Leaders at the Charleston School of Law are talking with the U.S. Department of Education on the revision of rules meant to protect students from predatory schools whose graduates find themselves buried in debt with little chance of finding good paying jobs.
Charleston’s president, Ed Bell, said he has urged the DOE to ensure that it is using accurate income rates for graduates when it determines whether a school meets the department’s gainful employment standards.
According to Bell, Charleston discovered through an independent audit that the DOE had miscalculated the incomes of 2014 graduates, which resulted in the school failing the gainful employment standard in findings released earlier this year. Failure could result in a loss of federal financial aid, among other penalties.
Charleston’s representatives participated in an online conference with the DOE earlier this month, according to Bell. He said the department was “very receptive” to the school’s suggestions.
“They seemed to understand our plight,” he said. “Quite frankly, I think it surprised them to hear that their numbers were wrong.”
Attempts to speak with the DOE were unsuccessful. But U.S. Secretary of Education Betsy DeVos said in a prepared statement that the student protection rules had created a “muddled process that’s unfair to students and schools, and puts taxpayers on the hook for significant costs.”
“It’s time to take a step back and make sure these rules achieve their purpose: helping harmed students. It’s time for a regulatory reset. It is the Department’s aim, and this Administration’s commitment, to protect students from predatory practices while also providing clear, fair and balanced rules for colleges and universities to follow,” she added.
Meanwhile, Bell said his school would file an appeal of the DOE’s gainful employment findings before June 30 and was confident that Charleston would be removed from the “naughty list.” The for-profit school is transitioning to a nonprofit institution — such schools currently are not subjected to the DOE’s gainful employment standard. But Bell said the DOE could release another list or two before the transition is complete.
Bell also said he’s suggested that the DOE look at graduates’ incomes after they complete an “apprenticeship period,” saying that it often takes several years for young lawyers to gain experience and begin making decent money.
“We are training all these people to have a better education and do a better job,’ he said, “yet their starting salary is less than what they need to pass this reg because they need more time.”
According to the DOE’s numbers, Charleston’s 2014 grads had a median annual income of $45,200 and spent 20.4 percent of that income on debt payments. Under DOE regulations, schools face penalties, including the loss of federal financial aid, for sending students out into the world with loan payments that exceed 8 percent of their total yearly income.
Finally, Bell has asked the DOE to consider the debt payment default rates of graduates as a factor in the gainful employment standard. He said Charleston’s current default rate is less than 1 percent.
“To me, the Department of Education should say, ‘We’ll leave the law schools alone and let the ABA [American Bar Association] handle it as long as you meet the default rate,” he added.
While Charleston and other schools have applauded the DOE for revisiting its student protection rules, the National Consumer Law Center is crying foul. The Boston-based nonprofit NCLC was particularly aggrieved at the DOE’s decision to postpone borrower defense regulations, which were slated to take effect July 1 and would help students walk away from loan debt if they proved a school took advantage of them.
“As an advocate for low income students and families … I think both job placement and earnings data matter so people understand the obligations they’re going to have on the back end,” said Joanna Darcus of the NCLC. “We want people to have their eyes wide open.”
Darcus added that for-profit school leaders have been asserting for years that the DOE’s numbers or methodology were flawed.
“There are a bunch of statistics out there and none of them are perfect,” she said. “It’s always been difficult to balance the interests of students and institutions.”
Follow Phillip Bantz on Twitter @SCLWBantz