clear the department's highest proposed hurdle of loan repayment by 45% of graduates, scored a 25% school-wide. The company had noted last month that it was difficult to measure rates exactly because loan consolidation complicates the measure of repayment. The school said on a conference call early Monday that it would file a Freedom oflnformation Act request to see some of the data on which the Department based its calculations, calling the data "inaccurate," "nonsensical" and "arbitrary." "This discrepancy has significant operational, financial , and public policy implications," Strayer said in a statement Saturday. Capella Education also questioned the data, saying the 40% repayment rate across its schools was inconsistent with findings from an internal analysis it had conducted of its larger programs. According to that calculation, the programs would have a repayment rate above the 45% threshold. Capella said it has requested to see the Department's underlying data and methodology. Apollo Group Inc. shares were up 6% as the company's University ofPhoenix posted a repayment rate of 44.2%, higher than most analysts expected, and Universal Technical Institute shares rose 7.4% to $15.94 as its 52% repayment rate also pleased investors. From: Finley Steve To: Bergerm David Yuan Georgia McFadden. Elizabeth Kyaal James CC: Date: 8/16/2010 3:26:50PM Subject: RE: Repayment rate data-- WSJ articles and FOIA requests (b)(S) From: Bergeron, David Sent: Monday, August 16, 2010 3:23PM To: Finley, Steve; Yuan, Georgia; McFadden, Elizabeth; Kvaal, James Subject: RE: Repayment rate data-- WSJ articles and FOIA requests (b)(S) From: Finley, Steve Sent: Monday, August 16, 2010 1:24PM To: Yuan, Georgia; McFadden, Elizabeth; Bergeron, David; Kvaal, James Subject: Repayment rate data-- WSJ articles and FOlA requests (b)(5) Dow Jones Newswires' Melissa Kom reports: A number of for-profit colleges may be in more danger than first believed of running afoul of a regulation proposed by the U.S. Department ofEducation that would force on them harsh penalties for graduating students with high debt loads, according to data the agency released late Friday. The department, in an attempt to show some of the rule's potential impact were it to be implemented, posted to its website late Friday a listing of the fiscal 2009loan repayment rates at more than 8,000 for-profit schools nationwide. The numbers, disputed by some institutions as being based on faulty or unclear calculations, pushed schools' shares down sharply premarket as investors weighed how it would translate to the program-level figures on which the rule would ultimately be based. Strayer Education Inc.'s stock was off 16%. Shares ofiTT Educational Services Inc. were down 9.6%, DeVry Inc. slid 7.7% and Washington Post- due to its important Kaplan unit - was down about 12% in early trading. Some for-profit colleges are objecting to U.S. Department of Education data that suggest students are paying back loans at surprisingly low rates. Earlier this summer, the department proposed a rule intended to measure how well for-profit schools train students for gainful employment in a recognized occupation. Late Friday, the department issued its calculations on loan- repayment rates for more than 8,000 schools in an attempt to preview the rule's potential impact were it to be implemented. Schools could "pass" based on student loan repayment rates, or by maintaining a debt-to-income ratio below a certain percent. The schools could face tough new regulations stripping them of access to federal funds if their students are found to have heavy debt burdens and if they don't land jobs earning enough to handle the debt. The regulation sets a 45% repayment rate as the threshold to qualify for student aid. Some argue the department is punishing schools for having graduates enroll in loan-deferment programs that the government itself supports. Some of the schools are arguing their internal estimates ofloan repayment rates are better than the department's findings and are expressing frustration with what they say is the agency's unwillingness to share data supporting the calculations. The rule would also apply to non-profit schools with vocational programs, though the government expects for-profit schools to bear the brunt of any penalties. "Community colleges are subject to the rule, but we don't believe that they're going to be impacted by the rule because the vast majority of community college students do not borrow," said David Bergeron, acting deputy assistant secretary for policy, planning and innovation at the Department's Office of Postsecondary Education. Based on Friday's data, Universal Technical Institute Inc., Grand Canyon Education Inc., American Public Education Inc. and Bridgepoint Education Inc. had the highest repayment rates among publicly traded for-profit schools, all above the 45% threshold. Corinthian , Washington Post Co.'s Kaplan and ITT were among the lowest performers. Washington Post Co., whose Kaplan unit had a weighted average repayment rate of 28%, expressed concern Monday about the implications of the departrnent's data. The company said if program-level repayment rates are similar to the data provided Friday, a signjficant number of Kaplan schools could become ineligible for federal student aid, which "could have a materially adverse effect on the future results of the Company's higher education division." Shares of for-profit schools sank Monday as investors digested the data, with at least two school operators hitting new 52-week lows. Strayer Education Inc., considered among the most shielded from the proposed rule because of its large proportion of students in bachelor's and graduate degree programs and historically low loan default rate, was trading off 15% to $169.78. Corinthian Colleges Inc. was down 24.8% to $5.01 after reaching a year low of$4.94, ITT Educational Services Inc. was off 11.7% to $56.80 after hitting a new 52-week low of $54.75 and Capella Education Co. was down 16.5% to $58.60. Strayer, which late last month said it believed its programs would clear the departments highest proposed hurdle of loan repayment by 45% of graduates, scored a 25% school-wide. The company had noted last month that it was difficult to measure rates exactly because loan consolidation complicates the measure of repayment. The school said on a conference call early Monday that it would file a Freedom of Information Act request to see some of the data on which the Department based its calculations, calling the data "inaccurate," "nonsensical" and "arbitrary." "This discrepancy has signjficant operational, financial, and public policy implications," Strayer said in a statement Saturday. Capella Education also questioned the data, saying the 40% repayment rate across its schools was inconsistent with findings from an internal analysis it had conducted of its larger programs. According to that calculation, the programs would have a repayment rate above the 45% threshold. Capella said it has requested to see the Department's underlying data and methodology. Apollo Group Inc. shares were up 6% as the company's University of Phoenix posted a repayment rate of 44.2%, higher than most analysts expected, and Universal Technical Institute shares rose 7.4% to $15.94 as its 52% repayment rate also pleased investors. From: Jenkins, Harold To: Yuan. Georgia CC: Wolff. Russell Finley, Steve Date: 4/2/2010 9:15:04 AM Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Attachments: attach 0 (b)(5) Harold From: Yuan, Georgia Sent: Friday, April 02, 2010 9:10AM To: Manheimer, Ann; Jenkins, Harold; Shireman, Bob Subject: Re: Request for Follow Up Meeting This Week to Discuss Gainful Employment (b)(5) From: Manheimer, Ann To: Harris Miller Cc: Brian Moran ; Tammy Halligan ; Bergeron, David; Madzelan, Dan; Kanter, Martha; Shireman, Bob; Wolff, Russell; Jenkins, Harold; Madzelan, Dan; Picoult, Francine; Finley, Steve; Yuan, Georgia; Smith, Kathleen; Arsenault, Leigh Sent: Fri Apr02 07:56: 15 2010 Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Harris- from the Office of the Under Secretruy, Bob Shireman, Leigh Arsenault and I will be attending; from the Office of Postsecondary Education, Dan Madzelan and David Bergeron will be attending, and from the Office of General Counsel, Harold Jenkins, Steve Finley, Russ Wolff, Steve Finley, and possible, Georgia Yuan, will be attending. We look forward to hearing your presentation- Ann Manheimer, 260-1488 From: Harris Miller [mailto:HarrisM@career.org] Sent: Thursday, April 01, 2010 6:04PM To: Shireman, Bob; Kanter, Martha; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan; Manheimer, Ann Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Bob, et.al.: We look forward to the meeting Monday morning at 9 AM at the Department to discuss the gainful employment issue. Attending as part of the CCA delegation will be, in addition to me, Brian Moran, CCA' s Executive Vice President for Government Relations, Dr. Jonathan Guryan, University of Chicago, and Dr. Matthew Thompson of Charles River Associates, the leads on the research we will be presenting, Rebecca Campoverde from Kaplan, Anthony Guida from EDMC, and Tom Babel from Devry. If you could please let me know who will be in attendance from the Department, that would be appreciated. Attached you will find three documents. The first is the Executive Summary of the research findings. I will send you the full report tomorrow, Friday. Last minute editing on the full report was delayed by the Passover holiday. Second is the proposal CCA is putting forward as an alternative to the gainful employment proposal put forth by the Department during the negotiated rulemaking. Third is a document that summarizes the extensive tools the government already has to take actions against "bad actors" in our sector. Please let me know if you have any questions or comments. I look fmward to a productive conversation Monday. Enjoy the spectacular weather. Harris From: Shireman, Bob [mailto:Bob.Shireman@ed.gov] Sent: Monday, March 29, 2010 10:48 AM To: Harris Miller; Kanter, Martha; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan; Manheimer, Ann Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Work with Ann Manheimer on arranging the meeting. Please send your research and alternative prior to the meeting so we can get concrete and specific in the discussions. Thanks, -Bob From: Harris Miller [mailto:HarrisM@career.org] Sent: Monday, March 29, 2010 10:04 AM To: Kanter, Martha; Shireman, Bob; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan Subject: Request for Follow Up Meeting This Week to Discuss Gainful Employment Martha/Bob/Dan/David: CCA would like to have a follow on meeting with you this week to the one Brian Moran and I had with Dan and David ten days ago to discuss a) the results of our research (which was not complete when we met) on the impact of the Department's gainful employment proposal on students in higher education, and b) an alternative (which we discussed in general concept with Dan and David) to the Department ofEducation proposal. We can make ourselves available at almost any time starting tomorrow. Please let me know whom I should contact to arrange a meeting. Thanks in advance. Harris ***************************************************************** Harris N. Miller CEO/President Career College Association 1101 Connecticut Avenue, NW, Suite 900 Washington, DC 20036 harri sm@career.org + 1 202 336 6754 Executive Assistant: Jackie McWilliams j ack:i em@career. org + 1 202 336 6706 www. career.org l(b)(5) -----Original Appointment----- From: Manheimer, Ann Sent: Monday, March 29, 2010 2: 17 PM From: Yuan. Georgia To: Manheimer, Ann Madzelan, Dan Bergeron, David Shireman Bob Ranis Miller Jenkins. HarQld W Q]ft: Russell CC: Date: 3/29/2010 2:41:00 PM Subject: RE: Gainful Employment To: Madzelan, Dan; Bergeron, David; Shireman, Bob; Hanis Miller; Yuan, Georgia; Jenkins, Harold; Wolff, Russell Subject: Gainful Employment When: Monday, April OS, 2010 9:00 AM-10:00 AM (GMT-05:00) Eastern Time (US & Canada). Where: LBJ 7E312 or call in (b)(5) From: Jenkins, Harold To: Manheimer, Ann Yuan Georgia CC: Srureman, Bob Date: 4/2/2010 9:24:08 AM Sub.iect: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment (b)(5)
Sent: Friday, April 02, 2010 9:22AM To: Yuan, Georgia Cc: Jenkins, Shireman, Bob Subject: RE: Request for Follow Up Meeting Tllls Week to Discuss Gainful Employment (b)(5) From: Yuan, Georgia Sent: Friday, April 02, 2010 9:10AM To: Manheimer, Jenkins, Shireman, Bob Subject: Re: Request for Follow Up Meeting This Week to Discuss Gainful Employment (b)(5) From: Manheimer, Ann To: Harris Miller Cc: Brian Moran Tammy Halligan Madzelan, Kanter, Martha; Shireman, Wolff, Jenkins, Harold; Madzelan, Picoult, Finley, Yuan, Smith, Arsenault, Leigh Sent: Fri Apr02 07:56:15 2010 Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Harris- from the Office of the Under Secretary, Bob Shireman, Leigh Arsenault and I will be attending; from the Office of Postsecondary Education, Dan Madzelan and David Bergeron will be attending, and from the Office of General Counsel, Harold Jenkins, Steve Finley, Russ Wolff, Steve Finley, and possible, Georgia Yuan, will be attending. We look forward to hearing your presentation - Ann Manheimer, 260-1488 From: Harris Miller [mailto:HarrisM@career.org] Sent: Thursday, April 01 , 2010 6:04PM To: Shireman, Bob; Kanter, Martha; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan; Manheimer, Ann Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Bob, et.al.: We look forward to the meeting Monday morning at 9 AM at the Department to discuss the gainful employment issue. Attending as part of the CCA delegation will be, in addition to me, Brian Moran, CCA' s Executive Vice President for Government Relations, Dr. Jonathan Guryan, University of Chicago, and Dr. Matthew Thompson of Charles River Associates, the leads on the research we will be presenting, Rebecca Campoverde from Kaplan, Anthony Guida from EDMC, and Tom Babel from Devry. lf you could please let me know who will be in attendance from the Department, that would be appreciated. Attached you will find three documents. The first is the Executive Summary of the research findings. I will send you the full report tomorrow, Friday. Last minute editing on the full report was delayed by the Passover holiday. Second is the proposal CCA is putting forward as an alternative to the gainful employment proposal put forth by the Department during the negotiated rulemak:ing. Third is a document that summarizes the extensive tools the government already has to take actions against "bad actors" in our sector. Please let me know if you have any questions or comments. I look forward to a productive conversation Monday. Enjoy the spectacular weather. Hams From: Shireman, Bob [mailto:Bob.Shireman@ed.gov] Sent: Monday, March 29, 2010 10:48 AM To: Harris Miller; Kanter, Martha; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan; Manheimer, Ann Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Work with Ann Manheimer on arranging the meeting. Please send your research and alternative prior to the meeting so we can get concrete and specific in the discussions. Thanks, -Bob From: Harris Miller [mailto:HarrisM@career.org] Sent: Monday, March 29, 2010 10:04 AM To: Kanter, Martha; Shireman, Bob; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan Subject: Request for Follow Up Meeting This Week to Discuss Gainful Employment Martha/Bob/Dan/David: CCA would like to have a follow on meeting with you this week to the one Brian Moran and I had with Dan and David ten days ago to discuss a) the results of our research (which was not complete when we met) on the impact of the Department' s gainful employment proposal on students in higher education, and b) an alternative (which we discussed in general concept with Dan and David) to the Department ofEducation proposal . We can make ourselves available at almost any time starting tomorrow. Please let me know whom I should contact to arrange a meeting. Thanks in advance. Harris ***************************************************************** Harris N. M:iller CEO/President Career College Association 1101 Connecticut Avenue, NW, Suite 900 Washington, DC 20036 hanism@career.org + 1 202 336 6754 Executive Assistant: Jackie McWilliams j acki em@career. org +1 202 336 6706 www.career.org From: Jenkins, Harold To: Woiff,Russell CC: Finley. Steve Date: 4/2/2010 9:37:20 AM Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment [(b)(5) From: Wolff, Russell Sent: Friday, April 02, 2010 9:35AM To: Jenklns, Harold Cc: Finley, Steve Subject: RE: Request for Follow Up Meeting Trus Week to Discuss Gainful Employment (b)(5) From: Jenkins, Harold Sent: Friday, April 02, 2010 9:10AM To: Wolff, Russell Cc: Finley, Steve Subject: FW: Request for Follow Up Meeting Trus Week to Discuss Gainful Employment (b)(5) Harold From: Jenkins, Harold Sent: Friday, April 02, 2010 9:03AM To: Manheirner, Ann Cc: Yuan, Georgia; Wolff, Russell; Finley, Steve Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment (b)(5) Harold From: Manheimer, Ann Sent Friday, April 02, 2010 8:56AM To: Hanis Miller Cc: Brian Moran; Tammy Halligan; Bergeron, David; Madzelan, Dan; Kanter, Martha; Shireman, Bob; Wolff, Russell; Jenkins, Harold; Madzelan, Dan; Picoult, Francine; Finley, Steve; Yuan, Georgia; Smith, KathJeen; Arsenault, Leigh Subject: RE: Request for Follow Up Meeting Ths Week to Discuss Gainful Employment Harris- from the Office of the Under Secretary, Bob Shireman, Leigh Arsenault and I will be attending; from the Office of Postsecondary Education, Dan Madzelan and David Bergeron will be attending, and from the Office of General Counsel, Harold Jenkins, Steve Finley, Russ Wolff, Steve Finley, and possible, Georgia Yuan, will be attending. We look forward to hearing your presentation - Ann Manheimer, 260-1488 From: Harris Miller [mailto:HarrisM@career.org] Sent Thursday, April 01 , 2010 6:04PM To: Shireman, Bob; Kanter, Martha; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan; Manheimer, Ann Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Bob, et.al.: We look forward to the meeting Monday morning at 9 AM at the Department to discuss the gainful employment issue. Attending as part of the CCA delegation will be, in addition to me, Brian Moran, CCA's Executive Vice President for Government Relations, Dr. Jonathan Guryan, University of Chicago, and Dr. Matthew Thompson of Charles River Associates, the leads on the research we will be presenting, Rebecca Campoverde from Kaplan, Anthony Guida from EDMC, and Tom Babel from Devry. If you could please let me know who will be in attendance from the Department, that would be appreciated. Attached you will find three documents. The first is the Executive Summary of the research findings. I will send you the full report tomorrow, Friday. Last minute editing on the full report was delayed by the Passover holiday. Second is the proposal CCA is putting forward as an alternative to the gainful employment proposal put forth by the Department during the negotiated rulemaking. Third is a document that summarizes the extensive tools the government already has to take actions against "bad actors" in our sector. Please let me know if you have any questions or comments. I look forward to a productive conversation Monday. Enjoy the spectacular weather. Harris From: Shireman, Bob [mailto:Bob.Shireman@ed.gov] Sent: Monday, March 29, 2010 10:48 AM To: Harris Miller; Kanter, Martha; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan; Manheimer, Ann Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Work with Ann Manheimer on arranging the meeting. Please send your research and alternative prior to the meeting so we can get concrete and specific in the discussions. Thanks, -Bob From: Harris Miller [mailto:HarrisM@career.org] Sent: Monday, March 29, 2010 10:04 AM To: Kanter, Martha; Shireman, Bob; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan Subject: Request for Follow Up Meeting This Week to Discuss Gainful Employment Martha/Bob/Dan/David: CCA would like to have a follow on meeting with you this week to the one Brian Moran and I had with Dan and David ten days ago to discuss a) the results of our research (which was not complete when we met) on the impact of the Department's gainful employment proposal on students in higher education, and b) an alternative (which we discussed in general concept with Dan and David) to the Department ofEducation proposal. We can make ourselves available at almost any time starting tomorrow. Please let me know whom I should contact to arrange a meeting. Thanks in advance. Harris ***************************************************************** Harris N. Miller CEO/President Career College Association 11 01 Connecticut A venue, NW, Suite 900 Washington, DC 20036 harri sm@career.org + 1 202 336 6754 Executive Assistant: Jackie McWilliams j ackiem@career. org +1 202 336 6706 www.career.org From: Jenkins, Harold To: Manheimer, Ann CC: Yuan. Georgia Wolff. Russell Finley Steve Date: 4/2/2010 9:02:50 AM. Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment (b)(5) Harold From: Manheimer, Ann Sent: Friday, April 02, 2010 8:56AM To: Hanis Miller Cc: Brian Moran; Tammy Halligan; Bergeron, David; Madzelan, Dan; Kanter, Martha; Shireman, Bob; Wolff, Russell; Jenkins, Harold; Madzelan, Dan; Picoult, Francine; Finley, Steve; Yuan, Georgia; Smith, Kathleen; Arsenault, Leigh Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Harris- from the Office of the Under Secretary, Bob Shireman, Leigh Arsenault and I will be attending; from the Office ofPostsecondaty Education, Dan Madzelan and David Bergeron will be attending, and from the Office of General Counsel, Harold Jenkins, Steve FinJey, Russ Wolff, Steve Finley, and possible, Georgia Yuan, will be attending. We look forward to hearing your presentation- Ann Manheimer, 260-1488 From: Harris Miller [mailto:HarrisM@career.org] Sent: Thursday, April 01, 2010 6:04PM To: Shireman, Bob; Kanter, Martha; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan; Manheimer, Ann Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Bob, et.al.: We look forward to the meeting Monday morning at 9 AM at the Department to discuss the gainful employment issue. Attending as part of the CCA delegation will be, in addition to me, Brian Moran, CCA' s Executive Vice President for Government Relations, Dr. Jonathan Guryan, University of Chicago, and Dr. Matthew Thompson of Charles River Associates, the leads on the research we will be presenting, Rebecca Campoverde from Kaplan, Anthony Guida from EDMC, and Tom Babel from Devry. If you could please let me know who will be in attendance from the Department, that would be appreciated. Attached you will find three documents. The first is the Executive Summary of the research findings. I will send you the full report tomorrow, Friday. Last minute editing on the full report was delayed by the Passover holiday. Second is the proposal CCA is putting forward as an alternative to the gainful employment proposal put forth by the Department during the negotiated rulemaking. Third is a document that summarizes the extensive tools the government already has to take actions against "bad actors" in our sector. Please let me know if you have any questions or comments. I look forward to a productive conversation Monday. Enjoy the spectacular weather. Harris From: Shireman, Bob [mailto:Bob.Shireman@ed.gov] Sent: Monday, March 29,2010 10:48 AM To: Harris Miller; Kanter, Martha; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan; Manheimer, Ann Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Work with Ann Manheimer on arranging the meeting. Please send your research and alternative prior to the meeting so we can get concrete and specific in the discussions. Thanks, -Bob From: Harris Miller [ mailto:HarrisM@career.org] Sent: Monday, March 29, 2010 10:04 AM To: Kanter, Shireman, Madzelan, Bergeron, David Cc: Brian Moran; Tammy Halligan Subject: Request for Follow Up Meeting This Week to Discuss Gainful Employment Martha/Bob/Dan/David: CCA would like to have a follow on meeting with you this week to the one Brian Moran and I had with Dan and David ten days ago to discuss a) the results of our research (which was not complete when we met) on the impact of the Department's gainful employment proposal on students in higher education, and b) an alternative (which we discussed in general concept with Dan and David) to the Department ofEducation proposal. We can make ourselves available at almost any time starting tomorrow. Please let me know whom l should contact to arrange a meeting. Thanks in advance. Hams ***************************************************************** Hams N. Miller CEO/President Career College Association 1101 Connecticut Avenue, NW, Suite 900 Washington, DC 20036 harrism@career.org + 1 202 336 6754 Executive Assistant: Jackie McWilliams j acki em@career. org + 1 202 336 6706 www.career.org From: Manheimer Ann To: Yum Georgia CC: Jenkins. Harold Srureman, Bob Date: 4/2/2010 9:21:38 AM Sub,iect: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment (b)(5) From: Yuan, Georgia Sent: Friday, April 02, 2010 9:10AM To: Manheimer, Ann; Jenkins, Harold; Shireman, Bob Subject Re: Request for Follow Up Meeting Trus Week to Discuss Gainful Employment (b)(5) From: Manheimer, Ann To: Harris Miller Cc: Brian Moran ; Tammy Halligan ; Bergeron, David; Madzelan, Dan; Kanter, Martha; Shireman, Bob; Wolff, Russell; Jenkins, Harold; Madzelan, Dan; Picoult, Francine; Finley, Steve; Yuan, Georgia; Smith, Kathleen; Arsenault, Leigh Sent: Fri Apr02 07:56:15 2010 Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Harris- from the Office of the Under Secretary, Bob Shireman, Leigh Arsenault and I will be attending; from the Office of Postsecondary Education, Dan Madzelan and David Bergeron will be attending, and from the Office of General Counsel, Harold Jenkins, Steve Finley, Russ Wolff, Steve Finley, and possible, Georgia Yuan, will be attending. We look forward to hearing your presentation - Ann Manheimer, 260-1488 From: Harris Miller [mailto:HarrisM@career.org] Sent: Thursday, April 01, 2010 6:04PM To: Shireman, Bob; Kanter, Martha; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan; Manheimer, Ann Subject: RE: Request for Follow Up Meeting Thi s Week to Discuss Gainful Employment Bob, et.al.: We look forward to the meeting Monday morning at 9 AM at the Department to discuss the gainful employment issue. Attending as part of the CCA delegation will be, in addition to me, Brian Moran, CCA' s Executive Vice President for Government Relations, Dr. Jonathan Guryan, University of Chicago, and Dr. Matthew Thompson of Charles River Associates, the leads on the research we will be presenting, Rebecca Can1poverde from Kaplan, Anthony Guida from EDMC, and Tom Babel from Devry. If you could please let me know who will be in attendance from the Department, that would be appreciated. Attached you will find three documents. The first is the Executive Summary of the research findings. I will send you the full report tomorrow, Friday. Last minute editing on the full report was delayed by the Passover holiday. Second is the proposal CCA is putting forward as an alternative to the gainful employment proposal put forth by the Department during the negotiated rulemaking. Third is a document that summarizes the extensive tools the government already has to take actions against "bad actors" in our sector. Please let me know if you have any questions or comments. I look forward to a productive conversation Monday. Enjoy the spectacular weather. Harris From: Shireman, Bob [mailto:Bob.Shireman@ed.gov] Sent: Monday, March 29, 2010 10:48 AM To: Harris Miller; Kanter, Martha; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan; Manheimer, Ann Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Work with Ann Manheimer on arranging the meeting. Please send your research and alternative prior to the meeting so we can get concrete and specific in the discussions. Thanks, -Bob From: Harris Miller [mailto:HarrisM@career.org] Sent: Monday, March 29, 2010 10:04 AM To: Kanter, Martha; Shireman, Bob; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan Subject Request for Follow Up Meeting This Week to Discuss Gainful Employment Martha/Bob/Dan/David: CCA would like to have a follow on meeting with you this week to the one Brian Moran and I had with Dan and David ten days ago to discuss a) the results of our research (which was not complete when we met) on the impact of the Department' s gainful employment proposal on students in higher education, and b) an alternative (which we di scussed in generaJ concept with Dan and David) to the Department ofEducation proposaJ. We can make ourselves available at aJmost any time starting tomorrow. Please let me know whom I should contact to arrange a meeting. Thanks in advance. Harris ***************************************************************** Harris N. Miller CEO/President Career College Association 1101 Connecticut Avenue, NW, Suite 900 Washington, DC 20036 harri sm@career.org + 1 202 336 6754 Executive Assistant: Jackie McWilliams j acki em@career. org + 1 202 336 6706 www. career.org From: Manheimer Ann To: Jenkins, Harold CC: Yuan. Georgia Wolff. Russell Finley Steve Date: 4/2/2010 9:04:44 AM. Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Thanks From: Jenkins, Harold Sent: Friday, April 02, 2010 9:03AM To: Manheimer, Ann Cc: Yuan, Georgia; Wolff, Russell; Finley, Steve Subject: RE: Request for Follow Up Meeting Thi s Week to Discuss Gainful Employment (b)(5) Harold From: Manheimer, Ann Sent: Friday, April 02, 2010 8:56AM To: Ranis Miller Cc: Brian Moran; Tammy Halligan; Bergeron, David; Madzelan, Dan; Kanter, Martha; Shireman, Bob; Wolff, Russell; Jenkins, Harold; Madzelan, Dan; Picoult, Francine; Finley, Steve; Yuan, Georgia; Smith, Kathleen; Arsenault, Leigh Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Harris- from the Office of the Under Secretary, Bob Shireman, Leigh Arsenault and I will be attending; from the Office ofPostsecondary Education, Dan Madzelan and David Bergeron will be attending, and from the Office of General Counsel, Harold Jenkins, Steve Finley, Russ Wolff, Steve Finley, and possible, Georgia Yuan, will be attending. We look forward to hearing your presentation- Ann Manheimer, 260-1488 From: Harris Miller [ mailto:HarrisM@career.org] Sent: Thursday, April 01, 2010 6:04PM To: Shireman, Bob; Kanter, Martha; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan; Manheimer, Ann Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Bob, et.al.: We look forward to the meeting Monday morning at 9 AM at the Department to discuss the gainful employment issue. Attending as part of the CCA delegation will be, in addition to me, Brian Moran, CCA' s Executive Vice President for Government Relations, Dr. Jonathan Guryan, University of Chicago, and Dr. Matthew Thompson of Charles River Associates, the leads on the research we will be presenting, Rebecca Campoverde from Kaplan, Anthony Guida from EDMC, and Tom Babel from Devry. lf you could please let me know who will be in attendance from the Department, that would be appreciated. Attached you will find three documents. The first is the Executive Summary of the research findings. I will send you the full report tomorrow, Friday. Last minute editing on the full report was delayed by the Passover holiday. Second is the proposal CCA is putting forward as an alternative to the gainful employment proposal put forth by the Department during the negotiated rulemaking. Third is a document that summarizes the extensive tools the government already has to take actions against "bad actors" in our sector. Please let me know if you have any questions or comments. I look forward to a productive conversation Monday. Enjoy the spectacular weather. Harris From: Shireman, Bob [mailto:Bob.Shireman@ed.gov] Sent: Monday, March 29, 2010 10:48 AM To: Harris Miller; Kanter, Martha; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan; Manheimer, Ann Subject: RE: Request for Follow Up Meeting Th.is Week to Discuss Gainful Employment Work with Ann Manheimer on ananging the meeting. Please send your research and alternative prior to the meeting so we can get concrete and specific in the discussions. Thanks, -Bob From: Harris Miller [mailto:HarrisM@career.org] Sent: Monday, March 29,2010 10:04 AM To: Kanter, Shireman, Madzelan, Dan; Bergeron, David Cc: Brian Tammy Halligan Subject: Request for Follow Up Meeting This Week to Discuss Gainful Employment Martha/Bob/Dan/David: CCA would like to have a follow on meeting with you this week to the one Brian Moran and I had with Dan and David ten days ago to discuss a) the results of our research (which was not complete when we met) on the impact of the Department's gainful employment proposal on students in higher education, and b) an alternative (which we discussed in general concept with Dan and David) to the Department ofEducation proposal .. We can make ourselves available at almost any time starting tomorrow. Please let me know whom I should contact to arrange a meeting. Thanks in advance. Harris ***************************************************************** Harris N. M:iller CEO/President Career College Association 1101 Connecticut Avenue, NW, Suite 900 Washington, DC 20036 harrism@career.org + l 202 336 6754 Executive Assistant: Jackie McWilliams j ack:i em@career. org + 1 202 336 6706 www.career.org From: Shireman Bob To: Yum Georgia CC: Date: 4/2/2010 9:16:04 AM Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment l(b)(6) [(b)(S) From: Yuan, Georgia Sent: Friday, April 02, 2010 9: 10AM To: Manheimer, Ann; Jenkins, Harold; Shireman, Bob Subject: Re: Request for Follow Up Meeting This Week to Discuss Gainful Employment (b)(5) From: Manheimer, Ann To: Harris Miller Cc: Brian Moran ; Tammy Halligan ; Bergeron, David; Madzelan, Dan; Kanter, Martha; Shireman, Bob; Wolff, Russell; Jenkins, Harold; Madzelan, Dan; Picoult, Francine; Finley, Steve; Yuan, Georgia; Smith, Kathleen; Arsenault, Leigh Sent: Fri Apr02 07:56:15 2010 Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Harris - from the Office of the Under Secretary, Bob Shireman, Leigh Arsenault and I will be attending; from the Office of Postsecondary Education, Dan Madzelan and David Bergeron will be attending, and from the Office of General Counsel, Harold Jenkins, Steve Finley, Russ Wolff, Steve Finley, and possible, Georgia Yuan, will be attending. We look forward to hearing your presentation - Ann Manheimer, 260-1488 From: Harris Miller [ mailto:HarrisM@career.org] Sent: Thursday, April 01, 2010 6:04PM To: Shireman, Bob; Kanter, Martha; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan; Manheimer, Ann Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Bob, et.al.: We look forward to the meeting Monday morning at 9 AM at the Department to discuss the gainful employment issue. Attending as part of the CCA delegation will be, in addition to me, Brian Moran, CCA's Executive Vice President for Government Relations, Dr. Jonathan Guryan, University of Chicago, and Dr. Matthew Thompson of Charles River Associates, the leads on the research we will be presenting, Rebecca Campoverde from Kaplan, Anthony Guida from EDMC, and Tom Babel from Devry. If you could please let me know who will be in attendance from the Department, that would be appreciated. Attached you will find three documents. The first is the Executive Summary of the research findings. I will send you the full report tomorrow, Friday. Last minute editing on the full report was delayed by the Passover holiday. Second is the proposal CCA is putting forward as an alternative to the gainful employment proposal put forth by the Department during the negotiated rulemaking. Third is a document that summarizes the extensive tools the government already has to take actions against "bad actors" in our sector. Please let me know if you have any questions or comments. I look forward to a productive conversation Monday. Enjoy the spectacular weather. Harris From: Shireman, Bob [mailto:Bob.Shireman@ed.gov] Sent: Monday, March 29, 2010 10:48 AM To: Harris Miller; Kanter, Martha; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan; Manheimer, Ann Subject: RE: Request for Follow Up Meeting Ths Week to Discuss Gainful Employment Work with Ann Manheimer on arranging the meeting. Please send your research and alternative prior to the meeting so we can get concrete and specific in the discussions. Thanks, -Bob From: Harris Miller [ mailto:HanisM@career.org] Sent: Monday, March 29, 2010 10:04 AM To: Kanter, Shireman, Madzelan, Bergeron, David Cc: Brian Tammy Halligan Subject: Request for Follow Up Meeting This Week to Discuss Gainful Employment Martha/Bob/Dan/David: CCA would like to have a follow on meeting with you this week to the one Brian Moran and I had with Dan and David ten days ago to discuss a) the results of our research (which was not complete when we met) on the impact of the Department' s gainful employment proposal on students in higher education, and b) an alternative (which we discussed in general concept with Dan and David) to the Department of Education proposal. We can make ourselves available at almost any time starting tomorrow. Please let me know whom I should contact to arrange a meeting. Thanks in advance. Harris ***************************************************************** Harris N. Miller CEO/President Career College Association 1101 Connecticut Avenue, NW, Suite 900 Washington, DC 20036 hanism@career.org + 1 202 336 6754 Executive Assistant: Jackie McWilliams j acki em@career. org + 1 202 336 6706 www.career.org From: Wolff, Russell To: Jenkins, Harold CC: Finley. Steve Date: 4/2/2010 9:34:36 AM Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment (b)(5) From: Jenkins, Harold Sent: Friday, April 02, 2010 9:10AM To: Wolff, Russell Cc: Finley, Steve Subject: FW: Request for Follow Up Meeting This Week to Discuss Gainful Employment (b)(5) Harold From: Jenkins, Harold Sent: Friday, April 02, 2010 9:03AM To: Manheimer, Ann Cc: Yuan, G e o r g i ~ Wolff, Russell; Finley, Steve Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment (b)(5) Harold From: Manheimer, Ann Sent: F1iday, April 02, 2010 8:56AM To: Harris Miller Cc: Brian Moran; Tammy Halligan; Bergeron, David; Madzelan, Dan; Kanter, Martha; Shireman, Bob; Wolff, Russell; Jenkins, Harold; Madzelan, Dan; Picoult, Francine; Finley, Steve; Yuan, Georgia; Smith, Kathleen; Arsenault, Leigh Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Harris- from the Office of the Under Secretary, Bob Shireman, Leigh Arsenault and I will be attending; from the Office of Postsecondary Education, Dan Madzelan and David Bergeron will be attending, and from the Office of General Counsel, Harold Jenkins, Steve Finley, Russ Wolff, Steve Finley, and possible, Georgia Yuan, will be attending. We look forward to hearing your presentation - Ann Manheimer, 260-1488 From: Harris Miller [mailto:HarrisM@career.org] Sent: Thursday, Apri 1 01, 201 0 6:04 PM To: Shireman, Bob; Kanter, Martha; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan; Manheimer, Ann Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Bob, et.al.: We look forward to the meeting Monday morning at 9 AM at the Department to discuss the gainful employment issue. Attending as part of the CCA delegation will be, in addition to me, Brian Moran, CCA' s Executive Vice President for Government Relations, Dr. Jonathan Guryan, University of Chicago, and Dr. Matthew Thompson of Charles River Associates, the leads on the research we will be presenting, Rebecca Campoverde from Kaplan, Anthony Guida from EDMC, and Tom Babel from Devry. If you could please let me know who will be in attendance from the Department, that would be appreciated. Attached you will find three documents. The first is the Executive Summary of the research findings. I will send you the full report tomorrow, Friday. Last minute editing on the full report was delayed by the Passover holiday. Second is the proposal CCA is putting forward as an alternative to the gainful employment proposal put forth by the Department during the negotiated rulemaking. Third is a document that summarizes the extensive tools the government already has to take actions against "bad actors" in our sector. Please let me know if you have any questions or comments. I look forward to a productive conversation Monday. Enjoy the spectacular weather. Harris From: Shireman, Bob [mailto:Bob.Shireman@ed.gov] Sent: Monday, March 29, 2010 10:48 AM To: Harris Miller; Kanter, Martha; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan; Manheimer, Ann Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Work with Ann Manheimer on arranging the meeting. Please send your research and alternative prior to the meeting so we can get concrete and specific in the discussions. Thanks, -Bob From: Harris Miller [mailto:HarrisM@career.org] Sent: Monday, March 29, 2010 10:04 AM To: Kanter, Martha; Shireman, Bob; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan Subject: Request for Follow Up Meeting This Week to Discuss Gainful Employment Martha/Bob/Dan/David: CCA would like to have a follow on meeting with you this week to the one Brian Moran and I had with Dan and David ten days ago to discuss a) the results of our research (which was not complete when we met) on the impact of the Department' s gainful employment proposal on students in higher education, and b) an alternative (which we discussed in general concept with Dan and David) to the Department ofEducation proposal. We can make ourselves available at almost any time starting tomorrow. Please let me know whom I should contact to arrange a meeting. Thanks in advance. Hams ***************************************************************** Ranis N. Miller CEO/President Career College Association 1101 Connecticut Avenue, NW, Suite 900 Washington, DC 20036 harrism@career.org + l 202 336 6754 Executive Assistant: Jackie McWilliams j ackiem@career. org + 1 202 336 6706 www. career.org From: Yuan Georgia To: Manheimer, Ann Jenkins. Harold Shireman, Bob CC: Date: 4/2/2010 9:09:48 AM. Subject: Re: Request for Follow Up Meeting This Week to Discuss Gainful Employment (b)(S)
To: Hanis Miller Cc: Brian Moran; Tammy Halligan ; Bergeron, David; Madzelan, Dan; Kanter, Martha; Shireman, Bob; Wolff, Russell ; Jenkins, Harold; Madzelan, Dan; Picoult, Francine; Finley, Steve; Yuan, Georgia; Smith, Kathleen; Arsenault, Leigh Sent: Fri Apr 02 07:56:15 2010 Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Ranis- from the Office of the Under Secretary, Bob Shireman, Leigh Arsenault and I will be attending; from the Office ofPostsecondary Education, Dan Madzelan and David Bergeron will be attending, and from the Office of General Counsel, Harold Jenkins, Steve Finley, Russ W ol:ff, Steve Finley, and possible, Georgia Yuan, will be attending. We look forward to hearing your presentation- Ann Manheimer, 260-1488 From: Harris Miller [mailto:HarrisM@career.org] Sent: Thursday, April 01, 2010 6:04PM To: Shireman, Bob; Kanter, Martha; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan; Manheimer, Pu1n Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Bob, et.al.: We look forward to the meeting Monday morning at 9 AM at the Department to discuss the gainful employment issue. Attending as part of the CCA delegation will be, in addition to me, Brian Moran, CCA's Executive Vice President for Government Relations, Dr. Jonathan Guryan, University of Chicago, and Dr. Matthew Thompson of Charles River Associates, the leads on the research we will be presenting, Rebecca Campoverde from Kaplan, Anthony Guida from EDMC, and Tom Babel from Devry. If you could please let me know who will be in attendance from the Department, that would be appreciated. Attached you will find three documents. The first is the Executive Summary of the research findings. I will send you the full report tomorrow, Friday. Last minute editing on the full report was delayed by the Passover holiday. Second is the proposal CCA is putting forward as an alternative to the gainful employment proposal put forth by the Department during the negotiated rulemaking. Third is a document that summarizes the extensive tools the government already has to take actions against "bad actors" in our sector. Please let me know if you have any questions or comments. I look forward to a productive conversation Monday. Enjoy the spectacular weather. Harris From: Shireman, Bob [mailto:Bob.Shireman@ed.gov] Sent: Monday, March 29, 2010 10:48 AM To: Harris Miller; Kanter, Martha; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan; Manheimer, Ann Subject: RE: Request for Follow Up Meeting This Week to Discuss Gainful Employment Work with Ann Manheimer on arranging the meeting. Please send your research and alternative prior to the meeting so we can get concrete and specific in the discussions. Thanks, -Bob From: Harris Miller [mailto:HarrisM@career.org] Sent: Monday, March 29, 2010 10:04 AM To: Kanter, Martha; Shireman, Bob; Madzelan, Dan; Bergeron, David Cc: Brian Moran; Tammy Halligan Subject: Request for Follow Up Meeting This Week to Discuss Gainful Employment Martha/Bob/Dan/David: CCA would like to have a follow on meeting with you this week to the one Brian Moran and I had with Dan and David ten days ago to discuss a) the results of our research (which was not complete when we met) on the impact of the Department's gainful employment proposal on students in higher education, and b) an alternative (which we discussed in general concept with Dan and David) to the Department ofEducation proposal. We can make ourselves available at almost any time starting tomorrow. Please let me know whom I should contact to arrange a meeting. Thanks in advance. Harris ***************************************************************** Harris N. Miller CEO/President Career College Association 110'1 Connecticut Avenue, NW, Suite 900 Washington, DC 20036 harrism@career.org + 1 202 336 6754 Executive Assistant: Jackie McWilliams jackiem@career.org +1 202 336 6706 www. career.org (b)(5) -----Original Message----- From: Jenkins, Harold Sent: Thursday, February 25, 2010 12:56 PM To: Finley, Steve Cc: Marinucci, Fred Subject: RE: request for meeting (b)(5) -----Original Message----- From: Finley, Steve Sent: Thursday, February 25, 2010 12:54 PM To: Jenkins, Harold; Sann, Ronald Cc: Wolff, Russell; Woodward, Jennifer Subject: RE: request for meeting (b)(S) -----Original Message----- From: Jenkins, Harold From: Finley, Steve To: Jenkins, Harold CC: Marinucci. Fred Date: 2/25/2010 1:58:04 PM Subject: RE: request for meeting Sent: Thursday, February 25, 2010 12:51 PM To: Yuan, Georgia; Finley, Steve; Sann, Ronald Cc: Wiegner, Ashley; Rose, Charlie; Miceli, Julie; Wolff, Russell; Woodward, Jennifer Subject: RE: request for meeting (b)(5) -----Original Message----- From: Yuan, Georgia Sent: Thursday, February 25, 2010 12:08 PM To: Jenkins, Harold; Finley, Steve; Sann, Ronald Cc: Wiegner, Ashley; Rose, Charlie; Miceli, Julie Subject: FW: request for meeting (b)(5) -----Original Message----- From: Broff, Nancy [mailto:BroftN@DicksteinShapiro.COM] Sent: Thursday, February 25, 201010:25 AM To: Rose, Charlie Cc: Yuan, Georgia; Miceli, Julie; Wiegner, Ashley Subject: RE: request for meeting Hi Charlie- I am writing to renew my request for a meeting. The meeting would be with the CEOs of three higher education companies: Daniel Hamburger ofDeVry Clark Elwood ofiTT Educational Services, Inc. Andrew Clark ofBridgepoint Education They would like to meet on March 11 if you have an availability that day. The agenda would be to discuss some of the issues from the recently completed negotiated rulemaking. Thanks so much, Nancy JRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the JRS, we inform you that any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the .Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. From: Rose, Charlie [mailto:Charlie.Rose@ed.gov] Sent: Monday, February 15, 2010 10:52 PM To: Broff, Nancy Cc: Yuan, Georgia; Miceli, Julie; Wiegner, Ashley Subject: RE: request for meeting Nancy: Thanks. Let me check and I will follow-up with you regarding the meeting. By the way, even by Chicago standards, the DC snow is tough to deal with. Charlie -----Original Message----- From: Broff, Nancy [mailto:BroffN@DicksteinShapiro.COM] Sent: Tuesday, February 09, 2010 1 1:54AM To: Rose, Charlie Subject: request for meeting Hello Charlie - I hope you are doing well in all this snow. I guess you Chicagoans have an advantage in the area of coping with real winter. I am writing to request a meeting with you for the CEO of my client, Bridgepoint Education, lnc. Andrew Clark will be in town on the morning ofFebruary 25th and would very much appreciate an opportunity to discuss some concerns arising out of the recent negotiated rulemaking sessions. Bridgepoint owns two institutions: Ashford University and University of the Rockies. I will be happy to provide some background information on both universities in advance of the meeting. Those of us in the higher education bar very much appreciated your openness to hearing from members of the community, and this is an important topic on which I think it is important for you to hear directly from a school official. In the interest of full disclosure, I want to mention that Ashford is in the midst of an OIG audit (not an investigation), but we have not yet received a draft report and would not plan to discuss that at this meeting. I hope you can make time in your schedule for this meeting. Best regards, Nancy IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. 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If you have received this confidential communication in error, please notifY the sender immediately by repl y e-mail message and permanently delete the original message. To reply to our email administrator directly, send an email to postmaster@dicksteinshapiro.com Dickstein Shapiro LLP http:/ /www.Di cksteinShapiro. com From: Finley Steve To: Jenkins. Harold Sann. Ronald CC: WoLff, Russell Woodward. Jetmifer Date: 2/25/2010 L53:42PM Sub.iect: RE: request for meeting (b)(5) -----Original Message----- From: Jenkins, Harold Sent: Thursday, February 25, 2010 12:51 PM To: Yuan, Georgia; Finley, Steve; Sann, Ronald Cc: Wiegner, Ashley; Rose, Charlie; Miceli, Julie; Wolff, Russell ; Woodward, Jennifer Subject: RE: request for meeting (b)(5) -----Original Message----- From: Yuan, Georgia Sent: Thursday, February 25, 2010 12:08 PM To: Jenkins, Harold; Finley, Steve; Sann, Ronald Cc: Wiegner, Ashley; Rose, Charlie; Miceli, Julie Subject: FW: request for meeting (b)(5) -----Original Message----- From: Broff, Nancy [mailto:BroflN@DicksteinShapiro.COM] Sent: Thursday, February 25, 2010 10:25 AM To: Rose, Charlie Cc: Yuan, Georgia; Miceli, Julie; Wiegner, Ashley Subject: RE: request for meeting H.i Charlie- I am writing to renew my request for a meeting. The meeting would be with the CEOs of three higher education companies: Daniel Hamburger ofDe Vry Clark Elwood ofiTT Educational Services, Inc. Andrew Clark ofBridgepoint Education They would like to meet on March 11 if you have an availability that day. The agenda would be to discuss some of the issues from the recently completed negotiated rulemaking. Thanks so much, Nancy IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we infoiiD you that any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. From: Rose, Charlie [mailto:Charlie.Rose@ed.gov] Sent: Monday, February 15, 2010 10:52 PM To: Broff, Nancy Cc: Yuan, Georgia; Miceli, Julie; Wiegner, Ashley Subject: RE: request for meeting Nancy: Thanks. Let me check and I will follow-up with you regarding the meeting. By the way, even by Chicago standards, the DC snow is tough to deal with. Charlje -----Original Message----- From: Broff, Nancy [mailto:BroffN@DicksteinShapiro.COM] Sent: Tuesday, February 09, 2010 11 :54 AM To: Rose, Charlie Subject: request for meeting Hello Charlie- I hope you are doing well in all this snow. I guess you Chicagoans have an advantage in the area of coping with real winter. I am writing to request a meeting with you for the CEO of my client, Bridgepoint Education, Inc. Andrew Clark will be in town on the morning ofFebruary 25th and would very much appreciate an opportunity to discuss some concerns arising out of the recent negotiated rulemaking sessions. Bridgepoint owns two institutions: Ashford University and University of the Rockies. I will be happy to provide some background information on both universities in advance of the meeting. Those of us in the higher education bar very much appreciated your openness to hearing from members of the community, and this is an important topic on which I think it is important for you to hear directly from a school official. In the interest of :full disclosure, I want to mention that Ashford is in the midst of an OIG audit (not an investigation), but we have not yet received a draft report and would not plan to discuss that at this meeting. I hope you can make time in your schedule for tlus meeting. Best regards, Nancy IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. This e-mail message and any attached files are confidential and are intended solely for the use of the addressee(s) named above. This communication may contain material protected by attorney-client, work product, or other privileges. If you are not the intended recipient or person responsible for delivering this confidential communication to the intended recipient, you have received this communication in error, and any review, use, dissemination, forwarding, printing, copying, or other distribution of this e-mail message and any attached files is strictly prohibited. Dickstein Shapiro reserves the right to monitor any communication that is created, received, or sent on its network. If you have received this confidential communication in error, please notify the sender immediately by reply e-mail message and permanently delete the original message. To reply to our email administrator directly, send an email to postmaster@dicksteinshapiro. com Dickstein Shapiro LLP http://www.DicksteinShapiro.com This e-mail message and any attached files are confidential and are intended solely for the use of the addressee(s) named above. This communication may contain material protected by attorney-client, work product, or other privileges. If you are not the intended recipient or person responsible for delivering this confidential communication to the intended recipient, you have received this communication in error, and any review, use, dissemination, forwarding, printing, copying, or other distribution of this e-mail message and any attached files is strictly prohibited. Dickstein Shapiro reserves the right to monitor any communication that is created, received, or sent on its network. If you have received this confidential communication in error, please notify the sender immediately by reply e-mail message and permanently delete the original message. To reply to our email administrator directly, send an email to postmaster@dicksteinshapiro.com Dickstein Shapiro LLP http://www.DicksteinShapiro.com From: Jenkins Harold To: Yuan, Georgia Finley, Steve Sann. Ronald CC: Wie.gner Ashley Rose Charlie Miceli Julie W olfL Russell Woodward. Jennifer Date: 2/25/2010 1:50:48 PM Subject: RE: request for meeting (b)(5) -----Ori gi nat Message----- From: Yuan, Georgia Sent Thursday, February 25, 2010 12:08 PM To: Jenkins, Harold; Finley, Steve; Sann, Ronald Cc: Wiegner, Ashley; Rose, Charlie; Micel i, Julie Subject: FW: request for meeting (b)(5) -----Original Message----- From: Broff, Nancy [mailto:BrofiN@DicksteinShapiro.COM] Sent Thursday, February 25, 2010 10:25 AM To: Rose, Charlie Cc: Yuan, Georgia; Miceli, Julie; Wiegner, Ashley Subject: RE: request for meeting Hi Charlie- I am writing to renew my request for a meeting. The meeting would be with the CEOs of three higher education companies: Daniel Hamburger ofDeVry Clark Elwood oflTT Educational Services, Inc. Andrew Clark ofBridgepoint Education They would like to meet on March ll if you have an availability that day. The agenda would be to discuss some of the issues from the recently completed negotiated rulemaking. Thanks so much, Nancy IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. From: Rose, Charlie [mailto:Charlie.Rose@ed.gov] Sent Monday, February 15, 2010 10:52 PM To: Broff, Nancy Cc: Yuan, Georgia; Miceli, Julie; Wiegner, Ashley Subject: RE: request for meeting Nancy: Thanks. Let me check and I wilJ follow-up with you regarding the meeting. By the way, even by Chicago standards, the DC snow is tough to deal with. Charlie -----Original Message----- From: Broff, Nancy [mailto:BroffN@DicksteinShapiro.COM] Sent: Tuesday, February 09, 2010 11:54 AM To: Rose, Charlie Subject: request for meeting Hello Charlie- I hope you are doing well in all this snow. I guess you Chicagoans have an advantage in the area of coping with real winter. I am writing to request a meeting with you for the CEO of my client, Bridgepoint Education, Inc. Andrew Clark will be in town on the morning ofFebruary 25th and would very much appreciate an opportunity to discuss some concerns arising out of the recent negotiated rulemaking sessions. Bridgepoint owns two institutions: Ashford University and University of the Rockies. I wilJ be happy to provide some background information on both universities in advance of the meeting. Those of us in the higher education bar very much appreciated your openness to hearing from members of the community, and this is an important topic on which I think it is important for you to hear directly from a school official. In the interest of full disclosure, I want to mention that Ashford is in the midst of an OIG audit (not an investigation), but we have not yet received a draft report and would not plan to discuss that at this meeting. I hope you can make time in your schedule for this meeting. Best regards, Nancy JRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the JRS, we inform you that any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. This e-mail message and any attached files are confidential and are intended solely for the use of the addressee(s) named above. This communication may contain material protected by attorney-client, work product, or other privileges. If you are not the intended recipient or person responsible for delivering this confidential communication to the intended recipient, you have received this communication in error, and any review, use, dissemination, forwarding, printing, copying, or other distribution of this e-mail message and any attached files is strictly prohibited. Dickstein Shapiro reserves the right to monitor any communication that is created, received, or sent on its network. If you have received this confidential communication in error, please notify the sender immediately by reply e-mail message and permanently delete the original message. To reply to our email administrator directly, send an email to postmaster@di ckstei nshapi ro.com Dickstein Shapiro LLP http:/ /www.Dickste.inShapiro. com - ----- - ----------------------------------------------------------------- This e-mail message and any attached files are confidential and are intended solely for the use of the addressee(s) named above. This communication may contain material protected by attorney-client, work product, or other privileges. If you are not the intended recipient or person responsible for delivering this confidential communication to the intended recipient, you have received this communication in error, and any review, use, dissemination, forwarding, printing, copying, or other distribution ofthis e-mail message and any attached flies is strictly prohibited. Dickstein Shapiro reserves the right to monitor any communication that is created, received, or sent on its network. If you have received this confidential communication in error, please notifY the sender immediately by reply e-mail message and permanently delete the original message. To reply to our email administrator directly, send an email to postmaster@dicksteinshapiro.com Dickstein Shapiro LLP http:/ /www.Di cksteinShapiro. com (b)(5) -----Original Message----- From: Finley, Steve Sent: Thursday, February 25, 2010 12:58 PM To: Jenkins, Harold Cc: Marinucci, Fred Subject: RE: request for meeting (b)(5) -----Original Message----- From: Jenkins, Harold Sent: Thursday, February 25, 2010 12:56 PM To: Finley, Steve Cc: Marinucci, Fred Subject: RE: request for meeting -----Original Message----- From: Finley, Steve Sent: Thursday, February 25, 2010 12:54 PM To: Jenkins, Harold; Sann, Ronald Cc: Wolff, Russell; Woodward, Jennifer Subject: RE: request for meeting (b)(S) -----Original Message----- From: Jenkins Harold To: Finl{}y. Steve CC: Marinucci. Fred Date: 2/25/2010 1:59:48 PM Subject: RE: request for meeting From: Jen1jns, IIarold Sent: Thursday, February 25, 2010 12:51 PM To: Yuan, Georgia; Finley, Steve; Sann, Ronald Cc: Wiegner, Ashley; Rose, Charlie; Miceli, Julie; Wolff, Russell; Woodward, Jennifer Subject: RE: request for meeting (b)(S) -----Original Message----- From: Yuan, Georgia Sent: Thursday, February 25, 2010 12:08 PM To: Jenkins, Harold; Finley, Steve; Sann, Ronald Cc: Wiegner, Ashley; Rose, Charlie; Miceli, Julie Subject: FW: request for meeting (b)(S) -----Original Message----- From: Broff, Nancy [mailto:BroftN@DicksteinShapiro.COM] Sent: Thursday, February 25, 2010 10:25 AM To: Rose, Charlie Cc: Yuan, Georgia; Miceli, Julie; Wiegner, Ashley Subject: RE: request for meeting IIi Charlie- I am writing to renew my request for a meeting. The meeting would be with the CEOs of three higher education companies: Danielliamburger ofDeVry Clark Elwood ofiTT Educational Services, Inc. Andrew Clark ofBridgepoint Education They would like to meet on March 11 if you have an availability that day. The agenda would be to discuss some of the issues from the recently completed negotiated rulemaking. Thanks so much, Nancy IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. From: Rose, Charlie [mailto:Charlie.Rose@ed.gov] Sent: Monday, February 15, 2010 10:52 PM To: Broff, Nancy Cc: Yuan, Georgia; Miceli, Julie; Wiegner, Ashley Subject: RE: request for meeting Nancy: Thanks. Let me check and I will follow-up with you regarding the meeting. By the way, even by Chicago standards, the DC snow is tough to deal with. Charlie -----Original Message----- From: Broff, Nancy [mailto:BrofiN@DicksteinShapiro.COM] Sent: Tuesday, February 09, 2010 11:54 AM To: Rose, Charlie Subject: request for meeting Hello Charlie- I hope you are doing well in all this snow. I guess you Chicagoans have an advantage in the area of coping with real winter. I am writing to request a meeting with you for the CEO of my client, Bridgepoint Education, Inc. Andrew Clark will be in town on the morning ofF ebruary 25th and would very much appreciate an opportunity to discuss some concerns arising out of the recent negotiated rulemaking sessions. Bridgepoint owns two institutions: Ashford University and University of the Rockies. I will be happy to provide some background information on both universities in advance of the meeting. Those of us in the higher education bar very much appreciated your openness to hearing from members of the community, and this is an important topic on which I think it is important for you to hear directly from a school official. In the interest offutl disclosure, I want to mention that Ashford is in the midst of an OIG audit (not an investigation), but we have not yet received a draft report and would not plan to discuss that at this meeting. I hope you can make time in your schedule for this meeting. Best regards, Nancy IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. This e-mail message and any attached files are confidential and are intended solely for the use of the addressee(s) named above. This communication may contain material protected by attorney-client, work product, or other privileges. If you are not the intended recipient or person responsible for deliveting this confidential communication to the intended recipient, you have received this communication in error, and any review, use, dissemination, forwarding, printing, copying, or other dist:tibution of this e-mail message and any attached files is strictly prohibited. Dickstein Shapiro reserves the right to monitor any communication that is created, received, or sent on its network. If you have received this confidential communication in error, please notify the sender immediately by reply e-mail message and permanently delete the original message. To reply to our email administrator directly, send an email to postmaster@di cksteinshapi ro.com Dickstein Shapiro LLP http:/ /www.Di cksteinShapiro. com This e-mail message and any attached files are confidential and are intended solely for the use of the addressee(s) named above. This communication may contain material protected by attorney-client, work product, or other privileges. If you are not the intended recipient or person responsible for delivering this confidential communication to the intended recipient, you have received this communication in error, and any review, use, dissemination, forwarding, printing, copying, or other distribution of this e-mail message and any attached files is sttictly prohibited. Dickstein Shapiro reserves the right to monitor any communication that is created, received, or sent on its network. If you have received this confidential communication in error, please notifY the sender immediately by reply e-mail message and permanently delete the original message. To reply to our email administrator directly, send an email to postrnaster@dicksteinshapiro.com Dickstein Shapiro LLP http:/ /www.Di cksteinShapiro. com From: Jenkins Harold To: Finl{}y. Steve CC: Marinucci. Fred Date: 2/25/2010 1:55:52 PM Subject: RE: request for meeting -----Ori ginal Message----- From: Finley, Steve Sent: Thursday, February 25, 2010 12:54 PM To: Jenkins, Harold; Sann, Ronald Cc: Wolff, Russell; Woodward, Jennifer Subject: RE: request for meeting (b)(5) -----Original Message----- From: Jenkins, Harold Sent: Thursday, February 25, 2010 12:51 PM To: Yuan, Georgia; Finley, Steve; Sann, Ronald Cc: Wiegner, Ashley; Rose, Charlie; Miceli, Julie; Wolff, Russell; Woodward, Jennifer Subject: RE: request for meeting (b){5) -----Original Message----- From: Yuan, Georgia Sent: Thursday, February 25, 2010 12:08 PM To: Jenkins, Harold; Finley, Steve; Sann, Ronald Cc: Wiegner, Ashley; Rose, Charlie; Miceli, Julie Subject: FW: request for meeting (b)(5) -----Original Message----- From: Broff, Nancy [mailto:BroflN@DicksteinShapiro.COM] Sent: Thursday, February 25, 2010 10:25 AM To: Rose, Charlie Cc: Yuan, Georgia; Miceli, Julie; Wiegner, Ashley Subject RE: request for meeting Hi Charlie- I am writing to renew my request for a meeting. The meeting would be with the CEOs of three higher education companies: Daniel Hamburger ofDe V ry Clark Elwood ofiTT Educational Services, Inc. Andrew Clark ofBridgepoint Education They would like to meet on March ll if you have an availability that day. The agenda would be to discuss some of the issues from the recently completed negotiated rulemaking. Thanks so much, Nancy IRS Clrcular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. From: Rose, Charlie [mailto:Charlie.Rose@ed.gov] Sent: Monday, February 15, 2010 10:52 PM To: Broff, Nancy Cc: Yuan, Georgia; Miceli, Julie; Wiegner, Ashley Subject: RE: request for meeting Nancy: Thanks. Let me check and I will follow-up with you regarding the meeting. By the way, even by Chicago standards, the DC snow is tough to deal with. Charlie -----Original Message----- From: Broff, Nancy [mailto:BroftN@DicksteinShapiro.COM] Sent: Tuesday, February 09, 2010 11 :54 AM To: Rose, Charlie Subject: request for meeting Hello Charlie- I hope you are doing well in all this snow. I guess you Chicagoans have an advantage in the area of coping with real winter. I am writing to request a meeting with you for the CEO of my client, Bridgepoint Education, Inc. Andrew Clark will be in town on the morning ofFebruary 25th and would very much appreciate an opportunity to discuss some concerns arising out of the recent negotiated rulemaking sessions. Bridgepoint owns two institutions: Ashford University and University of the Rockies. I wilJ be happy to provide some background information on both universities in advance of the meeting. Those of us in the higher education bar very much appreciated your openness to hearing from members of the community, and this is an important topic on which I think it is important for you to hear directly from a school official. In the interest of full disclosure, I want to mention that Ashford is in the midst of an OIG audit (not an investigation), but we have not yet received a draft report and would not plan to discuss that at this meeting. I hope you can make time in your schedule for this meeting. Best regards, Nancy IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. This e-mail message and any attached files are confidential and are intended solely for the use of the addressee(s) named above. This communication may contain material protected by attorney-client, work product, or other privileges. If you are not the intended recipient or person responsible for delivering this confidential communication to the intended recipient, you have received this communication in error, and any review, use, dissemination, forwarding, printing, copying, or other distribution of this e-mail message and any attached files is strictly prohibited. Dickstein Shapiro reserves the right to monitor any communication that is created, received, or sent on its network. If you have received this confidential communication in error, please notify the sender immediately by reply e-mail message and permanently delete the original message. To reply to our email administrator directly, send an email to postmaster@di ckstei nshapi ro.com Dickstein Shapiro LLP http:/ /www.DicksteinShapiro. com ------------------------------------------------------------------------ This e-mail message and any attached files are confidential and are intended solely for the use of the addressee(s) named above. This communication may contain material protected by attorney-client, work product, or other privileges. If you are not the intended recipient or person responsible for delivering this confidential communication to the intended recipient, you have received this communication in error, and any review, use, dissemination, forwarding, printing, copying, or other distribution of this e-mail message and any attached files is strictly prohibited. Dickstein Shapiro reserves the right to monitor any communication that is created, received, or sent on its network. lfyou have received this confidential communication in error, please notify the sender immediately by reply e-mail message and permanently delete the original message. To reply to our email administrator directly, send an email to postmaster@dicksteinshapiro.com Dickstein Shapiro LLP http:/ /www.Di cksteinShapiro. com From: Jenkins Harold To: Finley, Stev!( Sann. Ronald CC: WoLff, Russell Woodward, Jetmifer Marinucci Fred Date: 2/25/201 o 1:5 5:22PM Subject: RE: request for meeting l(b)(5) -----Original Message----- From: Finley, Steve Sent Thursday, February 25, 20'1 0 12:54 PM To: Jenkins, Harold; Sann, Ronald Cc: Wolff, Russell; Woodward, Jennifer Subject RE: request for meeting (b)(5) -----Original Message----- From: Jenkins, Harold Sent: Thursday, February 25, 2010 12:51 PM To: Yuan, Georgia; FinJey, Steve; Sann, Ronald Cc: Wiegner, Ashley; Rose, Charlie; Miceli, Julie; Wolff, Russell ; Woodward, Jennifer Subject: RE: request for meeting (b)(5) -----Original Message----- From: Yuan, Georgia Sent: Thursday, February 25, 2010 12:08 PM To: Jenkins, Harold; Finley, Steve; Sann, Ronald Cc: Wiegner, Ashley; Rose, Charlie; Miceli, JuJie Subject: FW: request for meeting (b)(5) -----Origi nat Message----- y From: Broff, Nancy [mailto:BroftN@DicksteinShapiro.COM] Sent: Thursday, February 25, 2010 10:25 AM To: Rose, Charlie Cc: Yuan, Georgia; Miceli, Julie; Wiegner, Ashley Subject: RE: request for meeting Hi Charlie- I am writing to renew my request for a meeting. The meeting would be with the CEOs of three higher education companies: Daniel Hamburger ofDe V ry Clark Elwood ofiTT Educational Services, Inc. Andrew Clark ofBridgepoint Education They would like to meet on March 11 if you have an availability that day. The agenda would be to discuss some of the issues from the recently completed negotiated rulemaking. Thanks so much, Nancy lRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the lRS, we inform you that any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. From: Rose, Charlie [mailto:Charlie.Rose@ed.gov] Sent: Monday, February 15, 2010 10:52 PM To: Braff, Nancy Cc: Yuan, Georgia; Miceli, Julie; Wiegner, Ashley Subject RE: request for meeting Nancy: Thanks. Let me check and I wilJ follow-up with you regarding the meeting. By the way, even by Chicago standards, the DC snow is tough to deal with. Charlie -----Original Message----- From: Broff, Nancy [mailto:BroftN@DicksteinShapiro.COM] Sent: Tuesday, February 09, 2010 11 :54 AM To: Rose, Charlie Subject: request for meeting Hello Charlie- I hope you are doing well in all this snow. I guess you Chicagoans have an advantage in the area of coping with real winter. I am writing to request a meeting with you for the CEO of my client, Bridgepoint Education, Inc. Andrew Clark will be in town on the morning ofFebruary 25th and would very much appreciate an opportunity to discuss some concerns arising out of the recent negotiated rulemaking sessions. B1idgepoint owns two institutions: Ashford University and University of the Rockies. I will be happy to provide some background information on both universities in advance of the meeting. Those of us in the higher education bar very much appreciated your openness to hearing fiom members of the community, and tills is an important topic on which I trunk it is important for you to hear directly from a school official. In the interest of full disclosure, I want to mention that Ashford is in the midst of an OIG audit (not an investigation), but we have not yet received a draft report and would not plan to discuss that at tills meeting. I hope you can make time in your schedule for tills meeting. Best regards, Nancy IRS Circular 230 Di sclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in tills communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Tills e-mail message and any attached files are confidential and are intended solely for the use of the addressee(s) named above. Tills communication may contain material protected by attorney-client, work product, or other privileges. If you are not the intended recipient or person responsible for delivering tills confidential communication to the intended recipient, you have received tills communication in error, and any review, use, dissemination, forwarding, printing, copying, or other distribution of this e-mail message and any attached files is strictly prohibited. Dickstein Shapiro reserves the right to monitor any communication that is created, received, or sent on its network. If you have received this confidential communication in error, please notify the sender immediately by reply e-mail message and permanently delete the original message. To reply to our email administrator directly, send an email to postmaster@di ckstei nshapi ro.com Dickstein Shapiro LLP http:/ /www.DicksteinShapiro. com This e-mail message and any attached files are confidential and are intended solely for the use of the addressee(s) named above. This communication may contain material protected by attorney-client, work product, or other privileges. If you are not the intended recipient or person responsible for delivering this confidential communication to the intended recipient, you have received this communication in error, and any review, use, dissemination, forwarding, printing, copying, or other distribution ofthis e-mail message and any attached flies is strictly prohibited. Dickstein Shapiro reserves the right to monitor any communication that is created, received, or sent on its network. If you have received this confidential communication in error, please notifY the sender immediately by reply e-mail message and peimanently delete the original message. To reply to our email administrator directly, send an email to postmaster@dicksteinshapiro.com Dickstein Shapiro LLP http:/ /www.Di cksteinShapiro. com From: Yuan, Georgia To: Jenkins. Harold CC: Date: 2/25/2010 1:53:50 PM Subject: RE: request for meeting l(b)(S) -----Original Message----- From: Jenkins, Harold Sent: Thursday, February 25, 2010 12:51 PM To: Yuan, Georgia; Finley, Steve; Sann, Ronald Cc: Wiegner, Ashley; Rose, Charlie; Miceli, Julie; Wolff, Russell; Woodward, Jennifer Subject: RE: request for meeting (b)(5) -----Original Message----- From: Yuan, Georgia Sent: Thursday, February 25, 2010 12:08 PM To: Jenkins, Harold; Finley, Steve; Sann, Ronald Cc: Wiegner, Ashley; Rose, Charlie; Miceli, Jul1e Subject: FW: request for meeting (b)(5) -----Original Message----- From: Broff, Nancy [mailto:BroftN@DicksteinShapiro.COM] Sent: Thursday, February 25, 2010 10:25 AM To: Rose, Charlie Cc: Yuan, Georgia; Miceli, Julie; Wiegner, Ashley Subject: RE: request for meeting H Charlie- I am writing to renew my request for a meeting. The meeting would be with the CEOs of three higher education companies: Daniel Hamburger ofDeVry Clark Elwood ofiTT Educational Services, Inc. Andrew Clark ofBridgepoint Education They would like to meet on March 11 if you have an availability that day. The agenda would be to discuss some of the issues from the recently completed negotiated rulemaking. Thanks so much, Nancy IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. From: Rose, Charlie [mailto:Charlie.Rose@ed.gov] Sent: Monday, February 15, 2010 10:52 PM To: Broff, Nancy Cc: Yuan, Georgia; Miceli, Julie; Wiegner, Ashley Subject: RE: request for meeting Nancy: Thanks. Let me check and I will follow-up with you regarding the meeting. By the way, even by Chicago standards, the DC snow is tough to deal with. Charlie -----Original Message----- From: Broff, Nancy [mailto:BroffN@DicksteinShapiro.COM] Sent: Tuesday, February 09, 2010 ll :54 AM To: Rose, Charlie Subject: request for meeting Hello Charlie- I hope you are doing well in all this snow. I guess you Chicagoans have an advantage in the area of coping with real winter. I am writing to request a meeting with you for the CEO of my client, Bridgepoint Education, Inc. Andrew Clark will be in town on the morning ofFebruary 25th and would very much appreciate an opportunity to discuss some concerns arising out of the recent negotiated rulemaking sessions. Bridgepoint owns two institutions: Ashford University and University of the Rockies. I will be happy to provide some background information on both universities in advance of the meeting. Those of us in the higher education bar very much appreciated your openness to hearing from members of the community, and this is an important topic on which I think it is important for you to hear directly from a school official. In the interest of full disclosure, I want to mention that Ashford is in the midst of an OIG audit (not an investigation), but we have not yet received a draft report and would not plan to discuss that at this meeting. I hope you can make time in your schedule for this meeting. Best regards, Nancy IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. This e-mail message and any attached files are confidential and are intended solely for the use of the addressee(s) named above. This communication may contain material protected by attorney-client, work product, or other privileges. If you are not the intended recipient or person responsible for delivering this confidential communication to the intended recipient, you have received this communication in error, and any review, use, dissemination, forwarding, printing, copying, or other distribution of this e-mail message and any attached files is strictly prohibited. Dickstein Shapiro reserves the right to monitor any communication that is created, received, or sent on its network. If you have received this confidential communication in error, please notify the sender immediately by reply e-mail message and permanently delete the original message. To reply to our email administrator directly, send an email to postmaster@di ckstei nshapi ro.com Dickstein Shapiro LLP http:/ /www.DicksteinShapiro. com This e-mail message and any attached files are confidential and are intended solely for the use of the addressee(s) named above. This communication may contain material protected by attorney-client, work product, or other priviJeges. If you are not the intended recipient or person responsible for delivering this confidential communication to the intended recipient, you have received this communication in error, and any review, use, dissemination, forwarding, printing, copying, or other distribution of this e-mail message and any attached files is strictly prohibited. Dickstein Shapiro reserves the right to monitor any communication that is created, received, or sent on its network. If you have received this confidential communication in error, please notify the sender immediately by reply e-mail message and permanently delete the original message. To reply to our email administrator directly, send an email to postrnaster@dicksteinshapiro.com Dickstein Shapiro LLP http://www.DicksteinShapiro.com (b)(5) From: Kvaal, James Sent: Monday, August 16, 2010 9:17AM From: Bergeron, David To: K vaal, James Kanter. Martha Yuan, Georgia CC: Date: 8/16/2010 9:22:18 AM Subject: RE: Reuters on Strayer call To: Kanter, Martha; Yuan, Georgia; Bergeron, David Subject: Reuters on Strayer call UPDATE 2-Strayer, Capella dispute DoE data on loan repayment 12:00amEDT Mon Aug 16, 2010 8:47am EDT * Cos say DoE data differs significantly from own analysis * Cos say they still qualify for federal aid *Strayer, Capella shares fall in premarket trade (Recasts throughout; adds comments from Capella, Apollo) Aug 16 (Reuters)- Strayer Education Inc (STRA.O) and Capella Education (CPLA.O) questioned the U.S. Department of Education's findings on loan repayment rates regarding the proposed gainful employment regulation, and said their programs still qualify for federal aid tbr students. Strayer said the data released by the DoE on Strayer University was significantly at odds with its own analysis. "This discrepancy has significant operational, financial, and public policy implications, and we would like to address it immediately," Strayer said in a ftling with the U.S. Securities and Exchange Commission. On Friday, the DoE released data on estimated student loan repayment rates of some for-profit schools, as part of a drive to tighten oversight of the industry. [ID:nN13232515] The schools have to meet a proposed federal threshold of 45 percent repayment to be fully eligible for federal aid. Strayer University averaged in the low twenties, placing it in the ineligible zone by that metric. Capella, which the DoE said has a 40 percent repayment rate, concurred with Strayer and said its programs would continue to qualify for federal student aid participation and have a repayment rate of over 45 percent. Both the companies said they will reach out to the DoE to fmd out the data and methodology used in its calculation of the repayments rates. According to data released on Friday, different locations ofpeerDeVry Inc's (DV.N) DeVry University averaged around 40 percent, while Washington Post Co's (WPO.N) Kaplan programs and Corinthian Colleges' (COCO.O) Everest colleges and institutes averaged in the low twenties. Shares of Arlington, Virginia-based Strayer were trading down 5 percent at $189.90 before the bell. The shares, which closed at $200.01 Friday on Nasdaq, have fallen about 31 percent since their lifetime high in April. Capella shares were down about I percent at $69.24. They closed at $70.20 on Nasdaq. Corinthian Colleges shares were down about 9 percent at 6.08. The stocks have been impacted due to the uncertainty regarding the proposed gainful employment regulation. Separately, sector bellwether Apollo Group (APOL.O) said its University of Phoenix has received a letter from the Higher Learning Commission (HLC) requiring it to provide some information and evidence of its compliance with HLC accreditation standards. "The letter indicates that if the response by University ofPhoenix is unsatisfactory, HLC may impose additional monitoring or sanctions at its meeting in November 2010," Apollo said in a regulatory filing. The HLC letter relates to an investigation on for-profit schools' enrollment and recruitment practices. Apollo shares were up 2 percent at $39.80 in premarket trade. (Reporting by A.Ananthalakshmi and Megha Mandavia in Editing by Maju Samuel) From: Finley Steve To: Siegel, Brian CC: Burton. Vanessa Jenkins, Harold Marinucci Fred Morelli, Denise Sann Ronald Scaniffe Dawn Vamovitsky, Natasha Wanner, Sarah Wolff, Russell Woodward Jennifer Date: 5/4/2010 8:05:18 AM Subject: RE: Set your TIVO or DVR --Frontline on PBS takes on For-profit higher ed Nonresponsive Tenor OfF or-Profit School Discussion Gets Toned Down By Melissa Kom OfDOW JONES NEWSWIRES NEW YORK (Dow Jones)--This week's sell-off in for-profit school stocks, prompted by a report of a U.S. Department ofEducation official's speech, may have been overblown, some analysts say now that they have read a full transcript of the comments. The sector's shares fell sharply Thursday after trade Web site Inside Higher Ed reported that Robert Shireman, deputy undersecretary for education, spoke harshly of market-funded colleges at a meeting of state school administrators and accreditors Wednesday. The article, citing sources at the meeting, said Shireman compared the schools to Wall Street firms whose actions helped cause the recent financial crisis. Inside Higher Ed, which didn't have a reporter at the meeting, attempted to confirm the comments with Education Department officials, who declined comment for the article. Shireman did make that comparison, according to a transcript of his speech, which analysts believe was relatively even- handed and wide-ranging. He also said regulators could do abetter job. Shireman devoted much of his speech, delivered at the National Association of State Administrators and Supervisors ofPrivate Schools meeting, to proposed changes in rules governing all of higher education. The Inside Higher Ed article sparked a nearly universal sell-off in higher-education shares, but some recovered ground Friday. Career Education Corp. (CECO), which fell more than 12% Thursday, was recently trading up 1.1% to $29.59. ITT Educational Services Inc. (ESI), which lost 6.6% the previous day, was off a fraction in recent trading at $102.78. Apollo Group Inc. (APOL), which fell 6.1% Thursday, was up 0.4% at $57.98. Analysts who have read both Inside Higher Ed's report and a transcript of Shireman's speech say the comments were mostly in line with his earlier stance, which has generally accepted the role offer-profit schools in the Obama administration's plan to increase access to higher education. Doug Lederman, editor of Inside Higher Ed and author of the article, said the story "made pretty clear that it was based on accounts from people in the room. There was no question that they interpreted his comments in a certain way." Lederman has heard a recording of the full speech since publishing the article. "Shireman was laying out a case for greater government regulation given increased investments in Pell Grants," Wedbush Securities analyst Ariel Sokol said in an email message after reviewing the meeting transcript. "He seemed amenable to forming bridges with the sector." Shireman commended the schools for "making sure that there was capacity to be able to serve additional students" during the recession, according to a transcript provided by Career Education Review. Shireman cited year-over-year percentage increases in Pel! grant funds for 11 publicly traded school companies, including Corinthian Colleges Inc. (COCO), DeVry Inc. (DV), and American Public Education Inc. (APEI). Most for-profit schools derive the majority of their revenue from federal student aid. A Department of Education spokesman reiterated Shireman's comments, saying in an emailed statement: "For-profit colleges play a critically important role in helping to ensure so many Americans have access to education and training tl1at can improve their job prospects and lives." To be sure, Shireman did liken the relationship between schools and accrediting groups to that between banks and ratings agencies, which have an "inherent conflict of interest," as the agencies are paid by the companies they are supposed to regulate. "Are there regulators in the room who feel like you do have the analytical firepower you need to assess what is going on with the entities you regulate in higher education," Shireman asked. "I don't think we feel we have the firepower we need." Lederman said the speech was "a much strongerindictmentofthesystem ofhighereducation accreditation than ofthe sector." Trace Urdan of Signal Hill Capital Group wrote in a note to clients, regarding the full transcript, that Shireman's "tone in general is much less severe" toward schools specifically. "He presents as a reasonable person struggling with accountability gaps that he perceives exist in the system." According to the transcript, Shireman devoted a portion of his speech to detailing the process by which the Department ofEducation formulates new rules governing higher education, known as negotiated rulemak:ing. He stressed that there were productive discussions on many fronts, though he said college representatives weren't particularly constructive when it came to a measure to quantify how well the schools prepare students for "gainful employment" in a recognized occupation. Concerns over that proposal have upended the for-profit school industry over the past few months, with a trade group estimating the government's early version would displace hundreds of thousands of students as their programs lose access to federal funds. During a question-and-answer session, Shireman said there is no final proposal yet, and he is open to suggestions to ensure the rule is fair. -By Melissa Kom, Dow Jones Newswires; 212-416-2271; melissa.kom@dowjones.com -----Original Message----- From: Siegel, Brian Sent: Tuesday, May 04, 2010 7:54AM To: Burton, Vanessa; Finley, Steve; Jenkins, Harold; Marinucci, Fred; Morelli, Denise; Sann, Ronald; Scaniffe, Dawn; Vamovitsky, Natasha; Wanner, Sarah; Wolff, Russell; Woodward, Jennifer Subject: Set your TIVO or DVR --Frontline on PBS takes on For-profit higher ed From the schedule on-line it looks like WETA is showing it tonight at 10 and MPT has it tonight at 10:30. Public TV Takes on For-Profit Colleges Airing tonight on PBS at 9 p.m. is Frontline's College, Inc., an hour-long look at for-profit higher education, its investors, and the U.S. Department ofEducation's efforts to regulate it. For close readers of Inside Higher Ed, the documentary won't bring much new to the table. It tells stories of students plunging deep into debt and unable to get jobs, touches on traditional academe's criticisms, and looks at the negotiated rule-making process aimed at reining in abuses of the Title IV federal financial aid system, with a particular focus on career colleges. But it is likely to gamer lots of attention-- from ordinary Americans, think tankers and Congressional staffers- and to stir up press releases, editorials and conversations that will skew against the for-profit institutions just as the Education Department ratchets up its criticisms of the sector. The storyline is more balanced than many major-media examinations of for-profit colleges, but it's still a less-than-favorable depiction of the sector. (b)(5) From: Jenkins, Harold Sent: Thursday, January 07, 2010 1:17PM From: Finley Steve To: Jenkins. Harold Marinucci. Fred WoLff, Russell Woodward, Jetmifer Sann, RDnald CC: Date: l/7 /2010 2:28:26PM Subject: RE: UOP meeting To: Marinucci, Wolff, Woodward, Finley, Sann, Ronald Subject: FW: UOP meeting Importance: High (b)(5) Harold From: Shireman, Bob Sent: Thursday, January 07, 2010 1:09PM To: Jenkins, Harold Subject: UOP meeting Importance: High (b)(5) From: Julie Shroyer To: Shireman, Bob Sent: Thu Jan 07 11:54:23 2010 Subject: Hello and Meeting Request Dear Bob, I hope the new year is treating you well. Just left you a voice mail message but realize it may be easier to send you a note via email. Nonresponsive
As I indicated in my voice mail, I would also like to submit a formal meeting request for Apollo. We are hoping that you may have time in your schedule sometime over the next few weeks. Here are the specifics: Meeting Participants: Greg Cappelli, CEO, Apollo Terri Bishop, DirectorNice President External Affairs, Apollo Julie Shroyer, Sr VP, Wheat Government Relations (consultant to Apollo/University ofPhoenix) Purpose: To discuss ideas for implementing various student/consumer protections (e.g., related to borrowing practices, disclosures, etc.) and the technology that Apollo is developing to support compliance and academic quality and innovation. When: Preferably as soon as possible or within the next few weeks. Thank you so much for your consideration of the request. I look forward to hearing from you and seeing you soon. Best, Julie Julie E. Shroyer SeniorVP Wheat Government Relations 1201 S. Eads Street, Suite Two Arlington, VA 22202 (703) 271-8760 jshroyer@wheatgr.com From: Woodward, Jennifer Sent: Thursday, January 07, 2010 1:34PM From: Finley Steve To.: Woodward, Jennifer CC: Date: 1/7/20102:38:18PM Subject: RE: UOP meeting To: Finley, Jenkins, Mari nucci, Wolff, Sann, Ronald Subject: RE: UOP meeting (b}(5} From: Finley, Steve Sent Thursday, January 07, 2010 1:28PM To: Jenkins, Marinucci, Wolff, Woodward, Sann, Ronald Subject: RE: UOP meeting (b)(5} From: Jen}jns, Harold Sent: Thursday, January 07, 2010 1:17PM To: Marinucci, Fred; Wolff, Russell; Woodward, Jennifer; Finley, Steve; Sann, Ronald Subject: FW: UOP meeting Importance: I-Iigh (b)(5) Harold From: Shireman, Bob Sent: Thursday, January 07, 2010 1:09PM To: Jenkins, Harold Subject: UOP meeting Importance: I-Iigh l(b)(5) From: Julie Shroyer To: Shireman, Bob Sent: Thu Jan 07 11:54:23 2010 Subject: Hello and Meeting Request Dear Bob, I hope the new year is treating you well . Just left you a voice mail message but realize it may be easier to send you a note via email. Nonresponsive Nonresponsi ve . Q r"OQ As I indicated in my voice mail, I would also li ke to submit a formal meeting request for Apollo. We are hoping that you may have time in your schedule sometime over the next few weeks. Here are the specifics: Meeting Participants: Greg Cappelli , CEO, Apollo Terri Bishop, Director/Vice President External Affairs, Apollo Julie Shroyer, Sr VP, Wheat Government Relations (consultant to Apollo/University of Phoenix) Purpose: To discuss ideas for implementing various student/consumer protections (e.g., related to borrowing practices, disclosures, etc.) and the technology that Apollo is developing to support compliance and academic quality and innovation. When: Preferably as soon as possible or within the next few weeks. Thank you so much for your consideration of the request. I look forward to hearing from you and seeing you soon. Best, Julie Julie E. Shroyer Senior VP Wheat Government Relations 1201 S. Eads Street, Suite Two Arlington, VA 22202 (703) 271-8760 jshroyer@wheatgr.com (b)(S) From: Woodward, Jennifer Sent: Thursday, January 07, 2010 1:43PM To: Finley, Steve; Wolff, Russell Subject: RE: UOP meeting From: Finley, Steve Sent: Thursday, January 07, 2010 1:38PM To: Woodward, Jennifer Subject: RE: UOP meeting From: Woodward, Jennifer Sent: Thursday, January 07, 2010 1:34PM From: Finley Steve To: Woodward, Jennifer Wolff Russell CC: Date: 1/7/2010 2:46:22 PM Subject: RE: UOP meeting To: Finley, Steve; Jenkins, Harold; Marinucci, Fred; Wolff, Russell; Sann, Ronald Subject: RE: UOP meeting (b)(S) (b)(5) From: Finley, Steve Sent: Thursday, January 07, 2010 1:28PM To: Jenkins, Harold; Marinucci, Fred; Wolff, Russell ; Woodward, Jennifer; Sann, Ronald Subject: RE: UOP meeting (b)(5) From: Jenkins, Harold Sent: Thursday, January 07, 2010 1:17PM To: Marinucci, Fred; Wolff, Russell; Woodward, Jennifer; Finley, Steve; Sann, Ronald Subject: FW: UOP meeting Importance: High (b)(5) Harold From: Shireman, Bob Sent: Thursday, January 07, 2010 1:09PM To: Jenkins, Harold Subject: UOP meeting Importance: High (b)(5) From: Julie Shroyer To: Shireman, Bob Sent: Thu Jan 07 11:54:23 2010 Subject: Hello and Meeting Request Dear Bob, I hope the new year is treating you well. Just left you a voice mail message but realize it may be easier to send you a note via email. i<b)(6); (b)(7(C) (b)(6); (b)(7(C) As I indicated in my voice mail, I would also like to submit a formal meeting request for Apollo. We are hoping that you may have time in your schedule sometime over the next few weeks. Here are the specifics: Meeting Participants: Greg Cappelli, CEO, Apollo Terri Bishop, Director/Vice President External Affairs, Apollo Julie Shroyer, Sr VP, Wheat Government Relations (consultant to Apollo/University of Phoenix) Purpose: To discuss ideas for implementing various student/consumer protections (e.g., related to borrowing practices, disclosures, etc.) and the technology that Apollo is developing to support compliance and academic quality and innovation. When: Preferably as soon as possible or within the next few weeks. Thank you so much for your consideration of the request. I look forward to hearing from you and seeing you soon. Best, Julie Julie E. Shroyer SeniorVP Wheat Government Relations 1201 S. Eads Street, Suite Two Arlington, VA 22202 (703) 271-8760 j shroyer@wheatgr.com l(b)(S) From: Sann, RonaJd Sent: Thursday, January 07, 2010 2:05PM To: Jenkins, Harold From: Jenkins Harold To.: Sann. Ronald CC: Marinucci. Fred Finley. Steve Wolff Russell Woodward, Jennifer Date: 1/7/2010 4:59:22 PM Subject: RE: UOP meeting Cc: Marinucci, Fred; Finley, Steve; Wolff, Russell; Woodward, Jennifer Subject: RE: UOP meeting (b)(5) From: Jenkins, Harold Sent: Thursday, January 07, 2010 1 : 17 PM To: Marinucci, Fred; Wolff, Russell; Woodward, Jennifer; Finley, Steve; Sann, RonaJd Subject FW: UOP meeting Importance: High (b)(5) Harold From: Shireman, Bob Sent: Thursday, January 07, 2010 1:09PM To: Jenkins, Harold Subject: UOP meeting Importance: High l(b)(5) From: Julie Shroyer To: Shireman, Bob Sent: Thu Jan 07 11:54:23 2010 Subject: Hello and Meeting Request Dear Bob, I hope the new year is treating you well. Just left you a voice mail message but realize it may be easier to send you a note via emaiJ. jNonresponsive 1",,.,,,,,. I I As I indicated in my voice mail, I would also like to submit a formal meeting request for Apollo. We are hoping that you may have time in your schedule sometime over the next few weeks. Here are the specifics: Meeting Participants: Greg Cappelli, CEO, Apollo Terri Bishop, Director/Vice President External Affairs, Apollo Julie Shroyer, Sr VP, Wheat Government Relations (consultant to Apollo/University of Phoenix) Purpose: To discuss ideas for implementing various student/consumer protections (e.g., related to borrowing practices, disclosures, etc.) and the technology that Apollo is developing to support compliance and academic quality and innovation. When: Preferably as soon as possible or within the next few weeks. Thank you so much for your consideration of the request. I look forward to hearing from you and seeing you soon. Best, Julie Julie E. Shroyer SeciorVP Wheat Government Relations 1201 S. Eads Street, Suite Two Arlington, VA 22202 (703) 271-8760 jshroyer@wheatgr.com (b)(5) Ron From: Jenkins, Harold Sent: Thursday, January 07, 2010 1:17PM From: Sann, Ronald To.: Jenkins. Harold CC: Marinucci. Fred Finley. Steve Wolff Russell Woodward, Jennifer Date: 1/7/2010 3:05:16PM Subject: RE: UOP meeting To: Marinucci, Wolff, Woodward, Finley, Sann, Ronald Subject: FW: UOP meeting Importance: High (b)(5) Harold From: Shireman, Bob Sent: Thursday, January 07, 2010 1:09PM To: Jenkins, Harold Subject: UOP meeting Importance: High (b)(5) From: Julie Shroyer To: Shireman, Bob Sent: Thu Jan 07 11:54:23 2010 Subject: Hello and Meeting Request Dear Bob, I hope the new year is treating you well . Just left you a voice mail message but realize it may be easier to send you a note via email. INonresponsive I As I indicated in my voice mail, I would also like to submit a formal meeting request for Apollo. We are hoping that you may have time in your schedule sometime over the next few weeks. Here are the specifics: Meeting Participants: Greg Cappelli , CEO, Apollo Terri Bishop, Director/Vice President External Affairs, Apollo Julie Shroyer, Sr VP, Wheat Government Relations (consultant to Apollo/University of Phoenix) Purpose: To discuss ideas for implementing various student/consumer protections (e.g., related to borrowing practices, disclosures, etc.) and the technology that Apollo is developing to support compliance and academic quality and innovation. When: Preferably as soon as possible or within the next few weeks. Thank you so much for your consideration of the request. I look fmward to hearing from you and seeing you soon. Best, Julie Julie E. Shroyer SeniorVP Wheat Government Relations 1201 S. Eads Street, Suite Two Arlington, VA 22202 (703) 271-8760 jshroyer@wheatgr.com (b)(5) From: Woodward, Jennifer Sent: Thursday, January 07, 2010 1:34PM From: Wolff, Russell To: Woodward, Jennifer Finley, Steve Jenkins, Harold Marinucci Fred Sann, RDnald CC: Date: l/7/2010 3:02:44 PM Subject: RE: UOP meeting To: Finley, Steve; Jenkins, Harold; Marinucci, Fred; Wolff, Russell; Sann, Ronald Subject RE: UOP meeting (b)(5) From: Finley, Steve Sent: Thursday, January 07, 2010 1:28PM To: Jenkins, Harold; Marinucci, Fred; Wolff, Russell; Woodward, Jennifer; Sann, Ronald Subject: RE: UOP meeting (b)(5) (b)(5) From: Jenkins, Ilarold Sent: Thursday, January 07, 2010 1:17PM To: Marinucci , Fred; Wolff, Russell; Woodward, Jennifer; Finley, Steve; Sann, Ronald Subject: FW: UOP meeting Importance: Iligh (b)(5) Ilarold From: Shireman, Bob Sent: Thursday, January 07, 2010 1:09PM To: Jenkins, Ilarold Subject: UOP meeting Importance: H.igh (b)(5) From: Julie Shroyer To: Shireman, Bob Sent: Thu Jan 07 11:54:23 2010 Subject: Hello and Meeting Request Dear Bob, I hope thP. nP.w van a . .buLI:ealize..i.t:.lnaY..h.e..easi.erJ:o...&erui.lmu.ano!f . , !Nonresponsive vta emrul j Nonresponsive As I illdicated in my voice mail, I would also like to submit a formal meeting request for Apollo. We are hoping that you may have time in your schedule sometime over the next few weeks. Here are the specifics: Meeting Participants: Greg Cappelli, CEO, Apollo Terri Bishop, Director/Vice President External Affairs, Apollo Julie Shroyer, Sr VP, Wheat Government Relations (consultant to Apollo/University ofPhoenix) Purpose: To discuss ideas for implementing various student/consumer protections (e.g., related to borrowing practices, disclosures, etc.) and the technology that Apollo is developing to support compliance and academic quality and innovation. When: Preferably as soon as possible or within the next few weeks. Thank you so much for your consideration of the request. I look forward to hearing from you and seeing you soon. Best, Julie Julie E. Shroyer SeniorVP Wheat Government Relations 120 l S. Eads Street, Suite Two Arlington, VA 22202 (703) 271-8760 j shroyer@wheatgr.com From: Yuan, Georgia Sent: Friday, September 03, 2010 4:33PM To: Wolff, Russell Subject: FW: Visit with Bill -----Original Message----- From: Holland, Linda Sent: Friday, September 03, 2010 3:35 PM To: Yuan, Georgia Subject: FW: Visit with Bill (b)(5) -----Original Message----- From: Mitchelson, Mary Sent: Friday, September 03, 2010 3:34PM To: Holland, L i n d a ~ Minor, Robin Subject: RE: Visit with Bill (b )(5),(b)(7)(E) -----Original Message----- From: Holland, Linda Sent: Friday, September 03, 2010 2:46PM To: Minor, Robin; Mitchelson, Mary Subject: FW: Visit with Bill I (b)( 5)' (b )(7)(E) From: Wolff, Russell To.: Yuan. Georgia CC: Date: 9/4/2010 9:13:06 AM Subject: RE: Visit with Bill -----Original Message----- From: Joseph D'Amico [mailto:joe.damico@apollogrp.edu] Sent: Tuesday, August 24, 2010 8:05PM To: Holland, Linda Cc: Gregory CappeJlj Subject: Visit with Bill Hi Linda .. .I hope you are well. Our Co CEO, Greg Cappelli, who Bill has met, and I would like to set up an appointment to meet with Bill and review with him some of the things we are doing to address the GAO report and related matters. If we can get an hour of his time, we would really appreciate it and I know it wou]d be ofva.lue to him, especially with all that is going on in the sector. We will do our best to meet his dates. Thanks and look forward to seemg you soon. Warm regards, Joe Sent from my iPad This message is ptivate and confidential. If you have received it in error, please notify the sender and remove it from your system. (b)(5) Stephanie From: Fine Stephanie To.: Yuan. Georgia CC: Date: 3/26/2010 7:14:04 PM Subject: Response needed Attachments: attach 0 attach 1 attach 2 From: Andy Rosen <arosen@kaplan.edu> To: Plivate -Miller. Anthony CC: Fine, Stephanie Rebecca Campoverde Date: 3/25/2010 11:29:52 PM Sub,ject: Thanks and next steps Tony: Thank you for making time to meet with me on Tuesday regarding gainful employment and other issues of importance to Kaplan's students and postsecondary schools. I am encouraged that you are engaged in the important policy discussions taking place within the Department and the Administration. As I indicated, your proposal to create a small sector group to work with you and the Department on gainful employment makes a great deal of sense. I am glad to help organize such a group and suggest that our staff talk regarding the number of participants, time frame, and specific dates on which you would be available for such a meeting. I look forward to hearing back from you regarding proposed next steps. Again, many thanks for your interest and attention. Best regards, Andy Andrew S. Rosen Chairman and CEO Kaplan, Inc. Tony, From: McKernan, John <jmckeman@edmc edu> To: Private- Miller Anthony CC: Guida. Anthony Rothkopf, Arthur J Date: 3/25/2010 9:02:34 PM Subject: Thank you Thank you for meeting with Arthur and the gang yesterday! 1 hope it was clear from our meeting that we at EDMC are supportive of the Department's goals of giving more higher education opportunities for more of our citizens. We especially appreciated your openness and candor, and we look f01ward to being constructive participants in our future discussions. I, in particular, believe there is a need for appropriate regulation of our industry given the amount of tax dollars supporting students in higher education. We want to make sure, however, that the proposed regulations address identified problem areas in a way that is both consistent with the authority delegated to the department and narrow enough to avoid unintended consequences which coul reduce student opportunities and access to legitimate and beneficial programs. Our SVP for Regulatory Affairs, Tony Guida, and Mark Pelesh from Corinthian will be following up with your office as we discussed. I will be monitoring the various proposals being considered and am wiJling to be as involved as you would like. Please feel free to include me in the discussions to the extent you feel I can be helpful . Again, thanks for your involvement. We hope this will be the beginning of a very important dialogue about how best to regulate an industry that needs to be a significant provider of post secondary education services if, as the President envision millions of additional students in America are to have the educational opportunities they need and deserve. With best wishes. Jock McKernan CONFIDENTIALITY NOTICE: This email and any files transmitted with it are confidential and intended solely for the use of the individual or entity to which they are addressed. If you are not the intended recipient, you may not review, copy or distribute this message. If you have received this email in error, please notify the sender immediately and delete the original message. Neither the sender nor the company for which he or she works accepts any liability for any damage caused by an virus transmitted by this email. From: To: CC: Date: Pelesh Mark <MPelesh@cci edu> Private- Miller, Anthony )mckeman@edmc.edu' Massimino, Jack 'Guida, Anthony' Rothkopf, Atthur J 3/25/2010 7:26:04 PM Subject: Follow-up Meeting-- Gainful Employment Thank you again for meeting with us, our colleagues from EDMC, and Arthur Rothkopf yesterday. We are anxious to follow-up on our constructive discussion regarding the gainful employment proposal under consideration at the Department. We very much want to take you up on your suggestion for a foll ow-up meeting in the near future to discuss other approaches to address the concerns that may have led to the development of the gainful employment proposal, as well as a more comprehensive long range approach to accountability. As we discussed, it would also be very helpful if we could get a full statement of the problems the Department is seeking to solve. This will allow us to develop better approaches to address those problems than the gainful employment proposal, which we continue to believe is deeply flawed, and to make the meeting as productive as possible. We have reviewed our calendars and suggest the following dates for the follow-up meeting: (April 6, 12, 13, 14, 15, or 16). I will ask Stephanie Johnson at the Chamber to be in touch with your scheduler to make the arrangements. We look forward to continuing our dialogue. MarkPelesh Executive Vice President, Corinthian Colleges (b)(5) -Bob Robert Shireman, Deputy Undersecretary U.S. Department ofEducation 400 Maryland Ave., S.W. Room 7E310 Washington, D.C. 20202 (202) 260-0101 Fax: 202-205-0063 bob.shireman@ed.gov From: Shireman, Bob To: Arsenault, Leigh l\1anheimer Ann CC: Yuan. Georgia Dannenberg, Michael Date: 4/6/2010 4:59:04 PM Subject: revised deck Attachments: GE 2 ppt (b)(5) Thanks, Georgia Georgia Yuan From: Yuan, Georgia To: Kvaal. Jam((s Bergeron. David McFadden, Elizabeth CC: Date: 9117/2010 1:49:10PM Sub.iect: Schedule for meetings Deputy General Counsel Postsecondary and Regulatory Service LBJ 6E341 202-401-6399 (b)(S) DRAFT 2 *INTERNAL DOCUMENT* DELIBERATIVE PROCESS CONFIDENTIAL 1 (b)(S) 1 (b)(5) 1 (b)(5) (b){S) From: Bergeron, David To: Kolotos. John Sellers. Fred Harris, Nikki Finkel, Jessica CC: Kvaa:l James Yuan Georgia Finley Steve Date: 9/21/2010 3:58:18 PM Subject: Suggestions.docx (b)(5) (b)(5) (b)(5) (b)(5) (b}(5} Georgia From: Yuan, Georgia To.: Cunningham,Peter CC: Date: 5/3/2010 3:02:14 PM Subject: The actors #1 Your Taxes Supporting For-Profit Firms as They Acquire Colleges Share Business Exchange Twitter Facebookl Email I Print I A A A By Daniel Golden March 4 (Bloomberg)-- ITT Educational Services Inc. paid $20.8 million for debt-ridden Daniel Webster College in June. In return, the company obtained an academic credential that may generate a taxpayer-funded bonanza worth as much as $1 billion. ITT Educational, the U.S.'s third-biggest higher education company with a market value of $3.8 billion, may increase it by 26 percent, or $1 billion, within five years because of the purchase of 1,200-studentDaniel Webster in Nashua, New Hampshire, according to Michael Clifford, an investor in Del Mar, California, who has participated in the acquisitions of four nonprofit colleges. At least 75 percent of new revenue would come from access to the more than $100 billion a year in financial aid the U.S. hands out to college students, he said. Key to tapping that money is Webster's regional accreditation, which is the same gold standard of academic quality enjoyed by Harvard University and helps students transfer course credits from one college to another. Daniel Webster' s accreditation was its "most attractive" feature to ITI Educational, said Michael Goldstein, an attorney at Dow Lohnes, a Washington law firm that has long represented the company. "Companies are buying accreditation," said Kevin Kinser, an associate professor at the State University ofNew York at Albany, who studies for -profit higher education. "You can get accreditation a lot of ways, but all of the others take time. They don' t have time. They want to boost enrollment 100 percent in two years." Exploiting Loopholes The nation' s for-profit higher education companies have tripled enrollment to 1.4 million students and revenue to $26 billion in the past decade, in part through the recruitment oflow-income students and active-duty military. Now they're taking a new tack in their quest to expand. By exploiting loopholes in government regulation and an accreditation system that wasn't designed to evaluate for-profit takeovers, they' re acquiring struggling nonprofit and religious colleges-- and their coveted accreditation. Typically, the goal is to transform the schools into online behemoths at taxpayer expense. For-profit education companies, including ITT Educational Services, based in Carmel, Indiana, and Laureate Education Inc., in Baltimore, have purchased at least 16 nonprofit colleges with regional accreditation since 2004, according to corporate announcements and filings with the U.S. Securities and Exchange Commission. Jack Welch, the former chief executive of General Elect:tic Co., and Michael Mil ken, the U.S. junk bond pioneer, have invested in for-profit companies that bought or formed partnerships with nonprofit, regionally accredited schools. Academic Status By acquiring regional accreditation, trade and online colleges gain a credential usually associated with the traditional academic culture ofliberal arts, faculty scholarship and selective admissions. Normally the accreditation process takes about five years and requires evaluations by outside professors. The regional bodies examine financial stability, academic rigor and commitment to "teaching, learning, service and scholarship," according to the Web site of the Commission on Institutions of Higher Education, which accredits colleges in New England. Enrollment at Grand Canyon University, a Christian college in Phoenix bought by investors in 2004, has soared to 37,700, as of Dec. 31, up from 1 ,500, said Brian Mueller, chief executive of Grand Canyon Education Inc. Ninety-two percent of students now take classes online, according to the company' s most recent 10-K. Bridgepoint Education Inc., based in San Diego, has boosted enrollment of two regionally accredited colleges it bought in 2005 and 2007 to 53,688 students as of Dec. 31, up from 400 combined, according to a company filing. Ninety-nine percent of those students take courses exclusively online. Growth Potential Daniel Webster "could parallel Grand Canyon or Bridgepoint's growth cutve," said Clifford, who was part of the investor group that purchased Grand Canyon. ITT Educational Services declined to comment. The company plans to open more Daniel Webster campuses and also expand online offerings, Kevin Modany, ITT Educational's chairman and chief executive officer, said in a Feb. 22 presentation to analysts. The company expects to introduce programs including accounting, education and health sciences, he said. Daniel Webster will attract more students "a little on the higher end" in income whose tuition would be paid by private employers rather than federal financial aid, Modany said. New Regulations The U.S. Department ofEducation, which doled out $129 biiJion in federal financial aid to students at accredited postsecondary schools in the year ended Sept. 30, is examining whether these kinds of acquisitions circumvent a federal law that new for-profit colleges can' t qualify for assistance for two years, Deputy Undersecretary of Education Robert Shireman said in a telephone interview. Under federal regulations taking effect July 1, accrediting bodies may also have to notify the secretary of education if enrollment at a college with online courses increases more than 50 percent in one year. "It' s an area that we are watching closely," Shireman said. "It certainly has been a challenge both for accreditors and the Department of Education to keep up with the new creative arrangements that have been developing." Buying accreditation lets the new owners benefit immediately from federal student aid, which provides more than 80 percent of revenue for some for-profit colleges, instead of having to wait at least two years. Traditional colleges are also more inclined to offer transfer credits for courses taken at regionally approved institutions, making it easier to attract students nationwide. Scant Scrutiny The six nonprofit regional accrediting bodies, which rely on academic volunteers, bestow the valuable credential with scant scrutiny of the buyers' backgrounds, Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars & Admissions Officers in Washington, said in a telephone interview. While accrediting bodies treat these purchases as changes of ownership, the acquisitions, in reality, create new colleges that should be required to earn certification from scratch, Kinser said. For accreditation to continue once the college is sold, the buyer must promise not to change its mission, Steven Crow, former executive director of the Chicago-based Higher Learning Commission, the largest regional body, said in a telephone interview. Once accreditation is maintained, the acquirer seeks permission, which is usually granted, to start branch campuses and online programs, Crow said. New Plan "You knew by month six they would come back to you with a new game plan," said Crow, now a consultant to publicly traded Corinthian Colleges Inc., based in Santa Ana, California. It acquired regionally accredited San Francisco-based Heald College on Jan. 4. Obama administration officials have recently questioned whether the accreditation system is effective in protecting academic standards. Accrediting decisions lack transparency and take too long, Undersecretary of Education Martha Kanter said in a Jan. 26 speech in Washington to the annual meeting of the Council for Higher Education Accreditation. The inspector general of the Education Department in December urged the agency to consider terminating recognition of the Higher Learning Commission, which has approved more for- profit colleges than its counterparts around the country. The inspector general criticized the commission' s decision to accredit Career Education Corp.'s online American Intercontinental University , citing concerns about how much time students spent in class. The approval was appropriate, the commission and Hoffman Estates, lllinois-based Career Education said. Growth Deterrents More vigilance by the Education Department and accrediting groups is likely to slow enrollment growth and the share prices of higher education companies that rely on acquisitions, said Clifford. While publicly held postsecondary education companies rose 25.6 percent in the 12 months ended March 2, they lagged behind the S&P 500, which increased 59.6 percent over the same period. The shortfall reflected investors' fears of tighter federal regulation of for-profit colleges, said Jeffrey Silber, an analyst for BMO Capital Markets in New York. Regional accreditation is worth $10 million to a for-profit acquirer, Clifford said in a telephone interview. That's how much it would cost to start a regionally accredited college, a process that can take 10 years and has only a 50-50 chance of success, he said. On top of the $10 million, buyers typically pay $23,000 to $50,000 per enrolled student, making the purchase ofDaniel Webster a bargain, Clifford said. ' Same Institution' Clifford and his fellow investors popularized the strategy of acquiting nonprofit colleges with regional accreditation by purchasing Grand Canyon University in 2004 and building online enrollment. Grand Canyon "is the same institution," Mueller said in an e-mail. "It was important to the new leadership group that the mission of providing a high-quality Christian-based education remain intact." Grand Canyon, which went public in November 2008, derived 83 percent of its revenue from federal financial aid in 2009, according to a company filing. Bridgepoint Education bought the regionally accredited Franciscan University of the Prairies in 2005 and Colorado School ofProfessional Psychology in 2007. It renamed them Ashford University and University of the Rockies, respectively, and refocused them online. Ashford gained 86 percent of its revenue from federal student aid in 2009 and University of the Rockies got 85 percent, according to a 1 0-K filing by Bridgepoint, which went public in April. 'Meaningful Continuities' "There are several meaningful continuities" from the colleges before they were acquired, including campus athletic and social events, Shari Rodriguez, a Bridgepoint spokeswoman, wrote in an e-mail. Clifford participated in the 2008 purchase of Myers University in Cleveland, which was renamed Chancellor University. Chancellor attracted Welch as an investor last year and named its new online management institute after him. Welch collaborated with faculty in developing curricula for a master' s program in business administration, Clifford said. "We chose to work with Chancellor University because it gave us the flexibility to start something new," Welch said through a spokeswoman, Betsy Linaberger. "As a for-profit venture, we have the resources to invest in the student experience and the very best faculty, and we want to provide a high quality business education." Mlken Investment Knowledge Universe Learning Group, chaired by Milken, entered into a partnership in 2007 with regionally accredited Sierra Nevada College in Incline Village, Nevada, agreeing to provide as much as $15 million in return for an opportunity to share in online revenue, Geoffrey Moore, a senior adviser to Mil ken, said in an e-mail. The company is a unit of Santa Monica, California-based Knowledge Universe Inc., of which Milken is co-founder and chainnan. Knowledge Universe Learning Group has three seats on the nonprofit college' s nine-member board, Moore said. "This partnership preserved the existing character of Sierra Nevada College," he said. "That was important to us and the college." A 2006 regulatory change fostered online growth and made takeovers more attractive, said Silber, the BMO analyst. That year, Congress eliminated a rule prohibiting colleges that offered more than half of their courses online from receiving federal financial aid. Red Brick ITT Educational Services Inc. didn' t buy Daniel Webster just for its 52-acre red-brick campus and science and technology programs including training pilots and air traffic controllers. "Regional accreditation was very important'' to the company, said Goldstein, co-leader of the higher education practice at Dow Lohnes. "I don't think there's any question that was the most attractive element." Of the $20.8 million purchase price, $20.6 million went to pay off the college' s debt, according to an ITT Educational 1 0-Q filing. ITT Educational Services, which was spun off from ITI Corp. in the 1990s, wasted no time making changes at Daniel Webster. It renovated a main building and razed a dilapidated dormitory. It also dismissed one fourth of the staff, fired President Robert Myers, and has been accused by faculty members of misleading the New England accreditor, the Commission on Institutions ofHigher Education, based in Bedford, Massachusetts. 'Fundamental Nature' "ITT didn' t really have much interest in anything other than having acquired a regionally accredited institution," said Myers, now president of the New England Cut inary Institute in Montpelier, Vennont. " If I had it to do all over again, I wouldn't have gone anywhere near m . The fundamental nature of the college has changed." Modany, the ITT Educational CEO, declined to comment for this story. "We' re making fantastic progress with the cultural assimilation" ofDaniel Webster, Modany said in a Jan. 21 call with analysts. "Things are going really well there, great group of staff and faculty, and everybody is getting on board." Barbara Brittingham, director of the Commission on Institutions of Higher Education, declined to comment on its approval of the Daniel Webster sale. In general, "when these institutions are bought, they are not at the moment successful in the financial sense or they wouldn' t be for sale," Brittingham said. "There' s an understanding that whoever buys them is going to want to do something different." Self-Regulation Accreditation is higher education' s way of regulating itself The nonprofit associations set standards on financial stability, governance, faculty and academic programs and use volunteers from college presidents to professors to assess quality. It is a peer review system: a marketing professor is more likely than a poet to evaluate a business school. For more than a century, regional organizations have evaluated most public and private universities. Starting in the 1950s, leaders of for-profit colleges, which were then ineligible for regional approval, established seven national accrediting bodies for career education and training. The regions dropped their for-profit ban in the 1960s. Apollo Group Inc.'s University of Phoenix, whose enrollment of 4 55,600 makes it the nation' s second-largest university behind the State University ofNew York system, is accredited by a regional body, the Higher Learning Commission. Students enrolled at both regionally and nationally accredited colleges can receive federal grants and loans. Cachet, Credits Regional accreditation is important to for-profit colleges because students are attracted to its cachet and can transfer course credits more easily. Only 14 percent of nonprofit universities accept credits transferred from nationally certified schools, according to a 2006 study by the University Continuing Education Association, in Washington. The six regional associations scrutinize takeovers of nonprofit colleges in advance, and then follow up afterward, accrediting officials said in telephone interviews. They could cite few, if any, cases in which they refused to continue accreditation, they said. Corinthian Colleges' past difficulties with California state regulators didn' t matter to accreditors when it purchased Heald Capital LLC, parent company ofHeald College, for $395 million. Corinthian, the country' s seventh-largest higher education company by market value, has more than 100 campuses in North America, and had 106,052 students as of Dec. 31, including Heald, said Anna Marie Dunlap, a Corinthian spokeswoman. $6.5 Million Corinthian paid a $6.5 rnilli on settlement in July 2007 to the California attorney general' s office, over allegedly misrepresenting graduates' job placement rates and salaries. It also agreed to cease enrolling students in 11 programs at nine campuses. The Santa Ana, California-based Corinthian said in a 10-K filing that it didn' t admit wrongdoing. "We strongly disagreed with the Attorney General ' s conclusions, but we are pleased to have settled the matter," Dunlap said in an e-mail. Regionally accredited Heald College had 11 campuses with 12,900 students, primarily in two-year health-care and business programs, as of Dec. 31. The college was nonprofit before its purchase in 2007 by Palm Ventures LLC , a Greenwich, Connecticut, investment company. Heald expects to start enrolling exclusively online students this year, Corinthian ChiefExecutive Peter Waller wrote in an e-mail. Approved Change The Accrediting Commission for Community & Junior Colleges in Novato, California, which certifies two-year institutions in California and Hawaii, approved the change in Heald' s ownership. "We judge the college we accredit," said Barbara Bene, president of the commission. "It would be unfair to say, ' Heald, you' ve been bought by a parent corporation that doesn' t have as fine a track record as you do. Therefore, we' ll condemn you,"' she said in a telephone interview. Heald will "continue to meet ACCJC' s accreditation standards and eligibility requirements," Waller said. The scrutiny "doesn' t remotely satisfy the sloppiest of due-diligence requirements," said Nassirian of the American Association of Collegiate Registrars & Admissions Officers. "There is no methodical review of who has bought the college. If the Cosa Nostra applied, you would think you' d take a look." The nation' s biggest regional accreditor is starting to take a closer look. The Higher Learning Commission, which certifies more than 1,000 colleges from Arkansas to Wisconsin, stiffened its rules on ownership changes last year. ' Same Animal' Buyers must wait from one to four years to reapply for accreditation if the college won' t stay "the same animal ," President Sylvia Manning said in a telephone interview. The commission now charges $10,000 for ownership changes to pay for more extensive research. New owners must be approved by its board, rather than at the staff level, Manning said. The commission applied its newfound rigor to Mayes Education Inc.'s purchase of Waldorf College in Forest City, Iowa, putting the brakes on online expansion. A subsidiary of online privately held Columbia Southern University in Orange Beach, Alabama, Mayes agreed in May to buy the assets of Waldorf, an Evangelical Lutheran college with 500 students, for an undisclosed sum. The deal closed on Jan. 8. Approval Condition As a condition of approval, the commission stipulated that Waldorf can't offer online-only degrees at least until 2011- 2012. Mayes Education plans to boost Waldorfs enrollment to 2,300 students in three years through programs combining online classes with face-to-face instruction at temporary sites around the country, Jessica Brown, a spokeswoman for Columbia Southern, said in a telephone interview. The sale "barely made it through" the commission, former Waldorf president Richard Hanson said in a telephone interview. "Columbia Southern wanted to ramp up the online program quickly. The commissioners said, 'If we maintain accreditation, Waldorf has to remain the college we know."' Columbia Southern wasn' t the only for-profit that expressed interest in buying Waldorf, Hanson said. Another company that lacked regional accreditation also contacted him: ITT Educational Services. ITT Educational, runs 120 nationally accredited technical institutes with 80,000 students, most of whom pursue associate degrees. ITT Educational' s shares closed at $109.78 on March 3, down 1.4 percent in the past 12 months. Graduation Rate The cost of attending an ITT Technical Institute, including tuition, fees and off-campus room and board, was $26,775 in 2008-09, according to the National Center for Education Statistics. Of students who entered ITT' s two-year schools in 2004, 29 percent graduated. ITI derived 70 percent of its 2009 revenue from federal financial aid, according to a company filing. ITT Educational is in the preliminary stages of seeking regional accreditation for its technical institutes through the Higher Learning Commission, which sent a team to visit the company in late 2009, a commission spokeswoman, Susan Van Kollenburg, said in an e-mail. The commission hasn' t acted on this evaluation, she said. Daniel Webster is ITT Educational ' s first regionally accredited campus. Founded in 1965 as the New England Aeronautical Institute, the college is tucked beside Nashua' s municipal airport, and keeps its fleet ofPipers and Cessnas there. The campus includes an aviation center, a library, an administration building, classrooms, dormitories, and a student center called the Common Thread. ' Good Reputation' Over the years, the college expanded from flight instruction into training air traffic controllers and airline managers, as well as teaching computer science, engineering, and business. It has "a longstanding good reputation," said Gary Kiteley, executive director of the Aviation Accreditation Board International in Auburn, Alabama, which licenses the college' s aviation programs. Financially, Daniel Webster never enjoyed a cushion. With an endowment that peaked at about $3 million in 2008, it relied on tuition revenue, Myers said. The airline industry' s decline after 9/ 11 and the collapse of Internet stocks hurt enrollment in aviation and computer science, said former provost Michael Fishbein, who said he suffered a heart attack from the stress of keeping the college alive. Just as trustees reached consensus on a strategic plan in 2008, fuel costs skyrocketed, and "we were running red ink again," Rodney Conard, the former chairman of the board, said in a telephone interview. Jeopardizing Aid The Commission on Institutions ofHigher Education and the U.S. Department ofEducation expressed concerns that Daniel Webster didn' t meet their financial standards, placing its accreditation and eligibility for federal aid in jeopardy, according to a fiting last April 23, by the college in a New Hampshire court. ITT Educational contacted Myers in December 2008, he said. Modany visited Daniel Webster the next month, and the parties reached agreement in April. The acquisition would enable the company to target a more upscale audience, Modany told Wall Street analysts on April 23. While ITT Educational' s institutes drew unskilled "career changers," the regionally accredited college would appeal to "career advancers" seeking to enhance their capabilities, Modany said. The Commission on Institutions ofHigher Education approved the sale that same month. 'Public Interest' "It's in the public interest to have these small institutions continue to function," said Bruce Mallory, a commission member and education professor at the University ofNew Hampshire in Durham. "If a proprietary school can come in, continue to provide the same level of education and assure viability, that' s all for the better." Modany promised to leave Daniel Webster' s administrators in charge because they were experts in running a four -year residential college, Myers and Fishbein said. At a campus event introducing the ITT Educational chief executive to the college community, Modany said the company was growing and there would be ample job opportunities, said Myers. As Myers negotiated the sale, he came to suspect that the company wasn' t being forthright about its intentions, he said. When he and Conard, who chaired the college' s board of trustees, worked out at a YMCA a week before the June closing, they discussed canceling the deal, Myers said. Only after consulting colleagues did they decide to go through with it, he said. Not Comfy "We had lots of conversations when it was on the table," said Conard, a management consultant. "Should we take it? We didn' t have to take it. There was a point where we realized, they were going to be more businesslike about it. It didn' t feel as comfy as we were hoping." Going through with the sale was the right decision, Conard said. "ITT is in this for the long haul, and I'm very comfortable with where they plan to take Daniel Webster," Conard said. Another former trustee, Cathy Trower, went along with the sale as a last resort to save the college and honor commitments to students, she said. "A for-profit should not be able to buy accreditation," Trower, a research director at Harvard University' s Graduate School ofEducation in Cambridge, Massachusetts, said in a telephone interview. "To me, that's almost like buying a degree and not actually earning it." Duplicating Functions In July, ITT Educational dismissed more than 20 Daniel Webster employees, Myers said. It believed they were duplicating functions that the company' s corporate offices in Indiana could provide, two people familiar with the company' s thinking said. ITT Educational also replaced Conard, Trower and the other trustees. Appointees to the college' s new board included Charles Cook, former director of the Commission on Institutions of Higher Education, which accredits Daniel Webster. Cook soon resigned because of a potential conflict of interest with his position as a director of Corinthian' s Heald College, he said in a telephone interview. "I was never substantively involved with Daniel Webster," Cook said. At the time of the firings, Myers was circulating a draft report questioning whether some of ITT Educational' s changes were in accord with the standards of the accreditation commission, which call for a faculty role in curriculum and governance, he said. "ITT came in and said, ' We only want faculty to teach,"' Myers said. "We' ll develop curricula in Carmel, Indiana, and give them to you." Myers Fired On August 5, ITT Educational ousted him, Myers said. Nadine Dowling, director of the Woburn, Massachusetts, campus ofiTT Tech, became interim president. In an unusual move in credential-conscious academia, ITT Educational also named an assistant professor without an advanced degree to a deanship. When Triant Flouris, who has a doctorate and has written four books, resigned as dean of aviation sciences, he was replaced by David Price, who only has a bachelor's degree. Price is weeks away from completing a master' s degree at Daniel Webster, and will enroll in a doctoral program in the coming academic year at President Dowling' s request, he said in a telephone interview. "ITT has continued the strong emphasis we' ve always had on getting a higher degree," he said. Fewer Worries The biggest difference at Daniel Webster under new ownership is "worrying Jess," Price said. "There are a lot of schools that would just go under, students would be out of a school, faculty and staff would be out of a job that they love passionately. I'm allowed to stay in the position I'm in because ofiTT." In November, faculty members told a team from the New England commission visiting the campus that ITI Educational had rewritten a college self-study report prepared by professors and staff for the accrediting group. Faculty members complained that the company' s revisions glossed over inadequacies in such areas as governance, according to two people who attended the session. When asked about the allegations concerning the self-study report, Richard Schneider, president ofNorwich University in Northfield, Vermont, who chaired the team, said that in his experience colleges don' t try to deceive accrediting bodies. F acebook Group About 450 people have joined a Facebook group entitled, "I went to Daniel Webster before it sold out," including Chad Los Schumacher, 20. After his sophomore year at Daniel Webster, where he majored in homeland security and joined the paintball club, Los Schumacher transferred for the current academic year to Saint Leo University in Saint Leo, Florida. "It was a very hard decision to come to, but I knew I could not stay there," Los Schumacher said. Los Schumacher was bothered by an ITT Educational policy that students receiving financial assistance through work- study programs sign an agreement that the company owned their intellectual output, he said. "If I created the next Facebook or Twitter, it would be theirs," Schumacher said. Matthew Mcinnis, a flight operations major, stayed at Daniel Webster. "A lot of big names in aviation have come through here and taught here," the senior from Beverly, Massachusetts, said as he headed to the aviation center on Jan. 27. "Looking in the long term, the ITT buyout should add value. Hopefully, it will attract better professors and more students." Personnel Moves The personnel moves took New Hampshire regulators aback, the officials said. ITT "did give me the sense they would continue as before," said Kathryn Dodge, executive director of the New Hampshire Postsecondary Education Commission, in Concord, which approved the sale in May. "We did not expect to see the turnover in staffing happen when it happened." As a result of the Webster case, Dodge said, she is proposing to require colleges in ownership transition to outline plans for faculty and staff contracts and internal governance. "It's a culturaJ issue," Dodge said. "Unless we're extremely specific in our requests, for-profits aren't as forthcoming as nonprofits." To contact the reporter on this story: Daniel Golden in Boston at dlgolden@bloomberg.net Last Updated: March 4, 2010 00:00 EST Tem1s of Setvice I Privacy Policy I Trademarks (b){S) From: Finley, Steve To.: Yuan. Georgia CC: Date: 4/30/2010 3:02:56PM Subject: Transcript ofBob's speech (b)(5) Robert Shireman Speech to NASASPS ApriJ 28, 2010 Transcript provided by the Career Education Review Michael J. Cooney, Editor mcooney@workforce-com.com . .. And I had forgotten to put the FAFSA simplification applause line into my actual remarks so I have applaud when he said it so it never fails and of course- it's not often- sometimes it's the thing I get questions about but more often its about things like two Pell awards, two programs in an award year, things more detailed like that. But thank you so much for that introduction. Two and a half or three years ago, we started to see a serious economic slide downward in this country, credit markets had seized up, the sub prime mortgage issue was a major cause of that and we stmied seeing ppllosing their jobs. We saw ppl in their jobs feeling much more insecure, much less secure about their ability to invest in higher education, their ability to buy a home w the collapse of the credit markets and the way to solve that - long term- is to invest in improving our nations economy, to invest in the kind of innovation that comes from education, the productivity increases that come from job training. Jn order to follow up on that President Obama laid out a bold goal for he country, he said that by 2002 we want to regain our place as the number one country in the world in terms of adults with post sec credentials, college degrees, certificates and other job training programs. In the recovery legislation, now about a yr and a half ago, that included an expansion of the tax credits that [x] hoping to create in the 90s, an expansion of that tax credit to $2500, making it for 4 yrs and actually covering more of the types of expenses that students and families have for higher education. Increases in Pell grants- the usual approach and what you have seen in your own states, are in an econ downtum, more ppl are poor, more ppl want to go to school , but instead of following up on that need by putting more money onto the grant and scholarship programs actually less money goes into the grant and scholarship programs be of the state budgets. Fed govt took the opposite approach really, what needs to be countercyclical spending that helps- like unemployment insurance- spending that needs to follow up on and help to address the new gaps that families are seeing - so the tax credits were part of that, the increases in Pell grants are not only meeting the new demand for Pell grant dollars but actually increasing he size of the Pell grants and proving those increases into the future with the follow up legislation passed a few weeks ago. Also restoring some certainty to the student loan program, and making sure that no one has any reason to doubt whether they will be able to get the federal student loans that they need, again with the refmms that were implemented a few weeks ago. I mentioned that when people are losing their jobs, when ppl become insecure in their jobs, they look for higher education, they look to find what kind of job training can I get, what kind of skills can I add to my repertoire, what are the skills that I have, how can I make them better so that ill keep my job, so that ifl lose my job I'll have options. And at the same t ime, while we saw this increase in demand, which is helpful and useful given what the President had to say about the need to train our population, we saw state tax revenue declining in all but a few states, we saw resulting cuts in the budgets of state colleges and universities and community colleges, resulting in a combination of very large increases in tuition in some cases and reduced enrollments, fewer seats. So increased demand - ppl wanting more education and training, and public institution either had fewer seats and charging more tuition or might not declare going to be enrolling fewer ppl but their course offerings are cut, fewer kinds of course offerings, so the result is they are not able to demand for higher education. Tuition-driven institutions didn't react that way because they're tuition-driven institutions, and the non-profit institutions have done pretty well despite significant declines in their endowments because there continued to be significant demand for higher education. The public., the non profit private colleges did well and in particular the for profit institutions have come in with investors making sure that there was capacity to be able to serve additional students, and they knew that those students would come with those federal dollars, Pell grants, student loans, tax credits and that hat would help them to not only be consumers who want higher ed but consumers who can pay for that higher education with that federal support so the for-profit industry, more than any other in this economic difficult times, has responded. I want to give you some specific numbers, we now post now on one of the [X] websites, the quarterly numbers ofPell grants by different kinds of schools s I looked at what the first 3 quarters- the total of the first 3 quarters of this award year compared to the last award year for some of the schools that I knew would be here today. So for example, Corinthian Colleges- 38% increase for first 3 quarters this year compared to last year for a total of $800M DeVry- a couple people here from DeVry?- 42% increase up to $1.78 ITT- you guys here? A 44% increase up to $623M Strayer- still here? Is that you? Well this one- 95% increase, may be something about the quarters, but up to $414M APE!- Wally here? And Russell? 94% increase up to $44M Kaplan- they here? So this total is actually all the Washington Post owned entities, 33% increase up to $909M, and again this is the first 3 quarters of the year so the totals for the year are obviously more than that Career Education Corporation- 29% increase up to $1B this first three quarters EDMC- several folks here; a 16% increase, $1.1B Capella- over there? 40% increase to $378M And I think I've just got a couple of others: Grand Canyon- 55% increase to $260M And University of phoenix- you there?- 9% increase but obviously that's on a larger base. So probably that increase is as much as a lot of others' total dollars, and that increase is $2.7b total And Bridgepoint- you guys here? - 6 l% increase, $393M I think those were all that I had numbers for, obviously I know that there's a few others here as well. So I wanted to begin just by thanking the for-profit industry for responding to the critical demands from ppl out there who need higher education. I'd like everybody to give them a hand. Now, others of us in the room have the responsibility for making sure those federal funds I just listed, for education and training, that it's all totally above board. That those significant increases in fed spending for higher education- loans, grants- are serving students and tax payers as well as they possibly can. and that is what the Triad is about- and I know I can say triad in front of this audience because I heard somebody say it earlier. I want to talk for a second about some things going on in Washington right now, and I don't mean negotiated rulemaking- I will get to that in a few minutes, but there is a wall street reform debate going on right now in Washington. What happened in that credit crisis a couple of years ago had something to do with credit rating agencies- agencies like S&P, Fitch, other agencies that were responsible for rating instruments- :financial instruments, looking at what is the quality of these things that have names that cause people's eyes to roll over- things like collateralized debt obligations, and other kinds of securitizations- so what is the quality of the loans, mortgages, are they going to be repaid, how likely are theses loans to be repaid so that an investor purchasing this, how confident can they be that when they purchase, when they invest in this particular instrument, that they will get the money back that they are expecting. The business model for these rating agencies has come under fire in these meetings in Washington, part of this has to do with the business model of the rating agencies, on the one hand, their responsibility, their job, the core of their business was to make sure they did a good job providing an honest rating tor the instrument that they were analyzing. On the other hand, they relied on the income from the companies who asked them to rate the instrument, and ill read to you from- a NYTimes- some of the emails that have been coming out recently. In 2004, well before wall street's bets on subprime mortgages became widely known, employees at Standard & Poor's credit rating agency were feeling pressure to expand the business. One employee warned in an internal email that the company would lose business if it failed to give high enough ratings to collateralized debt obligations, the investments that later emerged at the heart of the financial crisis. Quote, " we are meeting with your group this week to discuss adjusting criteria for rating CDOs of Real estate assets be of the ongoing threat of losing deals. Lose the CDO and lose the base business. A self reinforcing loop" In other words, if we don't loosen up, we don't loosen up in our assessment of these instruments, nobody is going to come have their instruments assessed by us anymore. And this created a conflict which led to instruments that should have been questioned not being questioned, and [leading] over to the financial crisis that we have been suffering from for the past couple of years. The other issue besides the business model was the complexity and fast growth of diff kinds of instruments and ill read from another of the recent articles. "Email. documents and other messages suggested that executives and analysts at ratings agencies embraced new business from Wall Street even though they recognized that they couldn't properly analyze all of the banks' products. And one of the other quotes ends with, "we were so overwhelmed." So I want to actually ask, on that issue, the complexity and growth, and I know we're feeling this with publicly traded corporations and purchases going this way and that way, and we're trying to figure out what's going on . Are there regulators in the room who feel like you DO have the analytical firepower you need to assess what is going on with the entities you regulate in higher education? Those who do feel you have the firepower you need? I don't think we feel we have the firepower we need. So the reform back on the financial instrument side of the equation, what they're really talking about now in Washington on financial reform, one analyst- an academic looking at what's going on, said it only tinkers with the workings of the ratings agency, it doesn't end the inherent conflicts of interest, those cont1icts of interest where the ppl who do the rating are paid for by those who do the ratings. This whole situation w credit agencies, credit rating agencies, is, as I see it, very similar to the way accrediting agencies work in this country. The same kind of inherent conflict of interest. Albeit accrediting agencies are nonprofit and on top of that, what would this crisis look like ifthe banks had actually been the ones running the credit agencies and were doing a peer review kind of model, which is the model we have in accreditation, where it is the regulated who are really looking at each other rather than an outside entity. So to borrow from Winston Churchill, accreditation, as a part of that triad, in terms of a way of assessing quality in higher education, is the worst form of accountability except for all of the others. What Winston Churchill actually said was, democracy is the worst form of government, except for all the others. So I am bringing up this issue of accreditation not to say that we should back away from it or change it, 1 actually don't have a better system for us for assessing quality in higher education. But it is problematic and we need to remember that as the other two pieces of the triad, as we figure out how we can do the best job possible in our responsibilities. Federal and state governments cannot rely on accreditation to insure that consumers and taxpayers are protected t the full extent that they need to be- all three legs of that three legged stool need to be working and working well. There are a number ofthings that we're doing, you've heard about some ofthem- elevating, monitoring and enforcement, we're working with the inspector general at the department of education, taking a much closer look at data than ever before to help guide our selection for program reviews and investigations when necessary by the inspector general, working with he federal trade commission to join their consumer complaint system so complaints they get and other agencies that are on their consumer sentinel, working on the issue of how we can look more at issues of misrepresentation as we do program reviews and other kinds of monitoring. A second area besides the monitoring and enforcement is improving consumer information. We have put graduation rates, retention rates and transfer rates right on the F AFSA form when students are choosing colleges, the rates are right there as a reminder to students that they should do some good shopping, look at various kinds of data that might help them to compare schools. We're also providing them with a more detailed financial aid estimate in terms of the financial aid that they can get and this is partly to make sure that people know they can get that aid wherever they go. Sometimes students think, oh I can get that $12K because the school costs $12K, and I would only get $3k at a community college that only cost $3K, not realizing hat in fact if they wanted to get more than what tuition costs at that community college so that they can focus on their studies instead of working excessive hours, that that is something that they can have available to them. And starting this summer, as a result of a regulatory process that has already completed, schools will have to begin providing placement information and where the have placement rates, they actually will need to make students aware on their websites of placement rates they have for programs that they are offering. Uh coordination and sharing, I head some of the discussion in prior sessions and I look forward to this af-temoons discussion. Within the federal government, we are working with the Fed trade commission, the veterans administration around the GI bill , the SEC because of the involvement of publicly traded institutions, states we have encouraged involvement in this group and are looking for other ways that we can help. Happy to discuss that in q&a here as well as this afternoon because we really need to become good partners if we' re going to do best by taxpayers and students. And accreditors, there are some new requirements, we're working on sharing some draft guidance related to all of the requirements for accreditors and again building that triad and all working together. In fact, I was actually on the internet looking for a three legged stool to see if [ could bring one for this, and [ noticed one of the three legged stools had a, not only the three legs, but it had this connecting piece of wood that held the three legs together, and I thought, well that would be the perfect prop, because that would demonstrate it's a strong stool if that connecting- that connector is there, making it as strong as possible. Also, may of you have heard, reviewing the rules and regulations and where appropriate revising, in the process of revising those rules. Let me take a I ittle bit of time to tell you about some of those. We started about a year ago, doing public hearings where we basically said, we want to know whether we need to in1prove program integrity, are thee things we need to be doing? Here's a list of some areas, misrepresentation- definition of credit hour, state authorization, other kinds of things, and we saw input. We did 3 public hearings, ppl were able to submit items over the internet, through email, and we got a lot of input about great schools out there, students who were having a good experience, people who attended the schools, got a job, had a great experience. We also heard from forn1er students who felt that they were misled, legal aid attorneys who had clients whose stories were cause for concern. That was followed up by- we asked for nominations for ppl to serve on committees- the way this whole process works is that we do our best to work through possible rule changes with a committee of stakeholders, recommended, nominated by interested parties, states, various institutions, student organizations, legal aid.tr 3 weeklong sessions, December, January and February went through each of 14 issues talking about, changes that might make sense. One of them, misrepresentation, clarification really against misrepresentation by schools. High school diploma- one of those things that you take to somebody and think, how hard can it be to know if a high school dimple is valid?? As you know, not that easy and many of you are at the state level so you know that the state isn't necessarily declaring who is good or bad. And the issue of the federal government declaring what is a valid HS education, for example, gets into areas where the def government isn't supposed to be declaring such things, so I think a more complicated issue than I think a lot of ppl expected. We are making - at least in NegReg session - reached some tentative agreement around the definition. I would say the most significant thing we are doing is looking at- and I think this is now a likelihood, when people apply on the F AFSA and it asks for a HS diploma, a list will actually pop up and they can enter what that high school is, the name of that high school based on some feral lists we have. It wont necessarily mean that it will be a valid high school, but it does give us and you the ability to, if for example a suspected diploma mill, we would be able to see who are, where are the students going who are using this particular high school as the place they say they get their diploma from. And if we find that its some particular colleges, that means that it might b encouraging ppl to go and use and diploma mill. So it will be a useful took for us and you as well. , and that's the most important change we'll be making there. Incentive compensation was a major issue, the issue of paid recruiters. A number of years ago, a number of safe harbors were created and there was a lot of indication that they were wider loopholes than are appropriate given the wording of the actual law that prohibits payment of actual compensation based on enrollment. So that's another one that we are working on. State authorization, I heard California mentioned and it was a surprise to me when I came to Washington and asked about California to discover that a legal interpretation of the Dept of Ed, well if the school is not not authorized, then it is authorized. So this a raised question that came up in NegReg about what is at least some minimum standard about what kind of authorization should count in terms of the state role in that Triad. Satisfactory academic progress is another area taking attendance. What] used to call R2D2, return to tile 4. and I'm not mentioning all of the issues, but the final one I will talk some about is Gainful Employment, and this is the one that's been in the news a lot. It seems that every time I speak somewhere, something thinks I said something new and calls a stock analyst who then reports it causing the stocks to go up or down or whatever, and I assure you I am not going to say anything new. If you are a stock analyst or you know a stock analyst, the answer when they ask you, What did Shireman say? You say nothing new. So the statute, the federal law requires that in order for some programs to be eligible for federal financial aid, they have to lead to gainful employment in a recognized occupation. This applies to non degree programs at any type of school and it applies to most programs at for-profit schools, really all except some BA, liberal arts programs through an exception, a recently enacted exception, that actually begins this July 1 51 but for the most part, a for-profit institution, in order to be eligible for federal financial aid, has to show that the program leads to gainful employment or prepares the student for gainful employment in a recognized occupation. So a year ago, we began asking the question, what is the definition, what should db e the definition of gainful employment in a recognized occupation. We had hoped that perhaps some schools would come forward and say, well when we start a program, here's how we determine whether or not it complies .. we didn't get that kind of information. We brought it up in NegReg and made some suggestions for discussion. We suggested, maybe there should be some relationship to the debt levels that students are taking on and the expected earnings that they may have from the occupations that you have identified that you are preparing people for. We also suggested that perhaps a loan repayment rate approach could be devised where we would be able to see that federal loans are actually being repaid at a rate that makes sense if ppl were actually gainfully employed. We looked at the provision and current regulation that currently applies to very short programs, the 70/70 mle. So 70% completion rate, 70% placement rate, and asked should something like that be part of the definition of gainful employment? And then for new programs, we suggested maybe there should be something from an employer, who employs ppl in the occupations that the program is preparing people for, that at least asserts that yes, the cuiTiculum, the program that ive seen at this school is designed in a way where it would prepare people for the jobs that I have in my particular business, so we suggested that for new programs. Now in evety other issue in negreg, we got pretty good discussion at the table, sometimes we actually got consensus from the group on what we should actually, how regulation should actually be worked out. But for some reason on the gainful employment issue, we didn't get the kind of discussion that would at least help to guide in a very constructive way the direction, and to know well, this would be okay with certain kinds of schools but wouldn't be okay with other kinds of schools. Instead the reaction from, in particular those who were representing the for-profit colleges, was you cant do this, you cant define this term, why are you doing this, and that continued even after the NegReg sessions. We continued to meet, we have gotten improved input, improved feedback. And where things stand now with whole regulatory packed, so everything I've just discussed now including the gainful employment, is that in the next few weeks there will be proposed rule published in the federal register. There will be a comment period after that proposed rule is published. That will be the appropriate time to suggest changes or express support for provisions, suggest alternatives, and then a final mle, our goal would be to publish a final rule by November I 51 For rules to take effect in general. next year from this July, they need to be published by November 1 51 So that's where we will be, that's the tin1eline for the rule going forward. I wanted to conclude my remarks before going to some Q&A and some discussion with a piece that Thomas Frank wrote in the WSJ. The title ofthe article is, "Obama and the Regulat01y Capture," and it is again, back about the financial regulation. "It was not merely stmctural problems that led certain regulators to nap through the crisis. The people who filled regulatory jobs in the past administration were asleep at the switch because they were supposed to be. It was as though they had been hired for their extraordinary powers of drowsiness. The reason for that is simple: There are powerful institutions that don't like being regulated. Regulation sometimes cuts into their profits and interferes with their business. So they have used the political process to sabotage, redirect, defund, undo or hijack the regulatory state since the regulatory state was first invented." So, he follows that up with one more line here, "And it created a situation where banking regulators posed for pictures with banking lobbyists while putting a chainsaw to a pile of regulations. Smiles all around. Let the fellows at IndyMac do whatever they want." So my closing words, is, we should take the photos, we should smile, but lets not shirk our responsibility for regulating the industry. The schools will make plenty of money and students and taxpayers will be better off if we do our jobs as best as we can. Thank you very much. Host - Some time for questions and answers, and I know gainful employment will come up, but first I want to just make a comment. I think most of the states, clearly the states in the room, because the ones that aren't in the room, there might not be a cognizant agency that actually is involved in the regulation, if it's a registration with the secretary of state or what-have-you, but fortunately, there is another state within our state that someone can go get a better rate at or what have you. So I think that's clearly one thing that I was thinking about. There is an alternative on per se that the school has if they want to be serving your students, they want to be in your state. They have a set of laws, a little bit different, but 1 certainly appreciate the parallel, and I think important to add- Shireman- I was really more talking about the parallel with accrediting and it's not as much of an issue with states Host- right so you know, 1 sympathize with that, good parallel. Did the Dept, was there any discussion when gainful employment issue was being looked at, to say, can somehow the Dept tap into infom1ation at the Dept of Labor or at the prior [X]. I understand there may be some challenges there, but we're trying to measure whether or not this individual is 1, either employed or perhaps employed and had benefited because of the education or training that they had received and somehow reached their salary or what have you. Was there any discussion around that area, because it seems like there may be some ways of doing that? Shireman -Yes, one of the areas of discussion, so part of the areas we are looking at.; some of the criticism that has been out there has been about the use of averages or 25lh percentile of BLS occupational data. And the reason we suggested use of BLS was not as - it was actually as a way to reduce the work that would need to be done by whoever is coming up with the income information. So for example, it's going to be the schools having to figure out what their graduates eamed, we figured why not just have a level that's an average based on the industry that will eliminate a lot of the school's need to follow up and look at their own graduates. In other words, if it meets- if the debt I income ratio is fine given the earnings in the occupation generally, you don't need to worry about it as a school. Just look at your debt and if it's okay, flne. You only need to look more detailed if you don't, if it doesn't beat it that way, because maybe your graduates are earning something more. It was really to try to reduce the number that would have to go through a process, either using IRS data or a state data system. States like FL are in a much better position to be able to look individual programs and have this kind of information using their U[, unemployment insurance, database. So there's a lot that can be done there, and the discussion at and since negotiated rulemaking has helped us to think through those issues. Host- know there's going to be some questions ... Michael Cooney- Bob, [patt] of your presentation is, do you believe that for profit institutions are serving their students well? Shireman -1 think they have to be given their demand, given the number of people that are going to for-profit institutions, I think it's, I think they are, absolutely. All of them for all students, I think that's where our role comes in Cooney- following up on that, then your gainful employment provisions as we understand it, according to CCA would approximate 300K students from the possibilities of receiving an education. Is that an unintended consequence or are you all cognizant of that? Shireman - there isn't a proposal, and my argument with the- and ive had these conversations directly with CCA, is work with us about what the definition should be. So we can get in- what they've done is say, 8% pure labor statistics, these folks are crazy! But the reality is, thee only way to get to a rule that makes sense, and we need to have a definition, is to get down in the weeds and start working out the details. And they and others have come back with, id say some more constructive thoughts in recent weeks, and those will be considered in the proposed rule, and then they' ll be further input that I hope we' ll get in a final rule. [Ken Miller] -Mr. Shireman, im concerned about national averages. Some states are in much better shape employment-wise than others. I'm fiom Ohio, a county in Ohio that has 17% unemployment. Question - how can you adjust this rule, this definition, for those kinds of anomalies between states, and should you? Shireman -So using actual data from students as was suggested would deal with that completely. The BLS data actually is available on a state basis so that could potentially be another option. So this is where we are, we're open to suggestion and ideas about what would be the best way, or whether it should be various possibilities that a school might have an option to use. This is that input-seeking process for what would be the right kind of approach. Again, part ofthe reason we just used the national average was because, to eliminate a whole lot of work so that fewer needed to look in a more detailed way, and in some ways I suppose if we had not suggested an approach to reducing work, we wouldn't have had the BLS stuff on the table and wouldn't have the criticism, but I think it does make sense, because it was a reasonable, work-reducing item that we put on the table during negotiated rulemaking. [Tom CasseJJ(?)] -have you looked at the idea of a value added concept in the definition? Gainful to me means you've gained, improved. So if we looked at our students and where they came to us and what their earni ngs were afterwards, a measurement of change of gain as the definition? Shireman - so specific suggestions about that proposal and how to do it, we welcome that, I mean that's very useful. So in the proposed rule period, that's especially timely. Make sure, Especially from this point forward, make sure that ideas are considered, that comment period after we publish the proposed rules. That's the kind of thing that would be great to work out the details and suggest it during that comment period. [Keith Boss (?), Northwest Technical Institute) - layers of control can sometimes create layers of bureaucracy as you well know, you've got to struggle with that. There's al ready of default rate, and we're very proud of our very low default rate, was it ever considered that that 's enough control to see that students have the ability to pay offtheir student loans and why would there need to be more layers of control, more bureaucracy than that? Shireman- the discussion at the table around default rate had to do with the fact that the federal government has made sure that ppl who take out at least federal student loans aren't put in a situation where it's a choice between food on the table and paying rent and paying off your student loan. So we have things like forbearance, and if you ask for forbearance, you could make no payments at all and you're not in default, there's income based prepayment where you may be making nothing or next to nothing, but if you're on income-based prepayment, there's very low repayment or maybe nothing at all and you're not in default. So default rate doesn't measure whether or not people are actually earning any money. [Ray]- one of the problems ppl have come to wrestle with this concept is that any fommla that is derived that results in the elimination of eligibility for a program has the potential to have a school on the NE corner vs. a school n the SE corner delivering the same program at the same level of efficiency and quality, but merely because of the borrowing characteristics of their student population, one school's program could be declared ineligible while the other school's program continues ... further, as you go through this and eliminate program eligibility, the students don't go away, they seek out, in many cases, the same education, in another institution. You could end up with a deluge in the public institutions because they're not subject to the sanctions of a loss of eligibility and yet, so it's okay to continue to train that person and for them to continue to have debt and for state dollars to continue to subsidize their education at a public institution but meanwhile the resulting product is the same? Shireman- so what's your suggestion for a definition of gainful employment? [Ray]- well I don't know- I always thought it was defined in the IRS code, the Social Security admin .... Shireman- I need a citation, tell me what we can do, as the US Dept of Ed, to detennine whether a program is in or out. [Ray]- I honestly don't know Shireman- this is the problem. If you cant give me a definition, we're not making any progress. So anything- I can respond to the details of your question, things like the 90/10 rule - any time you draw a line, there will be people right on one side and people on the other side of the line that are very similarly situated. But that's what lines are about, so your suggestions about what would be, and I think asking your colleagues, your own institution, how do we decide, how do we know our programs are eligible for finical aid, would help for you to develop some suggestions for us. Host- see I knew we should have had a workshop on gainful employment.. we've all sat around trying to figure it out. .. we have some good thinkers in the room .. Russell - APEI -I have sort of a detailed question im going to pose for you. You mentioned earlier [xx] with regard to title IV funds, but those fund are not necessatily earmarked specifically for education costs, or direct education costs, and I think we all recognize the reality is that many student do in fact realize substantial amount of money for impotent, incidental spending, a new car, walking around, whatever. My question is, lets take a scenario where an individual sent to community college for a couple years borrows $35-40k, then that graduate comes to APEI system, where it will cost you $30k to get a BA degree from start to finish, we inherit $35-40K worth of debt and add it to the $30k the student incurs with us, we've got $75-80k of debt. Is that going to count against us for the purposes of calculating gainful employment? Shireman -we haven't proposed a rule yet but what we discussed a the table in negotiated rulemaking, the answer would be no. That's because we proposed using the median, and using the median means that all those outliers don't pull up the average. It's the median, schools don't generally have more than half of their students coming in with huge amounts of debt from someplace else. Now there's also the option in the rule of saying, it's only debt you incur at the institution, so in the proposed rule in the comment period will be the time to look back to a particular issue. There's debt/ income ratio in the rule, and you can provide commentary. Again this is the kind ofthing, the kind of discussion we needed a year ago and have begun to get recently and I really do appreciate because they're useful and constructive discussions to have. Russell - well the reason, ifl can just add another comment to that, I think it's important to have [other debt] considered because if you take that approach that im only accountable for my own debt- Sh.ireman- Right, so to be clear, it's just a proposed rule. Comment period, final rule. So we've gotten this kind of input, they'll be a proposed rule. If we haven't addressed this issue and it needs to be addressed further in your view, there will be another opportunity for you beyond the opportunities you've had in the last several weeks. Russell - The one thing I would like not to see happen is that for admissions staff to say we don't want to admit you because you've got debt. Shireman - understood. [NA] - can you tell me how this would apply to a public university or state college? Shireman- well what we discussed at the table, in negotiated rulemaking- and I keep repeating that because the "this"- we haven't proposed anything, we brought discussion items to the table during Negotiated rulemaking, but it would mean that for shorter tem1 certificate programs, if more than half of the completers had debt, then the median debt level of all completers, in other words not just the debt level of those who borrowed, but the median debt level of all the people who complete the program, that would be the debt level that would be compared against the expected earnings in the occupation the program is preparing people for or the set of occupations. And then the discussion earlier was about well, do you use actual earnings for people who are in the program or do you use averages or 25th percentile with BLS so there's that question about what the measures of income should be, so that would be - the concept was that as a standard. And again, at the table we also had other suggestions for an institution if they didn't meet that particular measure like graduation placement rates and loan prepayment rate. LNAJ -so are you going to be asking them to post their placement rates as well/ Shireman- well placement rates have to be posted starting this July anyway, or placement information. if you have rates, rates need to be posted. LNA ) -so if they don't do it now, if they don't have placement info now . .. Shireman - placement information was done as part of a rule done in - Congress required all schools to post placement information in the Higher Education Opportunity Act, and that goes into effect under the rule that was adopted last year so that goes into effect this July. [John Weir(?)] -from a state regulatory perspective, appreciate the Dept's effort to try to address the cost issue, and one of the things that we've found at the state level is that students don't seem to be price conscious when it comes to education. And what do you think we can do at the state level to help make students better consumers, particularly as to the cost issue? Shireman- I think we've seen some improvement in that because of the economic downturn, are seeing families chop more and really look at, does it really make sense for me to spend $30-40K a year, what about the state university ... what about other options? So I think it has improved somewhat, but more needs to be done. There will be, again because of the Higher Education Opportunity Act, starting I believe this summer, schools will now post net tuition - I cant remember if it's net tuition or net cost of attendance- anyway some net figures by income bands so people will actually be able to go and say, for someone in my fami ly income background, it's more common to pay this price rather than the other price. And starting in, I think it' s a year and a half, all colleges will have to have a net cost calculator, where a person can put in their income and other basic information and get a basic sense of what their net cost would be. So that helps to deal with some of the issues, we've provided some more tools to help people get more information and to help them also deal with reality that sometimes a college that looks really expensive based on its sticker price for a particular family, especially lower income, may not actually be that expensive. So there's some new tools coming forward. I do worry that just more information on the internet doesn't really help that much, and that figuring out who we can provide tools more directly to teachers, counselors, people at one stop job training centers. You know, our website, when people are actually applying, finding those moments, those teachable moments when people are actually thinking through these issues, so suggestions you have about the ways that we can do that, Pell programs, state programs- we're certainly interested in ideas. It's important and not easy to figure out how you teach the vast public things that aren't simple. [Julie]- I guess this is more of a comment, but im somewhat concerned about the potential for consumer confusion with the net cost calculator and different types of disclosers about tuition. I know at the state, I'm in Tennessee, we've required that our enrollment agreements contain the total cost of the program for a very long time. We now require that the tuition rate be posted on the internet, we've required disclosure of completion, referral rate, placement rates for a good while. We now do in depth audits of placement data, so if student looks at our website, it's likely the numbers that they'll see are going to be very difierent from maybe what they see on the F AFSA or some other disclosure on the federal side. So how do we address the very likely possibility of confusion, not knowing different methodologies and standards? Shireman- I think you're right, there is going to be confusion. And even me, when I :first started talking about net tuition, I couldn't remember, is it net tuition, is it net cost? What's included in the definition? And I think there will be confusion, I guess the positive side of that is, usually when you take a step and it creates those problems, it then forces us all to sit down and say, how can we improve on what we had come up with originally? Sort of like, data that's not perfect. Like, we cant post that data, it's not totally clean. But the way to get people to clean their data is, you post it. And when we started posting the student debt data that universities had reported to US News & World Report, and universities would call and say, well that's not our figure and we'd say, well that's what you reported to US News. And they'd go back, and sure enough, somebody had reported something wrong, s I think that you're right, there will be some confusion but that will probably force the issue to some degree. But id also welcome- I mean I'd love to look at what Tennessee does and take it to some of our folks and ask about what we can do, A lot of- for some reason Congress in the education space, especially the higher education space, gets very detailed in the legislation's actual statutory language, which then makes it very difficult for us in the implementation to do things differently that what they had prescribed. So we may not have a lot of flexibility in terms of our implementation but maybe there's some suggestions we could make back to Congress by pointing out to them these issues for particular states. [Ray]- there seemed to be a reluctance on the part of Dept officials as well as most people in the room during the NegReg process to talk about the troublesome aspect of schools not being able to limit student borrowing,. It seems that we have a statute, a rule that leaves the amount that students borrow entirely up to them. It's based on fom1ulas, numbers across[] program lengths are mandated by state laws in many fields of training, [licensure], all these things are out ofthe control of the institution, they cannot seem to limit the amount that students borrow except in very specific case-by-case basis, and then they subject themselves to lawsuits by students claiming they were discriminated against. Might there be any opportunity to open up and look at some of those rules so that we might be able to avoid some serious unintended consequences of a formula that could cause havoc? Shireman- student loan program and the Pell grant program are entitlements. They are entitlements for covering tuition, fees, books, supplies, room & board, and to restrict an entitlement program is a pretty big deal, and that's why it's difficult for us to do in tem1s of regulations. Now you do have the ability, if you believe someone would default on their loan, I think that's the ability that the fin aid administrators have ... you're also able to establish what you feel to be reasonable expenses including in the room & board space. But restricting loans beyond that would likely be something Congress would need to consider, and I think part of the reason Congress has had a hard t ime thinking this one through is higher education has benefitted enormously from Pell grants and student loans, Pell grants working like an entitlement program on an annual basis, and student loan programs being an entitlement program. And going down the road of starting to restrict the entitlement, I think is something to do very cautiously if we want to make sure people get the need they are eligible for. END. (b)(5) Peter Cunningham From: Cunningham Peter To.: Yuan. Georgia CC: Date: 5/7/2010 7:59:58 AM Subject: two things Assistant Secretary for Communications and Outreach U S. Department of Education peter.cunningham@ed.gov 202-401-2563 (office) 202-230-2404 (cell) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) (b)(5) Bob: (b)(5) Russ From: Wolff, Russell To.: Shireman. Bob CC: Woodward. Jennifer Jenkins, Harold Date: 1/8/2010 11:52:20 AM Subject: UOP 1 0-Q Table of Contents APOLLO GROUP, INC. A:W SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) U.S. Department of Education and its eUgibility continues on a month-to-month basis until the U.S. Department of Education completes its review of the application and issues its decision. We have no reason to believe that the application will not be renewed in due course. U.S. Departnumt C!f Education Program Review The U.S. Department of Education periodically reviews institutions participating in Title IV programs for compliance with applicable standards and regulations. ln February 2009. the U.S. Department of Education performed a program review of Limversity of Phoenix's policies and procedures involving Title JV programs. On December 31. 2009. University ofPhoenix received the l;.S. Department of .Education's Program Review Report, which is a preliminary report of the U.S. Department of Education's findings. We have until March 31. 2010 to submit a response to these findings. After the U.S. Department of Education receives our response. it will issue a Final Program Review Determination letter that will specify any required corrective action or amounts owed to the U.S. Department of Education. The report contains six findings and one concem. Three of the findings generally relate to our procedures for detennining the date on which a student withdraws from University of Phoenix, one of which cites exceptions to the U.S. Department of Education's rules regarding the timing of returning w1earned Title IV funds. No errors were identified in our calculation of the amounts of Title IV funds to be retumed. Another finding relates to isolated clerical errors in verifying student-supplied [nformation. Tile two remaining findings were self reported by University of Phoenix in its 2008 Annual Compliance Audit. These involve our calculation of student financial need in certain cases without taking into account tuition and fee waivers and discounts, principally for employees of Apollo Group and it<> nftiliates eligible for tuition assistance. and the use of Title TV funds for non-program purposes such as transcript. application and late fees. In addition. the U.S. Department of Education expressed a concern that some students enroll and begin attending classes before completely understanding the implications of enrollment, including their eligibility for srudcnt financial aid. The U.S. Department of Education stated its belief that prospective students would be better served if they were more extensively counseled prior to incuning any tuition liability about total program charges, the number of credits that are transferable. the total number of credits required to complete their chosen program and the financial aid available for each academic year of the program. We believe that our liability resulting from these findings will be approximately S 1.5 million, which has been accrued in our November 30. 2009 financial statements. In addition. the U.S. Department of Education's regulations require certain institutions to post a letter of credit where a preliminary program review repon cites untimely retum of unearned Title N funds for more than I 0% of the sampled students. Absent relief from this requirement from the U.S. Department of Education. University of Phoenix will be required to post by January 3(). 20 I 0 a letter of credit in the amount of approximately $125 million, to be maintained until at least September 30. 2011. We are reviewing the report in detail and we expect to submit a timely response to the U.S. Department of Education. Securities and Exchange Commission Informal lnquit}' During October 2009. we received notification from the Enforcement Division of the Securities and Exchange Commission indicating that they have commenced an informal inquiry into our revenue recognition practices. Based on the information that bas been disclosed to us, the scope. duration and outcome of the inquiry cannot be detem1ined at this time. We are fully cooperating with the Securities and Exchange Commission in connection with the Inquiry. lnterna( Revenue Sen-ice Audits Please refer to 1'-'ote I 0, lncome Ta"es, for discllssion oflntemal Revenue Service audits. 25