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September 8, 2010
The Honorable Ame Duncan
Secretary, U.S. Department of Education
400 Maryland Ave S\N, Room 7W311
Washington, DC 20202
Dear Secretary Duncan,
I would like to share my ooncems with the proposed "Gainful Employment"
rules and also offer an alternative strategy. Your consideration of these
recommendations Is appredated. We will also offer a formal response to the
proposed rule that will further articulate our concerns as well as elaborate on
our recommendations.
For 80 years, OeVry has been a leader in private-sector education. We have
developed a strong reputation by focusing on developing quality programs,
managing our institutions and the public trust with accountability and integrity,
and maintaining a commitment of SefVioe to our students. We support your
efforts to Improve academic outcomes in higher education as 'Well as in
elementary and secondary education, as exemplified by our CeVry University
Advantage Academy, a partnership with public school districts In Chicago and
Columbus.
We understand that the objectives of the proposed rules are to control for
three concerns:
A disproportionate amount of debt taken on by students to complete
their program of study as compared to their economic expectations as
graduates, Including expected earnings and employment opportunities;
A misalignment of the economic expectations of new Institutional
owners compared to the educational and career expectations of that
institution's students; and
Inappropriately aggressive marketing practices and misrepresentation
of programs or institutions to prospective students.
We have a long history of working with the Department to effect positive
change to the benefit of students and taxpayers. We continue to seek to do
so. With changes along tha lines of the following six simple recommendations,
we are in support of the Department's proposed rule.
DeVry's former Chairman and CEO, Dennis Keller, liked to start these sorts of
communications with the recommendation first, and follow that with the
rationale and commentary. Since that has served us well in the past, I will offer
you the same approach.
Recommendations
1. Use 3-year cohort default rates (at the program level) instead of
the proposed repayment rate, and use BLS data for the debt-
service rate.
DeVry has a number of concems with the proposed repayment rate,
many of which mirror some of the public comments you have received
so far. Some of our larger concems are discussed In the second
section of this letter.
As an alternative, the 3-year default rate has already been legislated
as a means to address the possibility of "manipulation" of default rates
through the use of deferments and forbearances. We recommend
using the established 30% rate at a programmatic level to identify
programs fhat need fixing.
As noted in the second section of this letter, we aJso have concerns
with using actual earnings data, the periods in which earnings data
would be captured and the lack of a known process for capturing those
earnings. Also concerning is the lack of transparency into the earnings
calculation. As an alternative, we recommend that BLS data be used
lnltiaUy for the debt-service calculatJon. It Is knowable Information, It
can be mapped to specific occupations <r1d does not penalize a school
for teJ'Yl)Orary decreases In earnings that may result from parental,
medical or other leaves of absences that aU families experience from
time-to-time.
2. Regulate degree and n o n ~ r e e programs differently by using
metrics that are censlstent with the level of education and the
long-term value of that education.
DeVry schools offer programs of study at all levels of higher education
-from undergraduate certificate programs to graduate end
professional degree programs. We note that there are signlftcant
differences among these students in terms of their expectations for
their education, thetr need for support servloes. lnduding their need for
financial assistance and their understandtng of the lrrc>llcatlons of
using debt. and their vision of heM' their education will impact their
careers. Measurements ofgainful employmenr should correlate
meaningfully to the student attributes and expectations that are
predominant at each of the various levels of education.
We recommend that the default and debt-&ervlce metrics be used for
non-degree undergraduate certmcate programs, but not for degree
programs, whiCh are better assessed by a test of employment after
graduation.
Throughout the Title IV statute end regulations, there are precedents
for variances in how eligibility, student and Institutional performance
are measured according to program level and student status. For
example. academic progress is measured differently for students
enrolled In clock hour v. credit hour programs and even differently for
students enrolled in standard-term v. nonstandard-term credit hour
programs. We recommend you extend thjs measuring
whether a program successfully prepares a student for gainful
employment differently for dffferent levels of programs.
Department of labor data shows that the expected earnings for
graduates with only an undergraduate certificate will be just slightly
higher than earnings for someone with only a high school diploma. rt'/e
note. of course, that there are other benefits to the certificate graduate.
such as lower unemployment rates and better employment benefits.)
This earnings data is summarized in the chart below.
$50,000 . Previous wilges (Light color}
Current wages (Dark color)
$40,000 - $31.782
. $2t.224
S3o,ooo " $2s,tsa
!
szo.ooo 1
SlO,OOO l ., .
so 1....---
(Control} No
Degree,
Considered School
(n-:208)
Certificate
(n=159}
Associate's
(n=67}
Bachelor's
(n=37l)
This study was conducted by The Group from one institution's prospective
student pool from 2003. Tha study shows the change in esmings from 20()3 to 2010 by
tevel of program altainment.
Thus, we believe it reasonable to control unaffordable debt and
unqualified enrollment in non-degree progrems through metrics such
as those proposed by the Department.
However, expected earnings begin to substantially Increase with
degree attainment, and thus the proposed GE metrics become less
functional as a measure of gainful employment. The return on almost
all degrees is substantial, and that return must be measured over Ule
long period for which an Individual's investment in a degree is
appropriately amortized. Put differently, unlike a student's investment
in a certificate course of study, which Is generally amortized over a
relatively few number of years, a student's Investment in a degree
program Is generally amortized over the lifetime of that Individual's
career. As sucll, near-term measurement of earnings as it relates to
the debt taken on to obtain Ulat degree is inappropriate.
Alternatively, In order to assess degree programs, we recommend
measurement of how wen graduates of those programs obtain
employment In their lleld of study. Specifically, we recommend that a
standard 1/l<e that used by the Accrediting Council for Independent
Collegfis and Schoofs (ACICSJ be used as the test of whether an
undergraduate associate or baccalaureate degt'98 program meets the
"gainfuf employment requirement.
Further, we recommend that graduate oerliDcate and degt'98 programs
not be subjected to new tests- such programs simply do not lend
themselves to a Ga/rtu/ Employment" type of metric. Alternatively, the
Higher EducaUOn Opportunity Act (HEOA) included new requirements
tor surveying emplOyment outcomes of graduates and disclosing this to
prospective students. And we believe disclosure or this Information Is
an appropriate step at this level, as graduate students themselves are
typically the best judge of whether a program supports their
employment objectives.
Please note Ulat the DeVry ramily or institutions includes Ulose at every
teval, trom doctoral to certificates. We are proposing regulations that
would impact ell of our scllools and programs. Some ot our certificate
programs may need to show improvement based on these standards
and we are committed to achieving such improvements.
In summary, we recommend Ule tollowing standards as tests tor the
"gainful employment" requirement:
Program Level Debt .. ei'VIce-to- BLS Percemlle
'inceme thntshold
Certincats 8% 25"'
Msoc:iate & 60% of graduates employ$d in lleir field of
Baccalaureate Oearees s1udv
Graduate Certificates & Di&dosure of posillon titleS and employers r:J
Degree aradua!es
3. Failure to hit minimum thresholds ahould result In requirement to
develop specific Improvement plans, not Immediate program
tennfnatJon.
Failure to hit minimum thresholds shoUld trigger actions designed to
enable the institution to improve. The objecllve should be to drive
improved performance and to Increase capacity at that improved
performance level- rot simply to cut off the weaker performers without
the opportunlly for cure, which Is akin to ejecting a player after their
first foul. Only those programs that show no ability to improve
performance should be ultimately subject to the Secretary's limitation,
suspension and termination authority. This approach is, of course,
consistent with the Departmenrs historical practices -when an
institution faits to meet either the Cohort Default Rate, the 90/10 or the
financial responsibility thresholds, the institution is given an opportunity
at remediation before the program or Institution is terminated from
participation in Title IV.
4. Continue work on repayment rate and use of ac:tual eamlngs in
the debt-service rate. We like these metrics at the conceptual level.
With development, testing and refinement, we beUeve they have the
potential to be more reflective than the current CDR mebics of actual
performance and risk associated with the programs. But, they are not
yet ready for use. They have not been clearty defined or scoped. They
are not transparent In their impact, or capable of being monitored by
schools on an ongoing basis. As currently drafted, almost one-half of
all colleges would fail to meet the first threshold (45%) for the
repayment rate, includlflg many well-regarded Institutions.
We recommend that you defer implementation of these rates, and
assign them to either a special task force or a focused negotiated
rulemaklng to develop them k) e point that they could serve as the
basis for a regutatory regime that would hold all institutions
acooun1able for the programs and services they deliver. We would be
eager to wolt( with the Department in that regard.
5. Limit growth for lnstltutfons with new, unqualified ownership.
New institutions are prohibited from participating In Title IV programs
until they have been established and operating for at least two years. A
similar restriction couki be imposed on institutions with a change of
control that results In control vested in a person or organization that
does not heve previOus experience in Title IV administration. We
recommend Title IV assistance be capped at pre-change levels for a
per1od of two years, and until a postchange program review has been
completed by the Department to assure that no substantial change in
mission or educational outcomes has occurred pursuant to the change.
We believe these proposals would serve to mUfgale potential
misalignment of the Interests Of new Institutional owners and the
educational and career expectations of that lnstitutfon's students.
6. Move forward with the new, tougher standard on
"mirepresentatJon" and Increased enforcement ac:tlon. We
agree with the proposed rule oonceming misrepresentation of
programs. AOO we applaud the recent announcement of
levels of enforcement. Together. we believe these actions wilt address
the Oepartmenrs concerns regarding misrepresentation, Including
inappropriately aggressive mar1<eting to prospective students.
Concerns with the current proposal
DeVry has a number of significant concerns with the Gainful Employment
proposal, most of whiCh are related to the indeterminable impact of the
proposed rule or the unknown methodologies used in determining the
published and proposed rates. The following represent our most significant
concerns and where we think the rrost egregious lapses have occurred in the
proposal's development:
a. Repayment Rate
The development of the repayment rate was done outside of the
negotiated rulemaklng process. As such it was lacking in the
transparency and breadth of contributions that helps assure relevancy
and quality. Despite the conference call held with the
community and the subsequent publication of a question and answer
document. there is still too much unknown about the rate and too many
unanswered questions as to what populations are Included or
excluded. According to an analysis by Dr. John Guryan of
Northwestern University, at least 300,000 new students each year
enroll in programs that would be elimina1ed or restricted based on the
proposed rules. The implementation of a requirement with unknown
Implications presents too hfgh of a risk to hundreds of thousands of
students, many of whom have few or no other options.
The repayment rate thresholds are completely arbitrary, and appear to
lack an ob]fJctive basis tied to the Department's objectives. There is no
statistical connection to the thresholds to establish any linkage to
program or institutional quality. In fact, the mean repayment rate for aM
schools is 48%, with a standard deviaUon of 24 percentage points. This
would indicate that there is no statistically significant difference in the
qualily of programs (as it relates to repayment rate) among almost all
Institutions. It would Indicate that variances in performance are as likely
to be due to student annbutes and risk factors as institutional or
program quality. Establishment of punitive thresholds within a single
standard deviation of the mean is contrary to the fundamental tenets of
continuous Improvement. It is not a good test of quality when almost
onehalf of the colleges fail to meet the expected performance level.
The overwhelming majority of minority-serving institutions and
community colleges, as well as many urban public and independent
colleges and universities. fail to meet the 45% threshoki. As such, the
proposed regulatory regime would invariably tamt these high-quality
institutions, right alongside a range of high-quality proprietary
providers. The chart below illustrates the unintended consequences of
this arbitrary methodology, as many long-established, well-regarded
institutions have low repayment rates, induding Spelman, Roosevelt
and North Carolina Wesleyan.
The proposed definition of repayment" ignores students who are
repaying. It also penalizes schools for debt incurred at a previous
institution. The proposed rule too narrowly limits the definition of
borrowers in repayment to just those whose outstanding principal
balance is reduced in a given year. This omits a number of borrowers
whose loans are in good standing and many of whom are current in
their payment obligations. Last year, you and the President lauded new
loan repayment plans that harped borrowers be responsible In
repayment, but at the same time reduce the stress or repayment -
especially during this economic crisis. These plans, income-based or
graduated repayment, require reduced payments in earty years and
typically etld up with the borrower accruing unpaid interest in those
years, resulting in an increase in the prindpal amount owed. Borrowers
opting for thase plans and maintaining a good record of repayment do
not count in the proposed repayment rate methodology as repayi ng
their loans. These plans are especially attractive to students who want
to consol idate loans from m.tlti ple lenders, loans from both the FFEL
and Direct Loan programs. and loans that were received in
undergraduate as well as graduate programs.
Additionally, borrowers who retum to school and receive deferments
on unsubsidized loans will see interest accrue while they are back in
school. This accrued interest ends up being capitalized and added to
the outstanding prtndpal when they retum to repayment. The result is
that, even though the borrower is current on their payment obligations,
there has been an Increase in principal balance and their loans fall to
meet the requirements to be considered in the repayment calculation.
All of these situations apply heavily to DeVry students, and as a result.
have a punitive impact on the repayment rate of DeVry schools. 35%
of OeVry University and Chambertain College of Nursing
undergraduate students enroll with debt Incurred from prior schools.
Last year, the average debt from prior enrollments for these students
was almost $14,000. And, of course, the issue is greater at tfle
graduate schoot level. Almost 75% of DeVry University graduate
students have prior debt with this debt averaging more than $33,000.
When these students leave DeVry, the combined debt from the
multiple enrollments will innuence many of these bonowers to opt for a
repayment plan that may result in a negative amortization in the early
years. Further. fhe p r o p o ~ l for fM debt-seNice rate recognized the
unfairness of Including prior debt in fhaf calculation, but there is no
such exclusion In the repayment rate propooal- there should be.
b. Debt-Service Rate
The Depattment proposes a single debt-service rate (or range) to
apply to all programs, regardless of level or duration. But one size
does not fit all. Much of the Department's rationale is based on the
study of Sandy Baum and Saul Schwartz. However, Baum and
Schwartz specifically criUcize the use of such a blanket threshold,
asserting that there is a greater capadty to afford higher debt levels as
(expected) earnings Increase. This is consistent with the eamlngs
growth rates that are realiZed with Increased education. Many studies,
induding Department of Labor research, have established that there Is
a correlation between earnings growth and education level - the higher
the education level. the htgher the earnings growth rate. It is then
inconsistent with this research to assign the same debt-service
thresholds to all levels of education. It is entirely appropriate and
consistent with the research in this area to establish different forms of
measure and different standards for higher level programs.
Thank you for your consideration of my comments and proposals. I would be
delighted to discuss these matters. and will make myself and my team
available at your convenienoe. OeVry stands ready to work with the
Department and is committed to assuring accountabieity and integrity In the
TiUe IV programs.
Sincerely,
y a J ~
Daniel Hamburger
President and CEO
DeVry Inc.
9/26/2010
(b)(6)
Mr. David Pauldine, President
Devryl Inc.
3005 Highland Parkway
Downers Grove, IL 60515-5799
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Re: Conunents by Harris Miller, APSCU CEO, to the Atlanta Journal-constitution
Dear Mr. Pauldine:
As much as I consider DeVry the only McUniversity that I 'WOuld pay money to attend, some comments
by Mr. Harris in Dtfaulq llffDIICt Atlanta Journal-constitution Sept. 26. 2010 are most
unhelpful and serve to clarify the need to do something about the bounty of crooked for-profit schools.
be able as a grown-up to decide to. enroll. The Departmc:nt of Education thlnks
best- better even than well infonned consumer." As a taxpayer, my view is that if a
.
has his or her own money to pay for training he/she may enroll in any school he/she
chooses .. to attend. I can not make an agenda of people
1
s decision when they spend their own money .
.. .. . ... '
' . .
However, if that individual intends to spend my money for an education I demand that the Department
of Education insist that the individual receive a meaningful and gainful education- enough for the
graduate to enjoy employment and return of my money to the US Treasury. This point is not negotiable.
I do not want to hear' anything about the color or ineptitude of the student body, because lf1Iie
organizations have a long and proud history of running to any minority concentrated poverty abatement
government initiative to set up fronts, frauds, surrogates, and button men to rip off the initiative.
Invariably, the minorities are left in debt, with a criminal record, ruined reputation, and even more
poverty. if you do not believe this Google "HUB Zone Abuses,'' "Empowerment Zone fraud." Hope
VI fraud," and "student loan abuses." You will see why taxpayers are sick and tired of your industry.
Perception is reality. Fact is that the for profit education industry has a more squalid reputation than a
skunk in attendance at the queen's candle light dinner party. We have images of industry boiler room
recruiting process enrolling criminals, who could not get a j ob with four Ph. Ds. We have footage of
industry lying to innocent working class people, trying to educate their way out of poverty. We have
footage of industry employees slamming doors on reporters, when the fonner could not explain abusive
acts. We have footage of enrollment officers helping unqualified applicants to lie about the latter's
eligibility to get a student loan- all in the name of getting these people
1
s government ftm.ded tuition.
Goverrunent should not butt out, and I will work in the political process to terminate any government
that fails to crack down on fur-profit schools and force them into a place where they are part of the
solution and not part of the problem. Mr. Harris should not be deluded.
MI. Hanis is speaking as if government money is free money and government is like a spo'iling
interloper who has come to disinfect this economic cesspool and spoil the stinking fm. WelJ, he should
be clear that the boom bas come to town and is coming down on McSchools where his mentality
pervasive administrative currency.
I must admit that all these schoo]s are not lik.e American InterContinental University. DeVry is a
shining example, with a long record of training people successfully and ethically and then putting them
to work making good money and making a real difference in their respective industries .. So, I am not
against for-profit schools per se. I am against the red light district reputation of the industry, and its
view that the US Treasury is a plantation to be raped, plundered and burned.
Mr. Harris continued, "You could have hundreds of thousands of thousands of students no longer
longer given the opportunity of enrolling in these programs." What he is weeping about is that his
industry's abuses will be stopped. This bleeding heart notion has nothing to do with the academic
success of poor people- he already said tky are black and overworked, meaning that low expectations
are justified. It is about his for-profit heart breaking, at the prospect that business as usual in his
industry will fmally come to a day of reckoning.
Fact is 1hat the national return on investment (ROI) is not there for this $30 billion industry. 88% of
these students borrow from the government. They borrow twice as much as govenunent school and non
profit school students. They default twice as often. A Phoenix degree boost the graduates income an
anemic 9%, and at the end of fifteen years a full 30%, or twice as much as the and
government school students, will default. In some countries people like MI. Harris would be sent to a
labor camp in a place like or Alaska for these kinds of metrics.
Mr. Hams shows a proverbially worst weakness of an incompetent or dishonest producer, who is not
committed to positive changes, quality assurance, and imitating great they blame the raw
material; his students, he cites, are minorities (read stupid) and have mortgages and juggling families. It
is quite foolish to make these claims because the majority of the graduate degrees, in this country, are
awarded to women with children, husband, jobs, and community participation. So, the rotten apple
inventory is purely and excuse to continue robbing the taxpayers blind.
Sincerely, /"'\
(b)(6)

cc: Robert Herzog, Treasurer Harrison College
Harris Miller, CEO, APSCU
Arne Duncan, Secretary of Education, United States Of America
Steven J. Tober, CEO, AmericanlnterContinental University
David J Kaufman, JD, Board Vice Chair, Duane Morris, LLP
Catoe, Tracy
From:
Sent:
To:
Catoe, Tracy on behalf of Duncan, Arne
Thursday. September 09, 2010 8:25AM
'Rebecca Campoverde'
Subject: RE: KAPLAN LETTER TO SECRETARY DUNCAN
t>eor Ms. Campoverde:
Thank you for your e-mail to Secretary of Education Arne Duncan. We appreciate hearing from you.
Your message has been forwarded to the appropriate staff member for review.
Thank you again for contacting us.
Sincerely,
T. Tracy Catoe
Deputy Director, Correspondence and
communications Control Unit
Office of the Secretary
U.S. Departmel'lt of Education
Washington, DC 20202
From: Rebecca Campoverde (mailto:Rebecx:a.campoverde@kaplao.com]
Sent: Wednesday, September 08, 2010 8: 10 PM
To: Duncan, Arne
Cc: Miller, Tony; Yale, Matt; 'Stephanie.Fine@ed.gov'
Subject: KAPlAN LETTER TO SECRETARY DUNCAN
Mr. Secretary,
Attached please find a letter from Andy Rosen, Chairman and CED of Kaplan, Inc. The Jetter is also being flied separately
as a comment to the Gainful Employment NPRM, but Andy wants to be sure that it first be sent directly to you with a
copy to Sec. Miller.
Rebecca Campoverde
Vice Government Relations
Kaplan, Inc.
202-334-6684 (0)
703-629-8532 (C)

Thi' transmi,ion may contain infonnation that is privileged, confidential and exempt from disclosure under applicable law. If you
receive thi' transmission in error. do not read, use or copy it. Please immediately contact the sender and destroy the material in its
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1
ANDREWS. ROSEN
CMirmMMICEO
_ ....... c.
September 8, 2010
The Honorable Arne Duncan
SecreWy of Education

400 Maryland Avenue, SW
Washinaton. DC 202020008
Re: Docket Number E0.201
Dear Mr. Secre1ary:
Readeni of recent news reports and cuual observers might conclude that private sector
("for-profit") coDeges and the federal government arc adversaries. with different views
about tbe needs of om students. I believe the cootrary is true.
I write to you from the point of view of someone who shares your dedication to
expanding access to high-quality education. I believe there are far more similarities in ow
goals than points of contention. Neither of us wants to see students take on debt they wiD
have difficulty discharging, nor taxpayers bearing undue burden. We both want to
provide acc.css to u.Dderserved students, especially low-income working adults who may
have been left behind by traditional post-secondazy institutions. We both believe deeply
that all students deserve consistent access to educational excellence. And we both
recognize the value that competition can oontitme to play in crcatina a world .class higher
education system. None of us claim to have all of the answers, but 1 think we both see
how new leamina approaches and innovation strengthen our country's education system.
Kaplan Higher Education has graduated more than a quarter-million students over the
pe!t ten years, and I'm consistently moved when I see at our graduations the pride and
sense of accomplishment in ow students' faces. Frequeatly the voices of celebration in
the audience are those of our graduates' children. whc look upon their parents as role
models for the proposition that bard work and study really matter. Our araduates- often
from limited means - have taken their place as important contributors to the American
story.
Kaplan' s roots as an education company go back more lhan 70 years. from the
beginning, our focus has been on expandiDi access to education. Stanley Kaplan, our
companys founder, enabled immigrant families to pin entrance into competitive
colleaes by demonstrating merit on standardized tests. 1bat mission is no less central to
6:f0l Klplln Unlvtrtlty Awnut. foft Lauderdale, FL :J:Jl09
Kaplan today. Our entry into post-secondary education ten years ago was based on
serving non-traditional students who found traditional college pathways poorly suited to
their needs. Over 60 percent of our post-5ccondary students are low-income. Many are
the first in their families to pursue a college education.
I am writing this letter because of the recent Notice of Proposed Rulemaking of "Gainful
Employment'' rules. While I applaud the efforts of the Administration and the
Department of Education to improve higher education standards and I welcome the
Department's oversight, I am confident there are better ways of accomplishing the
Deputmcnt's goals.
There has been a lot of talk about good actors" and "bad actors" in for-profit education,
without a clear definition of what those rcfetences mean. What this talk frequently fails to
consider is the fact that di verst student populations exist among institutions. In the non-
profit world. what might constitute excellence on certain metrics at Chicago State
University, for example, might be tar below expectations at DePaul University or
Nortbwestem University. This differentiation holds true at for-pofit institutions as well
I wll/4 saggnt tlull 11 "good tJc/Qrn is one tlr11t conslstelltly delivers RIWIN metrlcs
WMII collfiHI.nd to ilutitutltJM with simllcr stlldat popllltltions. Institutions whose
students average fewer than two of the Department's "risk

should be compaml
to other ''low risktt institutions; those with students averaging between two and four of
the "risk factors'' with other "mediwn risk" institutions; and those with more than four
with a "high risk" cohort. Within these cohorts, this oommon yardstick would distinguish
amona those institutions 1hat are setVini their sndents well and those 1hat are coming up
short. Comparisons within cohorts on a range ofmetrics- graduation, placement, default.
income cbqe, eu;, - would be appropriate.
I \Wuld, argue that all institutions, regardless of tax statui, should be compared by cohort
on these same mctrics. After all, to the extent the goal of regulation is to protect students.
it should not matter whether an institution is non. profit or for-profit. Even so, to the
extent the political environment dictates 1hat you only on for-profits, at least the
determination of whether the institution is a "good'' or "bad" actor should take in10
atCOUnt how that institution performs relative to all providers serving similar populations.
I wolll4further s11gpst thllt 11 "good lldfJr" u one tlult tlull stlldmu h11ve a
ilifonMd 11ntkrsltlndlng of the progl'tl bfst114y they re undntiiJing-
among other things, cost, anticipated debt burden, and likely outcomes- and an
opportunity to knowingly agree to those expectations. At Kaplan Higher Education,
are absolutely committed to furthering these goals, and we have recently taken significant
steps to reduce the chances of any individuals violating that commitment. I would
welcome the opportunity to discuss these steps with you or members of your staff.
1
lbe I>epartmeats Nationa.l Center for EduC.U011 (NCES) defines a stu<ieat u having
fourcr of me followma !IICtOrS: (l)delaycd enroUmont, (3) ftnauti&l
inclepcndcncc, (4) having dependents other than spouse, (S) working full-lime while enrolled, (6) liCking
a high school diploma, and (7) smaJe parenthood.
Kaplan's goal, however, is to go even further by making an introductory portion of our
program "risk free" to our students. That is, we want to enable any students wbo choose
to enroll in our programs to bave a multi-week period, depending on the length of their
program, in which they can assess whether the program is right for them. If they deeidc
for any IQSOn it is not, we will refund all tuition payments to the student or to the
Department of Education. This approach, assuming it meets with regulatory IUld other
approvals (and we invite your office's help to ensure that it does), will not only let
students get a real experience with our courses before incurring any expenses or future
debt, but will diminish IUlY motivation to students into programs. While this
approach will be expensive for us to implement, it will help us meet our goal of ensuring
that every one of our students is in class bccawe he or she is committed to being there
after fully understanding the commitment he or she is making. At the same time, it will
serve as an important protection for taxpayers.
I believe these are more appropriate ways to discern the diffenmce between "good" and
"bad,. actors thiUl the proposed Gainful Employment (GE) regulation, which serves
primarily to punish institutions that have taken on the task of serving high-risk
populations. Private sector institutions would be pushed by this regulation to seek to
serve the same more-affluent student populations that are already wellserved in the
marketplace, rather than the more needy students who can most benefit from our help.
Kaplan Higher Education will submit its fonnal Comments to the July 26; 2010 Notice of
Proposed Rulemaking, and I refer you to those Comma1U. However, 1 wish to make the
following brief comments 11bout the reasons we think the proposed Gainful Employment
regulation will lead to unintended and unwanted consequences:
GE will dramatleaft1 reduce educational options for lowmwme 1tudents.
The correlation between violations of the GE standards and low-income student
population is very high, suggesting on its 18ce that the proposed regulation serves
less to distinguish between good IUld bad actors, and more to distinguish between
those who welcome under-served students and those who do not.
GE wW result ill slplfieaatly lliglaer eo1tt for tupayen. Several recent studies
have concluded that for-profit education is the most tax-efficient of all sectors of
higher education. Public institutions reQeive between 90% (at two-year
instituooris) IUld 5900.4 (four-year institutionsr mon in combined federal, state
and local taxpayer support per student than do for-profit institutions. Any attempt
to shift students .from private sector to public institutions will require dramatically
higher taxpayer contributions- at a time of significiUlt pressure on government
resources.
GE wJD diminish educational outcomes for the reclueed a umber of tudents
wo are able to coatiDue their educatioa. Even for those students for<:ed out of
private sector schools who are able to find slots in public institutions, the
2
"Taxpayers Coso to Support Hfaher A ComParilon of Public, Private Not-for-Profk, and
Private For-Profit lnsJitution.s," Robert J. Shapiro IUld Nam D. Pham, September 2010.
3
prospects are not promising. Recent studies have demonstrated thin graduation
rates for students at two-year for-profit institutions are nearly triple that of
community colleges,
3
and earnings increases for private sector students outpace
those of public two-year institutions.
4
GE will reduce competitioa aad iaaovattoa bllliper education. The
American higher educatim system became the best in the world when our funding
syscem put IMney in tbe hands of students. so they could choose tbe institutions
that best served tb:ir That approach bas made studen&s the winners as
institutions innovate and compete for student loyalty. Oveniding student choice
through the regulatory process will only weaken American higher education and
reduce the healthy competition that bas been central to its success.
GE will plate tbe .Depart:mtat ia tile aacomfortable aad iaapproprt.te
pMitioa of Httmg tuidoa pricea, detfl"lDiiiiDg whicb PJ'OII'IIIIll schoolt an
offer, aad dictatin& wbieh atudeats Hllooll c:aa aecept to nmaiD eompllaat.
The proposed rqulations are troubling in the extent to which they turn the
Dep.unent into a decision maker in 8laiS that pteViously were assumed to be-
and that Congress expressly wanted to be -within tl of studenU or
institutiona. Beyond the questionable legal basis fur such a step, this move toward
federalizing higher education is very poor policy, and will undermine the vitality
of institutions America needs to retain its ec.onomie pre-eminence.
I believe that Kaplans goals and those of the Department are alisncd in most areas.
Although I disagree stro111ly with some of the approaches presented in the NPRM as a
way to achieve those goals, I am fully committed to the proposition that in addition to
educatimal excellence, students deserve a full \Dlderstandiog of tbeit responsibilities and
obligations; they should never be matched with progmms unsuited to their skills or
aspirations; and students should never be encouraged to take out lo.m that they will not
be able to repay.
We embrace the challenge of helpinJ President Obama meet his goal of restoring our
oountry to leadership in edlJcatiooal attaimnent We believe his goal is achJevable, can be
realized at a price our country can afford, and will have very important positive
implications for om society and economy in coming decades. At Kaplan, we have
invested significantly in tcchnolo gy, pedagogy, and research into student learning. all of
which we think can be helpful in achieving this soal, and we are eager 1D !hare our
experience, research, data and capabilities to assist you. To reach important goals like
this, our country needs all of us pulling together. ! urge you to slow down the sprint to
implement regulations that are so contrary to the President's goals, and instead substitute
new regulation that would encourage uaood actor., inltitutions to cootinue their good
J NCES: Enrollment in Posuec:ondluy lmdtutiou, Fatl 2001; GraduaUon Rates 2002 and 200S Cohorts;
lnd Statisti.cs FY 2003, P\lbliabed AprillOJO, pap 1.
The Panhnon Group: PerspecUves oo Private Sector Posl..Scronduy Stbools, Do They Deliver Value to
Studenes and Society?; Robert Lytle, Roaer BriMer, Chris Roa; Febnwy 24, 2010.
4
work across all of our country's student populations and become full partners in the effort
to achieve our nation's pressing goals.
Sincerely,
Andrew S. Rosen
Cc: The Honorable Anthony Wilder Miller
Ms. Jessica Finkel
l(b)(6)
Tom Harkin
Senator
United States Senate
731 Hart Senate Office Building
Washington, DC 20510
August 25, 2010
Dear Senator
I write to offer both my gratitude for efforts to better for-profit colleses and my
suaestlons for areas of further Inquiry within proprietary higher educatfon. For more than a year, I
have been employed as a Generctl Education Instructor by the Riverside campus of Kaplan Coftege- one
of the four institutions at which the Government Accountability Office (GAO recently uncovered
evidence of "fraudulent practices" within the admissions and financial aid departments. While laeree
with the recent assessments made by Bannak Nasslrian and others that the proposed US Department of
EduQtion rqulatlons coutd be more effectlvelystrlnsent, t also believe these regulations are an
Important step necessary to protect future students at for-profit cofleses. efforts In this reeard wiU
have positive reat world consequences for a multitude of people; for that I admire and applaud you.
I hope, however, that your efforts at refonn do not stoP at the collegiate front end." As chairman of
the Senate Health, Education, Labor and Pensions (HELP) Committee, I am certain you have encountered
a number of complaints about the quality of education at for-profit colleges. Stilt, I would like to add my
voice to the cacophony and hope that my observations may flnaliy tlp the scales and spur you to even
more action.
I cannot speak to the practices of the entire for-profit Industry. Nor can I definitively speak to the
practices of Kaplan Col lese in general. But I can provide you with my limited observations and
experiences as an Instructor at Kaplan College. I belieVe that my experience as a Kaplan Colleae
Instructor Is not singular, and as such I hope to provide with first-hand Insight into the educational
experience at Kap!an Colleae. Riverside.
Wfthin weeks of my tnltlai employment. I recognlzed that the school seemed willing to enroll any
student so long as those students could procure for tuition. Moreover, I quickly realiled that the
education of these students was not merely a secondary or tertiary priority among the campus
administration; it was not even a blip on their collective radar. During my tenure at Kaplan College,
Riverside, I have never had a serious converntlon about pedagogy or subject matter wfth my immediate
supervisor, the Education Department Proeram Director, or any other member of the administration. I
shoutd note that pedaeosv Is discussed during monthly fnservlce meetings required of the collese to
maintain accreditation; however, these pedag081callectures and discussions are led by peopJe who have
no background in education at theory and who, more often than not, misrepresent pedae08ical theory
and practice. These meetinp are unproductJve In terms of professional devefopment and only exist, I
believe, to maintain campus Kcredltation which, in turn, maintains the college's eligibility to receive
federal student loans.
While the college admtnlstrab'on seems to have little interest in fostering serious pedagog)cal
dlscusslons with and among Instructors, they do manage to havedallydlscusslons and meetlnss about
student attendance and retention. I am required to call students multiple times to try to convince them
to show up to dass, If only for a moment. As long as my class attendance rosters show no absences, my
supervisors are content. l<apfan tnstructors are constantly rewarded With public recosnitlon and
certificates for low student absence rates -I have never witnessed a similar award tor excellence in
teaching. Slmllarfy, Kaplan Instructors are continually notified publicalfy and privately ~ e n absence
rates for any Instructor rise too high. Instructors With hl&h absence rates must complete additional
paperwork, must attend additional meetings about student retention, and even run the risk of
termination.
Most of the contact between the administration and fndlvlduallnstructors centers around some form of
the question, "How can you improve the attendance within your classesr My general response to this
question, both orally and tn writing, has been to tell administrators that the attendance issues at Kaplan
are largely a SYmptom of unethical practices In the recruitment and admission of students. For Instance,
In a February 17, 2010 email correspondence with my Immediate supervisor, I stated that 1 had "grave
concems about the admissionsN practices at Kaplan COllege. Not surprisingly, the school admlnlstrators
have continually dismissed my claims as unfounded and have renewed their efforts to Jnsplre me to
become an attendance-oriented Instructor. However, as the GAO report confirms, many students
admitted to proprietary schools have Uttle chance of achievins academic or professional success within
the fields for which they are "educated.'"
This attendance-based reward and punishment system effectively trains instructors not to provide
students ~ h challengtnelnstruction, but to instead provide them with Incentives to show up to dass.
Within the administrative ethos, educators at Kaplan College do not exist to further student education.
lnstead Kaplan Instructors exist 1D ensure that students remain eligible for federaiioans. Instructors
b ~ o m e babysltters and students become cash cows to be managed, not taught.
I have remained with Kaplan College for the past year having convinced myself that I might further my
students' education despite the unethical administrative polldes which focus on retention of student
monies at the expense of student Intellectual capital. While I still hope that my classes have provided
value to my students' lives, I no longer believe that I best serve those students bY remain ins wtth them
under the yoke of an oppressive corporate culture. The GAO report revealed to me the pervasive nature
of this problem, and I will not continue to serve a system that will tether many of my students to debts
they cannot repay for an "education" that will not serve them after graduation. So, shortly before
sending this letter, I submitted my resignation to Kaplan College.
While the .,gainful employment" provision wlthln the current proposed regulations mlght provide some
improvement with regard to educational quality at proprietaryco"eges, It will not resolw the systematic
failure of these instttuttons to value education above profit. You, however, might very well be able to
find a ptace for education within the for-profit business model using a similar strategy to that so well
Implemented with the clandestine investigation of for-profit admissions and financial aid departments.
I suggest that you conduct a secret student rather than secret shopper, investigation. The results of
such an investigiltion would, I have no doubt, reveal unethical, if not fraudulent practttes within for-
profit higher education. More Importantly, I think, such an investigation would provide a stark contrast
between the quality of education provided ilt tradttionai, non-profit lnst1tutlons and the quality of
ed uc.tlon provrded at for-profit colleges.
I wish I could do more for my students. 1 wish that I held a position of power from which I might fight
for them. But as a soon-to-be unemployed teacher, there Is little I might do. So I put my hope in you,
Senator. Your actions with regard to the current proposed regutations bespeak your investment in this
issue. I implore you to further that Investment by more diligently considering how students are
educated after they pass through for-proflt admissions ha,Js.
f)(6) -
Cc; Arne Duncan, Secretary, US Department of Education
Sunday, August 22,2010
Secretary Arne Duncan
U.S. Department of Education
Docket ID: ED-2010-0PE-0012
1990 K Street, NW Room 8031
Washington, DC 20006-8502
Mcintyre 1
Dr William Mcintyre
EDMC -Art lnstitute, Inland Empire
The University of Phoenix. Southern California
22422 Glenwood Dr
#2200
Crestline CA 92325
Email: wmcintyre@aii.edu
r . '
... ~
RE: Gainful Employment Rule Denies Student Access, Costs Critical Jobs
Dear Secretary Duncan:
The various metrics in the proposed "Gainful Employment Rule" are in some cases
arbitrary and unfair. For instance, some years ago, I graduated with a Bachelor's degree in
English Literature from U.C. Berkeley, a top-rated university. What job did this degree
prepare me for? Writing 18th century novels? Writing Shakespearean-era iambic
pentameter plays? Certainly, not teaching-- for that, I needed additional credentlals. By the
proposed rule, because I and almost aJJ other English majors were not able to find a job in
my "field," this program would be disqualified, as would many programs in the Arts and
social sciences.
Later, 1 acquired a master's degree in English IJterature, with an emphasis in creative
writing from Cal State University San Francisco. Again, my degree did not allow me to
obtain a job as a best-selling novelist (or anything selling novelist) or a paid screenwriter.
Would you disqualify this program?
Additionally, the rules you propose are grossly unfair in that they apply to one category of
schools but not another. You establish a false opposition between private and public, for-
profit and not for-profit. The same rules should apply to aJI colleges and universities
because you fail to take into consideration that the for-profit sector serves a student-body
population that has not been served by traditional schools. The sectors do not stand In
opposition to one another; they complement one another.
For instance, one of the schools at which l teach-- the University of Phoenix-- has been one
of the Innovators of onHne education, which has carried the opportunities of education to
students outside of the demographic and geographi c areas normaJly served by traditional
Mclntyre- 2
schools. Additionally, the University of Phoenix also has structured its "on-ground" courses
around two principles: 1) take the school to the students, and 2)arrange for class times that
make the education accessible to working adults. At the University of Phoenix. I have
encountered countless students for whom higher education is only a possibility because of
the innovative scheduling and modalities.
On more than 45 campuses, The Art Institutes' faculty and staff prepare students for a
successful career in their preferred field- from culinary arts to photography to graphic
design. We take great pride in our skilled faculty's ability to educate students, and I have
closely followed the Department of Education's consideration of a Gainful Employment rule
that- as currently proposed- could bar thousands of our students and millions nationwide
from receiving an education of their choice.
Having worked so closely with our students and the academic programs in which they are
enrolled, I can attest that the quality of a higher education cannot be judged by an arbitrary,
one-size-fits-all metrlc test. In fact, the rule proposed by the Department Is biased against
the qual! ty degree programs offered at The Art Institutes, in favor of Jess costly certificate
or diploma programs.The Department of Education's proposed rule would block students
from academic programs that position them for success in the job market Over the years, I
have seen countless students come through The Art Institutes and leave with practical
skills that translate into real world experience and a job. Without student aid, this would
not be possible. This is an unwise and inadvisable course of action at a time of high
unemployment across the country. Career education should be encouraged, not
discouraged.
The proposed rules fall to consider that many ofthe students whom we serve are non-
conventional and otherwise "at risk." At the Art Institute, for instance, most of our students
have not been prepared by our (mostly) public education system for traditional academic
study or are just not inclined to such study- which is in traditional venues taught in a
pedagogic style that is more than 1,000 years old and is heavily focused on content which
many contemporary students find irrelevant to their needs. One of the prime virtues of
such for-profit schools is that they focus on the perceived needs and interests of the
students. This is why they have grown exponentially over the past years -- not because they
have "tricked" people Into enrolling.
The Gainful Employment rule will have a particularly adverse effect on degree programs
offered to low-income, minority, women, working adult, and otber at-risk students. This
will result in reduced access, less opportunity, and fewer choices for these students.
The students who enro1J at the for-profit schools do so well aware ofthe other educational
opportunities available to them. At the Art Institute Inland Empire and the Southern
California campus of the University of Phoenix, for instance, I teach students are well aware
of the much lower cost colleges and universities in the vicinity. Within a 20 minute drive of
each campus at which I teach, there are a half-a-dozen (at least) public venues for higher
education. Yet, these students chose to enroll with us. They do so for a variety of reasons--
the for-profit schools offer courses of study not offered at more conventional schools. The
Mcintyre- 3
modality of instruction is often times much more "user friendly." Often, the for-profit
schools are smaller, which lends them to more interpersonal interaction- student to
student and student to instructor; for instance, it is not uncommon that in a single walk
down a hallway I encounter half-a-dozen students whom I know (and whom I will greet ...
often by name); this personal closeness possible at a school with a 1,500 population but not
possible at a university with 30,000 students.
Should abuses be corrected? Yes. Should enrollment counselors be regulated so they tell
the truth to prospective students? Yes, undoubtedly. But should the for-profit educational
sector be governed by unfair and unevenly applied rules. Absolutely not
Because if you shut down the forprofit educational sector, you are doing more than
shutting down a few businesses. You are shutting down the hundreds ofthousands of
students who depend on us and who find considerable value in what we have to offer.
Respectfully.
~
EDMC- Art Institute, Inland Empire
The University of Phoenix, Southern California
22422 Glenwood Dr
# 2200
Crestline CA 92325
Email: wmcintyre@aii.edu
P. GA&Hu
Ugis/Ati Diltria 22
Prill George's County
Appropriations Commiu
Chttir
TraNportaUon and the Environment

Ovcnigl\t on Pcn;oond
THE MARYLAND HOUSE OF DELEGATES
.ANNAPOUS, MARYLAND 11401
September 28, 2010
The Honorable Arne Duncan
Secretary oftbe Department of Education
400 Maryland Avenue, S.W.
Washington, OC 20202
Dear Secretary Duncan:
I write on behalf of the Maryland campuses of the University of Phoenix.
1"be Maryland HoU$C of
6 Bbden Room .. 16
Annapolis. Muyland uo
ro8.4l,c>si
Ext. ,os8
30t Sf83llso

-; .
I proudly represent the 22
00
Legislative District in which tbe Prince George's campus
is located. The University of Phoenix offers our working adults an opportunity to
obtain their undergraduate or an advanced degree which ultimately helps them in their
current occupation or prepares them for career advancement.
In the State of Maryland, there are almost I 000 students attending classes at our four campuses
and over 11 ,000 Maryland studen:ts taking courses online from the University. The University
provides important jobs in our County in terms of faculty, administrative and support staff as
well as paying thousands of dollars in taxes making it a very important and contributing
corporate citizen.
As we are all well aware, our country witnesses a difficult economic time and I applaud the
University of Phoenix in supporting President Obama's goal to help educate and graduate a
greater number of citizens who will be better prepared for the challenges oftoday's society.
1 sincerely hope your department will join me in recognizing the University's contribution to
higher education and its importance lo our county and state.
Sincerely,
Tawanna P. Gaines
NANCY J. KlNti
.1 Yrb Distria
(
1:uation Counniucc
(
Health, I:Ouc.Hir>n, and
Hum.m Rr.:.<>ult\'> Suh<:ommittcc
SeR.lU C.l>tur
Jolnr CHmnlicte4' on
Ch<l<imt, Youth. :aud
September 29, 2010
THE SENATE OF MARYLAND
ANNAPOLIS, MARYLAND 1.1401
The Honorable Arne Duncan
Secretary of tbe Department of Education
400 Maryland Avenue, S.W.
Washington, D.C. 20202
Dear Secretary Duncan,
llmtupilliJ Office
James xna1c Otflct:
11 Bladen R.o<.>m u t
Amlap<Jiis. tvfaryland
jl>Rt'.
1-.rr )6R6
}(J.>: 'JI0841J670 }018j8J6(Q
Na ocy. md.u'
Distril't Ojfitt'
?901 ;iht<'W)bury Coull
Villatt." Maryb.>nJ tt>l!l!f>
Fmc
As the Department of Education works to finalize its regulations on "gainful
employment", I wanted to share with you some information about one for-profit school in
Maryland - The University of Phoenix.
The University of Phoenix has over 11,000 Maryland students studying online and close
to 1000 students attending classes at four campuses situated throughout Maryland. As a
State Senator in Montgomery County, Maryland, I am very aware of the positive role that
the University plays in our community in providing jobs for faculty, administrative and
staff support as well as paying thousands of dollars in both state and local taxes. 1 am also
aware of the positive impact the University has had in providing working adults in our
community the ability to obtain degrees which will prepare them for careers or career
advancement.
During these difficult economic times, I hope that all proposed regulations will carefully
consider the impact that the regulations will have on employment in our states. I applaud
the Department for their work on behalf of higher education in our country and appreciate
your consideration of my concerns.