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Will a New CEO Offer a Change of Course at For-Profit Colleges? (Hint: Not Likely)

Former Republican Congressman Steve Gunderson has taken the helm of the largest for-profit college association in the US. Will accountability rise on his watch?

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Since former Congressman Steve Gunderson (R-WI) was named in January as the new head of the largest for-profit college association, APSCU, there has been talk that he might take a “ kinder, gentler” approach to leading the troubled industry, which has pursued a take-no-prisoners lobbying approach in Washington. But having read Gunderson’s pronouncements in recent months, and having attended last week an off-the-record small group discussion with him, I’m concerned that what kinder and gentler means is: Currying favor with lobbyists for traditional non-profit and public colleges, but not yielding an inch to the interests of  taxpayers who have been fleeced and students who have had their lives ruined by bad actors in his industry.

For-profit colleges, many marked by deceptive recruiting, low-quality programs, and sky-high prices, have 13 percent of U.S. students but nearly 50 percent of student loan defaults. Recent data show that four-year students at for-profit colleges graduate less than half as often as other students. The for-profit college industry gets most of its $30 billion-plus annual revenue from federal financial aid; many for-profit schools obtain 90 percent of their income through federal student grants and loans. They use a good chunk of this money to lobby Congress and provide campaign contributions to Members with the aim of avoiding accountability for their destructive subprime programs.

Instead of using his stature to lead his industry to a more responsible place, Gunderson appears only to be pursuing a strategic alliance with traditional colleges to avoid accountability measures. This is consistent with the pre-Gunderson APSCU strategy, apparently urged by House Republicans, described in a 2011 internal APSCU draft memo first disclosed by Republic Report. That memo stated that, “as directed by House Republican leadership,” APSCU would stress, in lobbying for a bill to overturn standards on credit hours and state government oversight, that traditional colleges agreed with their position.  That bill did pass the House, with every GOP vote a yes, in February after Gunderson took the helm at APSCU.

Gunderson told the Chronicle of Higher Education, “You will never hear me or other APSCU officials criticize any of my colleagues in higher education…. I’m going to change this culture. We’ve got to be seen as partners and allies.” In turn, Terry Hartle, chief lobbyist for the higher ed group the American Council on Education (ACE), said, “Steve Gunderson is thoughtful, experienced and highly respected and will be a great asset for APSCU….  Steve’s career … has given him a great deal of experience in building bridges and sustaining coalitions. That’s an excellent background for his new post.” Gunderson reports that he has applied for APSCU to rejoin ACE, which it quit several years ago after being excluded from key councils.

It’s great that everyone’s getting along. But what about a more reasonable approach from the for-profits — acceptance of the fact that their industry is basically a federal program, and, accordingly, acceptance of federal policies that would reduce waste, fraud, and abuse by rewarding schools that actually help students learn and get jobs, and penalizing schools that systematically fail to help their students?

There, apparently, Gunderson can’t help us. In a recent op-ed, he maintained the APSCU hard line in attacking a key reform pursued by President Obama – the sensible “gainful employment” rule that would cut off financial aid to programs that, year after year, leave the vast majority of their students with insurmountable debt. Repeating meaningless slogans from last year’s industry barrage, Gunderson wrote that the rule “establishes a one-size-fits-all approach for deciding which institutions will be eligible for federal student aid and in the process limits the options of nontraditional students seeking skills and training for the purpose of securing employment.” Even though intense lobbying by the industry weakened the final measure significantly, APSCU filed a lawsuit to block the rule almost as soon as it was issued. There’s no sign that Gunderson wants to withdraw that complaint. Gunderson has said he wants to revise APSCU’s voluntary code of conduct for members. He didn’t say exactly how, but he did make clear why: “Self-regulation can prevent government regulation.”