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 AACC Statement on Department of Education Regulation on "Gainful Employment" 

7/27/2010

In commenting on the July 23 Department of Education proposed rule on gainful employment, George R. Boggs, president and CEO of the American Association of Community Colleges (AACC), said that "AACC regrets that the systematic exploitation of college students by for-profit institutions, sinking them ever deeper into debts that often cannot be repaid, have led the Department to promulgate this regulation. Put simply, hundreds of thousands of low-income students at for-profit institutions are borrowing huge sums of money that flow directly into investors' pockets."

Boggs added, "The large amount of debt being taken on by low-income students to attend profit-driven colleges represents failed public policy, particularly at a time when community colleges across the country are suffering from sharp budget reductions and public funding might be more effectively targeted." Boggs noted that community colleges will be greatly impacted by the proposed regulation because of the numerous career and technical programs that they offer.

According to Department of Education statistics (NPSAS, 2007), just 10 percent of all community college students incur debt to finance their educations, compared to 88 percent of for-profit students. The same data show that 62 percent of all community college associate degree recipients borrow nothing in obtaining these degrees, while 42 percent of students getting degrees from profit-driven schools have $20,000 or more in student loans—coupled with higher default rates than community college students.

Last fall, the average community college tuition was $2,544; the average for-profit college charged $14,174. A substantial portion of that difference comprises corporate profits and the advertising expenditures that drive them.

Boggs added, that "Although the full implications of the regulation are not clear, AACC will attempt to balance the mission of community colleges and the students they serve against the need for the federal government to ensure that its funds are being spent effectively."

Contact Information

David Baime
Senior Vice President, Government Relations & Research
Phone: 202-728-0200 x224
Email: dbaime@aacc.nche.edu

Norma G. Kent
Senior Vice President, Communications & Advancement
Phone: 202-728-0200 x209
Email: nkent@aacc.nche.edu

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