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Is Anyone Minding the Store on For-Profit College Job Placement Rates?

Published:  September 29, 2011

The job placement rates that for-profit colleges report to prospective students and regulators are fundamentally flawed.

The methodology that career colleges use to calculate the rates vary state by state and accreditor by accreditor, making them impossible to compare. And because neither accreditors, state regulators, nor the federal government make a serious effort to verify these rates, they are easily manipulated (see here for some of the most common tricks of the trade).

As Deanne Loonin of the National Consumer Law Center wrote back in 2005, the lack of oversight and enforcement regarding job placement rates “leaves nearly absolute discretion in the hands of schools that have every incentive to inflate the numbers.” As a result, “school officials know that there are unlikely to be consequences for failure to report data or for reporting erroneous or unsubstantiated data.” Unfortunately, little has changed since Loonin’s report, “Making the Numbers Count: Why Proprietary School performance Data Doesn’t Add Up and What Can Be Done About It,” came out.

Currently, the federal government leaves it up to accrediting agencies and states to set the standards that for-profit schools must use to calculate the rates, and to monitor them. The only exception is for extremely short-term job training programs, which must have employment rates of at least 70 percent to remain eligible to participate in the federal student loan program.

Career colleges that are accredited by national agencies are generally required to place at least 70 percent of their graduates into jobs related to their field of study to maintain their accreditation and, therefore, their federal student aid eligibility. [For-profit schools that are accredited by the six regional accreditation agencies do not have to meet such a requirement, although they generally must report their job placement rates to regulatory agencies in the states in which they operate.] But as a National Center on Education Statistics (NCES)  technical review panel that looked into this issue recently found, the methodologies that the different national accrediting agencies require schools to use for calculating these rates “ vary from agency to agency, resulting in placement rates across agencies” that “are incomparable.”

For example, according to a background report that was written for the NCES review panel, the two main national accreditation agencies -- the Accrediting Council for Independent Colleges and Schools (ACICS) and the Accrediting Commission of Career Schools and Colleges of Technology (ACCSC)  -- define the cohort of students that their members are required to track differently. ACCSC requires schools to report placement rates for students who have graduated within 150 percent of the normal completion time. ACICS, on the other hand, requires schools to report placement rates of graduates and program completers (those who took all the classes they needed but, for some reason, didn’t earn a credential) who leave the school during a set period of time (July 1 to June 30 each year) and have a job in their field or a related one by the middle of the following September. “Since both agencies accredit similar types of programs, it would not be possible to compare placement rates of a similar degree or certificate program accredited by ACICS to one accredited by ACCSC,” the background report stated.

Meanwhile, for-profit schools must also report placement rates to the state regulatory agencies that provide oversight over the proprietary schools that operate within their borders. But the methodologies that states require schools to use also vary significantly. “Some states allow institutions to report the same rates as those reported to accreditation agencies, while other states require institutions to follow the state’s methodology for calculating student job placement rates,” the NCES technical review committee reported. “As a result, a school could report two different job placement rates for a single program: a rate calculated for the accreditation agency, and a rate calculated for the state.”

Of course, it makes little difference how the rates are calculated, if schools don’t face any consequences for cheating. Two recent cases show how accreditors and state regulators have been asleep at the switch while abuses have occurred right under their noses.

For instance, ACCSC and the Texas Workforce Commission (TWC) only started to investigate ATI Enterprises after a news team at WFAA-TV in Dallas uncovered evidence that the company’s Texas campuses were engaged a systematic effort to cook the books on their placement rates. Where did the reporters get this evidence? From the TWC. The workforce commission was forced to turn over ATI job placement records to the journalists to comply with an open records law request the news station had filed with the state. The fact that journalists used records from TWC to identify abuses that the commission had missed entirely speaks volumes.

A similar case involves a federal whistleblower lawsuit that is pending in the U.S. District Court for the Southern District of Florida against Kaplan Higher Education. The lawsuit cites numerous records that a Kaplan Career Institute campus in Pittsburgh filed with ACICS to show how the school had manipulated its job placement rates. Why didn’t the ACICS question these practices? Is it possible they didn’t even know what was in their own files?

Clearly, the current system isn’t working, and a new approach is needed to prevent for-profit college companies from continuing to mislead students and regulators about their success in placing graduates into meaningful jobs.

At Higher Ed Watch, we believe that the federal government should develop a single, national standard that for-profit colleges would be required to use when calculating their job placement rates. It would be accompanied by a strict regulatory regime that would monitor schools to ensure that these numbers are not being rigged.

The Education Department recently had the opportunity to move forward with such an effort but appears to have bungled it. We will provide more details on this soon. Stay tuned.

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