Md. for-profit school rules advance after provisions stripped out

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Legislation regulating for-profit colleges in Maryland has passed both chambers of the General Assembly, but with amendments that supporters say gut the heart of one of the bills.

One bill would require schools to make disclosures about student outcomes, and the other would define what is a for-profit college and what is a nonprofit college. Both bills are sponsored by Sen. Paul Pinsky, D-Prince Georges, and Del. Shelly Hettleman, D-Baltimore County.

But one provision of the disclosure bill that would have required schools to receive less of their funding from the federal government was amended out of the legislation.

“The heart of that bill was the 85/15 rule,” said Jen Diamond, policy associate with the Maryland Consumer Rights Coalition. “The intention of the bill was to make sure that the government wasn’t propping up failing schools that were harming students.”

With the passage of the disclosure bill in the House of Delegates on second reader Thursday, all of the bills have received either approval or preliminary approval from their respective chambers. They would still need to be passed by the opposite chamber.

The bill defining what is a for-profit college and what is a nonprofit college passed unanimously in both chambers.

But the bill requiring disclosures has faced a more difficult path. It builds on disclosures schools are required to make to prospective students that the legislature mandated last year.

New disclosures this year include requirements that schools say how many students are employed after graduation and their average salary. Schools that advertise a program that would help students get a state-regulated license would also have to disclose whether their courses meet the requirement for a Maryland license.

In bill hearings, Maryland’s for-profit colleges said they had no problem with the disclosure requirements.

“We have no issues with the initial portion of the bill, which is disclosures,” Cyndie Shadow, president of Fortis College’s Landover campus, told the House Appropriations Committee last month. “We are more than happy to disclose any and all information related to programs which our potential students and current students are taking. In fact, we prefer they have more information rather than less.”

But the schools did take issue with the significant portion of the bill, which would have required schools to get 85 percent or less of their funding from the federal government, mainly federal student loans. Currently, schools can have no more than 90 percent of their funding through federal government funding.

Supporters believe that would require schools to have more “skin in the game.”

But the provision’s advocates will likely have to come back next year if they want to make progress on making that rule state law.

“This looks like a bill that will take some time,” Diamond said.

It is unclear how many for-profit schools in Maryland the legislation would have affected anyway. Only schools headquartered in the state can be regulated through state law because of State Authorized Reciprocity Agreements, or SARAs.

And for schools in Maryland, the legislation would have applied the 85/15 rule only to schools with more than $10 million in revenue. That would likely be five schools in the state.