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Code of Conduct or Publicity Stunt?

Published:  September 14, 2011

On Tuesday, the for-profit college industry group the Coalition for Educational Success unveiled a voluntary code of conduct for its members. The organization says that the code “will provide strong new student protections; guidelines for training, enrollment and financial aid; and include an enforcement mechanism to ensure that participating schools adhere to the principles of the new standards."

At Higher Ed Watch, we have to admit that the code is stronger than we would have thought, considering its source, a lobbying group that has been unapologetic in the scorched-earth tactics it has used to fight any and all efforts to reform the industry’s worst practices.With this document, the coalition is finally acknowledging that there have been abuses in the sector that have put students in harm’s way.

But is this is a serious effort to improve industry standards or simply a public relations gambit that the group hopes to use to stave off any further government attempts to rein in the industry? The testimonials that the group circulated on Tuesday from its stalwart supporters in Congress endorsing the code only add to our suspicions. [Honestly, when you have to rely on Rep. Alcee Hastings (D-FL), a lawmaker who won his seat in Congress after having been impeached as a federal judge over bribery charges, to give his seal of approval to your ethical standards, you know you’re in trouble.]

Here are some points we believe are worth considering:

  • Many of the standards that the group sets for schools are already required by law and/or U.S. Department of Education regulations. For example, the code simply reiterates statutory and regulatory prohibitions against colleges compensating recruiters based on their success in enrolling students and deliberately misleading students about the programs they offer. It also requires colleges to provide disclosures to students that the institutions are already required to make under the Education Department’s new gainful employment regulations. Strangest of all, the document mandates that colleges provide entrance and exit counseling to student loan borrowers on their campuses -- a requirement that has been in place in the Higher Education Act for decades. Have for-profit colleges been deliberately skirting this statutory responsibility? Perhaps this is an area that the Education Department and Congress should be investigating.
  • The standards appear to lay the blame for abuses entirely on “rogue” employees. Colleges that adopt the code are to have each of their admissions and financial aid officers sign a semi-annual attestation that his or her individual actions are in compliance with these Standards.” This seems to assume that company executives have been unaware of what has been going on at their campuses – when, in reality, many of them have either implicitly or explicitly encouraged misconduct through the incentive structures they have set up at their institutions. Shouldn’t the companies’ chief executive officers and board members be held to at least the same level of accountability as their employees?
  • The enforcement mechanism the group plans to use “to ensure compliance with the Standards” is extremely weak. According to the document, schools that sign on to the code will be required to hire independent auditors to review their policies and practices to make sure they are in compliance. “Institutions with an unqualified report will be certified as members in good standing on the student protection website” that the group has set up. Those that fail to adhere to the code will be removed from the website. Many of the companies have close relationships with the auditors they hire, and many of these firms have signed off on some pretty dubious for-profit college practices in the past. What’s to say that things will be different this time? And is the threat of being removed from a website really an adequate deterrent?

To be perfectly clear, we at Higher Ed Watch would be happy to find out that our concerns are unwarranted and that for-profit college companies that have signed on to the code – such as Career Education Corporation and Kaplan Higher Education – change their ways. If these corporations’ schools truly delivered on the promises they make, students would be better off and, as we’ve said before, the companies would be too -- with substantially improved outcomes and alumni networks that could help promote the schools (rather than heavily populating consumer complaint websites like ripoffreport.com).

That being said, we do think it’s noteworthy that two of the founding members of the Coalition for Educational Success -- the giant for-profit higher education companies Education Management Corporation and ITT Educational Services -- have not signed on to the code. As Sen. Dick Durbin (D-IL) said in a prepared statement yesterday, “schools that resist even this modest effort tell us all we need to know about their own practices and records.”

We couldn’t have said it better ourselves.

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