"Keystone Kops" in Real Life at Department of Education on Gainful Employment Regulation, Alford and Davis say

Apr 28, 2011, 17:12 ET from National Black Chamber of Commerce

A new white paper by Alford/Davis documents the incompetent, secret and biased process behind the Department of Education's "Gainful Employment" rule, which will hurt minorities and working people more than any others

WASHINGTON, April 28, 2011 /PRNewswire-USNewswire/ -- The National Black Chamber of Commerce (NBCC) in partnership with Lanny Davis, former Clinton White House Special Counsel, today released a new white paper depicting the incompetent process behind the Department of Education's "Gainful Employment" rule.

The paper, entitled "Now Playing at the Department of Education: Keystone Kops," details the numerous mistakes, multiple encounters between top Education Department officials and Wall Street short-sellers and a blatantly inaccurate and biased GAO report as part of a campaign against for-profit colleges, which provide higher education opportunity to low-income and minority students. The paper lays out the following examples:

  • The Department of Education proffered data from the State of Missouri to demonstrate the impact of its gainful employment (GE) regulation nationwide. This data was refuted as "not predictive of national statistics," drastically underestimating the impact of the regulation and potentially affecting over one million students.
  • The Department published trial three-year Cohort Default Rates that later proved to be "incorrectly inflated" - demonstrating that the Department cannot perform correctly even the most rudimentary of calculations. This error was even used by the California State Legislature in passing its recent budget legislation restricting student loans.
  • The Department confided in the counsel of Wall Street short-sellers who stood to profit if the regulation was enacted. A number of elected officials and public interest groups from the left and right have asked for investigations into the collusion of short-sellers and the Department.
  • The Department heavily relied on a now-discredited report by the Government Accountability Office (GAO), which harshly criticized the for-profit college industry. Ultimately, the GAO reissued the report correcting its mistakes, which were biased against for-profit colleges.

"The Obama Administration prides itself on promoting openness and transparency, yet we continue to see the Department of Education making careless, biased mistakes and more and more incidents of collusion with short-sellers," said Davis. "Before the Department implements the gainful employment rule, they should hit the reset button and take a closer look at who really supports this rule – Wall Street short-sellers – and what it's going to do to our most vulnerable students."

"The Department of Education should be focusing their efforts on helping more students get an education, especially minority and low-income students who face great barriers to go to college," said Alford. "Instead they are engaging in countless corrupt tactics and making regulations up in the dark that will drastically hurt our minority communities. At a time when our economy is struggling, the last thing we should be doing is hurting our students' ability to get the skills they need to get a job."  

Several members of Congress also adamantly oppose the gainful employment. As laid out in a recent POLITICO op-ed titled "Roll back rules that hurt college students," Rep. Alcee Hastings (D-Fla.) explained that the regulations "go against the very goals of federal education programs. Rather than opening the doors of opportunity for education and employment, they slam them shut on women, minorities and individuals from working families."

Davis and Alford expressed concerns with the rule earlier this week by co-authoring a two-part editorial series featured on the Daily Caller titled, "Why the Department of Education cannot be trusted on gainful employment regulations, Part I" and "Part II."

About NBCC

The NBCC reaches 100,000 Black owned businesses. There are 1.9 million Black owned businesses in the United States. Black businesses account for over $138 billion in annual sales. African Americans have over $1 trillion in expendable income each year according to the US Bureau of Census. The National Black Chamber of Commerce is dedicated to economically empowering and sustaining African American communities through entrepreneurship and capitalistic activity within the United States and via interaction with the Black Diaspora.

For more information, please call NBCC at (202) 466-6888 or visit www.uneducatedpolicy.com.

SOURCE National Black Chamber of Commerce