Md. lawmakers look to add for-profit college regulations again this year

State lawmakers hope this year to place new regulations on for-profit colleges operating in Maryland, a third straight year of new regulations for an industry that has seen more favorable regulatory actions from the federal government over the same period.

Legislators have introduced three pieces of legislation regulating for-profit colleges, but some of the state’s schools testified Tuesday that they believe the regulations will hurt good schools instead of weeding out the bad ones.

Also Tuesday, Attorney General Brian Frosh joined 25 other attorneys general in asking U.S. Education Secretary Betsy DeVos to extend debt-relief eligibility for students whose schools closed last year.

The Senate Education, Health and Environmental Affairs Committee Tuesday heard legislation that would require money that veterans receive from the federal government under the GI Bill for college be included in the federal portion of the 90-10 rule. That rule means that only 90 percent of a school’s overall revenue can be funded through federal loans, with the idea that schools would be forced to have “skin in the game,” but grants for veterans and foster children are excluded.

“What this bill is designed to stop is the unfair and abusive targeting of veterans to fill a hole in their federal funding,” Maryland Assistant Attorney General Chris Madaio testified.

Supporters of Senate Bill 294, sponsored by Sen. Arthur Ellis, D-Charles, called the veterans funding’s exclusion from the 90-10 rule a loophole.

But the colleges said it helps thousands of veterans find education that leads to jobs and the colleges could be forced to close if the bill were to pass. The bill prevents students from enrolling in colleges if the colleges fail to meet the 90-10 rule two years in a row or in two out of three years.

Cory Hughes, president of the Lincoln College of Technology’s Columbia campus, said good actors like his school would be hurt because the legislation takes on how schools get their money, not accountability measures.

“Every time that I read the proposed legislation, I look at it and I say it is going after the finances, but it never addresses accountability,” he said. “That’s the issue.”

Under questioning from Sen. Paul Pinsky, D-Prince George’s and the committee’s chair, Hughes said he would accept the inclusion of accountability measures like graduation rates and job placement rates.

The legislation is one of several bills regulating for-profit colleges that have been introduced. If they pass it would be the third consecutive year these types of regulations have passed the General Assembly.

Other proposals this year include a measure requiring schools to report revenue and spending information, and a bill governing how schools close. Both of those bills are sponsored by Pinsky, who has also sponsored past legislation regulating for-profit colleges.

The spurt of for-profit regulations coming out of the Maryland legislature comes as the federal Department of Education, under the guidance of DeVos, is seen as increasingly friendly toward for-profit colleges. Last year, DeVos repealed a rule that required schools to prove that their graduates could find gainful employment in order for students to access federal financial aid.

DeVos has also made attempts to scale back the borrower defense rule that forgives at least some of the debt of students whose college fails.

It is those students that Frosh said he was seeking to help in a letter he signed on to Tuesday.

The letter asks DeVos to discharge federal student loans of all students who were enrolled in schools operated by the nonprofit Dream Center Education Holdings, LLC, all of which are closed. Dream Center went into receivership early last year.

Dream Center enrolled Marylanders in online programs through its Argosy University and Art Institute brands, Frosh’s office said in a release. Frosh did not indicate how many students would be affected.

The attorneys general are asking DeVos to extend total loan forgiveness to all students enrolled in Dream Center schools dating back to Oct. 17, 2017. DeVos has currently applied that standard to students enrolled in 24 schools as of June 39, 2018.