DC Shuttle: Bill Would Make Sure Student Aid Funds Aren’t Spent on Marketing

Senate Health, Education, Labor and Pensions (HELP) Committee Chair Tom Harkin (D-IA) is sponsoring legislation to prevent colleges from using federal student aid revenue, including Post 9/11 GI Bill benefits, to fund marketing activities. Sen. Kay Hagan (D-NC), who is also sponsoring the not yet introduced bill, said that it would “protect taxpayers’ investment of billions of dollars in student financial aid by ensuring that it is used to help students succeed in college, not out-of-control advertising, marketing and recruitment budgets.” While the legislation would apply to all colleges and universities receiving federal student aid, it is largely perceived to be targeted at for-profit universities. Sen. Harkin cited a HELP Committee report showing that marketing expenses at 15 of the largest for-profit higher education companies made up an average of 23% of their budgets, compared with an average of 0.5% for nonprofit institutions. In some cases, for-profit colleges spent significantly more per-student on recruitment than on instruction. The industry group called the Association of Private Sector Colleges and Universities argued that for-profit colleges need larger recruitment budgets because the nontraditional students they serve are more difficult to attract than traditional, college-bound high school graduates. Democrats and particularly Republicans in the House have responded to HELP Committee attempts to increase regulation of for-profit colleges with skepticism and concern over the potential loss of educational opportunity for the nontraditional students attending their programs.

On Tuesday, the House Education and Workforce Committee discussed the proposed (H.R. 4297) to reauthorize the Workforce Investment Act (WIA), which expired in 2003. Ranking Member George Miller (D-CA) expressed concerns that the bill’s plan to consolidate 27 current programs into a single funding stream could disadvantage underserved populations which were specifically targeted under the individual programs. The legislation would also allow governors to consolidate additional programs if they hold to certain performance measures to judge the success of the resulting programs. Rep. Virginia Foxx (R-NC), one of the bill’s sponsors, countered that five of the programs in question have either never been funded or haven’t been funded for several years, and an additional seven are targeted for consolidation under the House Democrats’ version of the legislation (H.R. 4227). Bill supporters cited a 2011 Government Accountability Office report which found that 44 of WIA’s 47 current programs overlap with each other in some way, and argued that this duplication wastes money and causes confusion for job training program applicants. Committee member John Tierney (D-MA), a sponsor of the Democrats’ bill, said that despite continuing disagreement, he believes the committee members will find sufficient common ground to move forward with a bipartisan proposal. He said that he expects the panel to take up the bill for a vote as soon as this week.

On Thursday, President Obama announced the release of his blueprint for reauthorizing the 2006 Perkins Career and Technical Education Act (CTE), which expires at the end of this year. The $1 billion proposal would align CTE training programs with the skills needed for in-demand occupations in high-growth industries, implement performance measures for the programs, and encourage collaboration with high schools, colleges and employers to improve CTE programs through competitive grants. Senate HELP Committee Chair Harkin and Sen. Patty Murray (D-WA) have both introduced legislation to tailor students’ skills to those in demand in the workplace (S. 2252, S. 830, respectively), and both applauded the administration’s proposal.

As a member of New England Council, we publish the DC Shuttle each week featuring higher ed news from Washington. This edition is drawn from the Council’s Weekly Washington Report Higher Education Update, of April 23, 2012.

Founded in 1925, the New England Council is a nonpartisan alliance of businesses, academic and health institutions, and public and private organizations throughout New England formed to promote economic growth and a high quality of life in the New England region. The Council’s mission is to identify and support federal public policies and articulate the voice of its membership regionally and nationally on important issues facing New England. For more information, please visit: www.newenglandcouncil.com.


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